$575 Million Convertible Debt Offering 2006
As
filed
with the Securities and Exchange Commission on October 31,
2006
Registration
No. 333-
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
________________
FORM
S-3
REGISTRATION
STATEMENT
Under
THE
SECURITIES ACT OF 1933
________________
WEINGARTEN
REALTY INVESTORS
(Exact
name of registrant as specified in its charter)
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Texas
(State
or other jurisdiction
of
incorporation or organization)
|
|
74-1464203
(I.R.S.
Employer
Identification
No.)
|
2600
Citadel Plaza Drive, Suite 300
Houston,
Texas 77008
(713)
866-6000
(Address,
including zip code, and telephone number, including area code, of registrant's
principal executive offices)
________________
Andrew
M. Alexander
President
and Chief Executive Officer
Weingarten
Realty Investors
2600
Citadel Plaza Drive, Suite 300
Houston,
Texas 77008
(713)
866-6000
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
________________
Copies
to:
Bryan
L. Goolsby
Gina
E. Betts
Locke
Liddell & Sapp LLP
2200
Ross Avenue, Suite 2200
Dallas,
Texas 75201
(214)
740-8000
________________
Approximate
date of commencement of proposed sale to the public: from time to time after
the
effective date of this Registration Statement.
If
the
only securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
¨
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. x
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. ¨
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CALCULATION
OF REGISTRATION FEE
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|
Title
of Each Class of Securities
to
be Registered
|
Amount
to be
Registered
|
Proposed
Maximum Aggregate Price Per Share (1)
|
Proposed
Maximum Aggregate
Offering
Price (1)
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Amount
of
Registration
Fee
|
|
3.95%
Convertible Senior Notes Due 2026
Common
Shares of Beneficial Interest, $.03 par value per share
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$575,000,000
14,645,940
shares (2)
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100%
(3)
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$575,000,000
(3)
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$61,525
(3)
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(1)
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Estimated
solely for the purposes of calculating the registration fee pursuant
to
Rule 457 under the Securities Act of 1933, as amended (exclusive
of
accrued interest, if any).
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(2)
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This
number reflects the aggregate number of common shares of beneficial
interest issuable upon conversion of the notes at the conversion
rate of
25.4712 of our common shares for each $1,000 principal amount of
notes,
which is the maximum conversion rate that will apply upon a change
of
control in certain circumstances. Pursuant to Rule 416 under the
Securities Act, such number of common shares registered hereby shall
include an additional number of common shares that may be issued
in
connection with a stock split, stock dividend, recapitalization or
other
event.
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(3)
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Pursuant
to Rule 457(i) under the Securities Act, there is no additional filing
fee
with respect to the common shares issuable upon conversion of the
notes
because no additional consideration will be received in connection
with
the exercise of the conversion
privilege.
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PROSPECTUS
$575,000,000
(aggregate
principal amount)
Weingarten
Realty Investors
3.95%
Convertible Senior Notes due 2026 and
the
Common Shares Issuable Upon Conversion of the Notes
________________
We
issued
the notes in a private placement in August 2006. This prospectus will be used
by
selling securityholders to resell their notes and the common shares issuable
upon conversion of their notes. We will not receive any proceeds from this
offering.
Our
notes
bear interest at the rate of 3.95% per year, payable on February 1 and August
1
of each year, beginning February 1, 2007. The notes will mature on August 1,
2026. However, on or after August 4, 2011, we may redeem the notes in whole
or
in part for cash at 100% of the principal amount of the notes to be redeemed
plus accrued and unpaid interest (including additional interest, if any). We
may
not redeem the notes prior to August 4, 2011 except to the extent necessary
to
preserve our status as a real estate investment trust. On August 1, 2011, August
1, 2016 and August 1, 2021, as well as following the occurrence of certain
change in control transactions on or prior to August 4, 2011, holders may
require us to repurchase notes in whole or in part for cash at 100% of the
principal amount of the notes to be repurchased plus accrued and unpaid interest
(including additional interest, if any) accrued to the repurchase
date.
The
notes
are convertible into our common shares of beneficial interest, par value $0.03
per share, which we refer to as “our common shares,” prior to the close of
business on the second business day prior to the stated maturity date at any
time on or after August 1, 2025 and also under the following circumstances:
(i)
if the closing sale price of our common shares reaches a specified threshold
over a specified time period; (ii) if the trading price of the notes is below
a
specified threshold for a specified time period; (iii) if the notes have been
called for redemption; (iv) upon the occurrence of the specified transactions
described in this prospectus; or (v) if our common shares cease to be listed
on
a U.S. national or regional securities exchange or quoted on the Nasdaq National
Market for 30 consecutive trading days. Upon conversion of notes, we will
deliver cash and common shares, if any, with an aggregate value, which we refer
to as the “conversion value,” equal to the conversion rate multiplied by the
average price (as defined in this prospectus) of our common shares as follows:
(i) an amount in cash, which we refer to as the “principal return,” equal to the
lesser of (a) the principal amount of the converted notes and (b) the conversion
value; and (ii) if the conversion value is greater than the principal return,
an
amount with a value equal to the difference between the conversion value and
the
principal return, which we refer to as the “net amount.” The net amount may be
paid, at our option, in cash, common shares or a combination of cash and common
shares.
The
initial conversion rate for each $1,000 principal amount of notes is 20.3770
of
our common shares. This is equivalent to an initial conversion price of
approximately $49.075 per common share. For a discussion of the circumstances
in
which the conversion rate will be subject to adjustment, see “Description of
Notes — Conversion Rate Adjustments” in this prospectus. In addition, if certain
change in control transactions occur on or prior to August 4, 2011 and a holder
elects to convert notes in connection with any such transaction, we will
increase the conversion rate in connection with such conversion. This prospectus
covers the resale of all such shares issued upon conversion. Our common shares
are listed on the New York Stock Exchange under the symbol “WRI.”
On October 27, 2006, the last reported sales price for our common shares on
the NYSE was $46.54.
The
notes
will be our senior unsecured obligations and rank equally with all of our other
senior unsecured indebtedness and be effectively subordinated to our secured
indebtedness and to all liabilities and preferred equity of our subsidiaries.
We
do not
intend to apply for listing of the notes on any securities exchange or for
inclusion of the notes in any automated quotation system, although the notes
are
eligible for trading in The PORTAL
(SM)
Market
of the National Association of Securities Dealers, Inc. However, the notes
resold pursuant to this prospectus are not eligible for trading on The
PORTAL
(SM)
Market.
Interest
on the notes will accrue from August 2, 2006.
_______________
Investing
in the notes and our common shares issuable upon conversion of the notes
involves risks. See “Risk Factors” beginning on page 6 of this prospectus, as
well as the risk factors relating to our business that are incorporated by
reference in this prospectus from our Annual Report on Form 10-K for the year
ended December 31, 2005.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is October 31, 2006.
You
should rely only on the information contained or incorporated by reference
in
this prospectus. We have not authorized anyone to provide you with different
or
additional information. We are not making an offer to sell any security in
any
jurisdiction where the offer or sale is not permitted. You should assume that
the information contained in this prospectus and the documents incorporated
herein by reference is accurate only as of their respective dates. Our financial
condition, results of operations, business and prospects may have changed since
those dates.
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TABLE
OF CONTENTS
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WHERE
YOU CAN FIND MORE INFORMATION
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iii
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PROSPECTUS
SUMMARY
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1
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RISK
FACTORS
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6
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Risks
Related to the Offering
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6
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U.S.
Federal Income Tax Risks Related to the Notes
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10
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THE
COMPANY
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10
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USE
OF PROCEEDS
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11
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RATIOS
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED SHARE
DIVIDENDS
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11
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DESCRIPTION
OF NOTES
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12
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General
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12
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Interest
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13
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Maturity
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14
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Our
Redemption Rights
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14
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Repurchase
at Option of Holders on Certain Dates
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14
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Repurchase
at Option of Holders upon a Change in Control
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16
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No
Shareholder Rights for Holders of Notes
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18
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Conversion
Rights
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19
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Conversion
Settlement
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23
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Conversion
Rate Adjustments
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24
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Ownership
Limit
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29
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Calculations
in Respect of the Notes
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29
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Merger,
Consolidation or Sale
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29
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Events
of Default, Notice and Waiver
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29
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Modification
of the Indenture
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31
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Discharge,
Defeasance and Covenant Defeasance
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33
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Rule
144A Information
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33
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Provision
of Financial Information
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33
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Governing
Law
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34
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Trustee
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34
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Book-Entry
System
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34
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Registration
Rights; Additional Interest
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36
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DESCRIPTION
OF CAPITAL SHARES
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39
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Authorized
Shares
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39
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Shareholder
Liability
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39
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Common
Shares
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40
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Preferred
Shares
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41
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MATERIAL
FEDERAL INCOME TAX CONSIDERATIONS
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44
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U.S.
Holders of the Notes
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45
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Non-U.S.
Holders of the Notes
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49
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Information
Reporting and Backup Withholding Tax Applicable to Holders of the
Notes
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51
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Taxation
of the Company as a REIT
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51
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REIT
Qualification
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52
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Taxation
As a REIT
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56
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Relief
From Certain Failures of the REIT Qualification Provisions
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58
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Failure
To Qualify As a REIT
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58
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Taxation
of Taxable U.S. Holders
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58
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Backup
Withholding
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60
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Taxation
of Tax-Exempt Entities
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60
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Taxation
of Non-U.S. Holders
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61
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State
And Local Taxes
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62
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SELLING
SECURITYHOLDERS
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63
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PLAN
OF DISTRIBUTION
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71
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Electronic
Distribution
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73
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LEGAL
MATTERS
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74
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EXPERTS
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74
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WHERE YOU
CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC's public
reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request
copies of these documents by writing to the SEC and paying a fee for the copying
cost. Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the public reference room. Our SEC filings are also available
to
the public at the SEC's web site at http://www.sec.gov.
In
addition, you may read and copy our SEC filings at the offices of the NYSE,
20
Broad Street, New York, New York 10005. Our website address is http://www.weingarten.com.
The
information incorporated herein by reference is an important part of this
prospectus. Any statement contained in a document which is incorporated by
reference in this prospectus is automatically updated and superseded if
information contained in this prospectus, or information that we later file
with
the SEC prior to the termination of this offering, modifies or replaces this
information. The following documents filed with the SEC are incorporated by
reference in this prospectus:
| · |
Annual
Report on Form 10-K for the year ended December 31,
2005.
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| · |
Quarterly
Report on Form 10-Q for the quarters ended March 31, 2006, and June
30,
2006.
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| · |
Current
Report on Form 8-K filed on June 8, 2006, August 2,
2006, September14, 2006 and October 31,
2006.
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| · |
Proxy
Statement on Schedule 14A filed on March 20,
2006.
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| · |
The
description of our common shares of beneficial interest contained
in our
registration statement on Form 8-A filed March 17,
1988.
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| · |
All
documents we file with the SEC pursuant to Sections 13(a), 13(c),
14 or
15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (other than current reports furnished under Item 2.02 or 9.01
of Form 8-K) after the date of this prospectus and prior to the
termination of this offering.
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You
may
request copies of these filings at no cost by writing or telephoning our
Investor Relations Department at the following address and telephone
number:
Weingarten
Realty Investors
2600
Citadel Plaza Drive Suite 300
Houston,
Texas 77008
(713)
866-6000.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain
statements contained herein constitute forward-looking statements as such term
is defined in Section 27A of the Securities Act and Section 21E of the
Exchange Act. Forward-looking statements are not guarantees of performance.
Our
future results, financial condition and business may differ materially from
those expressed in these forward-looking statements. You can find many of these
statements by looking for words such as "plans," "intends," "estimates,"
"anticipates," "expects," "believes" or similar expressions in this prospectus.
These forward-looking statements are subject to numerous assumptions, risks
and
uncertainties. Many of the factors that will determine these items are beyond
our ability to control or predict.
For
these
statements, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
You are cautioned not to place undue reliance on our forward-looking statements,
which speak only as of the date of this prospectus or the date of any document
incorporated by reference. All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred
to in this section. We do not undertake any obligation to release publicly
any
revisions to our forward-looking statements to reflect events or circumstances
after the date of this prospectus.
PROSPECTUS
SUMMARY
The
information below is only a summary of more detailed information included
elsewhere in this prospectus or the documents incorporated herein by reference.
This summary does not contain all the information that is important to you
or
that you should consider before investing in the notes and common shares into
which the notes, in certain circumstances, are convertible. As a result, you
should read this entire prospectus, including the “Risk Factors” section
beginning on page 6, as well as the information incorporated herein by
reference, including the “Risk Factors” section of our Annual Report on Form
10-K for the year ended December 31, 2005, carefully.
As
used in this prospectus, unless the context otherwise requires, the terms “we,”
“us” and “our” refer to Weingarten Realty Investors and its
subsidiaries.
The
Company
We
are a
real estate investment trust based in Houston, Texas. We develop, acquire and
own neighborhood and community shopping centers. To a lesser degree, we develop,
acquire and own industrial real estate. We have engaged in these activities
since 1948.
As
of
June 30, 2006, we owned or had an equity interest in operating properties
consisting of approximately 48.3 million square feet of building area. These
properties consist of 295 shopping centers generally in the 100,000 to 400,000
square foot range and 65 industrial projects. Our properties are located in
21
states that span the southern half of the United States from coast to coast.
Our
shopping centers are anchored primarily by supermarkets, drugstores and other
retailers that sell basic necessity-type items. As of June 30, 2006, we leased
to approximately 5,200 different tenants under approximately 6,900 separate
leases. The weighted average occupancy rate of all of our improved properties
as
of June 30, 2006 was 93.7%.
Our
executive offices are located at 2600 Citadel Plaza Drive, Suite 300, Houston,
Texas 77008, and our telephone number is (713) 866-6000. Our website is
www.weingarten.com. The information contained on our website is not part of
this
prospectus.
Terms
of the Notes
This
prospectus covers the resale of $575,000,000 aggregate principal amount of
the
notes and 14,645,940 of our common shares, plus an additional number of
common shares that may be issued from time to time upon conversion of the notes
as a result of a stock split, stock dividend, recapitalization or other event
described in this prospectus.
We
issued
and sold $575,000,000 aggregate principal amount of the notes on August 2,
2006,
in a private offering to Citigroup Global Markets, Inc., JPMorgan Securities
Inc., and Morgan Stanley Co. Incorporated (the “Initial Purchasers”). We were
told by the Initial Purchasers that the notes were resold in transactions which
were exempt from the registration requirements of the Securities Act to persons
reasonably believed by the Initial Purchasers to be “qualified institutional
buyers” (as defined in Rule 144A under the Securities Act).
The
common shares may be offered by the selling securityholders following the
conversion of the notes.
The
following is a brief summary of the terms of the notes. For a more complete
description of the notes, see the section entitled “Description of the Notes” in
this prospectus.
In
this portion of the summary, the terms “we,” “us” and “our” refer only to
Weingarten Realty Investors and not to any of our
subsidiaries.
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Issuer
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Weingarten
Realty Investors.
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Notes
Offered
|
$575
million aggregate principal amount.
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Ranking
of Notes
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The
notes are our senior unsecured obligations and rank equally with
all of
our other senior unsecured indebtedness. However, the notes are
effectively subordinated to all of our secured indebtedness (to the
extent
of the collateral securing the same) and to all liabilities and preferred
equity of our subsidiaries.
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Interest
|
The
notes bear interest at a rate of 3.95% per year. Interest is payable
semi-annually in arrears on February 1 and August 1 of each year,
beginning February 1, 2007.
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Maturity
|
The
notes will mature on August 1, 2026 unless previously redeemed,
repurchased or converted in accordance with their terms prior to
such
date.
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Redemption
of Notes at Our Option
|
Prior
to August 4, 2011, we may not redeem the notes except to preserve
our
status as a real estate investment trust for U.S. federal income
tax
purposes (a “REIT”). However, on or after August 4, 2011, we may redeem
the notes in whole or in part, upon not less than 30 nor more than
60
days’ prior written notice to holders of the notes, for cash equal to 100%
of the principal amount of the notes to be redeemed plus any unpaid
interest (including additional interest, if any) accrued to the redemption
date.
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Repurchase
of Notes at Each Holder’s
Option
on Certain Dates
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Holders
of notes may require us to repurchase their notes in whole or in
part on
August 1, 2011, August 1, 2016 and August 1, 2021 for cash equal
to 100%
of the principal amount of the notes to be repurchased plus any unpaid
interest (including additional interest, if any) accrued to the repurchase
date.
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Repurchase
of Notes at Each Holder’s Option
Upon
Certain Change in Control Transactions
|
If
we undergo certain change in control transactions on or prior to
August 4,
2011, holders of notes may require us to repurchase their notes in
whole
or in part for cash equal to 100% of the principal amount of the
notes to
be repurchased plus any unpaid interest (including additional interest,
if
any) accrued to the repurchase
date.
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Conversion
Rights
|
Holders
may convert their notes based on the applicable conversion rate (described
below) prior to the close of business on the second business day
prior to
the stated maturity date at any time on or after August 1, 2025 and
also
under any of the following
circumstances:
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| • |
during
any calendar quarter beginning after December 31, 2006 (and only
during
such calendar quarter), if, and only if, the closing sale price of
our
common shares for at least 20 trading days (whether or not consecutive)
in
the period of 30 consecutive trading days ending on the last trading
day
of the preceding calendar quarter is greater than 130% of the conversion
price per common share in effect on the applicable trading
day;
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| • |
during
the five consecutive trading-day period following any five consecutive
trading-day period in which the trading price of the notes was less
than
98% of the product of the closing sale price of our common shares
multiplied by the applicable conversion
rate;
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| • |
if
those notes have been called for redemption, at any time prior to
the
close of business on the third business day prior to the redemption
date;
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| • |
upon
the occurrence of specified transactions described under “Description of
Notes — Conversion Rights” in this prospectus;
or
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| • |
if
our common shares are not listed on a U.S. national or regional securities
exchange or quoted on the Nasdaq National Market for 30 consecutive
trading days.
|
By
delivering to the holder cash and common shares, if any, we will satisfy our
obligation with respect to the notes tendered for conversion. Accordingly,
upon
conversion of a note, accrued and unpaid interest will be deemed to be paid
in
full, rather than cancelled, extinguished or forfeited.
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Conversion
Rate
|
The
initial conversion rate for each $1,000 principal amount of notes
is
20.3770 of our common shares, payable in cash and, at our election,
common
shares, as described under “Description of Notes — Conversion Settlement”
in this prospectus. This is equivalent to an initial conversion price
of
$49.075 per common share. In addition, if certain change in control
transactions occur on or prior to August 4, 2011 and a holder elects
to
convert notes in connection with any such transaction, we will increase
the conversion rate in connection with such conversion by a number
of
additional common shares based on the date such transaction becomes
effective and the price paid per common share in such transaction
as
described under “Description of Notes — Conversion Rights — Make Whole
Upon Certain Change in Control Transactions” in this prospectus. The
conversion rate may also be adjusted under certain other circumstances,
including the payment of cash dividends in excess of our current
regular
quarterly common share cash dividend of $0.465 per share, but will
not be
adjusted for accrued and unpaid interest on the notes. See “Description of
Notes — Conversion Rate Adjustments” in this
prospectus.
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Conversion
Settlement
|
Upon
the conversion of notes we will deliver cash and, at our election,
common
shares, with an aggregate value, which we refer to as the “conversion
value,” equal to the conversion rate multiplied by the average price of
our common shares as follows: (i) an amount in cash, which we refer
to as
the “principal return,” equal to the lesser of (a) the principal amount of
the converted notes and (b) the conversion value and (ii) if the
conversion value is greater than the principal return, an amount
with a
value equal to the difference between the conversion value and
the
principal return, which we refer
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to
as the “net amount.” The net amount may be paid, at our option, in cash,
common shares or a combination of cash and common shares. We refer
to any
cash delivered upon the conversion of notes as part of the net amount
as
the “net cash amount” and we refer to any common shares delivered upon the
conversion of notes as the “net shares.” Any portion of the net amount
that we elect to issue as net shares will be equal to the sum of
the daily
share amounts (calculated as described under “Description of Notes —
Conversion Settlement” in this prospectus) for each trading day in the 10
consecutive trading-day period referred to below, except that we
will pay
cash in lieu of any fractional common shares issuable, at our option,
as
net shares based on the average price of our common shares.
The
“average price” of our common shares will be equal to the average of the
closing sale prices of common shares over the 10 consecutive trading-day
period commencing on the third trading day following the date the
notes
are tendered for conversion.
We
will pay the principal return and cash for fractional shares, and
deliver
net shares or pay the net cash amount, as applicable, to holders
upon the
conversion of their notes no later than the third business day
following
the last trading day of the 10 consecutive trading-day period referred
to
above.
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Restrictions
on Ownership
|
In
order to assist us in maintaining our qualification as a REIT for
U.S.
federal income tax purposes, no person may own, or be deemed to own
by
virtue of the attribution rules of the Internal Revenue Code of 1986,
as
amended (hereinafter referred to as the “Internal Revenue Code” or the
“Code”), more than 9.8% of the issued and outstanding shares of any class
or series of our shares of beneficial interest, subject to certain
exceptions. Notwithstanding any other provision of the notes, no
holder of
notes will be entitled to convert such notes for our common shares
to the
extent that receipt of such common shares would cause such holder
(together with such holder’s affiliates) to exceed the ownership limit
contained in our declaration of trust. See “Material Federal Income Tax
Considerations — REIT Qualification” in this
prospectus.
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|
No
Shareholder Rights for Holders of Notes
|
Holders
of notes, as such, will not have any rights as our shareholders
(including, without limitation, voting rights and rights to receive
dividends or other distributions on our common
shares).
|
|
Registration
Rights
|
We
have agreed to file with the SEC within 90 calendar days after
the
original issuance of the notes, and to use our reasonable best
efforts to
cause to become effective within 180 calendar days after the original
issuance of the notes, the shelf registration statement, of which
this
prospectus is a part, or otherwise make a shelf registration statement
available, with respect to the resale of the notes and the common
shares
that may be issuable upon conversion of the notes. See
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|
|
“Description
of Notes — Registration Rights; Additional Interest” in this
prospectus.
To
sell your notes or any common shares issued upon conversion of
the notes
pursuant to the shelf registration statement, you must, among other
things, be named as a selling securityholder in the prospectus.
If
we fail to comply with specified obligations under the registration
rights
agreement, additional interest will be payable on the notes. See
“Description of Notes — Registration Rights; Additional Interest” in this
prospectus.
|
|
Trading
|
The
notes are a new issue of securities, and there is currently no established
trading market for the notes. An active or liquid market may not
develop
for the notes or, if developed, be maintained. The notes originally
issued
in the private placement are eligible for trading on The
PORTAL(SM)
Market. We have not applied, and do not intend to apply, for the
listing
of the notes on any securities exchange or for quotation on any automated
dealer quotation system. Our common shares are listed on the NYSE
under
the symbol “WRI.”
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|
Book-Entry
Form
|
The
notes were issued in book-entry only form and are represented by
two
global certificates deposited with a custodian for, and registered
in the
name of a nominee of, The Depository Trust Company, commonly known
as DTC,
in New York, New York. Beneficial interests in a global certificate
representing the notes are shown on, and transfers are effected only
through, records maintained by DTC and its direct and indirect
participants and such interests may not be exchanged for certificated
notes, except in limited circumstances described in “Description of Notes
— Book-Entry System.”
|
|
Use
of Proceeds
|
We
will not receive any proceeds from the sale by the selling securityholders
of the securities offered by this
prospectus.
|
|
Tax
|
The
notes and common shares that may be issuable upon conversion of the
notes
are subject to special and complex U.S. federal income tax rules.
Prospective investors are strongly urged to consult their own tax
advisors
with respect to the federal, state, local and foreign tax consequences
of
purchasing, owning and disposing of the notes and common shares into
which
the notes, in certain circumstances, are convertible. See “Material
Federal Income Tax Considerations” in this
prospectus.
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|
Risk
Factors
|
You
should read carefully the “Risk Factors” beginning on page 6 of this
prospectus, as well as the risk factors relating to our business
that are
incorporated by reference in this prospectus, for certain considerations
relevant to an investment in the notes and common shares into which
the
notes, in certain circumstances, are
convertible.
|
RISK
FACTORS
You
should carefully consider the risks described below, as well as the risks
described in the documents incorporated by reference in this prospectus, before
making a decision to invest in the notes and common shares into which the notes,
in certain circumstances, are convertible. The trading price of the notes and
common shares into which the notes, under certain circumstances, are convertible
could decline due to any of these risks, and you may lose all or part of your
investment. This prospectus and the documents incorporated herein by reference
also contain forward-looking statements that involve risks and uncertainties.
Actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks
faced by us described below and in the documents incorporated herein by
reference.
Risks
Related to the Offering
The
effective subordination of the notes may limit our ability to satisfy our
obligations under the notes.
The
notes
are our senior unsecured obligations and rank equally with all of our other
senior unsecured indebtedness. However, the notes are effectively subordinated
to all of our secured indebtedness to the extent of the value of the collateral
securing such indebtedness. As of June 30, 2006, Weingarten Realty Investors
had
outstanding $48 million of secured indebtedness (exclusive of indebtedness
of
our consolidated subsidiaries). The provisions of the indenture governing the
notes do not prohibit us from incurring additional secured indebtedness in
the
future. Consequently, in the event of a bankruptcy, liquidation, dissolution,
reorganization or similar proceeding with respect to us, the holders of any
secured indebtedness will be entitled to proceed directly against the collateral
that secures such secured indebtedness. Therefore, such collateral will not
be
available for satisfaction of any amounts owed under our unsecured indebtedness,
including the notes, until such secured indebtedness is satisfied in
full.
The
notes
also are effectively subordinated to all unsecured and secured liabilities
and
preferred equity of our subsidiaries. In the event of a bankruptcy, liquidation,
dissolution, reorganization or similar proceeding with respect to any such
subsidiary, we, as an equity owner of such subsidiary, and therefore holders
of
our debt, including the notes, will be subject to the prior claims of such
subsidiary’s creditors, including trade creditors, and preferred equity holders.
As of June 30, 2006, the total liabilities (exclusive of intercompany debt,
trade payables, distributions payable, accrued expenses and other liabilities)
of our consolidated subsidiaries was approximately $802.7 million and our
consolidated subsidiaries had no outstanding preferred equity. In addition,
as
of June 30, 2006, our share of the total liabilities (exclusive of intercompany
debt, trade payables, distributions payable, accrued expenses and other
liabilities) and preferred equity of the entities which we account for under
the
equity method of accounting was approximately $74.7 million. The provisions
of
the indenture governing the notes do not prohibit our subsidiaries from
incurring additional indebtedness or issuing preferred equity in the
future.
We
may not have the cash necessary to pay the principal return and any net amount
upon the conversion of notes or to repurchase the notes on specified dates
or
following certain change in control transactions.
Upon
the
conversion of notes in accordance with their terms, we will be required to
pay
the principal return of such notes in cash. Furthermore, there may be
circumstances that prevent the issuance of our common shares for all or any
portion of any net amount deliverable upon the conversion of notes, thereby
requiring us to satisfy our net amount obligation in cash. Holders of notes
also
have the right to require us to repurchase the notes for cash on August 1,
2011,
August 1, 2016 and August 1, 2021 or upon the occurrence of certain change
in
control transactions on or prior to August 4, 2011. Any of our future debt
agreements or securities may contain similar provisions. We may not have
sufficient funds to pay the principal return and any such net cash amount or
make the required repurchase of notes, as the case may be, in cash at the
applicable time and, in such circumstances, may not be able to arrange the
necessary financing on favorable terms. In addition, our ability to pay the
principal return and any such net cash amount or make the required repurchase,
as the case may be, may be limited by law or the terms of other debt agreements
or securities. However, our failure to pay the principal return and any such
net
cash amount or make the required repurchase, as the case may be, would
constitute an event of default under the indenture governing the notes which,
in
turn, could constitute an event of default under other debt agreements or
securities, thereby resulting in their acceleration and required prepayment
and
further restrict our ability to make such
payments
and repurchases.
There
is currently no trading market for the notes, and an active liquid trading
market for the notes may not develop or, if it develops, be
maintained.
The
notes
are a new issue of securities. Although the notes are eligible for trading
in
The PORTAL(SM)
Market,
we cannot assure you that an active trading market for the notes will develop
or
be sustained. We do not intend to apply for listing of the notes on any
securities exchange or for quotation of the notes on any automated dealer
quotation system. Although the initial purchasers have advised us that they
intend to make a market in the notes, they are not obligated to do so and may
discontinue any market-making at any time without notice. Accordingly, an active
public trading market may not develop for the notes and, even if one develops,
may not be maintained. If an active public trading market for the notes does
not
develop or is not maintained, the market price and liquidity of the notes is
likely to be adversely affected and holders may not be able to sell their notes
at desired times and prices or at all. If any of the notes are traded after
their purchase, they may trade at a discount from their purchase
price.
The
liquidity of the trading market, if any, and future trading prices of the notes
will depend on many factors, including, among other things, the market price
of
our common shares, prevailing interest rates, our financial condition, results
of operations, business, prospects and credit quality relative to our
competitors, the market for similar securities and the overall securities
market, and may be adversely affected by unfavorable changes in any of these
factors, some of which are beyond our control and others of which would not
affect debt that is not convertible or exchangeable into capital shares.
Historically, the market for convertible or exchangeable debt has been volatile.
Market volatility could materially and adversely affect the notes, regardless
of
our financial condition, results of operations, business, prospects or credit
quality.
The
notes
have a number of features that may adversely affect the value and trading prices
of the notes, including conversion conditions and the lack of financial
covenants. Furthermore, even if the conversion conditions are met, since the
conversion value of the notes is dependent on the closing sale price of our
common shares, volatile or depressed market prices for our common shares is
likely to have a similar effect on the trading prices of the notes. It is
impossible to assure holders of notes that the closing sale price of our common
shares in the future will not have an adverse effect on the trading prices
of
the notes.
Holders
of notes will not be entitled to any rights with respect to our common shares,
but will be subject to all changes made with respect to
them.
Holders
of notes 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 holders of notes
will be subject to all changes affecting our common shares. Holders of notes
will be entitled to the rights afforded our common shares only if and when
our
common shares are delivered to them upon the conversion of their notes. For
example, in the event that an amendment is proposed to our declaration of trust
or bylaws requiring shareholder approval and the record date for determining
the
shareholders of record entitled to vote on the amendment occurs prior to a
holder’s receipt of our common shares upon the conversion of notes, such holder
will not be entitled to vote on the amendment, although such holder will
nevertheless be subject to any changes affecting our common shares.
The
price of our common shares may fluctuate
significantly.
The market price of our common shares may fluctuate significantly in response
to
many factors, including:
| · |
actual
or anticipated changes in operating results or business
prospects;
|
| · |
changes
in financial estimates by securities
analysts;
|
| · |
an
inability to meet or exceed securities analysts’ estimates or
expectations;
|
| · |
conditions
or trends in our industry or
sector;
|
| · |
the
performance of other REITs in our sector and related market
valuations;
|
| · |
announcements
by us or our competitors of significant acquisitions, strategic
partnerships, divestitures, joint ventures or other strategic
initiatives;
|
| · |
hedging
or arbitrage trading activity in our common
shares;
|
| · |
changes
in interest rates;
|
| · |
additions
or departures of key personnel; and
|
| · |
future
sales of our common shares or securities convertible into, or exchangeable
or exercisable for, our common
shares.
|
Holders
who receive our common shares upon the conversion of their notes will be subject
to the risk of volatile and depressed market prices of our common shares. In
addition, many of the factors listed above are beyond our control. These factors
may cause the market price of our common shares to decline, regardless of our
financial condition, results of operations, business or prospects. It is
impossible to assure converting holders that the market price of our common
shares will not fall in the future.
The
conditional conversion feature of the notes may prevent the conversion of notes
prior to August 1, 2025. We also have the right to deliver all cash upon the
conversion of notes and holders may not receive any of our common shares upon
conversion.
The
notes
are convertible prior to the close of business on the second business day prior
to the stated maturity date at any time on or after August 1, 2025 and also
if
the closing sale price of our common shares reaches a specified threshold over
a
specified time period, if the trading price of the notes is below a specified
threshold for a specified time period or if certain specified transactions
or
events occur and then only at prescribed times. See “Description of Notes —
Conversion Rights” in this prospectus. If these conditions are not met, holders
of notes will not be able to convert their notes prior to August 1, 2025 and
therefore may not be able to receive the value of the consideration into which
the notes would otherwise be convertible. In addition, even if such conditions
are met, upon the conversion of notes, we are required to pay the principal
return in cash and, to the extent any net amount exists, we may elect to pay
the
entire net amount in cash. As a result, we are not required to deliver any
of
our common shares upon the conversion of notes. Therefore, holders may not
be
able to obtain any benefits of future ownership of our common shares upon any
such conversion and would be required to incur the related transaction costs
to
purchase our common shares with the cash consideration received upon such
conversion, including common shares that holders may require in order to cover
short positions.
The
premium payable on notes converted in connection with certain change in control
transactions on or before August 4, 2011 may not adequately compensate holders
for the lost option time value of their notes as a result of any such change
in
control.
If
certain transactions that constitute a change in control occur on or prior
to
August 4, 2011, under certain circumstances, we will increase the conversion
rate by a number of additional common shares. This increased conversion rate
will apply only to holders who convert their notes in connection with any such
transaction. The number of the additional common shares will be determined
based
on the date on which the transaction becomes effective and the price paid per
common share in such transaction, as described under “Description of Notes —
Conversion Rights — Make Whole Upon Certain Change in Control Transactions” in
this prospectus. While the number of additional common shares is designed to
compensate holders for the lost option time value of the notes as a result
of
such transaction, the amount of the premium payable is only an approximation
of
such lost value and may not adequately compensate holders for such loss. In
addition, notwithstanding the foregoing, if (i) such transaction occurs after
August 4, 2011, or (ii) the price paid per common share in the transaction
is
less than $39.26 or in excess of $85, the conversion rate will not be increased.
In no event will the number of common shares issuable
upon
the
conversion of notes exceed 25.4712 per $1,000 principal amount of notes, subject
to adjustment under certain circumstances, regardless of when the transaction
becomes effective or the price paid per common share in the
transaction.
The
conversion rate of the notes may not exceed 25.4712 of our common shares per
$1,000 principal amount of notes and may not be adjusted for all dilutive
events.
The
conversion rate of the notes may not exceed 25.4712 of our common shares per
$1,000 principal amount of notes, subject to adjustment in certain cases. As
a
result, holders of the notes will not realize the benefits of an increase to
the
conversion rate otherwise described in this prospectus if such increase,
together with previous increases, would result in the issuance of a number
of
common shares upon conversion in excess of such specified maximum
amount.
The
conversion rate of the notes is subject to adjustment for certain events,
including, but not limited to, certain dividends on our common shares, the
issuance of certain rights, options or warrants to holders of our common shares,
subdivisions or combinations of our common shares, certain distributions of
assets, debt securities, capital shares or cash to holders of our common shares
and certain tender or exchange offers as described under “Description of Notes —
Conversion Rate Adjustments” in this prospectus. The conversion rate will not be
adjusted for other events, such as an issuance of our common shares for cash,
that may adversely affect the trading price of the notes and our common shares.
There can be no assurance that an event will not occur that is adverse to the
interests of the holders of the notes and their value but does not result in
an
adjustment to the conversion rate.
The
definition of a change in control requiring us to repurchase notes is limited
and therefore the market price of the notes may decline if we enter into a
transaction that is not a change in control under the
indenture.
The
term
“change in control,” as used in the notes and the indenture, is limited and may
not include every event that might cause the market price of the notes to
decline. As a result, our obligation to repurchase the notes upon a change
in
control may not preserve the value of the notes in the event of a highly
leveraged transaction, reorganization, merger or similar
transaction.
Upon
conversion of their notes, holders may receive less consideration than expected
because the value of our common shares may decline between the day that the
conversion right is exercised and the day the value of the our common shares
is
determined.
The
conversion value that holders will receive upon conversion of their notes will
be determined on the basis of the closing sale price of our common shares on
the
NYSE for each of the 10 consecutive trading days beginning on the third trading
day following the date the notes are tendered for conversion. Accordingly,
if
the price of our common shares decreases after the conversion right is
exercised, the conversion value will be adversely affected.
The
net share settlement feature of the notes may have adverse
consequences.
The
net
share settlement feature of the notes, as described under “Description of Notes
— Conversion Settlement” in this prospectus, may:
| · |
result
in holders receiving no shares upon conversion or fewer shares relative
to
the conversion value of the notes;
|
| · |
reduce
our liquidity because we will be required to pay the principal return
in
cash and the net amount, if any, may be paid, at our option, in cash
as
well;
|
| · |
delay
holders’ receipt of the proceeds upon conversion;
and
|
| · |
subject
holders to market risk before receiving any shares upon
conversion.
|
Ownership
limitations in our declaration of trust may impair the ability of holders to
convert notes into our common shares.
In
order
to assist us in maintaining our qualification as a REIT for U.S. federal income
tax purposes, no person may own, or be deemed to own by virtue of the
attribution rules of the Internal Revenue Code, more than 9.8% of the issued
and
outstanding shares of any class or series of our shares of beneficial interest,
subject to certain exceptions. Notwithstanding any other provision of the notes,
no holder of notes will be entitled to convert such notes into our common shares
to the extent that receipt of such common shares would cause such holder
(together with such holder’s affiliates) to exceed the ownership limit contained
in the declaration of trust. See “Material Federal Income Tax Considerations —
REIT Qualification” in this prospectus.
U.S.
Federal Income Tax Risks Related to the Notes
Certain
of the possible adjustments to the conversion rate (or the failure to make
certain adjustments to the conversion rate) may result in a deemed distribution
from us to a holder of a note.
The
conversion rate of the notes is subject to adjustment under certain
circumstances. If certain of the possible adjustments to the conversion rate
of
the notes are made, a holder may be deemed to have received a distribution
from
us. See “Material Federal Income Tax Considerations” in this
prospectus.
We
may withhold on payments to non-U.S. holders of notes in a redemption or
conversion of notes for cash and any common shares.
We
may be
required to withhold U.S. federal income tax from any amount paid to non-U.S.
holders of notes in a redemption or conversion of notes for cash and any common
shares. We also intend to withhold U.S. federal income tax from any amount
paid
to non-U.S. holders with respect to deemed distributions from us that may result
in connection with certain adjustments made to the conversion rate of the notes.
See “Material Federal Income Tax Considerations” in this
prospectus.
The
notes have OID for U.S. federal income tax purposes. U.S. holders of notes
will
be required to include OID in income in advance of the receipt of cash
attributable to such income.
The
notes
were issued with original issue discount (“OID”) which, for U.S. federal income
tax purposes, must be included in income under a constant yield accrual method
regardless of the holder’s regular method of tax accounting. Because the notes
were issued with OID, U.S. holders will be required to include OID in income
in
advance of the receipt of cash attributable to such income. See “Material
Federal Income Tax Considerations” in this prospectus.
The
conversion of notes for cash and any of our common shares will be taxable for
holders.
Upon
any
conversion of notes for cash and, at our election, any of our common shares,
a
U.S. holder may recognize gain or loss. See “Material Federal Income Tax
Considerations” in this prospectus.
THE
COMPANY
We
are a
real estate investment trust based in Houston, Texas. We develop, acquire and
own neighborhood and community shopping centers. To a lesser degree, we develop,
acquire and own industrial real estate. We have engaged in these activities
since 1948.
As
of
June 30, 2006, we owned or had an equity interest in operating properties
consisting of approximately 48.3 million square feet of building area.
These properties consist of 295 shopping centers generally in the 100,000 to
400,000 square foot range and 65 industrial projects. Our properties are located
in 21 states that span the southern half of the United States from coast to
coast. Our shopping centers are anchored primarily by supermarkets, drugstores
and other retailers that sell basic necessity-type items. As of June 30, 2006,
we leased to approximately 5,200 different tenants under approximately 6,900
separate leases. The weighted average occupancy rate of all of our improved
properties of June 30, 2006 was 93.7%.
Our
executive offices are located at 2600 Citadel Plaza Drive, Suite 300, Houston,
Texas 77008, and our telephone number is (713) 866-6000. Our website is
www.weingarten.com.
The
information contained on our website is not part of this
prospectus.
USE
OF PROCEEDS
We
will
not receive any of the proceeds from the sale by any selling securityholder
of
the notes or the underlying common shares into which the notes may be
converted.
RATIOS
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED SHARE
DIVIDENDS
Our
ratios of earnings to combined fixed charges and preferred share dividends
for
each of the periods indicated are as follows:
| |
Six
Months
|
|
| |
Ended
|
|
| |
June
30,
|
Year
Ended December 31,
|
| |
2006
|
2005
|
2004
|
2003
|
2002
|
2001
|
|
Ratio
of earnings to combined fixed charges and preferred share
dividends
|
1.82x
|
1.92x
|
1.71x
|
1.77x
|
1.86x
|
1.92x
|
The
ratios of earnings to combined fixed charges and preferred share dividends
were
computed by dividing earnings by fixed charges and preferred share dividends.
For this purpose, earnings consist of income before income taxes, allocation
to
minority interests, income from investments in unconsolidated joint ventures
and
net gain on sales of real estate plus fixed charges, amortization of capitalized
interest, distributed income of investments in unconsolidated joint ventures
less capitalized interest and minority interest in pre-tax income of
subsidiaries that have not incurred fixed charges. Fixed charges consist of
interest expense, capitalized interest, loan amortization costs and preferred
dividends.
DESCRIPTION
OF NOTES
The
following description summarizes certain terms and provisions of the notes,
the
indenture and the registration rights agreement, does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the actual
terms and provisions of the notes, the indenture and the registration rights
agreement, which are incorporated herein by reference. We will provide copies
of
these documents to you upon request.
Capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the notes, the indenture or the registration rights agreement, as
applicable. As used in this section, the terms “we,” “us” and “our” refer to
Weingarten Realty Investors and not to any of its subsidiaries. Unless the
context otherwise requires, the term “interest” includes additional interest, if
any, due under the registration rights agreement.
General
The
notes
were issued pursuant to an indenture, dated as of May 1, 1995, which we have
entered into with The Bank of New York Trust Company, National Association,
as
successor trustee to JPMorgan Chase Bank, National Association, as supplemented
by the first supplemental indenture thereto relating to the notes. We refer
to
the indenture as supplemented by the first supplemental indenture thereto as
the
“indenture.”
The
terms
of the notes include those provisions contained in the notes and the indenture
and those made part of the indenture by reference to the Trust Indenture Act
of
1939, as amended (the “Trust Indenture Act”). The notes are subject to all such
terms, and holders of notes are referred to the notes, the indenture and the
Trust Indenture Act for a statement thereof. Copies of the indenture and the
form of the notes are available for inspection at the corporate trust office
of
the trustee, currently located at 600 Travis, Suite 1150, Houston, Texas
77002.
The
notes
are our senior unsecured obligations and rank equally with each other and with
all of our other senior unsecured indebtedness. However, the notes are
effectively subordinated to our mortgages and other secured indebtedness (to
the
extent of the value of the collateral securing the same) and to all preferred
equity and liabilities, whether secured or unsecured, of our subsidiaries.
As of
June 30, 2006, Weingarten Realty Investors had outstanding, exclusive of its
subsidiaries, $1.5 billion of senior unsecured indebtedness (exclusive of
intercompany debt, trade payables, distributions payable, accrued expenses
and
other liabilities) and $48 million of secured indebtedness. As of June 30,
2006,
our consolidated subsidiaries had outstanding an aggregate of $802.7 million
of
liabilities (exclusive of intercompany debt, trade payables, distributions
payable, accrued expenses and other liabilities) and our share of the total
liabilities (exclusive of intercompany debt, trade payables, distributions
payable, accrued expenses and other liabilities) and preferred equity of the
entities which we account for under the equity method of accounting was
approximately $74.7 million. Our consolidated subsidiaries had no outstanding
preferred equity as of June 30, 2006. The provisions of the indenture governing
the notes do not prohibit us or any of our subsidiaries from incurring
additional indebtedness or issuing preferred equity in the future. See “Risk
Factors — The effective subordination of the notes may limit our ability to
satisfy our obligations under the notes” in this prospectus.
The
notes
were issued in an aggregate principal amount of $575 million. We may, without
the consent of holders of the notes, increase the principal amount of the notes
by issuing additional senior debt securities in the future on the same terms
and
conditions, except for any difference in the issue price and interest accrued
prior to the issue date of the additional senior debt securities, and with
the
same CUSIP number as the notes offered hereby, provided that such additional
senior debt securities constitute part of the same issue as the notes offered
hereby for U.S. federal income tax purposes. The notes offered by this
prospectus and any additional senior debt securities would rank equally and
ratably and would be treated as a single series of debt securities for all
purposes under the indenture.
Holders
may present their notes for conversion at the office of the conversion agent,
present notes for registration of transfer at the office of the registrar for
the notes and present notes for payment at maturity at the office of the paying
agent. We have appointed the trustee as the initial conversion agent, registrar
and paying agent for the notes.
If
any
interest payment date, stated maturity date, redemption date or repurchase
date
is not a business day, the payment otherwise required to be made on such date
will be made on the next succeeding business day without any
additional
payment as a result of such delay. The term “business day” means, with respect
to any note, any day, other than a Saturday, Sunday or any other day on which
banking institutions in The City of New York are authorized or obligated by
law
or executive order to close. All payments will be made in U.S.
dollars.
The
terms
of the notes provide that we are permitted to reduce interest payments and
payments upon a redemption, repurchase or conversion of notes otherwise payable
to a holder for any amounts we are required to withhold by law. For example,
non-U.S. holders of notes may, under some circumstances, be subject to U.S.
federal withholding tax with respect to payments of interest on the notes.
Moreover, holders of convertible or exchangeable debt instruments such as the
notes may, in certain circumstances, be deemed to have received distributions
of
shares if the conversion price of such instruments is adjusted even though
such
holders have not received any cash or property as a result of such adjustments,
which deemed distribution (in the case of a non-U.S. holder) will be subject
to
a U.S. federal withholding tax. See “Material Federal Income Tax Considerations”
in this prospectus. We will set-off any such withholding tax that we are
required to pay against payments of interest payable on the notes and payments
upon a redemption, repurchase or conversion of notes.
The
indenture does not contain any provisions that would necessarily protect holders
of notes if we become involved in a highly leveraged transaction,
reorganization, merger or other similar transaction that adversely affects
us or
them. Furthermore, the notes contain certain features that could deter or
discourage third party acquisition proposals that could be beneficial to
holders.
We
or one
of our affiliates may, to the extent permitted by applicable law, at any time
purchase notes in the open market, by tender at any price or by private
agreement. Any note purchased by us or our affiliates (a) after the date that
is
two years from the latest issuance of the notes may, to the extent permitted
by
applicable law, be reissued or sold or may be surrendered to the trustee for
cancellation or (b) on or prior to the date referred to in clause (a), will
be
surrendered to the trustee for cancellation. Any notes surrendered for
cancellation may not be reissued or resold and will be canceled
promptly.
Interest
Interest
on the notes accrues at the rate of 3.95% per year from and including August
2,
2006 or the most recent interest payment date to which interest has been paid
or
provided for, and will be payable semi-annually in arrears on February 1 and
August 1 of each year, beginning February 1, 2007. The interest so payable
will
be paid to each holder in whose name a note is registered at the close of
business on the January 15 or July 15 (whether or not a business day)
immediately preceding the applicable interest payment date. Interest on the
notes is computed on the basis of a 360-day year consisting of twelve 30-day
months. In addition, we may be required to pay additional interest on the notes
as provided under “— Registration Rights; Additional Interest”
below.
Upon
the
conversion of notes, accrued interest thereon will be deemed to be paid by
delivery of the consideration due to the converting holder upon such conversion,
except that holders of notes at the close of business on a record date will
be
entitled to receive interest payable on the related interest payment date even
if such notes are converted after such record date and on or prior to such
interest payment date. However, unless we have called the notes for redemption
on a redemption date that falls after a record date for an interest payment
date
and on or prior to the related interest payment date, holders who surrender
their notes for conversion after such record date and on or prior to such
interest payment date must pay to the conversion agent upon conversion an amount
in cash equal to the interest payable by us on such interest payment date.
The
foregoing sentence shall not, however, apply to notes with overdue interest
or
additional interest at the time of the conversion, with respect to such overdue
interest or additional interest, as applicable. No other payment or adjustment
will be made for accrued interest on an a converted note.
If
we
redeem the notes, or if a holder surrenders a note for repurchase by us in
accordance with the terms of such note, we will pay accrued and unpaid interest
(including additional interest, if any) to the holder that surrenders such
note
for redemption or repurchase, as the case may be. However, if an interest
payment date falls on or prior to the redemption date or repurchase date for
a
note, we will pay the accrued and unpaid interest (including additional
interest, if any) due on that interest payment date instead to the record holder
of such note at the close of business on the related record date.
Maturity
The
notes
will mature on August 1, 2026 and will be paid against presentation and
surrender thereof at the corporate trust office of the trustee unless (1)
earlier redeemed by us at our option or repurchased by us at a holder’s option
at certain times as described under “— Our Redemption Rights,” “— Repurchase at
Option of Holders on Certain Dates” or “— Repurchase at Option of Holders Upon a
Change in Control” below or (2) converted at a holder’s option as permitted
under “— Conversion Rights” below. The notes are not entitled to the benefits
of, or be subject to, any sinking fund.
Our
Redemption Rights
We
will
not have the right to redeem any notes prior to August 4, 2011, except to
preserve our status as a REIT. If, at any time, we determine it is necessary
to
redeem the notes in order to preserve our status as a REIT, we may redeem the
notes, in whole or in part, for cash equal to 100% of the principal amount
of
the notes plus unpaid interest (including additional interest, if any) accrued
to the redemption date. In addition, on or after August 4, 2011, we will have
the right to redeem the notes in whole or in part, at any time or from time
to
time, for cash equal to 100% of the principal amount of the notes to be redeemed
plus unpaid interest (including additional interest, if any) accrued to the
redemption date. Written notice of redemption must be delivered to holders
of
the notes not less than 30 nor more than 60 days prior to the redemption
date.
If
the
paying agent holds money sufficient to pay the redemption price due on a note
on
the redemption date in accordance with the terms of the indenture, then, on
and
after the redemption date, that note will cease to be outstanding and interest
on that note will cease to accrue, whether or not the holder effects a
book-entry transfer of that note or delivers that note to the paying agent.
Thereafter, all other rights of the holder of that note terminate, other than
the right to receive the redemption price and additional interest, if any,
due
on the redemption date.
If
we
decide to redeem the notes in part, the trustee will select the notes to be
redeemed (in principal amounts of $1,000 and integral multiples thereof) on
a
pro rata basis or such other method it deems fair and appropriate. If the
trustee selects a portion of a note for partial redemption and a holder converts
a portion of the same note, the converted portion will be deemed to be from
the
portion selected for redemption.
In
the
event of any redemption of notes in part, we will not be required
to:
| · |
issue
or register the transfer or exchange of any note during a period
beginning
at the opening of business 15 days before any selection of notes
for
redemption and ending at the close of business on the earliest date
on
which the relevant notice of redemption is deemed to have been given
to
all holders of notes to be so redeemed,
or
|
| · |
register
the transfer or exchange of any note so selected for redemption,
in whole
or in part, except the unredeemed portion of any note being redeemed
in
part.
|
If
we
call notes for redemption, a holder may convert its notes only until the close
of business on the third business day immediately preceding the redemption
date,
unless we fail to pay the redemption price. See “Conversion Rights — Conversion
upon Notice of Redemption” below.
Repurchase
at Option of Holders on Certain Dates
Holders
of notes may require us to repurchase their notes in whole or in part (in
principal amounts of $1,000 and integral multiples thereof) on August 1, 2011,
August 1, 2016 and August 1, 2021 for cash equal to 100% of the principal amount
of the notes to be repurchased plus unpaid interest (including additional
interest, if any) accrued to the repurchase date. To exercise its repurchase
right, a holder must deliver a written repurchase notice to the paying agent,
which initially is the trustee, during the period beginning at any time from
the
opening of business on the date that is 30 days prior to the repurchase date
until the close of business on the third business day prior to the repurchase
date. Our repurchase obligation will be subject to certain additional
conditions.
On
or
before the 30th day prior to each repurchase date, we will provide to the
trustee, any paying agent and to all holders of the notes, and to
beneficial owners as required by applicable law, a notice stating, among
other
things:
| · |
the
name and address of the trustee and any paying
agent;
|
| · |
that
notes with respect to which the holder has delivered a repurchase
notice
may be converted, if otherwise convertible, only if the holder withdraws
the repurchase notice in accordance with the terms of the indenture;
and
|
| · |
the
procedures that holders must follow to require us to repurchase their
notes.
|
We
will
also disseminate a press release through Dow Jones & Company, Inc. or
Bloomberg Business News containing the information specified in such notice
or
publish that information in a newspaper of general circulation in The City
of
New York or on our web site, or through such other public medium as we deem
appropriate at that time.
A
holder’s notice electing to require us to repurchase notes must
specify:
| · |
if
such notes are in certificated form, the certificate number(s) of
the
notes to be repurchased;
|
| · |
the
principal amount of notes to be repurchased, in integral multiples
of
$1,000, provided that the remaining principal amount of notes is
in an
authorized denomination; and
|
| · |
that
the notes are to be repurchased by us pursuant to the applicable
provisions of the indenture and the
notes.
|
Holders
may withdraw any repurchase notice in whole or in part by a written notice
of
withdrawal delivered to the paying agent prior to the close of business on
the
third business day prior to the repurchase date. If a holder of notes delivers
a
repurchase notice, it may not thereafter surrender such notes for conversion
unless such repurchase notice is withdrawn as permitted below. The notice of
withdrawal must specify:
| · |
the
name of the holder;
|
| · |
the
principal amount of notes in respect of which the repurchase notice
is
being withdrawn, which must be an integral multiple of
$1,000;
|
| · |
if
the notes subject to the withdrawal notice are in certificated form,
the
certificate number(s) of all notes subject to the withdrawal notice;
and
|
| · |
the
principal amount of notes, if any, that remains subject to the repurchase
notice, which must be an integral multiple of
$1,000.
|
If
the
notes are in book-entry form, the above notices must also comply with the
appropriate procedures of DTC.
Holders
electing to require us to repurchase notes must either effect book-entry
transfer of notes in book-entry form in compliance with appropriate DTC
procedures or deliver the notes in certificated form, together with necessary
endorsements, to the paying agent prior to the repurchase date to receive
payment of the repurchase price on the repurchase date. We will pay the
repurchase price within two business days after the later of the repurchase
date
or the time of such transfer or delivery of the notes.
If
the
paying agent holds funds sufficient to pay the repurchase price of the notes
on
the repurchase date, then on and after such date:
| · |
such
notes will cease to be outstanding;
|
| · |
interest
on such notes will cease to accrue;
and
|
| · |
all
rights of holders of such notes will terminate except the right to
receive
the repurchase price.
|
Such
will
be the case whether or not book-entry transfer of the notes in book-entry form
is made and whether or not notes in certificated form, together with the
necessary endorsements, are delivered to the paying agent.
No
notes
may be repurchased by us at the option of the holders thereof if there has
occurred and is continuing an event of default with respect to the notes (other
than a default in the payment of the repurchase price for those notes). In
addition, we may also be unable to repurchase the notes in accordance with
their
terms. See “Risk Factors — We may not have the cash necessary to pay the
principal return and any net amount upon the conversion of notes or to
repurchase the notes on specified dates or following certain change in control
transactions.” in this prospectus.
To
the
extent legally required in connection with a repurchase of notes, we will comply
with the provisions of Rule 13e-4 and other tender offer rules under the
Exchange Act then applicable, if any, and will file a Schedule TO or any other
schedule required under the Exchange Act.
We
may
arrange for a third party to purchase any notes for which we receive a valid
repurchase notice that is not withdrawn, in the manner and otherwise in
compliance with the requirements set forth in the terms of the notes applicable
to the offer to repurchase the notes. If a third party purchases any notes
under
these circumstances, then interest will continue to accrue on those notes and
those notes will continue to be outstanding after the repurchase date and will
be fungible with all other notes then outstanding. The third party subsequently
may resell those purchased notes to other investors.
Repurchase
at Option of Holders upon a Change in Control
If
a
change in control occurs at any time on or prior to August 4, 2011, holders
of
notes may require us to repurchase their notes in whole or in part for cash
equal to 100% of the principal amount of the notes to be repurchased plus unpaid
interest (including additional interest, if any) accrued to the repurchase
date.
If a change in control occurs after August 4, 2011, holders of notes will not
have any right to require us to repurchase their notes, except as described
under “— Repurchase at Option of Holders on Certain Dates” above.
Within
20
days after the occurrence of a change in control, we are obligated to give
to
the holders of the notes notice of the change in control and of the repurchase
right arising as a result of the change in control and the repurchase date
(which may be no earlier than 15 days and no later than 30 days after the date
of such notice). We must also deliver a copy of this notice to the trustee.
We
will also disseminate a press release through Dow Jones & Company, Inc. or
Bloomberg Business News announcing the occurrence of the change in control
or
publish that information in a newspaper of general circulation in The City
of
New York, or on our web site, or through such other public medium as we deem
appropriate at that time.
To
exercise its repurchase right, a holder of notes must deliver to the trustee
prior to the close of business on the third business day prior to the repurchase
date written notice of such holder’s exercise of its repurchase right. Such
notice must state:
| · |
if
such notes are in certificated form, the certificate number(s) of
the
notes to be repurchased;
|
| · |
the
portion of the principal amount of notes to be repurchased, in multiples
of $1,000, provided that the remaining principal amount of notes
is in an
authorized denomination; and
|
| · |
that
the notes are to be repurchased by us pursuant to the applicable
provisions of the indenture and the
notes.
|
Holders
may withdraw any repurchase notice in whole or in part by a written notice
of
withdrawal delivered to the paying agent prior to the close of business on
the
third business day prior to the repurchase date. If a holder of notes delivers
a
repurchase notice, it may not thereafter surrender such notes for conversion
unless such repurchase notice is withdrawn as permitted below. The notice
of withdrawal must specify:
| · |
the
name of the holder;
|
| · |
the
principal amount of notes in respect of which the repurchase notice
is
being withdrawn, which must be an integral multiple of
$1,000;
|
| · |
if
the notes subject to the withdrawal notice are in certificated form,
the
certificate number(s) of all notes subject to the withdrawal notice;
and
|
| · |
the
principal amount of notes, if any, that remains subject to the repurchase
notice, which must be an integral multiple of
$1,000.
|
If
the
notes are in book-entry form, the above notices must comply with the appropriate
procedures of DTC.
Holders
electing to require us to repurchase notes must either effect book-entry
transfer of notes in book-entry form in compliance with appropriate DTC
procedures or deliver the notes in certificated form, together with necessary
endorsements, to the paying agent prior to the repurchase date to receive
payment of the repurchase price on the repurchase date. We will pay the
repurchase price within two business days after the later of the repurchase
date
or the time of such transfer or delivery of the notes.
If
the
paying agent holds funds sufficient to pay the repurchase price of the notes
on
the repurchase date, then on and after such date:
| · |
such
notes will cease to be outstanding;
|
| · |
interest
on such notes will cease to accrue;
and
|
| · |
all
rights of holders of such notes will terminate except the right to
receive
the repurchase price.
|
Such
will
be the case whether or not book-entry transfer of the notes in book-entry form
is made and whether or not notes in certificated form, together with the
necessary endorsements, are delivered to the paying agent.
A
“change
in control” will be deemed to have occurred at the time that any of the
following occurs:
| · |
consummation
of any transaction or event (whether by means of a share exchange
or
tender offer applicable to our common shares, a liquidation,
consolidation, recapitalization, reclassification, combination or
merger
of us or a sale, lease or other transfer of all or substantially
all of
our consolidated assets) or a series of related transactions or events
pursuant to which all of our outstanding common shares are exchanged
for,
converted into or constitute solely the right to receive cash, securities
or other property;
|
| · |
any
“person” or “group” (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable), other
than us
or any majority-owned subsidiary of ours or any employee benefit
plan of
ours or such subsidiary, is or becomes the “beneficial owner,” directly or
indirectly, of more than 50% of the total voting power in the aggregate
of
all classes of our shares of beneficial interest then outstanding
entitled
to vote generally in elections of trustees;
or
|
| · |
during
any period of 12 consecutive months after the date of original issuance
of
the notes, persons who at the beginning of such 12 month period
constituted our board of trust managers, together with any new persons
whose election was approved by a vote of a majority of the persons
then
still comprising the board of trust managers who were either members
of
the board of trust managers at the beginning of such period
|
| |
or
whose election, designation or nomination for election was previously
so
approved, cease for any reason to constitute a majority of our
board of
trust managers.
|
However,
even if any of the events specified in the preceding three bullet points
have
occurred, except as indicated
below, a “change in control” will not be deemed to have occurred if
either:
(A)
the
closing sale price of our common shares for any five trading days within (1)
the
period of 10 consecutive trading days ending immediately after the later of
the
change in control or the public announcement of the change in control, in the
case of a change in control relating to an acquisition of capital shares, or
(2)
the period of 10 consecutive trading days ending immediately after the change
in
control, in the case of a change in control relating to a merger, consolidation
or asset sale, equals or exceeds 105% of the conversion price applicable to
the
notes on each of those trading days; provided,
however, that
the
exception to the definition of “change in control” specified in this clause (A)
shall not apply in the context of a “change in control” as described under “—
Conversion Rights — Conversion Upon Specified Transactions” or “— Conversion
Rights — Make Whole Upon Certain Change in Control Transactions” below;
or
(B)
at
least 90% of the consideration (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters’ appraisal rights) in a merger,
consolidation or other transaction otherwise constituting a change in control
consists of common shares (or depositary receipts or other certificates
representing common equity interests) traded on a national securities exchange
or quoted on the Nasdaq National Market or another established automated
over-the-counter trading market in the United States (or will be so traded
or
quoted immediately following such merger, consolidation or other transaction)
and as a result of the merger, consolidation or other transaction the notes
become exchangeable into such shares of common stock (or depositary receipts
or
other certificates representing common equity interests).
For
purposes of these provisions “person” includes any syndicate or group that would
be deemed to be a “person” under Section 13(d)(3) of the Exchange
Act.
The
definition of “change in control” includes a phrase relating to the sale, lease
or other transfer of “all or substantially all” of our consolidated assets.
There is no precise, established definition of the phrase “substantially all”
under applicable law. Accordingly, the ability of a holder of notes to require
us to repurchase its notes as a result of the sale, lease or other transfer
of
less than all of our consolidated assets may be uncertain.
No
notes
may be repurchased by us at the option of the holders thereof if there has
occurred and is continuing an event of default with respect to the notes (other
than a default in the payment of the repurchase price for those notes). In
addition, we may also be unable to repurchase the notes in accordance with
their
terms. See “Risk Factors — We may not have the cash necessary to pay the
principal return and any net amount upon the conversion of notes or to
repurchase the notes on specified dates or following certain change in control
transactions” in this prospectus.
To
the
extent legally required in connection with a repurchase of notes, we will comply
with the provisions of Rule 13e-4 and other tender offer rules under the
Exchange Act then applicable, if any, and will file a Schedule TO or any other
required schedule under the Exchange Act.
We
may
arrange for a third party to purchase any notes for which we receive a valid
repurchase notice that is not withdrawn, in the manner and otherwise in
compliance with the requirements set forth in the terms of the notes applicable
to the offer to repurchase the notes. If a third party purchases any notes
under
these circumstances, then interest will continue to accrue on those notes and
those notes will continue to be outstanding after the repurchase date and will
be fungible with all other notes then outstanding. The third party subsequently
may resell those purchased notes to other investors.
No
Shareholder Rights for Holders of Notes
Holders
of notes, as such, will not have any rights as our shareholders (including,
without limitation, voting rights and rights to receive any dividends or other
distributions on our common shares).
Conversion
Rights
Subject
to the restrictions on ownership of our common shares and the conditions
described below, holders may convert their notes for cash, our common shares
or
a combination of cash and common shares, at our option, initially at a
conversion rate of 20.3770 of our common shares per $1,000 principal amount
of
notes (equivalent to an initial conversion
price of $49.075 per common share). The conversion rate and the equivalent
conversion price in effect at any given time are referred to in this prospectus
as the “conversion rate” and the “conversion price,” respectively, and will be
subject to adjustment as described herein.
Upon
conversion of a note, a holder will not receive any cash payment of interest
(unless such conversion occurs after a record date and on or prior to the
interest payment date to which it relates) and we will not adjust the conversion
rate to account for accrued and unpaid interest. Our delivery to the holder
of
cash and, if applicable, common shares, if any, will be deemed to satisfy our
obligation with respect to notes tendered for conversion. Accordingly, upon
the
conversion of notes, any accrued but unpaid interest will be deemed to be paid
in full, rather than cancelled, extinguished or forfeited.
Holders
of notes at the close of business on a record date for an interest payment
will
receive payment of interest payable on the corresponding interest payment date
notwithstanding the conversion of such notes at any time after the close of
business on the applicable regular record date. Notes tendered for conversion
by
a holder after the close of business on any record date for an interest payment
and on or prior to the corresponding interest payment date must be accompanied
by payment of an amount equal to the interest that the holder is to receive
on
the notes; provided,
however, that
no
such payment will be required to be made (1) if we have specified a redemption
date that is after such record date and on or prior to such interest payment
date or (2) with respect to overdue interest (including additional interest),
if
any overdue interest exists at the time of conversion with respect to such
notes.
If
a
holder converts its notes and we elect to deliver our common shares, we will
pay
any documentary, stamp or similar issue or transfer tax due on the issue of
our
common shares upon the conversion, if any, unless the tax is due because the
holder requests the shares to be issued or delivered to a person other than
the
holder, in which case the holder will pay that tax prior to receipt of such
common shares.
If
a
holder wishes to exercise its conversion right, such holder must deliver an
irrevocable duly completed and manually signed conversion notice, together,
if
the notes are in certificated form, with the certificated security, to the
conversion agent along with appropriate endorsements and transfer documents,
if
required or, if the notes are in book-entry form, comply with appropriate
procedures of DTC, and pay any transfer or similar tax, if required. The
conversion agent will, on the holder’s behalf, convert the notes into cash and
common shares, if any. Holders may obtain copies of the required form of the
conversion notice from the conversion agent.
If
a
holder has already delivered a repurchase notice as described under either
“—
Repurchase at Option of Holders on Certain Dates” or “— Repurchase at Option of
Holders upon a Change in Control” above, with respect to a note, that holder may
not tender that note for conversion until the holder has properly withdrawn
the
repurchase notice.
Upon
surrender of a note for conversion, the holder shall deliver to us cash equal
to
the amount that we are required to deduct and withhold under applicable law
in
connection with such conversion; provided,
however, that
if
the holder does not deliver such cash, we may deduct and withhold from the
consideration otherwise deliverable to such holder the amount required to be
deducted and withheld under applicable law.
Holders
may surrender their notes for conversion for cash, our common shares or a
combination of cash and our common shares, at our option, at the applicable
conversion rate prior to the close of business on the second business day
immediately preceding the stated maturity date at any time on or after August
1,
2025 and also under any of the following circumstances:
| · |
during
any calendar quarter beginning after December 31, 2006 (and only
during
such calendar quarter) if, and only if, the closing sale price of
our
common shares for at least 20 trading days (whether or not consecutive)
in
the period of 30 consecutive trading days ending on the last trading
day
of the preceding
|
| |
calendar
quarter is more than 130% of the conversion price per common share
in
effect on the applicable trading
day;
|
| · |
during
the five consecutive trading-day period following any five consecutive
trading-day period in which the trading price of the notes was
less than
98% of the product of the closing sale price of our common shares
multiplied by the applicable conversion
rate;
|
| · |
if
those notes have been called for redemption, at any time prior to
the
close of business on the third business day prior to the redemption
date;
|
| · |
during
prescribed periods upon the occurrence of specified transactions
discussed
below; or
|
| · |
if
our common shares are not listed on a U.S. national or regional securities
exchange or quoted on the Nasdaq National Market for 30 consecutive
trading days.
|
“Closing
sale price” of our common shares or other capital shares or similar equity
interests or other publicly traded securities 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 closing ask prices) on such date as
reported on the principal United States securities exchange on which our common
shares or such other capital shares or similar equity interests or other
securities are traded or, if our common shares or such other capital shares
or
similar equity interests or other securities are not listed on a United States
national or regional securities exchange, as reported by the Nasdaq National
Market or by the National Quotation Bureau Incorporated or another established
over-the-counter trading market in the United States. The closing sale price
will be determined without regard to after-hours trading or extended market
making. In the absence of the foregoing, we will determine the closing sale
price on such basis as we consider appropriate.
“Trading
day” means a day during which trading in securities generally occurs on the NYSE
or, if our common shares are not then listed on the NYSE, on the principal
other
United States national or regional securities exchange on which our common
shares are then listed or, if our common shares are not then listed on a United
States national or regional securities exchange, on the Nasdaq National Market
or, if our common shares are not then quoted on the Nasdaq National Market,
in
the principal other market on which our common shares are then
traded.
Make
Whole Upon Certain Change in Control Transactions
If
a
change in control occurs on or prior to August 4, 2011 as a result of a
transaction described in the first or second bullets of the definition of change
in control (as set forth above under “— Repurchase at Option of Holders upon a
Change in Control”) and a holder elects to convert its notes in connection with
such change in control as described below under “— Conversion Rights —
Conversion upon Specified Transactions,” we will increase the applicable
conversion rate for the notes surrendered for conversion by a number of
additional common shares (the “additional change in control shares”) as
described below. A conversion of notes will be deemed for these purposes to
be
“in connection with” such a change in control if the notice of conversion of the
notes is received by the conversion agent from and including the effective
date
of the change in control up to and including the 30th business day following
the
effective date of the change in control.
The
number of additional change in control shares will be determined by reference
to
the table below and is based on the date on which such change in control
transaction becomes effective (the “effective date”) and the price (the “share
price”) paid per common share of ours in such transaction. If the holders of our
common shares receive only cash in the change in control transaction, the share
price shall be the cash amount paid per our common share. Otherwise, the share
price shall be the average of the closing sale prices of our common shares
on
the 10 consecutive trading days up to but excluding the effective
date.
The
share
prices set forth in the first row of the table (i.e.,
the
column headers) will be adjusted as of any date on which the conversion rate
of
the notes is adjusted. The adjusted share prices will equal the share prices
applicable immediately prior to such adjustment multiplied by a fraction, the
numerator of which is the conversion rate immediately prior to the adjustment
giving rise to the share price adjustment and the denominator of which is the
conversion rate as so adjusted. In addition, the number of additional change
in
control shares will be subject to
adjustment
in the same manner as the conversion rate
as set forth below under “— Conversion Rate Adjustments.”
The
following table sets forth the share price and number of additional change
in
control shares of ours to be received per $1,000 principal amount of
notes:
|
Share
Price
|
|
Effective
Date
|
$39.26
|
$42.50
|
$45.00
|
$47.50
|
$50.00
|
$55.00
|
$60.00
|
$65.00
|
$70.00
|
$75.00
|
$80.00
|
$85.00
|
|
August
2, 2006
|
5.0942
|
3.8996
|
3.1466
|
2.5348
|
2.0376
|
1.3060
|
0.8240
|
0.5074
|
0.3003
|
0.1659
|
0.0797
|
0.0256
|
|
August
1, 2007
|
5.0942
|
3.8135
|
3.0371
|
2.4108
|
1.9067
|
1.1774
|
0.7106
|
0.4145
|
0.2284
|
0.1131
|
0.0433
|
0.0022
|
|
August
1, 2008
|
5.0942
|
3.6925
|
2.8847
|
2.2400
|
1.7283
|
1.0075
|
0.5671
|
0.3029
|
0.1477
|
0.0586
|
0.0089
|
0.0000
|
|
August
1, 2009
|
5.0942
|
3.5117
|
2.6552
|
1.9830
|
1.4623
|
0.7630
|
0.3718
|
0.1620
|
0.0541
|
0.0008
|
0.0000
|
0.0000
|
|
August
1, 2010
|
5.0942
|
3.2525
|
2.2928
|
1.5603
|
1.0222
|
0.3860
|
0.1147
|
0.0152
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
August
4, 2011
|
5.0942
|
3.1686
|
1.8605
|
0.6901
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
The
exact
share prices and effective dates may not be set forth in the table, in which
case:
(1)
if
the share price is between two share price amounts in the table or the effective
date is between two dates in the table, the additional change in control shares
will be determined by straight-line interpolation between the number of
additional change in control shares set forth for the higher and lower share
price amounts and the two dates, as applicable, based on a 365-day
year;
(2)
if
the share price is in excess of $85 per common share of ours (subject to
adjustment), no additional change in control shares will be issued upon
conversion; and
(3)
if
the share price is less than $39.26 per common share of ours (subject to
adjustment), no additional change in control shares will be issued upon
conversion.
Notwithstanding
the foregoing, in no event will the total number of common shares issuable
upon
conversion exceed 25.4712 per $1,000 principal amount of notes, subject to
adjustment in the same manner as the conversion rate as set forth below under
“—
Conversion Rate Adjustments.”
Our
obligation to deliver the additional change in control shares could be
considered a penalty, in which case the enforceability thereof would be subject
to general principles of reasonableness of economic remedies.
Conversion
upon Satisfaction of Market Price Condition
A
holder
may surrender any of its notes for conversion during any calendar quarter
beginning after December 31, 2006 (and only during such calendar quarter)
if, and only if, the closing sale price of our common shares for at least 20
trading days (whether or not consecutive) in the period of 30 consecutive
trading days ending on the last trading day of the preceding calendar quarter
is
more than 130% of the conversion price per common share in effect on the
applicable trading day. Our board of trust managers will make appropriate
adjustments, in its good faith determination, to account for any adjustment
to
the conversion rate that becomes effective, or any event requiring an adjustment
to the conversion rate where the ex-dividend date of the event occurs, during
that 30 consecutive trading-day period.
Conversion
upon Satisfaction of Trading Price Condition
A
holder
may surrender any of its notes for conversion during the five consecutive
trading-day period following any five consecutive trading-day period in which
the trading price per $1,000 principal amount of notes (as determined following
a reasonable request by a holder of the notes) was less than 98% of the product
of the closing sale price of our common shares multiplied by the applicable
conversion rate.
The
“trading price” of the notes on any date of determination means the average of
the secondary market bid quotations per $1,000 principal amount of notes
obtained by the trustee for a $5,000,000 principal amount of notes at
approximately 3:30 p.m., New York City time, on such determination date from
two
independent nationally
recognized
securities dealers we select, which may include the initial purchasers; provided
that if at least two such bids cannot reasonably be obtained by the trustee,
but
one such bid can reasonably be obtained by the trustee, then one bid shall
be
used. If the trustee cannot reasonably obtain at least one bid for a $5,000,000
principal amount of notes from a nationally recognized securities dealer or,
in
our reasonable judgment, the bid quotations are not indicative of the secondary
market value of the notes, then the trading price per $1,000 principal amount
of
notes will be deemed to be less than 98% of the product of the closing sale
price of our common shares and the conversion rate on such determination
date.
The
trustee shall have no obligation to determine the trading price of the notes
unless we have requested such determination, and we shall have no obligation
to
make such request unless a holder provides us with reasonable evidence that
the
trading price per $1,000 principal amount of notes would be less than 98% of
the
product of the closing sale price of our common shares and the conversion rate,
whereupon we shall instruct the trustee to determine the trading price of the
notes beginning on the next trading day and on each successive trading day
until
the trading price is greater than or equal to 98% of the product of the closing
sale price of our common shares and the conversion rate.
Conversion
upon Notice of Redemption
A
holder
may surrender for conversion any of the notes called for redemption at any
time
prior to the close of business on the third business day prior to the redemption
date, even if the notes are not otherwise convertible at such time. The right
to
convert notes will expire at that time, unless we default in making the payment
due upon redemption. A holder may convert fewer than all of its notes so long
as
the notes converted are an integral multiple of $1,000 principal amount and
the
remaining principal amount of notes is in an authorized denomination. However,
if a holder has already delivered a repurchase notice with respect to a note,
such holder may not surrender that note for conversion until it has properly
withdrawn such notice in accordance with the terms of the notes.
Conversion
upon Specified Transactions
If
we
elect to:
| · |
distribute
to all holders of our common shares certain rights entitling them
to
purchase, for a period expiring within 45 days, our common shares
at less
than the closing sale price of our common shares on the trading day
immediately preceding the declaration date of such distribution;
or
|
| · |
distribute
to all holders of our common shares assets, debt securities or certain
rights to purchase our securities, which distribution has a per share
value exceeding 10% of the closing sale price of our common shares
on the
trading day immediately preceding the declaration date of such
distribution,
|
we
must
notify the holders of notes at least 20 days prior to the ex-dividend date
for
such distribution. Once we have given that notice, holders may surrender their
notes for conversion at any time until the earlier of the close of business
on
the business day immediately prior to the ex-dividend date or an announcement
that such distribution will not take place; provided,
however, that
a
holder may not exercise this conversion right if the holder may participate,
on
an as-converted basis, in the distribution without conversion of the notes.
The
ex-dividend date is the first date upon which a sale of our common shares does
not automatically transfer the right to receive the relevant distribution from
the seller of our common shares to its buyer.
In
addition, if we are a party to a consolidation, merger or binding share exchange
pursuant to which all of our common shares would be exchanged for cash,
securities or other property that is not otherwise a change in control, a holder
may surrender its notes for conversion at any time from and including the date
that is 15 business days prior to the anticipated effective time of the
transaction up to and including five business days after the actual date of
such
transaction. We will notify holders as promptly as practicable following the
date we publicly announce such transaction (but in no event less than 15
business days prior to the anticipated effective time of such
transaction).
If
a
change in control occurs as a result of a transaction described in the first
or
second bullets of the definition of change in control (as set forth under “—
Repurchase at Option of Holders Upon a Change in Control”), a holder will have
the right to convert its notes at any time from and including the effective
date
of such transaction up to and
including
the 30th business day following the
effective date of the transaction, subject to expiration of a holder’s
conversion right with respect to any notes submitted for repurchase. We will
notify holders as promptly as practicable following the date we publicly
announce such change in control (but in no event later than five business days
prior to the effective date of such change in control).
If
we are
a party to a consolidation, merger or binding share exchange pursuant to which
all of our common shares are exchanged for cash, securities or other property,
then at the effective time of the transaction any conversion of notes and the
conversion value will be based on the kind and amount of cash, securities or
other property that a holder of notes would have received if such holder had
converted its notes for our common shares immediately prior to the effective
time of the transaction. For purposes of the foregoing, where a consolidation,
merger or binding share exchange involves a transaction that causes our common
shares to be exchanged into the right to receive more than a single type of
consideration based upon any form of shareholder election, such consideration
will be deemed to be the weighted average of the types and amounts of
consideration received by the holders of our common shares that affirmatively
make such an election. If a change in control occurs on or prior to
August 4, 2011 as a result of a transaction described in the first or
second bullets of the definition thereof, we will adjust the conversion rate
for
notes tendered for conversion in connection with the transaction, as described
above under “— Conversion Rights — Make Whole Upon Certain Change in Control
Transactions.”
Conversion
Upon Delisting of our Common Shares
A
holder
may surrender any of its notes for conversion at any time beginning on the
first
business day after our common shares have ceased to be listed on a United States
national or regional securities exchange or quoted on the Nasdaq National Market
for a 30 consecutive trading-day period.
Conversion
Settlement
Upon
the
conversion of notes, we will deliver, in respect of each $1,000 principal amount
of notes tendered for conversion in accordance with their terms:
| · |
cash
in an amount (the “principal return”) equal to the lesser of (a) the
principal amount of notes surrendered for conversion and (b) the
conversion value, and
|
| · |
if
the conversion value is greater than the principal return, an amount
(the
“net amount”) in cash or our common shares with an aggregate value equal
to the difference between the conversion value and the principal
return as
described in this prospectus.
|
We
may
elect to deliver any portion of the net amount in cash (which we refer to as
the
“net cash amount”) or our common shares, and any portion of the net amount we
elect to deliver in our common shares (the “net shares”) will be the sum of the
daily share amounts (calculated as described below) for each trading day during
the applicable conversion period. Prior to the close of business on the second
trading day following the date on which notes are tendered for conversion,
we
will inform holders of such notes of our election to pay cash for all or a
portion of the net amount and, if applicable, the portion of the net amount
that
will be paid in cash and the portion that will be delivered in the form of
net
shares.
We
will
deliver cash in lieu of any fractional common shares issuable in connection
with
payment of the net shares based upon the average price.
The
“conversion value” for each $1,000 principal amount of notes is equal to (a) the
applicable conversion rate, multiplied by (b) the average price.
The
“applicable conversion period” means the 10 consecutive trading-day period
commencing on the third trading day following the date the notes are tendered
for conversion.
The
“average price” is equal to the average of the closing sale prices of our common
shares for each trading day in the applicable conversion period.
The
“daily share amount” for each $1,000 principal amount of notes and each trading
day in the applicable conversion period is equal to the greater of:
| · |
a
number of our common shares determined by the following
formula:
|
[
(closing
sale price of our common shares on such trading day x applicable conversion
rate) — ($1,000 + net cash amount if any) ]
10
x
closing sale price of our common shares on such trading day
The
conversion value, principal return, net amount, net cash amount and the number
of net shares, as applicable, will be determined by us promptly after the end
of
the applicable conversion period. We will pay the principal return and cash
in
lieu of fractional shares, and deliver net shares or pay the net cash amount,
as
applicable, no later than the third business day following the last trading
day
of the applicable conversion period.
Conversion
Rate Adjustments
The
conversion rate shall be adjusted from time to time as follows:
(i)
If we
issue common shares as a dividend or distribution on our common shares to all
holders of our common shares, or if we effect a share split or share
combination, the conversion rate will be adjusted based on the following
formula:
CR1
= CR0
× OS1/OS0
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate in effect taking such event into account
OS0
= the
number of our common shares outstanding immediately prior to such
event
OS1
= the
number of our common shares outstanding immediately after such
event.
Any
adjustment made pursuant to this paragraph (i) shall become effective on the
date that is immediately after (x) the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution or (y)
the
date on which such split or combination becomes effective, as applicable. If
any
dividend or distribution described in this paragraph (i) is declared but not
so
paid or made, the new conversion rate shall be readjusted to the conversion
rate
that would then be in effect if such dividend or distribution had not been
declared.
(ii)
If
we issue to all holders of our common shares any rights, warrants, options
or
other securities entitling them for a period of not more than 45 days after
the
date of issuance thereof to subscribe for or purchase our common shares, or
if
we issue to all holders of our common shares securities convertible into our
common shares for a period of not more than 45 days after the date of issuance
thereof, in either case at an exercise price per common share or a conversion
price per common share less than the closing sale price of our common shares
on
the business day immediately preceding the time of announcement of such
issuance, the conversion rate will be adjusted based on the following
formula:
CR1
= CR0
× (OS0+X)/(OS0+Y)
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate taking such event into account
OS0
= the
number of our common shares outstanding immediately prior to such
event
X
= the
total number of our common shares issuable pursuant to such rights, warrants,
options, other securities or convertible securities
Y
= the
number of our common shares equal to the quotient of (A) the aggregate price
payable to exercise such rights, warrants, options, other securities or
convertible securities and (B) the average of the closing sale prices of our
common shares for the 10 consecutive trading days prior to the business day
immediately preceding the date of announcement for the issuance such rights,
warrants, options, other securities or convertible securities.
For
purposes of this paragraph (ii), in determining whether any rights, warrants,
options, other securities or convertible securities entitle the holders to
subscribe for or purchase, or exercise a conversion right for, our common shares
at less than the applicable closing sale price of our common shares, and in
determining the aggregate exercise or conversion price payable for such common
shares, there shall be taken into account any consideration we receive for
such
rights, warrants, options, other securities or convertible securities and any
amount payable on exercise or conversion thereof, with the value of such
consideration, if other than cash, to be determined by our board of trust
managers. If any right, warrant, option, other security or convertible security
described in this paragraph (ii) is not exercised or converted prior to the
expiration of the exercisability or convertibility thereof, the new conversion
rate shall be readjusted to the conversion rate that would then be in effect
if
such right, warrant, option, other security or convertible security had not
been
so issued.
(iii)
If
we distribute capital shares, evidences of indebtedness or other assets or
property of ours to all holders of our common shares, excluding:
(A)
dividends, distributions, rights, warrants, options, other securities or
convertible securities referred to in paragraph (i) or (ii) above,
(B)
dividends or distributions paid exclusively in cash, and
(C)
Spin-Offs described below in this paragraph (iii),
then
the
conversion rate will be adjusted based on the following formula:
CR1
= CR0
× SP0/(SP0-FMV)
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate taking such event into account
SP0
= the
average of the closing sale prices of our common shares for the 10 consecutive
trading days prior to the business day immediately preceding the earlier of
the
record date or the ex-dividend date for such distribution
FMV
= the
fair market value (as determined in good faith by our board of trust managers)
of the capital shares, evidences of indebtedness, assets or property distributed
with respect to each outstanding common share of ours on the earlier of the
record date or the ex-dividend date for such distribution.
An
adjustment to the conversion rate made pursuant to the immediately preceding
paragraph shall be made successively whenever any such distribution is made
and
shall become effective on the day immediately after the date fixed for the
determination of holders of our common shares entitled to receive such
distribution.
If
we
distribute to all holders of our common shares capital shares of any class
or
series, or similar equity interest, of or relating to a subsidiary or other
business unit of ours (a “Spin-Off”), the conversion rate in effect immediately
before the close of business on the date fixed for determination of holders
of
our common shares entitled to receive such distribution will be adjusted based
on the following formula
CR1
= CR0
× (FMV0+MP0)/MP0
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate taking such event into account
FMV0
=
the average of the closing sale prices of the capital shares or similar equity
interest distributed to holders of our common shares applicable to one common
share over the first 10 consecutive trading days after the effective date of
the
Spin-Off
MP0
= the
average of the closing sale prices of our common shares over the first 10
consecutive trading days after the effective date of the Spin-Off.
An
adjustment to the conversion rate made pursuant to the immediately preceding
paragraph will occur on the 10th trading day from and including the effective
date of the Spin-Off.
If
any
such dividend or distribution described in this paragraph (iii) 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.
(iv)
If
we pay or make any cash dividend or distribution in respect of any of our
quarterly fiscal periods (without regard to when paid) to all holders of our
common shares in an aggregate amount that, together with other cash dividends
or
distributions paid or made in respect of such quarterly fiscal period, exceeds
the product of $0.465 (the “Reference Dividend”) multiplied by the number of our
common shares outstanding on the record date for such distribution, the
conversion rate will be adjusted based on the following formula:
CR1
= CR0
× SP0/(SP0-C)
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate taking such event into account
SP0
= the
average of the closing sale prices of our common shares for the 10 consecutive
trading days prior to the business day immediately preceding the earlier of
the
record date or the day prior to the ex-dividend date for such
distribution
C
= the
amount in cash per share that we distribute to holders of our common shares
in
respect of such quarterly fiscal period that exceeds the Reference
Dividend.
An
adjustment to the conversion rate made pursuant to this paragraph (iv) shall
become effective on the date immediately after the date fixed for the
determination of holders of our common shares entitled to receive such dividend
or distribution. If any dividend or distribution described in this paragraph
(iv) is declared but not so paid or made, the new conversion rate shall be
readjusted to the conversion rate that would then be in effect if such dividend
or distribution had not been declared.
The
Reference Dividend shall be subject to adjustment on account of any of the
events set forth in paragraphs (i), (ii) and (iii) above and paragraph (v)
below. Any such adjustment will be effected by multiplying the Reference
Dividend by a fraction, the numerator of which will equal the conversion rate
in
effect immediately prior to the adjustment on account of such event and the
denominator of which will equal the conversion rate as adjusted.
(v)
If we
or any of our subsidiaries make a payment in respect of a tender offer or
exchange offer for our common
shares to the extent that the cash and value of any other consideration included
in the payment per common share exceeds the closing sale price per common share
on the trading day next succeeding the last date on which tenders or exchanges
may be made pursuant to such tender or exchange offer (the “Expiration Time”),
the conversion rate will be adjusted based on the following
formula:
CR1
= CR0
× (AC + (SP1 x OS1))/(SP1 X OS0)
where
CR0
= the
conversion rate in effect immediately prior to the adjustment relating to such
event
CR1
= the
new conversion rate taking such event into account
AC
= the
aggregate value of all cash and any other consideration (as determined by our
board of trust managers) paid or payable for our common 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 such tender or
exchange offer expires (after giving effect to the purchase or exchange of
shares pursuant to such tender or exchange offer)
SP1
= the
average of the closing sale prices of our common shares for the 10 consecutive
trading days commencing on the trading day next succeeding the date such tender
or exchange offer expires.
If
the
application of the foregoing formula would result in a decrease in the
conversion rate, no adjustment to the conversion rate will be made.
Any
adjustment to the conversion rate made pursuant to this paragraph (v) shall
become effective on the date immediately following the Expiration Time. If
we or
one of our subsidiaries is obligated to purchase our common shares pursuant
to
any such tender or exchange offer but is permanently prevented by applicable
law
from effecting any such purchase or all such purchases are rescinded, the new
conversion rate shall be readjusted to be the conversion rate that would be
in
effect if such tender or exchange offer had not been made.
(vi)
Notwithstanding the foregoing, in the event of an adjustment to the conversion
rate pursuant to paragraphs (iv) or (v), in no event will the conversion rate
exceed 25.4712 per $1,000 principal amount of notes, subject to adjustment
pursuant to paragraphs (i), (ii) and (iii).
(vii)
If
we have in effect a rights plan while any notes remain outstanding, holders
of
notes will receive, upon a conversion of notes in respect of which we have
elected to deliver net shares, in addition to such net shares, rights under
our
shareholder rights agreement unless, prior to such 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 our rights plan have separated
from our common shares in accordance with the provisions of the applicable
shareholder rights agreement so that holders of notes would not be entitled
to
receive any rights in respect of our common shares that
we
elect to deliver as net shares upon conversion of
notes, the conversion rate will be adjusted at the time of separation as if
we
had distributed to all holders of our common shares capital shares, evidences
of
indebtedness or other assets or property pursuant to paragraph (iii) above,
subject to readjustment upon the subsequent expiration, termination or
redemption of the rights. In lieu of any such adjustment, we may amend such
applicable shareholder rights agreement to provide that upon the conversion
of
notes the holders will receive, in addition to our common shares that we elect
to deliver as net shares upon such conversion, the rights which would have
attached to such common shares if the rights had not become separated from
our
common shares under such applicable shareholder rights agreement. To the extent
that we adopt any future shareholder rights agreement, upon the conversion
of
notes in respect of which we elect to deliver our common shares as net shares,
a
holder of notes shall receive, in addition to our common shares, the rights
under the future shareholder rights agreement whether or not the rights have
separated from our common shares at the time of conversion and no adjustment
will be made in accordance with paragraph (iii) or otherwise.
In
addition to the adjustments pursuant to paragraphs (i) through (vii) above,
we
may increase the conversion rate in order to avoid or diminish any income tax
to
holders of our common shares resulting from any dividend or distribution of
capital shares (or rights to acquire our common shares) or from any event
treated as such for income tax purposes. We may also, from time to time, to
the
extent permitted by applicable law, increase the conversion rate by any amount
for any period if we have determined that such increase would be in our best
interests. If we make such determination, it will be conclusive and we will
mail
to holders of the notes a notice of the increased conversion rate and the period
during which it will be in effect at least 15 days prior to the date the
increased conversion rate takes effect in accordance with applicable
law.
We
will
not make any adjustment to the conversion rate if holders of the notes are
permitted to participate, on an as-converted basis, in the transactions
described above.
The
applicable conversion rate will not be adjusted upon certain events, including
but not limited to:
| · |
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 and the investment of additional optional amounts
in our
common shares under any plan;
|
| · |
the
issuance of any of our common shares or options or rights to purchase
those shares pursuant to any present or future employee, trustee
or
consultant benefit plan, employee agreement or arrangement or program
of
ours;
|
| · |
the
issuance of any of our common shares pursuant to any option, warrant,
right, or exercisable, exchangeable or convertible security outstanding
as
of the date the notes were first
issued;
|
| · |
a
change in the par value of our common
shares;
|
| · |
accumulated
and unpaid dividends or distributions;
and
|
| · |
as
a result of a tender offer solely to holders of fewer than 100 of
our
common shares.
|
No
adjustment in the conversion price will be required unless the adjustment would
require an increase or decrease of at least 1% of the conversion price. If
the
adjustment is not made because the adjustment does not change the conversion
price by at least 1%, then the adjustment that is not made will be carried
forward and taken into account in any future adjustment. All required
calculations will be made to the nearest cent or 1/1000th of a share, as the
case may be. Notwithstanding the foregoing, if the notes are called for
redemption, all adjustments not previously made will be made on the applicable
redemption date.
If
certain of the possible adjustments to the conversion price of the notes are
made, a holder may be deemed to have received a distribution with respect to
our
shares even though such holder has not received any cash or property as a result
of such adjustments. We intend to withhold federal income tax (in the case
of a
non-U.S. holder) with respect to any deemed distribution from us, from cash
payments of interest and payments in redemption, repurchase
or
conversion of the notes. See “Material Federal Income
Tax Considerations” in this prospectus.
Ownership
Limit
In
order
to assist us in maintaining our qualification as a REIT for U.S. federal income
tax purposes, no person may own, or be deemed to own by virtue of the
attribution rules of the Internal Revenue Code, more than 9.8% of the issued
and
outstanding shares of any class or series of our shares of beneficial interest,
subject to certain exceptions. Notwithstanding any other provision of the notes,
no holder of notes will be entitled to convert such notes for our common shares
to the extent that receipt of such common shares would cause such holder
(together with such holder’s affiliates) to exceed the ownership limit contained
in our declaration of trust. See “Material Federal Income Tax Considerations —
REIT Qualification” in this prospectus.
Calculations
in Respect of the Notes
Except
as
explicitly specified otherwise herein, we will be responsible for making all
calculations required under the notes. These calculations include, but are
not
limited to, determinations of the conversion price and conversion rate
applicable to the notes. We will make all these calculations in good faith
and,
absent manifest error, our calculations will be final and binding on holders
of
the notes. We will provide a schedule of our calculations to the trustee, and
the trustee is entitled to rely upon the accuracy of our calculations without
independent verification. The trustee will forward our calculations to any
holder of notes upon request within 20 business days of the effective date
of
any adjustment.
Merger,
Consolidation or Sale
We
may
consolidate with, or sell, lease or convey all or substantially all of our
assets to, or merge with or into, any other corporation, limited liability
company, association, partnership, real estate investment trust, company or
business trust, provided that:
| · |
either
we are the continuing entity, or the successor entity (if other than
us)
formed by or resulting from any consolidation or merger or which
shall
have received the transfer of those assets shall expressly assume
payment
of the principal of and interest (including additional interest,
if any)
on the notes and the due and punctual performance and observance
of all of
the covenants and conditions contained in the
indenture;
|
| · |
if
as a result of such transaction the notes become exchangeable into
common
stock or other securities issued by a third party, such third party
assumes or fully and unconditionally guarantees all obligations under
the
notes and the indenture;
|
| · |
immediately
after giving effect to the transaction and treating any indebtedness
that
becomes our obligation or the obligation of any subsidiary as a result
thereof as having been incurred by us or that subsidiary at the time
of
the transaction, no event of default under the indenture, and no
event
which, after notice or the lapse of time, or both, would become an
event
of default, shall have occurred and be continuing;
and
|
| · |
an
officers' certificate and legal opinion covering those conditions
shall be
delivered to the trustee.
|
Events
of Default, Notice and Waiver
The
following events are “events of default” with respect to the notes:
| · |
failure
for 30 days to pay interest (including additional interest, if any)
due
and payable on the notes;
|
| · |
failure
to pay principal of any of the notes when the same becomes due and
payable, whether on the stated maturity date or any earlier date
of
redemption or repurchase or
otherwise;
|
| · |
default
in the delivery when due of the conversion value, on the terms set
forth
in the indenture and the notes, upon exercise of a holder’s conversion
right in accordance with the indenture and the continuation of such
default for 10 days;
|
| · |
our
failure to provide notice of the occurrence of a change in control
when
required under the indenture;
|
| · |
failure
to perform any other covenants contained in the indenture (other
than a
covenant expressly made inapplicable to the notes or added to the
indenture solely for the benefit of a another series of debt securities),
which continues for 60 days after written notice as provided in the
indenture;
|
| · |
default
under any of our other debt instruments with an aggregate principal
amount
outstanding of at least $10,000,000;
and
|
| · |
events
of bankruptcy, insolvency or reorganization, or court appointment
of a
receiver, liquidator or trustee.
|
If
an
event of default occurs and continues, the trustee or the holders of at least
25% of the total principal amount of the notes may declare the entire principal
of the notes due and payable immediately. If an event of default occurs due
to
bankruptcy, insolvency or reorganization or court appointment of a receiver,
liquidator or trustee, no advance notice of acceleration is required;
acceleration is automatic.
The
indenture provides that, if an event of default has occurred, the trustee is
to
use the degree of care a prudent person would use in the conduct of his own
affairs. Subject to those provisions, the trustee is under no obligation to
exercise any of its rights or powers under the indenture at the request of
any
of the holders of the debt securities of a series unless they have furnished
to
the trustee reasonable security or indemnity.
The
indenture provides that, after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
trustee, the holders of a majority in aggregate principal amount of the notes,
by written notice to us and the trustee, may rescind and annul such declaration
if we have paid, or deposited with the trustee a sum sufficient to
pay:
| · |
all
overdue interest (including additional interest, if any) on the
notes;
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| · |
the
principal of and, if any, on any of the notes which have become due
other
than by such declaration of acceleration, plus interest (including
additional interest, if any) thereon at the rate borne by the
notes;
|
| · |
to
the extent that payment of such interest is lawful, interest upon
overdue
interest at the rate borne by the
notes;
|
| · |
all
sums paid or advanced by the trustee under the indenture and the
reasonable compensation, expenses, disbursements and advances of
the
trustee, its agents and counsel;
and
|
| · |
all
events of default, other than the non-payment of principal of the
notes
which have become due solely by such declaration of acceleration,
have
been cured or waived.
|
The
trustee is required to give notice to the holders of notes within 90 days of
a
default under the indenture unless such default shall have been cured or waived;
provided, however, that the trustee may withhold notice to the holders of the
notes of any default with respect to the notes (except a default in the payment
of the principal of or interest (including additional interest, if any) on
any
notes) if the trustee considers such withholding to be in the interest of the
holders.
The
indenture also provides that the holders of a majority in principal amount
of
the outstanding notes may waive any past default and its consequences, except
a
default:
| · |
in
the payment of the principal of, or interest (including additional
interest, if any) on, the notes;
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| · |
our
failure to convert any note in accordance with the provisions of
the
indenture; or
|
| · |
in
respect of a covenant or provision contained in the indenture that
cannot
be modified or amended without the consent of the holder of each
note
affected thereby.
|
The
indenture limits the right of holders of the notes to institute legal
proceedings. No holder of the notes will have the right to bring a claim under
the indenture unless:
| · |
the
holder has given written notice to the trustee of default under the
terms
of the notes;
|
| · |
the
holders of not less than 25% of the aggregate principal amount of
the
notes shall have made a written request to the trustee to bring the
claim
and furnished the trustee reasonable indemnification as it may
require;
|
| · |
the
trustee has not commenced an action within 60 days of receipt of
the
notice, request and offer of indemnity;
and
|
| · |
no
direction inconsistent with a request has been given to the trustee
by the
holders of not less than a majority of the aggregate principal amount
of
the notes.
|
This
provision will not prevent, however, any holder of the notes from instituting
suit for the enforcement of payment of the principal of, and interest (including
additional interest, if any) on, the notes or the delivery of the conversion
value as required by the indenture upon the conversion of notes, at the
respective due dates thereof.
The
holders of a majority in aggregate principal amount of the notes may direct
the
time, method and place of conducting any proceeding for any remedy available
to
the trustee or exercising any power conferred on the trustee with respect to
the
notes; provided, however, that
| · |
the
direction does not conflict with any rule of law or the
indenture,
|
| · |
the
trustee may take any action it deems proper and which is consistent
with
the direction of the holders; and
|
| · |
the
trustee is not required to take any action that would unduly prejudice
the
holders of the notes not taking part in the action or would impose
personal liability on the trustee.
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Within
120 days after the close of each fiscal year, we must deliver to the trustee
a
certificate, signed by one of several specified officers, stating whether or
not
such officer has knowledge of any default applicable to the notes under the
indenture and, if so, specifying each such default and the nature and status
thereof.
Modification
of the Indenture
In
order
to change or modify the indenture, we must obtain the consent of holders of
a
majority in principal amount of all outstanding debt securities issued
thereunder (voting as a single class) that are affected thereby. The consent
of
holders of a majority in principal amount of the affected debt securities is
required to waive compliance by us with specific covenants in the indenture.
We
must obtain the consent of each holder of the notes affected by a
change:
| · |
to
extend the maturity, or to reduce the principal, redemption premium
or
interest rate;
|
| · |
make
any change that impairs or adversely affects the rights of a holder
to
convert notes in accordance with the
indenture;
|
| · |
impair
the right to institute suit for the enforcement of any payment on
or with
respect to notes or the delivery of the conversion value as required
by
the indenture upon the conversion of
notes;
|
| · |
change
the place of payment, or the coin or currency, for
payment;
|
| · |
limit
the right to sue for payment; or
|
| · |
reduce
the level of consents needed to approve a change to the indenture;
or
modify any of the foregoing provisions or any of the provisions relating
to the waiver of certain past defaults or certain covenants, except
to
increase the required level of consents needed to approve a change
to the
indenture.
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A
note
shall be deemed outstanding if it has been authenticated and delivered under
the
indenture unless, among other things, such note has matured or been canceled,
converted, redeemed or repurchased.
The
indenture provides that the holders of not less than a majority in principal
amount of outstanding notes have the right to waive compliance by us with
specified covenants in the indenture in respect of the notes.
Modifications
and amendments of the indenture will be permitted to be made by us and the
trustee without the consent of any holder, when authorized by our trust
managers, at any time, in a form satisfactory to the trustee, for certain
purposes, including the following:
| · |
evidences
the succession of another person to us and the assumption by any
such
successor of any covenants under the indenture and in the
notes;
|
| · |
adds
to our covenants for the benefit of the holders of the notes or surrenders
any of our rights or powers;
|
| · |
adds
any additional event of default for the benefit of the holders of
all the
notes;
|
| · |
adds
or changes any provisions to the extent necessary to provide that
bearer
securities may be registrable as to principal, to change or eliminate
any
restrictions on the payment of principal of or any premium or interest
on
bearer securities, to permit bearer securities to be issued in exchange
for registered securities or bearer securities of other authorized
denominations, or to permit or facilitate the issuance of securities
in
uncertificated form;
|
| · |
changes
or eliminates any provision affecting only debt securities not yet
issued;
|
| · |
establishes
the form or terms of debt securities of any series not yet
issued;
|
| · |
evidences
and provides for successor trustees or adds or changes any provisions
of
the indenture to the extent necessary to permit or facilitate the
appointment of a separate trustee or trustees for specific series
of debt
securities;
|
| · |
to
provide for conversion rights of holders of notes if any reclassification
or change of our common shares or any consolidation, merger or sale
of all
or substantially all of our property or assets occurs;
|
| · |
cures
any ambiguity, corrects or supplements any provisions which may be
defective or inconsistent with any other provision, or makes any
other
provisions with respect to matters or questions arising under the
indenture which shall not be inconsistent with the provisions of
the
indenture; provided, however, that no such modification or amendment
may
adversely affect the interest of holders of the notes;
or
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| · |
supplements
any provision of the indenture to such extent as shall be necessary
to
permit the facilitation of defeasance and discharge of any of the
notes;
provided, however, that any such action may not adversely affect
the
interest of holders of notes in any material
respect.
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The
indenture contains provisions for convening meetings of the holders of the
notes. A meeting will be permitted to be called at any time by the trustee,
and
also, upon request, by us or the holders of at least 10% in
principal
amount of the outstanding notes, in any
such case upon notice given as provided in the indenture. Except for any consent
that must be given by the holder of each note affected by specified
modifications and amendments of the indenture, any resolution presented at
a
meeting or adjourned meeting duly reconvened at which a quorum is present will
be permitted to be adopted by the affirmative vote of the holders entitled
to
vote a majority in aggregate principal amount of the outstanding debt securities
represented at that meeting; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given
or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding debt securities may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by
the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding debt securities. Any resolution passed or decision taken
at
any meeting of holders of debt securities, including the notes, duly held in
accordance with the indenture will be binding on all holders of such debt
securities, whether or not present or represented at the meeting. The quorum
at
any meeting of holders of the debt securities, including the notes, called
to
adopt a resolution, and at any reconvened meeting, will be persons holding
or
representing a majority in principal amount of such outstanding debt securities;
provided, however,
that if any action is to be taken at such meeting with respect to a consent
or
waiver which may be given by the holders of not less than a specified percentage
in principal amount of the outstanding debt securities, the persons holding
or
representing such specified percentage in principal amount of such outstanding
debt securities will constitute a quorum.
Notwithstanding
the foregoing provisions, if any action is to be taken at a meeting of holders
of the notes with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the indenture expressly provides
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding notes affected thereby, or of the holders
of
such series and one or more additional series:
| · |
there
shall be no minimum quorum requirement for such meeting;
and
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| · |
the
principal amount of such outstanding notes that vote in favor of
such
request, demand, authorization, direction, notice, consent, waiver
or
other action shall be taken into account in determining whether such
request, demand, authorization, direction, notice, consent, waiver
or
other action has been made, given or taken under the
indenture.
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Discharge,
Defeasance and Covenant Defeasance
We
may
satisfy and discharge our obligations under the indenture by delivering to
the
trustee for cancellation all outstanding notes or by depositing with the
trustee, the paying agent or the exchange agent, if applicable, after the notes
have become due and payable, whether on the stated maturity date, any redemption
date or any repurchase date, or upon exchange or otherwise, cash or common
shares (as applicable under the terms of the indenture) sufficient to pay all
of
the outstanding notes and paying all other sums payable under the
indenture.
Rule
144A Information
If
at any
time we are not subject to the reporting requirements of the Exchange Act,
we
will promptly furnish to the holders, beneficial owners and prospective
purchasers of the notes or underlying common shares, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) of the
Securities Act to facilitate the resale of those notes or shares pursuant to
Rule 144A.
Provision
of Financial Information
We
will
file with the trustee, within 15 days after we are required to file the same
with the SEC, copies of the annual reports and of the information, documents
and
other reports (or copies of such portions of any of the foregoing as the SEC
may
prescribe) which we are required to file with the SEC pursuant to Section 13
or
Section 15(d) of the Exchange Act. If we are not required to file
information, documents or reports pursuant to either of those sections, then
we
will file with the trustee and the SEC such reports as may be prescribed by
the
SEC at such time.
Governing
Law
The
indenture and the notes are governed by, and construed in accordance with,
the
laws of the State of New York.
Trustee
The
Bank
of New York Trust Company, National Association, is the trustee, as successor
trustee to JPMorgan Chase Bank, National Association and initially the
registrar, conversion agent, bid solicitation agent and paying agent. If an
event of default occurs and is continuing, the trustee will be required to
use
the degree of care and skill of a prudent man in the conduct of his own affairs.
The trustee will become obligated to exercise any of its powers under the
indenture at the request of any of the holders of any notes only after those
holders have offered the trustee indemnity satisfactory to it.
If
the
trustee becomes one of our creditors, it will be subject to limitations on
its
rights to obtain payment of claims
or
to realize on some property received for any such claim, as security or
otherwise. The trustee is permitted to engage in other transactions with us.
If,
however, it acquires any conflicting interest, it must eliminate that conflict
or resign.
Book-Entry
System
The
notes
were issued in the form of two fully-registered global notes in book-entry
form,
deposited with, or on behalf of, DTC and registered in the name of DTC’s
nominee, Cede & Co. Except as set forth below, the global notes may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of
DTC
to DTC or another nominee of DTC or by DTC or any such nominee to a successor
of
DTC or a nominee of such successor.
So
long
as DTC or its nominee is the registered owner of a global note, DTC or its
nominee, as the case may be, will be considered the sole holder of the notes
represented by such global note for all purposes under the indenture and the
beneficial owners of the notes will be entitled only to those rights and
benefits afforded to them in accordance with DTC’s regular operating procedures.
Upon specified written instructions of a participant in DTC, DTC will have
its
nominee assist participants in the exercise of certain holders’ rights, such as
demand for acceleration of maturity or an instruction to the trustee. Except
as
provided below, owners of beneficial interests in a global note will not be
entitled to have notes registered in their names, will not receive or be
entitled to receive physical delivery of notes in certificated form and will
not
be considered the registered owners or holders thereof under the
indenture.
If
(i)
DTC is at any time unwilling or unable to continue as depositary or if at any
time DTC ceases to be a clearing agency registered under the Exchange Act and
a
successor depositary is not appointed by us within 90 days, (ii) an Event of
Default under the indenture relating to the notes has occurred and is continuing
or (iii) we, in our sole discretion, determine at any time that the notes shall
no longer be represented by a global note, we will issue individual notes in
certificated form of the same series and like tenor and in the applicable
principal amount in exchange for the notes represented by the global note.
In
any such instance, an owner of a beneficial interest in a global note will
be
entitled to physical delivery of individual notes in certificated form of the
same series and like tenor, equal in principal amount to such beneficial
interest and to have the notes in certificated form registered in its name.
Notes so issued in certificated form will be issued in denominations of $1,000
or any integral multiple thereof and will be issued in registered form only,
without coupons.
The
following is based on information furnished by DTC:
DTC
will
act as securities depositary for the notes. The notes were issued as
fully-registered notes registered in the name of Cede & Co. (DTC’s
partnership nominee) or such other name as may be requested by an authorized
representative of DTC.
DTC,
the
world’s largest depositary, is a limited-purpose trust company organized under
the New York Banking Law, a “banking organization” within the meaning of the New
York Banking Law, 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. DTC holds and provides asset servicing for
over
2 million issues of U.S. and non-U.S. equity issues, corporate and municipal
debt issues and money market instruments from over 85 countries that DTC’s
direct participants deposit with DTC.
DTC
also
facilitates the post-trade settlement among direct participants of sales and
other securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between direct participants’
accounts. This eliminates the need for physical movement of securities
certificates. Direct participants include both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of
direct participants of DTC and members of the National Securities Clearing
Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation, as well as by The NYSE,
the American Stock Exchange LLC and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies and
clearing corporations that clear through or maintain a custodial relationship
with a direct participant, either directly or indirectly. DTC has Standard
&
Poor’s
highest rating: AAA. The DTC rules applicable to its participants are on file
with the SEC. More information about DTC can be found at www.dtcc.com.
Purchases
of the notes under the DTC system must be made by or through direct
participants, which will receive a credit for the notes on DTC’s records. The
beneficial interest of each actual purchaser of each note is in turn to be
recorded on the direct and indirect participants’ records. Beneficial owners
will not receive written confirmation from DTC 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 beneficial interests in the notes are to be
accomplished by entries made on the books of direct and indirect participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their beneficial interests in notes, except in the
event that use of the book-entry system for the notes is discontinued. The
laws
of some states require that certain persons take physical delivery in definitive
form of securities which they own. Such limits and such laws may impair the
ability of such persons to own, transfer or pledge beneficial interests in
a
global note.
To
facilitate subsequent transfers, all notes deposited by direct participants
with
DTC will be registered in the name of DTC’s partnership nominee, Cede & Co.
or such other name as may be requested by an authorized representative of DTC.
The deposit of the notes with DTC and their registration in the name of Cede
& Co. or such other nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the notes;
DTC’s records reflect only the identity of the direct participants to whose
accounts the notes will be 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.
Conveyance
of notices and other communications by DTC to direct participants, by direct
participants to indirect participants, and by direct participants and indirect
participants to beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Beneficial owners of the notes may wish to take certain steps
to
augment the transmission to them of notices of significant events with respect
to the notes, such as redemption, tenders, defaults, and proposed amendments
to
the security documents. For example, beneficial owners of the notes may wish
to
ascertain that the nominee holding the notes for their benefit has agreed to
obtain and transmit notices to beneficial owners. In the alternative, beneficial
owners may wish to provide their names and addresses to the registrar of the
notes and request that copies of the notices be provided to them directly.
Any
such request may or may not be successful.
Neither
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to the notes unless authorized by a direct participant in accordance
with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to
us as soon as possible after the regular record date. The Omnibus Proxy assigns
Cede & Co.’s consenting or voting rights to those direct participants to
whose accounts the notes are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
We
will
pay principal of and interest on the notes in same-day funds to the trustee
and
from the trustee to DTC, or such other nominee as may be requested by an
authorized representative of DTC. DTC’s practice is to credit
direct
participants’ accounts on the applicable
payment date in accordance with their respective holdings shown on DTC’s records
upon DTC’s receipt of funds and corresponding detail information. Payments by
participants to beneficial owners will be governed by standing instructions
and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in “street name,” and will be the
responsibility of these participants and not of us, the trustee, DTC, or any
other party, subject to any statutory or regulatory requirements that may be
in
effect from time to time. Payment of principal and interest to Cede & Co.,
or such other nominee as may be requested by an authorized representative of
DTC, is the responsibility of us or the trustee, disbursement of such payments
to direct participants is the responsibility of DTC, and disbursement of such
payments to the beneficial owners is the responsibility of the direct or
indirect participants.
We
will
send any redemption notices to DTC. If less than all of the notes are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of
each direct participant in such issue to be redeemed.
A
beneficial owner of notes shall give notice to elect to have its notes purchased
or tendered, through its participant, to the conversion agent and shall effect
delivery of such notes by causing the direct participant to transfer
the participant’s interest in notes, on DTC’s records, to the conversion agent.
The requirement for physical delivery of notes in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the notes are transferred by direct participants on DTC’s records and
followed by a book-entry credit of tendered notes to the conversion agent’s DTC
account.
DTC
may
discontinue providing its services as securities depositary for the notes at
any
time by giving us reasonable notice. Under such circumstances, if a successor
securities depositary is not obtained, we will print and deliver certificated
notes. We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depositary). In that event, we will
print
and deliver certificated notes.
We,
the
Initial Purchasers and the trustee will have no responsibility or liability
for
any aspect of the records relating to or payments made on account of the
beneficial interests in a global note, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
The
information in this section concerning DTC and DTC’s system has been obtained
from sources that we believe to be reliable, but we take no responsibility
for
its accuracy.
Registration
Rights;
Additional Interest
In
connection with the initial private placement of the notes, we entered into
a
registration rights agreement with the Initial Purchasers for the benefit of
the
holders of the notes. Pursuant to the registration rights agreement, we
agreed:
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to
file with the SEC or otherwise have on file with the SEC, by the
90th day
after the date we first issued the notes, a shelf registration statement
to cover resales of registrable securities (as described below) by
the
holders who satisfy certain conditions and provide the information
we
describe below for use with the shelf registration
statement;
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to
use our reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act, as promptly as
practicable but in any event by the 180th day after the date we first
issue the notes or otherwise make available for use by selling
securityholders an effective shelf registration statement no later
than
such date; and
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to
use our reasonable best efforts to keep the shelf registration statement
continuously effective under the Securities Act, until there are
no
registrable securities outstanding.
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However,
the registration rights agreement permits us to prohibit offers and sales of
registrable securities pursuant to the shelf registration statement for a period
not to exceed an aggregate of 30 days in any three-month period and not to
exceed an aggregate of 90 days in any 12-month period, under certain
circumstances and subject to certain conditions. We refer to any period during
which we may prohibit offers and sales as a “suspension period.” We need not
specify the nature of the event giving rise to a suspension in any notice to
holders of the registrable securities of
the
existence of such a suspension.
In
addition, if we deem it necessary to file a post-effective amendment to the
registration statement in order to make changes to the information in the
prospectus regarding the selling holders or the plan of distribution, we may
suspend sales under the registration statement until the date on which the
post-effective amendment is declared effective by the SEC; provided, however,
that any days in any such suspension period shall count towards the 30 and
90
day periods referred to in the previous paragraph.
“Registrable
securities” means each note and any common share issued upon conversion of the
notes until the earlier of:
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the
date the notes and any such common shares have been effectively registered
under the Securities Act and disposed of in accordance with the shelf
registration statement; and
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the
date when the notes or any such common shares are eligible for sale
by a
holder that is not an affiliate of ours pursuant to Rule 144(k) under
the
Securities Act or any similar provision then in
effect.
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We
have
filed the registration statement of which this prospectus is a part to meet
our
obligations under the registration rights agreement.
Holders
of registrable securities must deliver to us certain information to be used
in
connection with, and to be named as selling securityholders in, the shelf
registration statement in order to have their registrable securities included
in
the shelf registration statement. Any holder that does not duly complete and
deliver a questionnaire or provide the information it requires will not be
named
as a selling securityholder in the shelf registration statement and will not
be
permitted to sell any registrable securities held by that holder pursuant to
the
shelf registration statement. We cannot assure you that we will be able to
maintain an effective and current shelf registration statement as required.
The
absence of an effective shelf registration statement is likely to limit a
holder’s ability to sell its registrable securities and adversely affect the
price, if any, at which it may sell its registrable securities.
If:
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the
shelf registration statement is not filed with the SEC by the 90th
day
after the first issue date of the notes and we do not have on file
with
the SEC an effective shelf registration statement covering resales
of the
registrable securities;
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the
shelf registration statement has not been declared effective under
the
Securities Act by the 180th day after the first issue date of the
notes or
an effective shelf registration statement covering resales of the
registrable securities is otherwise not made available for use by
selling
securityholders by such date;
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a
holder supplies the questionnaire described below after the effective
date
of the shelf registration statement or the date after which we first
make
available an effective shelf registration statement for use by selling
securityholders, and we fail to supplement or amend the shelf registration
statement, or file a new shelf registration statement, in accordance
with
the terms of the registration rights agreement, in order to add such
holder as a selling securityholder;
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the
shelf registration statement is filed and has become effective under
the
Securities Act, but then ceases to be effective (without being succeeded
immediately by an additional shelf registration statement that is
filed
and immediately becomes effective) or usable for the offer and sale
of
registrable securities, other than as a result of a requirement to
file a
post-effective amendment or prospectus supplement to the registration
statement in order to make changes to the information in the prospectus
forming part of the shelf registration statement regarding the selling
securityholders or the plan of distribution, and (1) we do not cure
the
lapse of effectiveness or usability of the registration statement
within
ten business days (or if a suspension period is then in effect, the
tenth
business day following the expiration of such suspension period)
by a
post-effective amendment, prospectus supplement or report filed pursuant
to the Exchange
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Act,
or (2) if suspension periods exceed an aggregate of 30 days in
any
three-month period or an aggregate of 90 days in any 12-month period;
or
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we
fail to name as a selling securityholder, in the shelf registration
statement or any amendment to the shelf registration statement, at
the
time it becomes effective under the Securities Act, or in any prospectus
relating to the shelf registration statement, at the time we file
the
prospectus or, if later, the time the related shelf registration
statement
or amendment becomes effective under the Securities Act, any holder
that
is entitled to be so named as a selling securityholder within the
prescribed time periods,
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then
we
will pay additional interest to each holder of notes then outstanding that
constitute registrable securities who has provided to us the required selling
securityholder information. We refer to each event described in the bullet
points above as a “registration default.”
Additional
interest will accrue on the notes then outstanding that constitute registrable
securities, from, and including, the day following the registration default
to,
but excluding, the day on which the registration default has been
cured. Additional interest will be paid semi-annually in arrears, with the
first
semi-annual payment due on the first interest payment date, as applicable,
following the date on which such additional interest begins to accrue, and
will
accrue at a rate per year equal to:
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an
additional 0.25% of the principal amount to, and including, the 90th
day
following such registration default;
and
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an
additional 0.50% of the principal amount from and after the 91st
day
following such registration
default.
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In
no
event will additional interest accrue at a rate per year exceeding
0.50%.
We
will
not pay any additional interest on any note after it has been converted into
common shares. If a note ceases to be outstanding during a registration default,
we will prorate the additional interest to be paid with respect to that
note.
So
long
as a registration default continues, we will pay additional interest in cash
on
February 1 and August 1 of each year to each holder who is entitled to receive
additional interest in respect of registrable securities of which the holder
was
the holder of record at the close of business on the immediately preceding
January 15 and July 15, respectively.
Following
the cure of a registration default, additional interest will cease to accrue
with respect to that registration default. In addition, no additional interest
will accrue after the period we must keep the shelf registration statement
effective under the Securities Act or on any note that ceases to be a
registrable security. However, we will remain liable for any previously accrued
additional interest. Other than our obligation to pay additional interest,
we
will not have any liability for damages with respect to a registration default
on any registrable securities.
We
agreed
in the registration rights agreement to give notice to all holders of the filing
and effectiveness of the initial shelf registration statement by release through
a reputable national newswire service; provided that if we designate a
previously filed and effective shelf registration statement for use by holders
of registrable securities, in lieu of the foregoing notice we will provide
notice of our designation of such shelf registration statement and the date
on
which we will first make available for use by selling securityholders a
prospectus thereunder. A holder of registrable securities that does not provide
us with a completed questionnaire or the information called for by it on or
prior to the tenth business day before the date the initial shelf registration
statement becomes effective will not be named as a selling securityholder in
the
shelf registration statement when it becomes effective and will not able to
use
the shelf registration statement to resell registrable securities. Similarly,
if
we designate an effective shelf registration statement for use by selling
securityholders, a holder of registrable securities that does not provide us
with a completed questionnaire or the information called for by it on or prior
to the tenth business day before the date of the initial prospectus made
available to selling securityholders will not be named as a selling
securityholder in the prospectus and will not able to use the shelf registration
statement to resell registrable securities. However, in either case, such a
holder of registrable securities may thereafter provide us with a completed
questionnaire, following which we will, as promptly as reasonably practicable
after the date we receive the completed
questionnaire,
but in any event within ten business
days after that date (except as described below), file a supplement to the
prospectus relating to the shelf registration statement or, if required, file
a
post-effective amendment or a new shelf registration statement in order to
permit resales of such holder’s registrable securities. However, if we receive
the questionnaire during a suspension period, or we initiate a suspension period
within five business days after we receive the questionnaire, then we will,
except as described below, make the filing within ten business days after the
end of the suspension period. We will not be required to file more than three
such amendments or supplements for all holders during a fiscal quarter. If
we
file a post-effective amendment or a new shelf registration statement, then
we
will use our respective reasonable best efforts to cause the post-effective
amendment or new shelf registration statement to be declared effective under
the
Securities Act, as promptly as practicable, but in any event by the 30th day
in
the case of a post-effective amendment and the 60th day in the case of a new
shelf registration statement, after the date the registration rights agreement
requires us to file the post-effective amendment or new registration statement,
as applicable.
If
a
holder does not deliver a duly completed questionnaire on or before the tenth
business day before the effective date of the original shelf registration
statement or on or before the tenth business day before the date the
prospectus
is first made available for use by selling securityholders, the holder could
experience significant additional delay. We strongly encourage holders to submit
a completed questionnaire as promptly as possible. To the extent that any holder
of registrable securities identified in the shelf registration statement is
a
broker-dealer, or is an affiliate of a broker-dealer that did not acquire its
registrable securities in the ordinary course of its business or that at the
time of its purchase of registrable securities had an agreement or
understanding, directly or indirectly, with any person to distribute the
registrable securities, we understand that the SEC may take the view that such
holder is, under the SEC’s interpretations, an “underwriter” within the meaning
of the Securities Act.
The
specific provisions relating to the registration described above are contained
in the registration rights agreement. This summary of the registration rights
agreement is not complete and is qualified in its entirety by reference to
the
registration rights agreement.
DESCRIPTION
OF CAPITAL SHARES
We
are a
Texas real estate investment trust. The rights of a shareholder are governed
by
the Texas Real Estate Investment Trust Act, our declaration of trust and our
bylaws. The following summary of terms, rights and preferences of the shares
of
beneficial interest is not complete. You should read our declaration of trust
and bylaws for more complete information.
Authorized
Shares
Our
declaration of trust provides that we may issue up to 160,000,000 shares of
beneficial interest, consisting of 150,000,000 common shares, par value $0.03
per share, and 10,000,000 preferred shares, par value $.03 per share.
At October 25, 2006, 85,609,219 common shares, 3,000,000 depositary
shares, each representing one-thirtieth of a share of a 6.75% Series D
Cumulative Redeemable Preferred Share, and 2,900,000 depositary shares, each
representing one-one hundredth of a share of a 6.95% Series E Cumulative
Redeemable Preferred Share were issued and outstanding. In addition, as of
October 25, 2006, we have 3,368,712 common shares available for issuance
upon the exercise of options granted under our employee and trust manager share
option plans. Mellon Investor Services, LLC is the transfer agent and registrar
of our common shares and preferred shares.
Shareholder
Liability
Under
Texas law, a shareholder will not be personally liable for any obligation of
ours solely by reason of being a shareholder. Under our declaration of trust,
our shareholders are not personally liable for our debts or obligations and
will
not be subject to any personal liability in tort, contract or otherwise, to
any
person in connection with our property or affairs by reason of being a
shareholder.
Notwithstanding
these limitations, common law theories of "piercing the corporate veil" may
be
used to impose liability on shareholders in certain instances. Also, to the
extent that we conduct operations in another jurisdiction where the law of
that
jurisdiction (1) does not recognize the limitations of liability afforded by
contract, Texas law or our declaration of trust, and (2) does not provide
similar limitations of liability applicable to real estate investment
trusts
or other trusts, a third party could attempt,
under limited circumstances, to assert a claim against our shareholders based
upon our obligations.
Common
Shares
Dividends.
Subject
to any preferential rights of any outstanding series of preferred shares, the
holders of our common shares are entitled to such dividends and distributions
as
may be declared from time to time by the board of trust managers from funds
available therefor. We may pay dividends in either cash, property or in common
shares. Payment and declaration of dividends on our common shares and purchases
of shares thereof by us will be subject to certain restrictions if we fail
to
pay dividends on our preferred shares.
Distributions
and Liquidation Rights.
Upon
any liquidation, dissolution or winding up of us, holders of our common shares
will be entitled to share equally and ratably in any assets available for
distribution to them after payment or provision for payment of our debts and
other liabilities and the preferential amounts owing with respect to any
outstanding preferred shares.
No
Preemptive Rights.
No
holders of our common shares have preemptive or other rights to purchase or
subscribe for any common shares.
REIT
Restrictions on Ownership and Transfer.
Our
common shares are subject to certain restrictions upon ownership and transfer
which were adopted for the purpose of enabling us to preserve our status as
a
REIT. For a description of such restrictions, see “Material Income Tax
Considerations — REIT Qualification.”
Voting
Rights.
Each
outstanding common share owned by a shareholder entitles that holder to one
vote
on all matters submitted to a vote of shareholders, including the election
of
trust managers. The right to vote is subject to the provisions of our
declaration of trust regarding the restriction on the transfer of shares of
beneficial interest, which we describe under “Material Income Tax Considerations
— REIT Qualification.” There is no cumulative voting in the election of trust
managers.
Subject
to the terms of our declaration of trust regarding the restrictions on transfer
of shares of beneficial interest, each common share has the same dividend,
distribution, liquidation and other rights as each other common
share.
According
to the terms of our declaration of trust and bylaws and Texas law, all matters
submitted to the shareholders for approval, except for those matters listed
below, are approved if a majority of all the votes cast at a meeting of
shareholders duly called and at which a quorum is present are voted in favor
of
approval. The following matters require approval other than by a majority of
all
votes cast:
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the
election of trust managers (which provides that trust managers remain
on
the board unless and until a nominee for that board seat receives
the
affirmative vote of the holders of two-thirds of our common
shares);
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the
amendment of our declaration of trust by shareholders (which requires
the
affirmative vote of two-thirds of all votes entitled to be cast on
the
matter);
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our
termination, winding up of affairs and liquidation (which requires
the
affirmative vote of two-thirds of all the votes entitled to be cast
on the
matter); and
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our
merger or consolidation with another entity or sale of all or
substantially all of our property (which requires the approval of
the
board of trust managers and an affirmative vote of two-thirds of
all the
votes entitled to be cast on the
matter).
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Stock
Exchange Listing.
Our
common shares are traded on the NYSE under the trading symbol
"WRI."
Preferred
Shares
Our
declaration of trust authorizes our board of trust managers to issue up to
10,000,000 preferred shares from time to time, in one or more series, to
establish the number of shares in each series and to fix the designations,
powers, preferences and rights of each series and the qualifications,
limitations or restrictions thereof.
Future
Series of Preferred Shares.
Our
board of trust managers shall determine with respect to each series of preferred
shares that may be issued and sold in the future:
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the
designation of such shares and the number of shares that constitute
such
series;
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the
dividend rate (or the method of calculation thereof), if any, on
the
shares of such series and the priority as to the payment of dividends
with
respect to other classes or series of our capital
shares;
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the
dividend periods (or the method of calculation
thereof);
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the
voting rights, if any, of the
shares;
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the
terms and amount of a sinking fund, if
any;
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the
liquidation preference and the priority as to payment of such liquidation
preference with respect to other classes or series of our capital
shares
and any other rights of the shares of such series upon our liquidation
or
winding-up;
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whether
or not and on what terms the shares of such series will be subject
to
redemption or repurchase at our
option;
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whether
and on what terms the shares of such series will be convertible into
or
exchangeable for our other debt or equity
securities;
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whether
the shares of such series of preferred shares will be listed on a
securities exchange;
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any
limitations on direct or beneficial ownership and restrictions on
transfer
in addition to those described in “Material Federal Income Tax
Considerations — REIT Qualification” in each case as may be appropriate to
preserve our status as a real estate investment
trust;
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any
special United States federal income tax considerations applicable
to such
series; and
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the
other rights and privileges and any qualifications, limitations or
restrictions of such rights or privileges of such series not inconsistent
with our declaration of trust, our bylaws and the Texas Real Estate
Investment Trust Act.
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The
terms
of any preferred shares we issue will be set forth in resolutions adopted by
our
board of trust managers.
Depositary
Shares
General.
We may
issue receipts for depositary shares, each of which will represent a fractional
interest of a particular series of a class of preferred shares. As of the date
of this prospectus, the depositary shares are outstanding as described
below.
6.75%
Series D Cumulative Redeemable Preferred Shares and Depositary Shares.
On
April
30, 2003, we issued 100,000 shares of 6.75% Series D Cumulative Redeemable
Preferred Shares and 3,000,000 depositary shares for $75.0 million. Each
depositary share represents a 1/30 fractional interest in a share of Series
D
Preferred. The Series D Preferred has a liquidation preference of $750.00 per
share (equivalent to $25.00 per depositary share) and
the
holders are entitled to cumulative dividends from
the date of original issuance of $50.625 per share (equivalent to $1.6875 per
depositary share). The Series D Preferred ranks on parity with the Series E
Preferred described below with respect to the payment of dividends and payments
upon liquidation. We may not redeem the Series D Preferred Shares before April
30, 2008. The redemption price per share of Series D Preferred is $750.00
(equivalent to $25.00 per depositary share), plus any accrued and unpaid
dividends through the date of such redemption. The Series D Preferred and the
depositary shares have no maturity date and will remain outstanding indefinitely
unless redeemed. The Series D Preferred and the depositary shares are not
convertible into or exchangeable for any of our other securities. The Series
D
Preferred shareholders and holders of the depositary shares generally have
no
voting rights, except if we fail to pay dividends for six quarters. In that
event, the holders of the Series D Preferred and Series E Preferred, voting
together as a single class, have the right to elect two trust managers who
shall
serve until all dividend arrearages have been paid. In such case, the entire
board of trust managers will be increased by two trust managers. The Series
D
Preferred is not be listed for trading on any exchange. The depositary shares
are listed for trading on the NYSE.
6.95%
Series E Cumulative Redeemable Preferred Shares and Depositary Shares.
On
July
8, 2004, we issued 29,000 shares of 6.95% Series E Cumulative Redeemable
Preferred Shares and 2,900,000 depositary shares for
$72.5
million. Each depositary share represents a 1/100 fractional interest in a
share
of Series E Preferred. The Series E Preferred has a liquidation preference
of
$2,500 per share (equivalent to $25 per depositary share). The Series E
Preferred ranks on a parity with the Series D Preferred with respect to the
payment of dividends and payments upon liquidation. We may not redeem the Series
E Preferred Shares before July 8, 2009. The redemption price per share of Series
E Preferred is $2,500 (equivalent to $25.00 per depositary share), plus accrued
and unpaid dividends through the date of such redemption. The Series E Preferred
and the depositary shares have no maturity date and will remain outstanding
indefinitely unless redeemed. The Series E Preferred and the depositary shares
are not convertible into or exchangeable for any of our other securities. The
Series E Preferred shareholders and the holders of the depositary shares
generally have no voting rights, except if we fail to pay dividends for six
quarters. In that event, the holders of the Series D Preferred and Series E
Preferred, voting together as a single class, have the right to elect two trust
managers who shall serve until all dividend arrearages have been paid. In such
case, the entire board of trust managers will be increased by two trust
managers.
The
Series E Preferred is not listed for trading on any exchange. The depositary
shares are listed for trading on the NYSE.
Dividends
and Other Distributions.
The
depositary will distribute all cash dividends or other cash distributions
received on behalf of the preferred shares proportionately to the record holders
of the related depositary receipts owned by such holder. Such distributions
are
subject to certain obligations of holders to file proofs, certificates and
other
information and to pay certain charges and expenses to the depositary.
In
the
event of a non-cash distribution, the depositary will distribute property it
receives to the record holders of depositary receipts entitled to the property
unless the depositary determines that it is not feasible to make such
distribution, in which case the depositary may, with our approval, sell such
property and distribute the net proceeds of such sale to holders. Such
distributions by the depositary are subject to certain obligations of holders
to
file proofs, certificates and other information and to pay certain changes
and
expenses to the depositary.
Withdrawal
of Shares. Unless
the related depositary shares have previously been called for redemption, upon
surrender of the depositary receipts at the corporate trust office of the
depositary, the holders thereof will be entitled to delivery at such office,
to
or upon such holder's order, of the number of whole or fractional preferred
shares and any money or other property represented by the depositary shares
evidenced by such depositary receipts. Holders of depositary receipts will
be
entitled to receive whole or fractional shares of the related preferred shares
on the basis of the proportion of preferred shares represented by each
depositary share as specified in the applicable prospectus supplement, but
holders of such preferred shares will not thereafter be entitled to receive
depositary shares therefor. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number of depositary
shares representing the preferred shares to be withdrawn, the depositary will
deliver to such holder at the same time a new depositary receipt evidencing
such
excess number of depositary shares.
Redemption.
Whenever
we redeem preferred shares held by the depositary, the depositary will redeem
as
of the same redemption date the number of depositary shares representing the
preferred shares so redeemed, provided we
have
paid in full to the depositary the redemption
price of the preferred shares to be redeemed plus an amount equal to any accrued
and unpaid dividends thereon to the date fixed for redemption. With respect
to
noncumulative preferred shares, dividends will be paid for the current dividend
period only. The redemption price per depositary share will be equal to the
redemption price and any other amounts per share payable with respect to the
preferred shares. If less than all the depositary shares are to be redeemed,
the
depositary shares to be redeemed will be selected by the depositary by lot.
After
the
date fixed for redemption, the depositary shares called for redemption will
no
longer be deemed to be outstanding and all rights of the holders of the
depositary receipts evidencing the depositary shares called for redemption
will
cease. However, the holders will have the right to receive any moneys payable
upon redemption and any money or other property that the holders of such
depositary receipts were entitled to at the time of redemption when they
surrender their depositary receipts to the depositary.
Voting
Rights. Upon
receipt of notice of any meeting at which the holders of the preferred shares
are entitled to vote, the depositary will mail the information contained in
such
notice to the record holders of the depositary receipts related to such
preferred shares. Each record holder of depositary receipts on the record date
will be entitled to
instruct the depositary as to the exercise of the voting rights of the preferred
shares related to such holder's depositary receipts. The record date for
depositary receipts will be the same date as the record date for preferred
shares. The depositary will vote the preferred shares related to such depositary
receipts in accordance with such instructions, and we will agree to take all
reasonable action that the depositary deems necessary to enable it to vote
the
preferred shares. The depositary will abstain from voting preferred shares
represented by such depositary shares to the extent it does not receive specific
instructions from the holders of depositary receipts.
Liquidation
Preference. In
the
event of our liquidation, dissolution or winding-up, whether voluntary or
involuntary, each holder of a depositary receipt will be entitled to the
fraction of the liquidation preference accorded each preferred share represented
by the depositary share evidenced by such depositary receipt, as set forth
in
the applicable prospectus supplement.
Conversion
of Preferred Shares. The
depositary shares, as such, are not convertible into common shares or any of
our
other securities or property. Nevertheless, if so specified in the applicable
prospectus supplement relating to an offering of depositary shares, the
depositary receipts may be surrendered by holders thereof to the depositary
with
written instructions to the depositary to instruct us to cause conversion of
the
preferred shares represented by the depositary shares into whole common shares,
other preferred shares or other shares of capital shares. We have agreed that
upon receipt of such instructions and any amounts payable in respect thereof,
we
will cause the conversion thereof utilizing the same procedures as those
provided for delivery of preferred shares to effect such conversion. If the
depositary shares evidenced by a depositary receipt are to be converted in
part
only, one or more new depositary receipts will be issued for any depositary
shares not to be converted. No fractional common shares will be issued upon
conversion. If conversion will result in a fractional share being issued, we
will pay in cash an amount equal to the value of the fractional interest based
upon the closing price of the common shares on the last business day prior
to
the conversion.
Amendment
and Termination of the Deposit Agreement. The
form
of depositary receipt evidencing the depositary shares which represent the
preferred shares and any provision of the deposit agreement may at any time
be
amended by agreement between the depositary and us. However, any amendment
that
materially and adversely alters the rights of the holders of depositary receipts
will not be effective unless it has been approved by the existing holders of
at
least a majority of the depositary shares evidenced by outstanding depositary
receipts.
We
may
terminate the deposit agreement upon not less than 30 days' prior written notice
to the depositary if (1) such termination is to preserve our status as a REIT
or
(2) a majority of each class of preferred shares affected by such termination
consents to such termination. Upon termination of the deposit agreement, the
depositary shall deliver or make available to each holder of depositary
receipts, upon surrender of the depositary receipts held by such holder, such
number of whole or fractional preferred shares as are represented by the
depositary shares evidenced by such depositary receipts. In addition, the
deposit agreement will automatically terminate if:
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all
outstanding depositary shares have been redeemed;
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there
has been a final distribution in respect of the related preferred
shares
in connection with any liquidation, dissolution or winding-up and
such
distribution has been distributed to the holders of depositary receipts
evidencing the depositary shares representing such preferred shares;
or
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each
related preferred share shall have been converted into capital shares
that
are not represented by depositary shares.
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Fees
of Depositary. We
will
pay all transfer and other taxes and governmental charges arising solely from
the existence of the deposit agreement. In addition, we will pay the fees and
expenses of the depositary in connection with the performance of its duties
under the deposit agreement. However, holders of depositary receipts will pay
the depositary's fees and expenses for any duties that holders request to be
performed which are outside those expressly provided for in the deposit
agreement.
Resignation
and Removal of Depositary.
The
depositary may resign at any time by delivering to us notice of its resignation,
and we may remove the depositary at any time. Any such resignation or removal
will take effect upon the appointment of a successor depositary. A successor
depositary must be appointed within 60 days after delivery of
the
notice of resignation or removal. A successor depositary must be a bank or
trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
Miscellaneous.
The
depositary will forward to holders of depositary receipts any reports and
communications from us which it receives with respect to the related preferred
shares. Neither we nor the depositary will be liable if it is prevented from
or
delayed in, by law or any circumstances beyond its control, performing its
obligations under the deposit agreement. The obligations of us and the
depositary under the deposit agreement will be limited to performing their
duties thereunder in good faith and without negligence, gross negligence or
willful misconduct. We and the depositary will not be obligated to prosecute
or
defend any legal proceeding in respect of any depositary receipts, depositary
shares or preferred shares represented thereby unless satisfactory indemnity
is
furnished. We and the depositary may rely on written advice of counsel or
accountants, or information provided by persons presenting preferred shares
represented thereby for deposit, holders of depositary receipts or other persons
believed to be competent to give such information, and on documents believed
to
be genuine and signed by a proper party.
If
the
depositary shall receive conflicting claims, requests or instructions from
any
holders of depositary receipts, on the one hand, and us, on the other hand,
the
depositary shall be entitled to act on such claims, requests or instructions
received from us.
MATERIAL
FEDERAL INCOME TAX CONSIDERATIONS
The
following discussion describes the material U.S. federal income tax
considerations relating to the acquisition, ownership and disposition of the
notes, taxation of the company as a REIT and the acquisition, ownership and
disposition of our common shares into which the notes may be converted, but
does
not purport to be a complete analysis of all the potential tax considerations
relating thereto. The information in this section is based on the Code, current,
temporary and proposed Treasury regulations, the legislative history of the
Code, current administrative interpretations and practices of the Internal
Revenue Service (the “IRS”), including its practices and policies as endorsed in
private letter rulings, which are not binding on the IRS (except with respect
to
the taxpayer that received the ruling), and existing court decisions. Future
legislation, regulations, administrative interpretations and court decisions
could change current law or adversely affect existing interpretations of current
law. Any change could apply retroactively. It is possible that the IRS could
challenge the statements in this discussion, which do not bind the IRS or the
courts, and that a court could agree with the IRS.
Because
this is a summary that is intended to address only material U.S. federal income
tax considerations relating to the acquisition, ownership and disposition of
the
notes and our common shares that will apply to all holders, it may not contain
all the information that may be important to you. As you review this discussion,
you should keep in mind that:
| · |
the
tax consequences to you may vary depending on your particular tax
situation;
|
| · |
special
rules that are not discussed below may apply to you if, for example,
you
are a tax-exempt organization, a broker-dealer, a non-U.S. person,
a
trust, an estate, a regulated investment company, a financial institution,
an insurance company, holding notes or our common shares through
a
partnership or similar pass-through entity, or otherwise subject
to
special tax treatment under the
Code;
|
| · |
this
summary does not address state, local or non-U.S. tax
considerations;
|
| · |
this
summary deals only with notes and our common shares that are held
as
“capital assets,” within the meaning of Section 1221 of the Code;
and
|
| · |
this
discussion is not intended to be, and should not be, construed as
tax
advice
|
You
should review the following discussion and consult with your tax advisor to
determine the effect of the acquisition, ownership and disposition of the notes
and our common shares received upon conversion of a note on your individual
tax
situation, including any state, local or non-U.S. tax consequences.
As
used
herein, the term “U.S. Holder” means any beneficial owner of a note, or of our
common shares received upon conversion of a note, that is, for U.S. federal
income tax purposes, (i) a citizen or resident, as defined in Section 7701(b)
of
the Code, of the United States, (ii) a corporation (or other entity treated
as a
corporation for U.S. federal income tax purposes) created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, (iii) an estate the income of which is subject to U.S. federal income
taxation regardless of its source, (iv) in general, a trust subject to the
primary supervision of a U.S. court and the control of one or more U.S. persons
or a trust that was both treated as a domestic trust on August 19, 1996 and
in
existence on August 20, 1996 and has made a valid election to be treated as
a
U.S. person. As used herein, the term “Non-U.S. Holder” means a beneficial owner
of a note, or our common shares received pursuant to a conversion of a note,
(other than a partnership or an entity or arrangement treated as a partnership
for U.S. federal income tax purposes) that is not a U.S. Holder. In the case
of
an entity treated as a partnership for U.S. federal income tax purposes that
is
a beneficial owner of a note, or our common shares received pursuant to a
conversion of a note, the treatment of its partners generally will depend upon
the status of the partner and the activities of the partnership. Persons that
have an indirect interest in a note, or our common shares received pursuant
to a
conversion of a note, through an entity treated as a partnership for U.S.
federal income tax purposes should consult their tax advisors about the U.S.
federal income tax consequences of acquiring, holding and disposing of notes
or
our common shares received pursuant to a conversion of a note.
U.S.
Holders
of the Notes
Discount.
A note
issued at a discount will be treated as being issued with original issue
discount (“OID”) for U.S. federal income tax purposes unless the excess of the
note’s stated redemption price at maturity (“SRPM”) over its issue price is less
than a statutory de
minimis
amount
(one-fourth of one percent of the note’s SRPM times the number of complete years
from issuance to maturity). Generally, the “issue price” of a note is the first
price at which a substantial amount of the notes is sold to purchasers other
than bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers. The SRPM of a note
is
the total of all payments to be made under the note other than qualified stated
interest (generally, stated interest that is unconditionally payable in cash
or
property at least annually at a single fixed rate or at certain floating rates
that properly take into account the length of the interval between stated
interest payments). If a note is issued with an amount of discount that is
less
than the statutory de
minimis
amount,
then the amount of discount will be reportable as capital gain if and when
it is
received or the note is sold.
The
notes
were issued with OID. Accordingly, a U.S. Holder of a note will have to report
annually the OID as income as it accrues, based on a constant yield method
(which includes at least annual compounding) and regardless of the U.S. Holder’s
regular method of tax accounting. Thus, the OID income on a note will be taxable
before it is received in cash. In applying the constant yield method, the first
step requires a determination of the debt instrument’s yield and maturity. The
yield and maturity of a debt instrument are determined by taking into account
any unconditional option that the holder or issuer of the debt instrument has
to
require payments to be made on the debt instrument under an alternative payment
schedule. For these purposes, if a holder has an option to put the debt
instrument to the issuer, that option will be deemed exercised if it would
maximize the yield on the debt instrument.
Noteholders
have the right to require us to repurchase their notes in whole or in part
on
August 1, 2011, August 1, 2016 and August 1, 2021 for cash equal to 100% of
the principal amount of the notes to be repurchased plus any accrued but unpaid
interest (including additional interest, if any). Because the exercise of this
put option on August 1, 2011 would maximize the yield to a noteholder, this
put
option will be deemed exercised in applying the constant yield method. Thus,
for
purposes of calculating OID on the notes, the notes are treated as having a
maturity date of August 1, 2011, are deemed to have been issued with OID and
the
OID accrues as income during the period beginning on the issue date of the
notes
and ending on the deemed maturity date of August 1, 2011.
Stated
Interest.
Stated
interest on a note generally will be included in the income of a U.S. Holder
as
ordinary income at the time such interest is received or accrued, in accordance
with such U.S. Holder’s regular method of tax accounting.
Additional
Interest.
If we
fail to comply with specified obligations under the registration rights
agreement, such non-compliance may result in the payment of additional interest
in the manner described under “Description of Notes — Registration Rights;
Additional Interest.” In general, when the amount or timing of any additional
payments
on a debt instrument is contingent, such debt instrument could be subject to
special rules that apply to contingent payment debt instruments. We intend,
however, to take the position for U.S. federal income tax purposes that the
possibility of such payments should not cause the notes to be subject to the
special rules applicable to contingent payment debt instruments and,
accordingly, that any such payments of additional interest should be taxable
to
you as ordinary interest income when received or accrued, in accordance with
your usual method of tax accounting. This position is based in part on our
determination that as of the date of issuance of the notes, the possibility
that
such additional payments will be made are “remote” or “incidental”
contingencies, within the meaning of applicable Treasury regulations. Except
as
otherwise specifically discussed herein, the remainder of this discussion
assumes that the notes will not be treated as contingent payment debt
instruments.
Market
Discount.
In the
case of a note that is issued with OID such as the notes described in this
prospectus, if a U.S. Holder purchases the note for an amount that is less
than
its “revised issue price” (generally, its issue price plus accrued OID), then
the U.S. Holder will be treated as having purchased the note at a market
discount, unless such market discount is less than a de
minimis
amount
(as described in the next sentence). In the case of a note that is issued
without
OID, if
a U.S. Holder purchases the note for an amount that is less than its SRPM,
then
the U.S. Holder will be treated as having purchased the note at a “market
discount,” unless such market discount is less than a de
minimis
amount
(one-fourth of one percent of the SRPM times the number of complete years to
maturity after the U.S. Holder acquires the note).
Under
the
market discount rules, a U.S. Holder will be required to treat any partial
principal payment on a note, or any gain realized on the sale, conversion,
or
other disposition of a note, as ordinary income to the extent of the lesser
of
(i) the amount of such payment or realized gain or (ii) the market discount
which has not previously been included in income and is treated as having
accrued on such note at the time of such payment or disposition. Market discount
will be considered to accrue ratably during the period from the date of
acquisition to the maturity date of the note, unless the U.S. Holder elects
to
accrue market discount on a constant yield basis. Once made, such an election
may be revoked only with the consent of the IRS and, therefore, should only
be
made in consultation with a tax advisor.
A
U.S.
Holder may be required to defer the deduction of all or a portion of the
interest paid or accrued on any indebtedness incurred or maintained to purchase
or carry a note with market discount until the maturity of the note or certain
earlier dispositions, because a current deduction is only allowed to the extent
that the interest expense exceeds the portion of market discount allocable
to
the days during the taxable year in which the note was held by the taxpayer.
A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or constant yield basis), in which case the rules
described above regarding the treatment as ordinary income of gain upon the
disposition of the note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for U.S.
federal income tax purposes. Such an election will apply to all debt instruments
with market discount acquired by the U.S. Holder on or after the first day
of
the taxable year to which such election applies and may be revoked only with
the
consent of the IRS. The election, therefore, should only be made in consultation
with a tax advisor.
Acquisition
Premium.
A U.S.
Holder’s interest in a note will be purchased with acquisition premium if the
U.S. Holders’ initial basis in the note exceeds the adjusted issue price
(generally, the issue price plus accrued OID) of the note, but not its SRPM.
Acquisition premium reduces (but does not eliminate) the amount of OID that
the
U.S. Holder would otherwise have to include in income.
Amortizable
Bond Premium.
If a
U.S. Holder purchases a debt instrument for an amount that is greater than
the
sum of all amounts payable on the debt instrument after the purchase date,
other
than payments of qualified stated interest, then such U.S. Holder will be
considered to have purchased the debt instrument with “amortizable bond
premium.” In general, amortizable bond premium with respect to any convertible
debt instrument (such as a note) will be equal in amount to the excess, if
any,
of the tax basis (reduced as set forth in the following sentence) over the
sum
of all amounts payable on the debt instrument other than qualified stated
interest. For this purpose only, a U.S. Holder’s tax basis in a convertible debt
instrument is reduced by an amount equal to the value of such U.S. Holder’s
option to convert the convertible debt instrument for other property (such
as
our common shares); the value of this option may be determined under any
reasonable method. However, in the case of a debt instrument that may be
redeemed prior to maturity at the option of the issuer (such as the notes),
the
amount of amortizable bond premium is
determined by substituting the first date on which the debt instrument may
be
redeemed (the “redemption date”) for the maturity date and the applicable
redemption price on the redemption date for the amount payable at maturity,
if
the result would maximize the U.S. Holder’s yield to maturity (i.e., result in a
smaller amount of amortizable bond premium properly allocable to the period
before the redemption date). If the issuer does not in fact exercise its right
to redeem the debt instrument on the applicable redemption date, the debt
instrument will be treated (solely for purposes of the amortizable bond premium
rules) as having matured and then as having been reissued for the U.S. Holder’s
“adjusted acquisition price,” which is an amount equal to the U.S. Holder’s
basis in the debt instrument (as determined under the applicable Treasury
Regulations), less the sum of (i) any amortizable bond premium allocable to
prior accrual periods and (ii) any payments previously made on the debt
instrument (other than payments of qualified stated interest). The debt
instrument deemed to have been reissued will again be subject to the amortizable
bond premium rules with respect to the remaining dates on which the debt
instrument is redeemable.
A
U.S.
Holder may elect to amortize bond premium on a debt instrument over the
remaining term of the debt instrument. Once made, the election applies to all
taxable debt instruments owned by the U.S. Holder on the first day of the
taxable year to which such election applies and to all taxable debt instruments
thereafter acquired. Because the election may be revoked only with the consent
of the IRS, it should only be made in consultation with a tax advisor. In
general, a U.S. Holder amortizes bond premium by offsetting the qualified stated
interest allocable to an accrual period with the bond premium allocable to
the
accrual period, which is determined under a constant yield method pursuant
to
the applicable Treasury Regulations. If the bond premium allocable to an accrual
period exceeds the qualified stated interest allocable to such period, the
excess is treated by the U.S. Holder as a bond premium deduction. The bond
premium deduction for each accrual period is limited to the amount by which
the
U.S. Holder’s total interest inclusions on the debt instrument in prior accrual
periods exceed the total amount treated by such U.S. Holder as a bond premium
deduction on the debt instrument in prior accrual periods. Any amounts not
deductible in an accrual period may be carried forward to the next accrual
period and treated as bond premium allocable to that period.
Election
to Include All Interest in Income Using a Constant Yield
Method.
All U.S.
Holders may generally, upon election, include in income all interest (including
stated interest, acquisition discount, original issue discount, de
minimis
original
issue discount, market discount, de
minimis
market
discount, and unstated interest, as adjusted by any amortizable bond premium
or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions. Because this election will affect how the U.S.
Holder treats debt instruments other than the notes, it should be made only
in
consultation with a tax advisor.
Sale,
Redemption of Other Taxable Disposition of the Notes.
Upon the
sale, redemption, repurchase, retirement or other taxable disposition of a
note,
a U.S. Holder generally will recognize capital gain or loss equal to the
difference between the amount realized on such sale, redemption or other taxable
disposition (except to the extent such amount is attributable to accrued but
unpaid stated interest, which is taxable as ordinary income if not previously
included in such holder’s income) and (ii) such U.S. Holder’s adjusted tax basis
in the note. A U.S. Holder’s adjusted tax basis in a note generally will equal
the cost of the note to such Holder (i) increased by (A) any accrued original
issued discount (OID) and (B) any accrued market discount if the U.S.
Holder has included the
accrued
market discount in income and (ii) decreased
by (A) the amount of any payments, other than qualified stated interest
payments, received, and (B) amortizable bond premium taken with respect to
such
note. Capital gain or loss recognized upon the disposition of a note will be
a
long-term capital gain or loss if the note was held for more than one year.
The
maximum tax rate on long-term capital gains to non-corporate U.S. Holders is
generally 15% (for taxable years ending on or prior to December 31, 2010).
The
deductibility of capital losses may be subject to limitations.
Conversion
of Notes.
The tax
consequences of the conversion of a note into cash and our common shares are
not
entirely clear. A U.S. Holder who, in a conversion transaction, receives cash
(other than cash received in lieu of a fractional share), common shares, and
cash in lieu of a fractional share may be treated as exchanging (i) a portion
of
the converted notes for cash (other than cash received in lieu of a fractional
share), (ii) a portion of the converted notes for common shares (other than
a
fractional share) and (iii) a portion of the converted notes for cash received
in lieu of a fractional share. The portion of the notes treated as exchanged
for
each of these three components should be based
on the
amount of the cash (or cash received in lieu of a fractional share) or the
fair
market value of the common shares received upon conversion compared to the
aggregate fair market value of the cash and common shares
received upon conversion. The proportion of such U.S. holder's tax basis in
the
notes exchanged for each such component should be allocated among such
components as described in the preceding sentence.
To
the
extent that a U.S. Holder exchanges a portion of the notes for common shares
(other than fractional shares), such U.S. holder generally will not realize
any
income, gain or loss upon such conversion except with respect to common shares
that are attributable to accrued but unpaid interest not previously included
in
gross income. A U.S. holder's initial tax basis in the common shares (other
than
a fractional share) received upon conversion of a note will be the same as
the
U.S. holder's adjusted tax basis at such time in the portion of the note treated
as exchanged therefor (but not including the portion exchanged for cash or
cash
in lieu of a fractional share) as described above. However, the tax basis of
common shares received upon a conversion with respect to accrued but unpaid
interest that has not been included in income should equal the fair market
value
of such common shares. The holding period for the common shares (other than
a
fractional share) received on conversion generally will include the holding
period of the note converted. To the extent any common shares issued upon a
conversion are allocable to accrued but unpaid interest that has not been
included in income, however, the U. S. Holder's holding period for such common
shares may commence on the day following the date of delivery of the common
shares.
To
the
extent that a U.S. Holder exchanges a portion of the notes for cash (including
cash in lieu of a fractional share), gain or loss will be recognized by such
U.S. Holder in an amount equal to the difference between the amount of such
cash
received (including cash in lieu of a fractional share) and the U.S. Holder's
tax basis in the notes allocable to such components as described above. Such
gain or loss generally will result in capital gain or loss and will be long-term
capital gain or loss if the U.S. Holder held the note for more than one year
at
the time of conversion; provided, however, that amounts that are attributable
to
accrued but unpaid interest generally will be taxable to the U.S. Holder as
interest to the extent not previously included in income.
Alternatively,
a U.S. Holder may be treated as exchanging the note for our common shares and
cash in a recapitalization for U.S. federal income tax purposes. In such case,
the U.S. Holder would not be permitted to recognize loss, but would be required
to recognize gain. The amount of gain recognized by a U.S. Holder would equal
the lesser of (i) the excess (if any) of (A) the amount of cash received
(excluding any cash received in lieu of a fractional share and any cash received
attributable to accrued and unpaid interest) plus the fair market value of
our
common shares received (treating a fractional share as issued and received
for
this purpose and excluding any such common shares that are attributable to
accrued and unpaid interest) upon conversion over (B) the U.S. Holder’s tax
basis in the converted note, and (ii) the amount of cash received upon
conversion (other than any cash received in lieu of a fractional share and
any
cash received attributable to accrued and unpaid interest). The gain recognized
by a U.S. Holder upon conversion of a note will be long-term capital gain if
the
holder held the note for more than one year, or short-term capital gain if
the
holder held the note for one year or less, at the time of the conversion. The
U.S. Holder’s tax basis in the common shares received (including any fractional
share for which cash is paid, but excluding shares attributable to accrued
and
unpaid interest) generally would equal the tax basis of the converted note,
decreased by the amount of cash received (other than cash in lieu of a
fractional share and any cash attributable to accrued and unpaid interest),
and
increased by the amount of gain (if any) recognized upon conversion (other
than
any gain recognized as a result of cash received in lieu of a fractional share).
The U.S. Holder’s holding period in the common shares (other than shares
attributable to accrued and unpaid interest) would include the holding period
in
the converted note. With respect to cash received
in lieu of a fractional share, a U.S. Holder would be treated as if the
fractional share were issued and received and then immediately redeemed for
cash. Accordingly, the U.S. Holder generally would recognize gain or loss equal
to the difference between the cash received and that portion of the holder’s tax
basis in the common shares (determined as discussed above) attributable to
the
fractional share. Any cash and the value of any portion of our common shares
that is attributable to accrued and unpaid interest on the notes not yet
included in income by a U.S. Holder would be taxed as ordinary income. The
basis
in any common shares attributable to accrued and unpaid interest would equal
the
fair market value of such shares when received. The holding period in any common
shares attributable to accrued and unpaid interest would begin on the day after
the date of conversion.
We
plan
on taking the position for tax reporting and other purposes that the approach
first described above is the proper approach for U.S. federal income tax
purposes.
U.S.
Holders are urged to consult their own tax advisors with respect to the U.S.
federal income tax consequences of converting their notes into cash or a
combination of cash and our common shares.
Adjustments
to Conversion Rate.
The
conversion rate is subject to adjustment under specified circumstances. Under
Section 305 of the Code and the applicable Treasury regulations, a holder of
notes could, in certain circumstances, be deemed to have received a distribution
with respect to our common shares if and to the extent that the conversion
rate
is adjusted, resulting in ordinary income to the extent of our current and
accumulated earnings and profits, as determined for U.S. federal income tax
purposes. 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 debt instruments will generally not be deemed
to result in a constructive distribution with respect to our common shares.
Certain of the possible adjustments provided in the notes (including, without
limitation, adjustments in respect of taxable dividends to our shareholders)
do
not qualify as being made pursuant to a bona fide reasonable adjustment formula.
If such adjustments are made, we intend to take the position that you will
be
deemed to have received constructive distributions from us, even though you
have
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 below under
“— Taxation of Taxable U.S. Holders” and “— Taxation of Tax-Exempt
Entities.”
Non-U.S.
Holders
of the Notes
The
rules
governing the U.S. federal income taxation of a Non-U.S. Holder are complex
and
no attempt will be made herein to provide more than a general summary of such
rules. Non-U.S. Holders should consult their tax advisors to determine the
effect of U.S. federal, state, local and foreign tax laws, as well as tax
treaties, with regard to an investment in the notes.
Discount
and Interest.
A
Non-U.S. Holder holding the notes on its own behalf generally will be exempt
from U.S. federal income and withholding taxes on payments of interest
(including accrued OID) on a note so long as such payments are not effectively
connected with the conduct of a trade or business in the United States by such
Non-U.S. Holder, unless, in the case of interest payments, such Non-U.S. Holder
actually or constructively owns 10% or more of the combined voting power of
our
voting stock, within the meaning of Section 871(h)(3) of the Code, or is a
controlled foreign corporation with respect to which we are a “related person”,
within the meaning of Code Section 864(d)(4) or a bank extending credit pursuant
to a loan agreement entered into in the ordinary course of its trade or
business. In order for a Non-U.S. Holder that is an individual or corporation
(or entity treated as such for U.S. federal income tax purposes) to qualify
for
the exemption from taxation on noncontingent interest, the “withholding agent”
(generally, the last U.S. payor or a non-U.S. payor who is a qualified
intermediary or withholding foreign partnership) must have received a statement
(generally made on IRS Form W-8BEN) from the individual or corporation that:
(i)
is signed under penalties of perjury by the beneficial owner of the note, (ii)
certifies that such owner is not a U.S. Holder and (iii) provides the beneficial
owner’s name and address. Certain securities clearing organizations and other
entities that are not beneficial owners, may provide a signed statement
accompanied by a copy of the beneficial owner’s IRS Form W-8BEN to the
withholding agent. An IRS Form W-8BEN is generally effective for the remainder
of the year of signature plus three full calendar years unless a change in
circumstances renders any information on the form incorrect. Notwithstanding
the
preceding sentence, an IRS Form W-8BEN with a U.S. taxpayer identification
number will remain effective until a change in circumstances makes any
information on the form incorrect, provided that the withholding agent reports
at least annually to the
beneficial
owner. The beneficial owner must inform
the withholding agent within 30 days of such change and furnish a new IRS Form
W-8BEN. A Non-U.S. Holder that is not an individual or corporation (or an entity
treated as a corporation for U.S. federal income tax purposes) holding the
notes
on its own behalf may have substantially increased reporting requirements and
should consult its tax advisor.
To
the
extent that interest income with respect to a note is not exempt from U.S.
withholding tax as described above, a Non-U.S. Holder may still be able to
eliminate or reduce such taxes under an applicable income tax
treaty.
Disposition
of the Notes.
Any gain
realized on the sale, redemption, repurchase, conversion (including a conversion
of a note for cash and any of our common shares), or other taxable disposition
of a note by a Non-U.S. Holder (except to the extent such amount is attributable
to accrued but unpaid discount or interest if such discount or interest is
not
exempt for a reason stated above), will be exempt from U.S. federal income
and
withholding taxes so long as: (i) the gain is not effectively connected with
the
conduct of a trade or business in the United States by such Non-U.S. Holder,
(ii) in the case of a foreign individual, such Non-U.S. Holder is not present
in
the United States for 183 days or more in the taxable year, and (iii) the notes
do not constitute “U.S. real property interests” within the meaning of the
Foreign Investment in Real Property Tax Act (“FIRPTA”).
The
notes
will not constitute a U.S. real property interest for purposes of FIRPTA
if we
are a domestically-controlled REIT. We will be a domestically-controlled
REIT if
at all times during a specified testing period, we qualify as a REIT and
less
than 50% in value of our stock is held directly or indirectly by non-U.S.
persons. We believe that currently we are a domestically-controlled REIT
and,
therefore that the disposition of the notes would not be subject to taxation
under FIRPTA. Because our common stock is publicly traded, however, we cannot
guarantee that we are or will continue to be a domestically-controlled REIT.
Even if we do not qualify as a domestically-controlled REIT at the time a
non-U.S. holder disposes of the notes, gain arising from such disposition
still
would not be subject to FIRPTA tax if any class of our interests is considered
regularly traded under applicable Treasury regulations on an established
securities market, such as the New York Stock Exchange, and either (1) if
the
Notes are not regularly traded, on the date the notes were acquired by the
non-U.S. holder, the non-U.S. holder did not own, actually or constructively,
notes with a fair market value greater than the fair market value on that
date
of 5% of our outstanding common stock or (2) if the Notes are regularly traded,
the non-U.S. holder did not own, actually or constructively, more than 5%
of the
total fair market value of the notes throughout the shorter of the period
during
which the non-U.S. holder held the notes being sold or the five-year period
ending on the date of the sale or exchange.
If
gain
on the sale or exchange of notes were subject to taxation under FIRPTA, the
non-U.S. shareholder would be subject to regular U.S. income tax with respect
to
any gain in the same manner as a taxable U.S. shareholder, subject to any
applicable alternative minimum tax and special alternative minimum tax in
the
case of nonresident alien individuals. In that case, withholding tax would
apply
and any withholding tax withheld pursuant to the rules applicable to
dispositions of a U.S. real property interest would be creditable against
such
non-U.S. holder’s U.S. federal income tax liability.
Adjustments
to Conversion Rate.
The
conversion rate is subject to adjustment in certain circumstances. Any such
adjustment could, in certain circumstances, give rise to a deemed distribution
to Non-U.S. Holders of the notes. See “— U.S. Holders of the Notes — Adjustments
to Conversion Rate,” above. In such case, the deemed distribution would be
subject to the rules described under “—U.S. Taxation of Non-U.S. Holders” below.
In
the
case of a deemed distribution, and because such deemed distribution will not
give rise to any cash from which any applicable U.S. federal withholding tax
can
be satisfied, the indenture provides that we may set off any withholding tax
that we are required to collect with respect to any such deemed distribution
or
payment against cash payments of interest or from cash or shares of our common
shares otherwise deliverable to a holder upon a conversion of notes or a
redemption or repurchase of a note. Until such time as judicial, legislative,
or
regulatory guidance becomes available that would, in the reasonable
determination of the Company, permit us to treat such deemed distributions
as
other than deemed dividend distributions treated as ordinary income, we in
general intend to withhold on such distributions at a 30% rate or whatever
treaty rate is applicable to ordinary income dividends from REITs, to the extent
such dividends are made out of our current or accumulated earnings and
profits.
Interest
or Gain Effectively Connected with Conduct of U.S. Trade or
Business.
Except
to the extent that an
applicable
income tax treaty otherwise provides, a
Non-U.S. Holder whose gain or interest (including discount) income with respect
to a note is effectively connected with the conduct of a trade or business
in
the United States by such Non-U.S. Holder, although exempt from the withholding
tax previously discussed if the holder furnishes an IRS Form W-8ECI, will
generally be subject to U.S. federal income tax on the gain or interest income
at regular U.S. federal income tax rates, as if the holder were a U.S. person.
In addition, if the Non-U.S. Holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30 percent of its “dividend equivalent amount,”
as such term is defined in the Code, for the taxable year, subject to
adjustment, unless it qualifies for a lower rate or an exemption under an
applicable tax treaty.
Information
Reporting and Backup Withholding Tax
Applicable to Holders of the Notes
U.S.
Holders.
In
general, backup withholding at the applicable rate will apply to payments on
a
note (including stated interest payments and payments of the proceeds from
the
sale, redemption, repurchase, conversion or other disposition of a note) to
a
U.S. Holder, unless the holder of the note (i) is a corporation or comes within
certain exempt categories and, when required, demonstrates that fact or (ii)
provides a correct taxpayer identification number, certifies as to its exemption
from backup withholding and otherwise complies with applicable requirements
of
the backup withholding rules. Certain penalties may be imposed by the IRS on
a
holder that is required to supply information but does not do so in the proper
manner. Information returns, to the extent required by applicable law, will
be
filed with the IRS in connection with payments on the notes.
Non-U.S.
Holders.
Information reporting requirements and backup withholding generally will not
apply to payments on a note to a Non-U.S. Holder if the statement described
above under “— Non-U.S. Holders of the Notes” is duly provided by such Holder,
provided that the withholding agent does not have actual knowledge that the
Holder is a U.S. person. Information reporting requirements and backup
withholding will not apply to any payment of the proceeds of the sale of a
note
effected outside the United States by a foreign office of a “broker” (as defined
in applicable Treasury regulations), unless such broker (i) is a U.S. person,
(ii) derives 50% or more of its gross income for certain periods from the
conduct of a trade or business in the United States, (iii) is a controlled
foreign corporation within the meaning of the Code or (iv) is a U.S. branch
of a
foreign bank or a foreign insurance company. Payment of the proceeds of any
such
sale effected outside the United States by a foreign office of any broker that
is described in (i), (ii) or (iii) of the preceding sentence will not be subject
to backup withholding, but will be subject to the information reporting
requirements unless such broker has documentary evidence in its records that
the
beneficial owner is a Non-U.S. Holder and certain other conditions are met,
or
the beneficial owner otherwise establishes an exemption. Payment of the proceeds
of any such sale to or through the U.S. office of a broker is subject to
information reporting and backup withholding requirements, unless the beneficial
owner of the note provides the statement described above under “— Non-U.S.
Holders of the Notes” or otherwise establishes an exemption.
Backup
withholding is not an additional tax. Any amounts withheld from a payment to
a
holder of a note under the backup withholding rules will be refunded or credited
against the non-U.S. Holder’s federal income tax liability if certain required
information is furnished to the IRS. Non-U.S. Holders should consult their
tax
advisors regarding application of backup withholding in their particular
circumstances and the availability of and procedure for obtaining an exemption
from backup withholding under current Treasury regulations.
Taxation
of the
Company as a REIT
We
have
elected to be treated as a REIT under Sections 856 through 860 of the Code
for
federal income tax purposes commencing with our taxable year ended December
31,
1985. We believe that we have been organized and have operated in a manner
that
qualifies for taxation as a REIT under the Code. We also believe that we will
continue to operate in a manner that will preserve our status as a REIT. We
cannot however, assure you that such requirements will be met in the
future.
We
have
received an opinion from Locke Liddell & Sapp LLP, our legal counsel, to the
effect that we qualified as a REIT under the Code commencing with our taxable
year ended December 31, 1985, we have been organized and have operated in
conformity with the requirements for qualification and taxation as a REIT under
the Code and that our proposed manner of operation will enable us to continue
to
satisfy the requirements for qualification as a REIT under the Code for the
calendar year 2006, and thereafter, based upon the representations made by
us in
a factual
representation
letter. However, you should be aware
that opinions of counsel are not binding on the IRS or on the courts, and,
if
the IRS were to challenge these conclusions, no assurance can be given that
these conclusions would be sustained in court. The opinion of Locke Liddell
& Sapp LLP is based on various assumptions as well as on certain
representations made by us as to factual matters. The rules governing REITs
are
highly technical and require ongoing compliance with a variety of tests that
depend, among other things, on future operating results, asset diversification,
distribution levels and diversity of share ownership.
Locke
Liddell & Sapp LLP will not monitor our compliance with these requirements.
While we expect to satisfy these tests, and will use our best efforts to do
so,
no assurance can be given that we will qualify as a REIT for any particular
year, or that the applicable law will not change and adversely affect us and
our
shareholders. See “— Failure to Qualify as a REIT.” The following is a summary
of the material federal income tax considerations affecting us as a REIT and
the
holders of our securities. This summary is qualified in its entirety by the
applicable Code provisions, relevant rules and regulations promulgated under
the
Code, and administrative and judicial interpretations of the Code and these
rules and regulations.
REIT
Qualification
We
must
be organized as an entity that would, if we do not maintain our REIT status,
be
taxable as a regular corporation. We cannot be a financial institution or an
insurance company. We must be managed by one or more trust managers. Our taxable
year must be the calendar year. Our beneficial ownership must be evidenced
by
transferable
shares. Our capital shares must be held by at least 100 persons 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. Not more than 50% of the value of the
shares of our capital shares may be held, directly or indirectly, applying
the
applicable constructive ownership rules of the Code, by five or fewer
individuals at any time during the last half of each of our taxable years.
We
must also meet certain other tests, described below, regarding the nature of
our
income and assets and the amount of our distributions.
Our
outstanding common shares are owned by a sufficient number of investors and
in
appropriate proportions to permit us to satisfy these share ownership
requirements. To protect against violations of these share ownership
requirements, our declaration of trust provides that no person is permitted
to
own, applying constructive ownership tests set forth in the Code, more than
9.8%
of our outstanding capital shares, unless the trust managers (including a
majority of the independent trust managers) are provided evidence satisfactory
to them in their sole discretion that our qualification as a REIT will not
be
jeopardized. In addition, our declaration of trust contains restrictions on
transfers of capital shares, as well as provisions that automatically convert
common shares into excess securities to the extent that the ownership otherwise
might jeopardize our REIT status. These restrictions, however may not ensure
that we will, in all cases, be able to satisfy the share ownership requirements.
If we fail to satisfy these share ownership requirements, except as provided
below, our status as a REIT will terminate. However, if we comply with the
rules
contained in applicable Treasury Regulations that require us to ascertain the
actual ownership of our shares and we do not know, or would not have known
through the exercise of reasonable diligence, that we failed to meet the 50%
requirement described above, we will be treated as having met this requirement.
See “—Failure to Qualify as a REIT.” We may also qualify for relief under
certain other provisions. See the section below entitled “—Relief from Certain
Failures of the REIT Qualification Requirements.”
To
monitor our compliance with the share ownership requirements, we are required
to
and we do maintain records disclosing the actual ownership of our common shares.
To do so, we will demand written statements each year from the record holders
of
certain percentages of shares in which the record holders are to disclose the
actual owners of the shares (i.e., the persons required to include in gross
income the REIT dividends). A list of those persons failing or refusing to
comply with this demand will be maintained as part of our records.
Shareholders
who fail or refuse to comply with the demand must submit a statement with their
tax returns disclosing the actual ownership of the shares and certain other
information.
We
currently satisfy, and expect to continue to satisfy, each of these requirements
discussed above. We also currently satisfy, and expect to continue to satisfy,
the requirements that are separately described below concerning the nature
and
amounts of our income and assets and the levels of required annual
distributions.
Sources
of Gross Income.
In order
to qualify as a REIT for a particular year, we also must meet two tests
governing the sources of our income - a 75% gross income test and a 95% gross
income test. These tests are designed to ensure that a REIT derives its
income principally from passive real estate investments.
The
Code
allows a REIT to own and operate properties through wholly-owned subsidiaries
which are “qualified REIT subsidiaries.” The Code provides that a qualified REIT
subsidiary is not treated as a separate corporation, and all of its assets,
liabilities and items of income, deduction and credit are treated as assets,
liabilities and items of income, deduction and credit of the REIT.
In
the
case of a REIT which is a partner in a partnership or any other entity such
as a
limited liability company that is treated 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. Also, the REIT will
be
deemed to be entitled to its proportionate share of the income of the
partnership. The character of the assets and gross income of the partnership
retains the same character in the hands of the REIT for purposes of Section
856
of the Code, including satisfying the gross income tests and the asset tests.
Thus, our proportionate share of the assets and items of income of any
partnership in which we own an interest are treated as our assets and items
of
income for purposes of applying the requirements described in this discussion,
including the income and asset tests described below.
75%
Gross Income Test.
At
least 75% of a REIT’s gross income for each taxable year must be derived from
specified classes of income that principally are real estate related. The
permitted categories of principal importance to
us
are:
| · |
rents
from real property;
|
| · |
interest
on loans secured by real property;
|
| · |
gains
from the sale of real property or loans secured by real property
(excluding gain from the sale of property held primarily for sale
to
customers in the ordinary course of our business, referred to below
as
“dealer property”);
|
| · |
income
from the operation and gain from the sale of property acquired in
connection with the foreclosure of a mortgage securing that property
(“foreclosure property”);
|
| · |
distributions
on, or gain from the sale of, shares of other qualifying
REITs;
|
| · |
abatements
and refunds of real property taxes;
|
| · |
amounts
received as consideration for entering into agreements to make loans
secured by real property or to purchase or lease real property; and
“qualified temporary investment income” (described
below).
|
In
evaluating our compliance with the 75% gross income test, as well as the 95%
gross income test described below, gross income does not include gross income
from “prohibited transactions.” In general, a prohibited transaction is one
involving a sale of dealer property, not including foreclosure property and
not
including certain dealer property we have held for at least four
years.
We
expect
that substantially all of our operating gross income will be considered rent
from real property and interest income. Rent from real property is qualifying
income for purposes of the gross income tests only if certain conditions are
satisfied. Rent from real property includes charges for services customarily
rendered to tenants, and rent attributable to personal property leased together
with the real property so long as the personal property rent is not more than
15% of the total rent received or accrued under the lease for the taxable year.
We do not expect to earn material amounts from such services or from personal
property.
Rent
from
real property generally does not include rent based on the income or profits
derived from the property. However, rent based on a percentage of gross receipts
or sales is permitted as rent from real property and we will have leases where
rent is based on a percentage of gross receipts or sales. We do not intend
to
lease property and
receive
rentals based on the tenant’s income or
profit. Also excluded from “rents from real property” is rent received from a
person or corporation in which we (or any of our 10% or greater owners) directly
or indirectly through the constructive ownership rules contained in Section
318
and Section 856(d)(5) of the Code, own a 10% or greater interest.
A
third
exclusion from qualifying rent income covers amounts received with respect
to
real property if we furnish services to the tenants or manage or operate the
property, other than through an “independent contractor” from whom we do not
derive any income or through a “taxable REIT subsidiary.” A taxable REIT
subsidiary is a corporation in which a REIT owns stock, directly or indirectly,
and with respect to which the corporation and the REIT have made a joint
election to treat the corporation as a taxable REIT subsidiary. The obligation
to operate through an independent contractor or a taxable REIT subsidiary
generally does not apply, however, if the services we provide are “usually or
customarily rendered” in connection with the rental of space for occupancy only
and are not considered rendered primarily for the convenience of the tenant
(applying standards that govern in evaluating whether rent from real property
would be unrelated business taxable income when received by a tax-exempt owner
of the property). Further, if the gross income from non-customary services
with
respect to a property, valued at no less than 150% of our direct cost of
performing such services, is 1% or less of the total income derived from the
property, then the provision of such non-customary services shall not prohibit
the rental income (except the non-customary service income) from qualifying
as
“rents from real property.”
We
believe that the only material services generally to be provided to tenants
will
be those usually or customarily
rendered in connection with the rental of space for occupancy only. We do not
intend to provide services that might be considered rendered primarily for
the
convenience of the tenants, such as hotel, health care or extensive recreational
or social services.
Consequently,
we believe that substantially all of our rental income will be qualifying income
under the gross income tests, and that our provision of services will not cause
the rental income to fail to be included under that test.
Upon
the
ultimate sale of our properties, any gains realized also are expected to
constitute qualifying income, as gain from the sale of real property (not
involving a prohibited transaction).
95%
Gross Income Test.
In
addition to earning 75% of our gross income from the sources listed above,
95%
of our gross income for each taxable year must come either from those sources,
or from dividends, interest or gains from the sale or other disposition of
stock
or other securities that do not constitute dealer property. This test permits
a
REIT to earn a significant portion of its income from traditional “passive”
investment sources that are not necessarily real estate related. The term
“interest” (under both the 75% and 95% tests) does not include amounts that are
based on the income or profits of any person, unless the computation is based
only on a fixed percentage of receipts or sales.
Failing
the 75% or 95% Tests; Reasonable Cause.
As a
result of the 75% and 95% tests, REITs generally are not permitted to earn
more
than 5% of their gross income from active sources, including brokerage
commissions or other fees for services rendered. We may receive certain types
of
that income. This type of income will not qualify for the 75% test or 95% test
but is not expected to be significant and that income, together with other
nonqualifying income, is expected to be at all times less than 5% of our annual
gross income. While we do not anticipate that we will earn substantial amounts
of nonqualifying income, if nonqualifying income exceeds 5% of our gross income,
we could lose our status as a REIT. We may establish taxable REIT subsidiaries
to hold assets generating non-qualifying income. The gross income generated
by
these subsidiaries would not be included in our gross income. However, dividends
we receive from these subsidiaries would be included in our gross income and
qualify for the 95% income test.
If
we
fail to meet either the 75% or 95% income tests during a taxable year, we may
still qualify as a REIT for that year if, following the identification of such
failure, (1) we file a description of each item of our gross income in
accordance with regulations prescribed by Treasury, and (2) the failure to
meet
the tests is due to reasonable cause and not to willful neglect. It is not
possible, however, to state whether in all circumstances we would be entitled
to
the benefit of this relief provision. For example, if we fail to satisfy the
gross income tests because nonqualifying income that we intentionally accrue
or
receive causes us to exceed the limits on nonqualifying income, the IRS could
conclude that our failure to satisfy the tests was not due to reasonable cause.
If these relief provisions do not
apply
to a particular set of circumstances, we will
not qualify as a REIT. As discussed below, even if these relief provisions
apply, and we retain our status as a REIT, a tax would be imposed with respect
to our non-qualifying income equal to the product of (i) the greater of the
amount by which we fail either the 75% or 95% income tests for that year and
(ii) a fraction intended to reflect our profitability. See “—Taxation as a
REIT,” below.
Prohibited
Transaction Income.
Any
gain that we realize on the sale of any property held as inventory or other
property held primarily for sale to customers in the ordinary course of business
(including our share of any such gain realized by any subsidiary partnerships),
will be treated as income from a prohibited transaction that is subject to
a
100% penalty tax. This prohibited transaction income may also adversely affect
our ability to satisfy the income tests for qualification as a REIT. Under
existing law, whether property is held as inventory or primarily for sale to
customers in the ordinary course of a trade or business depends on all the
facts
and circumstances surrounding the particular transaction. We intend to hold
our
and our subsidiary partnerships intend to hold their properties for investment
with a view to long-term appreciation, to engage in the business of acquiring,
developing and owning properties, and to make occasional sales of the properties
as are consistent with their investment objectives. The IRS may contend,
however, that one or more of these sales is subject to the 100% penalty
tax.
Character
of Assets Owned.
At the
close of each calendar quarter of our taxable year, we also must meet three
tests concerning the nature of our investments. First, at least 75% of the
value
of our total assets generally must consist of real estate assets, cash, cash
items (including receivables) and government securities. For this purpose,
“real
estate assets” include interests in real property, interests in loans secured by
mortgages on real property or by certain
interests in real property, shares in other REITs and certain options, but
excluding mineral, oil or gas royalty interests. The temporary investment of
new
capital in stock or debt instruments also qualifies under this 75% asset test,
but only for the one-year period beginning on the date we receive the new
capital.
Second,
although the balance of our assets generally may be invested without
restriction, we will not be permitted to own (1) securities of any one
non-governmental issuer (other than a taxable REIT subsidiary) that represent
more than 5% of the value of our total assets, (2) securities possessing more
than 10% of the voting power of the outstanding securities of any single issuer
or (3) securities having a value of more than 10% of the total value of the
outstanding securities of any one issuer. A REIT, however, may own 100% of
the
stock of a qualified REIT subsidiary, in which case the assets, liabilities
and
items of income, deduction and credit of the subsidiary are treated as those
of
the REIT. A REIT may also own more than 10% of the voting power or value of
a
taxable REIT subsidiary. Third, securities of a single taxable REIT subsidiary
may represent more than 5% of the value of the total assets but not more than
20% of the value of a REIT’s total assets may be represented by securities of
one or more taxable REIT subsidiaries. In evaluating a REIT’s assets, if the
REIT invests in a partnership, it is deemed to own its proportionate share
of
the assets of the partnership.
After
initially 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 we fail to satisfy
the asset tests because we acquire securities or other property during a
quarter, we can cure this failure by disposing of sufficient nonqualifying
assets within 30 days after the close of that quarter. We intend to take such
action within the 30 days after the close of any quarter as may be required
to
cure any noncompliance. If we fail to cure noncompliance with the asset tests
within this time period, we could cease to qualify as a REIT.
If
we
fail to satisfy one or more of the asset tests for any quarter of a taxable
year, we nevertheless may qualify as a REIT for such year if we qualify for
relief under certain provisions of the Code. Those relief provisions generally
will be available (i) for failures of the 5% asset test and the 10% asset tests
if the failure is due to the ownership of assets that do not exceed the lesser
of 1% of our total assets or $10 million, and the failure is corrected within
6
months following the quarter in which it was discovered or (ii) for the failure
of any asset test (including the failure to satisfy the 5% asset test or the
10%
asset tests where the failure is due to ownership of assets that exceed the
amount in (i) above) if the failure is due to reasonable cause and not due
to
willful neglect, we file a schedule with a description of each asset causing
the
failure in accordance with regulations prescribed by the Treasury, the failure
is corrected within 6 months following the quarter in which it was discovered,
and we pay a tax consisting of the greater of $50,000 or a tax computed at
the
highest corporate rate on the amount of net income generated by the assets
causing the failure from the date of failure until the assets are disposed
of or
we otherwise return to compliance with the asset test. We may not qualify for
the relief provisions in all circumstances.
Annual
Distributions to Shareholders.
To
maintain our REIT status, we generally must distribute as a dividend to our
shareholders in each taxable year at least 90% of our net ordinary income.
Capital gain is not required to be distributed. More precisely, we must
distribute an amount equal to (1) 90% of the sum of (a) our “REIT Taxable
Income” before deduction of dividends paid and excluding any net capital gain
and (b) any net income from foreclosure property less the tax on such income,
minus (2) certain limited categories of “excess noncash income,” including
income attributable to leveled stepped rents, cancellation of indebtedness
and
original issue discount income. REIT Taxable Income is defined to be the
taxable
income of the REIT, computed as if it were an ordinary corporation, with
certain
modifications. For example, the deduction for dividends paid is allowed,
but
neither net income from foreclosure property, nor net income from prohibited
transactions, is included. In addition, the REIT may carry over, but not
carry
back, a net operating loss for 20 years following the year in which it was
incurred.
A
REIT
may satisfy the 90% distribution test with dividends paid during the taxable
year and with certain dividends paid after the end of the taxable
year.
Dividends
paid in January that were declared during the last calendar quarter of the
prior
year and were payable to shareholders of record on a date during the last
calendar quarter of that prior year are treated as paid on December 31 of
the prior year. Other dividends declared before the due date of our tax return
for the taxable year, including extensions, also will be treated as paid in
the
prior year if they are paid (1) within 12 months of the end of that taxable
year
and (2) no later than our next regular distribution payment. Dividends that
are
paid after the close of a taxable year that do not qualify under the rule
governing payments made in January (described above) will be taxable
to the shareholders in the year paid, even though we may take them into account
for a prior year. A nondeductible excise tax equal to 4% will be imposed for
each calendar year to the extent that dividends declared and distributed or
deemed distributed on or before December 31 are less than the sum of (a) 85%
of
our “ordinary income” plus (b) 95% of our capital gain net income plus (c) any
undistributed income from prior periods.
To
be
entitled to a dividends paid deduction, the amount distributed by a REIT must
not be preferential. For example, every shareholder of the class of shares
to
which a distribution is made must be treated the same as every other shareholder
of that class, and no class of shares may be treated otherwise than in
accordance with its dividend rights as a class.
We
will
be taxed at regular corporate rates to the extent that we retain any portion
of
our taxable income. For example, if we distribute only the required 90% of
our
taxable income, we would be taxed on the retained 10%. Under certain
circumstances we may not have sufficient cash or other liquid assets to meet
the
distribution requirement. This could arise because of competing demands for
our
funds, or due to timing differences between tax reporting and cash receipts
and
disbursements (i.e., income may have to be reported before cash is received,
or
expenses may have to be paid before a deduction is allowed).
Although
we do not anticipate any difficulty in meeting this requirement, no assurance
can be given that necessary funds will be available. In the event these
circumstances do occur, then in order to meet the 90% distribution requirement,
we may have to arrange for short-term, or possibly long-term, borrowings to
permit the payment of required dividends.
If
we
fail to meet the 90% distribution requirement because of an adjustment to our
taxable income by the IRS, we may be able to cure the failure retroactively
by
paying a “deficiency dividend,” as well as applicable interest and penalties,
within a specified period.
Taxation
As a REIT
As
a
REIT, we generally will not be subject to corporate income tax to the extent
we
currently distribute our REIT taxable income to our shareholders. This treatment
effectively eliminates the “double taxation” imposed on investments in most
corporations. Double taxation refers to taxation that occurs once at the
corporate level when income is earned and once again at the shareholder level
when such income is distributed. We generally will be taxed only on the portion
of our taxable income that we retain, which will include any undistributed
net
capital gain, because we will be entitled to a deduction for dividends paid
to
shareholders during the taxable year. A dividends paid deduction is not
available for dividends that are considered preferential within any given class
of shares or as between classes except to the extent that class is entitled
to a
preference. We do not anticipate that we will pay any
of
those preferential dividends. Because excess
shares will represent a separate class of outstanding shares, the fact that
those shares will not be entitled to dividends should not adversely affect
our
ability to deduct our dividend payments.
Even
as a
REIT, we will be subject to tax in certain circumstances as
follows:
| · |
we
would be subject to tax on any income or gain from foreclosure property
at
the highest corporate rate (currently 35%);
|
| · |
a
confiscatory tax of 100% applies to any net income from prohibited
transactions;
|
| · |
if
we fail to meet either the 75% or 95% source of income tests described
above, but still qualify for REIT status under the reasonable cause
exception to those tests, a tax would be imposed equal to the amount
obtained by multiplying (a) the greater of the amount, if any, by
which it
failed either the 75% income test or the 95% income test, times (b)
a
fraction intended to reflect our
profitability;
|
| · |
if
we fail the 5% asset test or either of the 10% asset tests (and do
not
qualify for a de
minimis
safe harbor) or fail to satisfy one or more of the other asset tests
for
any quarter of a taxable year, but nonetheless continue to qualify
as a
REIT because we qualify under certain relief provisions, we may be
required to pay a
tax of the greater of $50,000 or a tax computed at the highest corporate
rate on the amount of net income generated by the assets causing
the
failure from the date of failure until the assets are disposed of
or we
otherwise return to compliance with the asset
test;
|
| · |
if
we fail to satisfy one or more of the requirements for REIT qualification
(other than the income tests or the rules providing relief from
asset test
failures, described above), we nevertheless may avoid termination
of our
REIT election in such year if the failure is due to reasonable
cause and
not due to willful neglect and we pay a penalty of $50,000 for
each
failure to satisfy the REIT qualification
requirements;
|
| · |
we
will be subject to the alternative minimum tax on items of tax preference,
excluding items specifically allocable to our
shareholders;
|
| · |
if
we should fail to distribute with respect to each calendar year at
least
the sum of (a) 85% of our REIT ordinary income for that year, (b)
95% of
our REIT capital gain net income for that year, and (c) any undistributed
taxable income from prior years, we would be subject to a 4% excise
tax on
the excess of the required distribution over the amounts actually
distributed;
|
| · |
we
also may be taxed at the highest regular corporate tax rate on any
built-in gain attributable to assets that we acquire in certain tax-free
corporate transactions, to the extent the gain is recognized during
the
first ten years after we acquire those assets. Built-in gain is the
excess
of (a) the fair market value of the asset over (b) our adjusted basis
in
the asset, in each case determined as of the beginning of the ten-year
recognition period; and
|
| · |
we
will be taxed at regular corporate rates on any undistributed REIT
taxable
income, including undistributed net capital
gains.
|
In
addition, a tax is imposed on a REIT equal to 100% of redetermined rents,
redetermined deductions and excess interest. Redetermined rents are generally
rents from real property which would otherwise be reduced on distribution,
apportionment or allocation to clearly reflect income as a result of services
furnished or rendered by a taxable REIT subsidiary to tenants of the REIT.
There
are a number of exceptions with regard to redetermined rents, which are
summarized below.
| · |
Redetermined
rents do not include de
minimis
payments received by the REIT with respect to non-customary services
rendered to the tenants of a property owned by the REIT that do not
exceed
1% of all amounts received by the REIT with respect to the
property.
|
| · |
The
redetermined rent provisions do not apply with respect to any services
rendered by a taxable REIT subsidiary to the tenants of the REIT,
as long
as the taxable REIT subsidiary renders a significant amount of
similar services to persons other than the REIT and to tenants
who are
unrelated to the REIT or the taxable REIT subsidiary or the REIT
tenants,
and the charge for these services is substantially comparable to
the
charge for similar services rendered to such unrelated
persons.
|
| · |
The
redetermined rent provisions do not apply to any services rendered
by a
taxable REIT subsidiary to a tenant of a REIT if the rents paid by
tenants
leasing at least 25% of the net leasable space in the REIT’s property who
are not receiving such services are substantially comparable to the
rents
paid by tenants leasing comparable space who are receiving the services
and the charge for the services is separately
stated.
|
| · |
The
redetermined rent provisions do not apply to any services rendered
by a
taxable REIT subsidiary to tenants of a REIT if the gross income
of the
taxable REIT subsidiary from these services is at least 150% of the
taxable REIT subsidiary’s direct cost of rendering the
service.
|
| · |
The
Secretary of the Treasury has the power to waive the tax that would
otherwise be imposed on redetermined rents if the REIT establishes
to the
satisfaction of the Secretary that rents charged to tenants were
established on an arm’s length basis even though a taxable REIT subsidiary
provided services to the tenants.
|
Redetermined
deductions are deductions, other than redetermined rents, of a taxable REIT
subsidiary if the amount of these deductions would be decreased on distribution,
apportionment or allocation to clearly reflect income between the taxable REIT
subsidiary and the REIT. Excess interest means any deductions for interest
payments made by a taxable REIT subsidiary to the REIT to the extent that the
interest payments exceed a commercially reasonable rate of
interest.
Relief
From Certain Failures of the REIT Qualification Provisions
If
we
fail to satisfy one or more of the requirements for REIT qualification (other
than the income tests or the rules providing relief from asset test failures,
described above), we nevertheless may avoid termination of our REIT election
in
such year if the failure is due to reasonable cause and not due to willful
neglect and we pay a penalty of $50,000 for each failure to satisfy the REIT
qualification requirements. We may not qualify for this relief provision in
all
circumstances.
Failure
To Qualify As a REIT
For
any
taxable year in which we fail to qualify as a REIT and certain relief provisions
do not apply, we would be taxed at regular corporate rates, including
alternative minimum tax rates on all of our taxable income.
Distributions
to our shareholders would not be deductible in computing that taxable income,
and distributions would no longer be required to be made. Any corporate level
taxes generally would reduce the amount of cash available for distribution
to
our shareholders and, because the shareholders would continue to be taxed on
the
distributions they receive, the net after tax yield to the shareholders from
their investment likely would be reduced substantially. As a result, failure
to
qualify as a REIT during any taxable year could have a material adverse effect
on an investment in our common shares. If we lose our REIT status, unless
certain relief provisions apply, we would not be eligible to elect REIT status
again until the fifth taxable year which begins after the taxable year during
which our election was terminated. It is not possible to state whether in all
circumstances we would be entitled to this statutory relief.
Taxation
of Taxable U.S. Holders
Except
as
discussed below, distributions generally will be taxable to taxable U.S. Holders
as ordinary income to the extent of our current or accumulated earnings and
profits. We may generate cash in excess of our net earnings. If we distribute
cash to shareholders in excess of our current and accumulated earnings and
profits (other than as a capital gain dividend), the excess cash will be deemed
to be a return of capital to each shareholder to the extent of
the
adjusted tax basis of the shareholder’s shares.
Distributions in excess of the adjusted tax basis will be treated as gain from
the sale or exchange of the shares. A shareholder who has received a
distribution in excess of our current and our accumulated earnings and profits
may, upon the sale of the shares, realize a higher taxable gain or a smaller
loss because the basis of the shares as reduced will be used for purposes of
computing the amount of the gain or loss. Distributions we make, whether
characterized as ordinary income or as capital gains, are not eligible for
the
dividends received deduction for corporations. For purposes of determining
whether distributions to holders of common shares are out of current or
accumulated earnings and profits, our earnings and profits will be allocated
first to the outstanding preferred shares, if any, and then to the common
shares.
Dividends
we declare in October, November or December of any year and payable to a
shareholder of record on a specified date in any of these months shall be
treated as both paid by us and received by the shareholder on December 31 of
that year, provided we actually pay the dividend on or before January 31 of
the
following calendar year. Shareholders may not include in their own income tax
returns any of our net operating losses or capital losses.
Distributions
that we properly designate as capital gain dividends will be taxable to taxable
U.S. shareholders as gains from the sale or disposition of a capital asset
to
the extent that they do not exceed our actual net capital gain for the taxable
year. Depending on the period of time the tax characteristics of the assets
which produced these gains, and on certain designations, if any, which we may
make, these gains may be taxable to non-corporate U.S. shareholders at a 15%
or
25% rate. U.S. shareholders that are corporations may, however, be required
to
treat up to 20% of certain capital gain dividends as ordinary
income.
We
may
elect to retain, rather than distribute as a capital gain dividend, our net
long-term capital gains. If we make this election, we would pay tax on our
retained net long-term capital gains. In addition, to the extent we designate,
a
U.S. shareholder generally would:
| · |
include
its proportionate share of our undistributed long-term capital gains
in
computing its long-term capital gains in its return for its taxable
year
in which the last day of our taxable year
falls;
|
| · |
be
deemed to have paid the capital gains tax imposed on us on the designated
amounts included in the U.S. shareholder’s long-term capital
gains;
|
| · |
receive
a credit or refund for the amount of tax deemed paid by
it;
|
| · |
increase
the adjusted basis of its common shares by the difference between
the
amount of includable gains and the tax deemed to have been paid by
it;
and, in the case of a U.S. Holder that is a corporation, appropriately
adjust its earnings and profits for the retained capital gains in
accordance with Treasury Regulations to be prescribed by the
IRS.
|
Distributions
we make and gain arising from the sale or exchange by a U.S. Holder of our
shares will not be treated as income from a passive activity, within the meaning
of Section 469 of the Code, since income from a passive activity generally
does
not include dividends and gain attributable to the disposition of property
that
produces dividends. As a result, U.S. Holders subject to the passive activity
rules will generally be unable to apply any “passive losses” against this income
or gain.
Distributions
we make, to the extent they do not constitute a return of capital, generally
will be treated as investment income for purposes of computing the investment
interest limitation. Gain arising from the sale or other disposition of our
shares, however, will be treated as investment income if a shareholder so
elects, in which case the capital gain is taxed at ordinary income
rates.
Generally,
gain or loss realized by a shareholder upon the sale of shares will be
reportable as capital gain or loss. If a shareholder receives a long-term
capital gain dividend from us and has held the shares for six months or less,
any loss incurred on the sale or exchange of the shares is treated as a
long-term capital loss to the extent of the corresponding long-term capital
gain
dividend received. All or a portion of any loss a taxable U.S. Holder realizes
upon a taxable disposition of shares may be disallowed if the taxable U.S.
Holder purchases substantially identical shares within the 61 day period
beginning 30 days before and ending 30 days after the disposition.
In
any
year in which we fail to qualify as a REIT, the shareholders generally will
continue to be treated in the same fashion described above, except that none
of
our dividends will be eligible for treatment as capital gains dividends,
corporate shareholders will qualify for the dividends received deduction
and the
shareholders will not be required to report any share of our tax preference
items. Also, dividend distributions would be “qualified dividend income,” which
in the hands of individual shareholders is taxable at the long term capital
gain
rates for individuals.
The
tax
rate on both dividends and long-term capital gains for most non-corporate
taxpayers is 15% until 2010. This reduced maximum tax rate generally does not
apply to ordinary REIT dividends, which continue to be subject to tax at the
higher tax rates applicable to ordinary income (a maximum rate of 35%). The
15%
maximum tax rate, however, does apply to (1) long-term capital gains recognized
on the disposition of REIT shares; (2) REIT capital gain distributions (except
to the extent attributable to real estate depreciation, in which case such
distributions continue to be subject to a 25% tax rate), (3) REIT dividends
attributable to dividends received by the REIT from non-REIT corporations,
such
as taxable REIT subsidiaries, and (4) REIT dividends attributable to income
that
was subject to corporate income tax at the REIT level (e.g., when the REIT
distributes taxable income that had been retained and taxed at the REIT level
in
the prior taxable year).
Backup
Withholding
We
will
report to our shareholders and the IRS the amount of dividends paid during
each
calendar year and the amount of tax withheld, if any. If a shareholder is
subject to backup withholding, we will be required to deduct and withhold
a tax from any dividends payable to that shareholder. These rules may apply
(1)
when a shareholder fails to supply a correct taxpayer identification number,
(2)
when the IRS notifies us that the shareholder is subject to the rules or has
furnished an incorrect taxpayer identification number, or (3) in the case of
corporations or others within certain exempt categories, when they fail to
demonstrate that fact when required. A shareholder that does not provide a
correct taxpayer identification number may also be subject to penalties imposed
by the IRS. Any amount withheld as backup withholding may be credited against
the shareholder’s federal income tax liability. We also may be required to
withhold a portion of capital gain distributions made to shareholders who fail
to certify their non-foreign status.
Taxation
of Tax-Exempt Entities
In
general, a tax-exempt entity that is a shareholder will not be subject to tax
on
distributions or gain realized on the sale of shares. The IRS has confirmed
that
a REIT’s distributions to a tax exempt employees’ pension trust do not
constitute unrelated business taxable income. A tax-exempt entity may be subject
to unrelated business taxable income, however, to the extent that it has
financed the acquisition of its shares with “acquisition indebtedness” within
the meaning of the Code. In determining the number of shareholders a REIT has
for purposes of the 5/50 rule described above under “—REIT Qualification,”
generally, any shares held by tax-exempt employees’ pension and profit sharing
trusts which qualify under Section 401(a) of the Code and are exempt from tax
under Section 501(a) of the Code will be treated as held directly by its
beneficiaries in proportion to their interests in the trust and will not be
treated as held by the trust.
One
of
these trusts owning more than 10% of a REIT may be required to treat a
percentage of dividends from the REIT as UBTI. The percentage is determined
by
dividing the REIT’s gross income (less direct expenses related thereto) derived
from an unrelated trade or business for the year (determined as if the REIT
were
a qualified trust) by the gross income of the REIT for the year in which the
dividends are paid. However, if this percentage is less than 5%, dividends
are
not treated as UBTI. These UBTI rules apply only if the REIT qualifies as a
REIT
because of the “look-thru” rule with respect to the 5/50 rule discussed above
and if the trust is “predominantly held” by qualified trusts. A REIT is
predominantly held by qualified trusts if at least one pension trust owns more
than 25% of the value of the REIT or a group of pension trusts each owning
more
than 10% of the value of the REIT collectively own more than 50% of the value
of
the REIT. We do not currently meet either of these requirements.
For
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), (c)(9), (c)(17) and (c)(20) of the
Code, respectively, income from an investment in our capital shares will
constitute UBTI unless the organization is able to deduct an amount properly
set
aside or placed in reserve for certain purposes so as to offset the UBTI
generated by the investment in our capital shares. These prospective investors
should consult their
own
tax advisors concerning the “set aside” and
reserve requirements.
Taxation
of Non-U.S. Holders
The
rules
governing federal income taxation of Non-U.S. Holders are complex and no attempt
will be made herein to provide more than a summary of such rules. Prospective
Non-U.S. Holders should consult with their own tax advisors to determine the
impact of federal, state and local income tax laws with regard to an investment
in common shares, including any reporting requirements, as well as the tax
treatment of such an investment under the laws of their home
country.
Dividends
that are not attributable to gain from any sales or exchanges we make of United
States real property interests and which we do not designate as capital gain
dividends will be treated as dividends of ordinary income to the extent that
they are made out of our current or accumulated earnings and profits. Those
dividends ordinarily will be subject to a withholding tax equal to 30% of the
gross amount of the dividend unless an applicable tax treaty reduces or
eliminates that tax. However, if income from the investment in the common shares
is treated as effectively connected with the Non-U.S. Holder’s conduct of a
United States trade or business, the Non-U.S. Holder generally will be subject
to a tax at graduated rates, in the same manner as U.S. Holders are taxed with
respect to those dividends, and may also be subject to the 30% branch profits
tax in the case of a shareholder that is a foreign corporation. For withholding
tax purposes, we are required to withhold at a 30% rate on all distributions
made out of our current and accumulated earnings and profits and thus we intend
to withhold at such rate, or a reduced treaty rate if
applicable, on the amount of any such distribution (other than distributions
designated as capital gain dividends) made to a Non-U.S. Holder unless (1)
the
Non-U.S. Holder files on IRS Form W-8BEN claiming that a lower treaty rate
applies or (2) the Non-U.S. Holder files an IRS Form W-8ECI claiming that the
dividend is effectively connected income.
Under
certain Treasury Regulations, we would not be required to withhold at the 30%
rate on distributions we reasonably estimate to be in excess of our current
and
accumulated earnings and profits. Dividends in excess of our 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 shareholder’s shares,
but rather will reduce the adjusted basis of those shares. To the extent that
those dividends exceed the adjusted basis of a Non-U.S. Holder’s shares, they
will give rise to tax liability if the Non-U.S. Holder would otherwise be
subject to tax on any gain from the sale or disposition of his shares, as
described below. If it cannot be determined at the time a dividend is paid
whether or not a dividend will be in excess of current and accumulated earnings
and profits, the dividend will be subject to such withholding. We do not intend
to make quarterly estimates of that portion of dividends that are in excess
of
earnings and profits, and, as a result, all dividends will be subject to such
withholding. However, the Non-U.S. Holder may seek a refund of those amounts
from the IRS.
For
periods through the 2004 taxable year in which we qualified as a REIT,
distributions that were attributable to gain from our sales or exchanges of
United States real property interests were taxed to a Non-U.S. Holder under
the
provisions of FIRPTA. Under FIRPTA, those dividends were taxed to a Non-U.S.
Holder as if the gain were effectively connected with a United States business.
Non-U.S. Holders were thus taxed at the normal capital gain rates applicable
to
U.S. Holders subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien individuals. Also,
dividends subject to FIRPTA may have been subject to a 30% branch profits tax
in
the hands of a corporate Non-U.S. Holder not entitled to treaty exemption.
We
were required by the Code and applicable Treasury Regulations to withhold 35%
of
any dividend that could be designated as a capital gain dividend. This amount
was creditable against the Non-U.S. Holder’s FIRPTA tax liability.
Beginning
in the 2005 taxable year, the above taxation under FIRPTA of distributions
attributable to gains from our sales or exchanges of United States real property
interests (or such gains that are retained and deemed to be distributed) will
not apply, provided our common shares are “regularly traded” on an established
securities market in the United States, and the Non-U.S. Holder does not own
more than 5% of the common shares at any time during the one year period ending
on the date of the distribution. Instead, such amounts will be taxable as a
dividend of ordinary income not effectively connected to a U.S. trade or
business, as described earlier. A Non-U.S. Holder owning more than 5% of our
common shares could be subject to the prior rules.
Gain
recognized by a Non-U.S. Holder upon a sale of shares generally will not be
taxed under FIRPTA if we are
a
“domestically
controlled REIT,” defined generally
as a REIT in which at all times during a specified testing period less than
50%
in value of the shares was held directly or indirectly by foreign persons.
It is
currently anticipated that we will be a “domestically controlled REIT,” and
therefore the sale of shares will not be subject to taxation under FIRPTA.
Because the common shares will be publicly traded, however, no assurance can
be
given that we will remain a “domestically controlled REIT.” Gain not subject to
FIRPTA will be taxable to a Non-U.S. Holder if (1) investment in the common
shares is effectively connected with the Non-U.S. Holder’s United States trade
or business, in which case the Non-U.S. Holder will be subject to the same
treatment as U.S. shareholders with respect to that gain, and may also be
subject to the 30% branch profits tax in the case of a corporate Non-U.S.
Holder, or (2) the Non-U.S. Holder is a nonresident alien individual who was
present in the United States for 183 days or more during the taxable year and
has a “tax home” in the United States, in which case the nonresident alien
individual will be subject to a 30% withholding tax on the individual’s capital
gains. If we were not a domestically controlled REIT, whether or not a Non-U.S.
Holder’s sale of shares would be subject to tax under FIRPTA would depend on
whether or not the common shares were regularly traded on an established
securities market (such as the NYSE) and on the size of selling Non-U.S.
Holder’s interest in our capital shares. If the gain on the sale of shares were
to be subject to taxation under FIRPTA, the Non-U.S. Holder will be subject
to
the same treatment as U.S. Holders with respect to that gain (subject to
applicable alternative minimum tax and a special alternative minimum tax in
the
case of nonresident alien individuals and the possible application of the 30%
branch profits tax in the case of foreign corporations) and the purchaser of
our
common shares may be required to withhold 10% of the gross purchase
price.
State
And Local Taxes
We,
and
our noteholders and shareholders, may be subject to state or local taxation
in
various state or local jurisdictions, including those in which it or they
transact business or reside. Consequently, our noteholders and shareholders
should consult their own tax advisors regarding the effect of state and local
tax laws on an investment in our notes or shares.
SELLING
SECURITYHOLDERS
We
originally issued the notes in a private placement in August 2006 to Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., and Morgan Stanley & Co.
Incorporated. The notes were subsequently resold by the initial purchasers
to
purchasers, including the selling securityholders listed below, in transactions
exempt from registration pursuant to Rule 144A under the Securities Act. Selling
securityholders may from time to time offer and sell the notes and the
underlying common shares pursuant to this prospectus. When we refer to the
“selling securityholders” in this prospectus, we mean those persons listed in
the table below, as well as the pledgees, donees, assignees, transferees,
successors and other who later hold any of the selling securityholders’
interests.
The
following table contains information as of October 31, 2006 with respect to
the selling securityholders and the principal amount of notes and the underlying
common shares beneficially owned by each selling securityholder that may be
offered using this prospectus. However, the number of common shares into which
the notes are initially convertible is subject to adjustment as provided in
“Description of the Notes - Conversion Rate Adjustments.”
Selling
Securityholders Table
|
Name
|
Principal
Amount of Notes Beneficially Owned That May Be
Sold
|
Percentage
of Notes Outstanding
|
Number
of Common Shares That May Be Sold (1)
|
Percentage
of Common Shares Outstanding (2)
|
| |
|
|
|
|
|
1976
Distribution Trust FBO AR Lauder
|
6,000
|
*
|
122.26
|
*
|
|
2000
Revocable Trust FBO AR - Lauder
|
5,000
|
*
|
101.89
|
*
|
|
ADI
Alternative Investments
|
3,000,000
|
*
|
61,131.00
|
*
|
|
ADI
Alternative Investments c/o ADI Multistrategies
|
500,000
|
*
|
10,188.50
|
*
|
|
ADI
Alternative Investments c/o Axis Pan
|
500,000
|
*
|
10,188.50
|
*
|
|
ADI
Alternative Investments c/o Casam ADI CB Arbitrage
|
2,000,000
|
*
|
40,754.00
|
*
|
|
ADI
Alternative Investments c/o Kallista Arbitrage Strategies
|
2,000,000
|
*
|
40,754.00
|
*
|
|
ADI
Alternative Investments c/o Kallista Masterfund Limited
|
4,000,000
|
*
|
81,508.00
|
*
|
|
Advent
Convertible Master Fund LP
|
8,539,000
|
1.49%
|
173,999.20
|
*
|
|
Altma
Fund Sicav PLC in respect of Trinity Subfund
|
625,000
|
*
|
12,735.63
|
*
|
|
AM
International E MAC 63, Ltd.
|
1,385,000
|
*
|
28,222.15
|
*
|
|
AM
Master Fund I, LP
|
2,595,000
|
*
|
52,878.32
|
*
|
| Aristeia
Partners LP |
3,300,000
|
*
|
67,244.10
|
*
|
|
Bancroft
IAM Limited+
|
4,000,000
|
*
|
81,508.00
|
*
|
|
Beamtenversicherungskasse
des Kanton Zurich+
|
5,000,000
|
*
|
101,885.00
|
*
|
|
Bernische
Lehrerversicherungskasse+
|
1,300,000
|
*
|
26,490.10
|
*
|
|
Black
Diamond Convertible Offshore LDC
|
2,500,000
|
*
|
50,942.50
|
*
|
|
Black
Diamond Offshore Ltd.
|
1,037,000
|
*
|
21,130.95
|
*
|
|
CIBC
World Mkts Corp#
|
2,500,000
|
*
|
50,942.50
|
*
|
|
Citigroup
Global Markets Inc.#
|
6,971,000
|
1.21%
|
142,048.07
|
*
|
|
CQS
Convertible and Quantitative Strategies Master Fund
Limited
|
28,500,000
|
4.96%
|
580,744.50
|
|
|
Double
Black Diamond Offshore LDC
|
6,463,000
|
1.12%
|
131,696.55
|
*
|
|
FFVA
Mutual Insurance Company
|
54,000
|
*
|
1,100.36
|
*
|
|
Fore
Convertible Master Fund, Ltd.+ (3)
|
13,807,000
|
2.40%
|
281,345.24
|
*
|
|
Fore
ERISA Fund, Ltd. + (4)
|
1,193,000
|
*
|
24,309.76
|
*
|
|
Gemini
Sammelstiftung Zur For Der Ung Der Personalvorsorge+
|
550,000
|
*
|
11,207.35
|
*
|
|
Name
|
Principal
Amount of Notes Beneficially Owned That May Be
Sold
|
Percentage
of Notes Outstanding
|
Number
of Common Shares That May Be Sold (1)
|
Percentage
of Common Shares Outstanding (2)
|
| |
|
|
|
|
|
Georgia
Municipal Employee Benefit System
|
1,290,000
|
*
|
26,286.33
|
*
|
|
Hershey
Foods Corporation Master Retirement Trust (5)
|
132,000
|
*
|
2,689.76
|
*
|
|
HFR
Convertible Arbitrage
|
595,000
|
*
|
12,124.32
|
*
|
|
Independence
Blue Cross
|
710,000
|
*
|
14,467.67
|
*
|
|
Jefferies
Umbrella Fund Global Convertible Bond+
|
5,700,000
|
*
|
116,148.90
|
*
|
|
John
Hancock Funds II - Real Estate Equity Fund (6)
|
1,606,000
|
*
|
32,724.46
|
*
|
|
John
Hancock Trust - Real Estate Equity Trust (7)
|
1,632,000
|
*
|
33,255.26
|
*
|
|
KBC
Convertible MAC 28 Limited+
|
7,000,000
|
1.22%
|
142,639.00
|
*
|
|
KBC
Diversified Fund, a Segregated Portfolio of KBC Diversified Fund,
SPC+
|
14,000,000
|
2.43%
|
285,278.00
|
*
|
|
KBC
Financial Products USA Inc.#
|
2,600,000
|
*
|
52,980.20
|
*
|
|
Lyxor/AM
Investment Fund Ltd.
|
395,000
|
*
|
8,048.92
|
*
|
|
Lyxor
Convertible Arbitrage Fund
|
336,000
|
*
|
6,846.67
|
*
|
|
Lyxor
Quest Fund Ltd.
|
3,000,000
|
*
|
61,131.00
|
*
|
|
Magnetar
Capital Master, Ltd.
|
10,000,000
|
1.74%
|
203,770.00
|
*
|
|
Merced
Partners Limited Partnership
|
2,800,000
|
*
|
57,055.60
|
*
|
|
Pendragon
(Convertibles) Fund Ltd.
|
28,670,000
|
4.99%
|
584,208.59
|
*
|
|
Pensionkasse
Der Antalis AG+
|
80,000
|
*
|
1,630.16
|
*
|
|
Pensionkasse
Der Lonza AG+
|
300,000
|
*
|
6,113.10
|
*
|
|
Pensionkasse
Der Rockwell Automation AG+
|
160,000
|
*
|
3,260.32
|
*
|
|
Pensionkasse
Huntsman+
|
160,000
|
*
|
3,260.32
|
*
|
|
Police
& Firemen of the City of Detroit
|
520,000
|
*
|
10,596.04
|
*
|
|
PV
Promea+
|
350,000
|
*
|
7,131.95
|
*
|
|
Quest
Global Convertible Master Fund Ltd.
|
1,000,000
|
*
|
20,377.00
|
*
|
|
Radcliffe
SPC, Ltd for and on behalf of the Class A Convertible Crossover
Segregated Portfolio
|
28,500,000
|
4.96%
|
580,744.50
|
*
|
|
RBC
Capital Markets#
|
3,000,000
|
*
|
61,131.00
|
*
|
|
Rhythm
Fund, Ltd.+
|
14,000,000
|
2.43%
|
285,278.00
|
*
|
|
Satellite
Convertible Arbitrage Masterfund LLC
|
7,000,000
|
|
142,639.00
|
*
|
|
Suttonbrook
Capital Portfolio LP
|
40,000,000
|
6.96%
|
815,080.00
|
*
|
|
Tamarack
International Ltd.
|
1,200,000
|
*
|
24,452.40
|
*
|
|
The
Grable Foundation
|
80,000
|
*
|
1,630.16
|
*
|
|
T.
Rowe Price Real Estate Fund, Inc. (8)
|
9,330,000
|
1.62%
|
190,117.41
|
*
|
|
Trustmark
|
335,000
|
*
|
6,826.30
|
*
|
|
UBS
AG London F/B/O HFS+
|
10,000,000
|
1.74%
|
203,770.00
|
*
|
|
UBS
Securities LLC# (9)
|
3,859,000
|
*
|
78,634.84
|
*
|
|
Universal
Investment Gesellschaft MBH Ref Aventis+
|
5,000,000
|
*
|
101,885.00
|
*
|
|
Vicis
Capital Master Fund
|
9,000,000
|
1.57%
|
183,393.00
|
*
|
|
Waterstone
Market Neutral Master Fund, Ltd.
|
9,386,000
|
1.63%
|
191,258.52
|
*
|
|
Waterstone
Market Neutral MAC 51, Ltd.
|
5,614,000
|
*
|
114,396.48
|
*
|
|
Zurich
Institutional Funds, Wandelanleihen+
|
1,300,000
|
*
|
26,490.10
|
*
|
|
Unnamed
holders of notes or future transferee, distributee, pledgee,
donee, or
successor of any such unnamed holder (10) (11)
|
242,030,000
|
42.09%
|
4,931,845.31
|
5.45%
|
____________________________
*
Less
than
1%.
#
Broker-Dealer
+
Affiliate of a broker-dealer
| |
(1)
|
Assumes
conversion of all of the holder’s notes at a conversion rate of 20.3770 of
our common shares for each $1,000 principal amount of notes. However,
this
conversion rate is subject to adjustment as described under “Description
of Notes — Conversion Rate Adjustments.” As a result, the amount of common
shares issuable upon conversion of the notes may increase or decrease
in
the future.
|
| |
(2)
|
Calculated
based on Rule 13d-3(d)(i) of the Exchange Act using 85,609,219 common
shares outstanding as of October 25, 2006. In calculating this
amount, we
treated as outstanding the number of common shares issuable upon
conversion of all of that particular holder’s notes. However, we did not
assume the conversion of any other holder’s
notes.
|
| |
(3)
|
As
of August 8, 2006, Fore Convertible Master Fund had a short position
in
our common shares of 105,552.
|
| |
(4)
|
As
of August 8, 2006, Fore ERISA Fund, Ltd. had a short position in
our
common shares of 9,121.
|
| |
(5)
|
As
of October 18, 2006, Hershey Foods Corporation owned 10,300 of
our common
shares that are not subject to this Registration
Statement.
|
| |
(6)
|
As
of October 18, 2006, John Hancock Funds II - Real Estate Equity
Fund owned
98,200 of our common shares that are not subject to this Registration
Statement.
|
| |
(7)
|
As
of October 18, 2006, John Hancock Trust - Real Estate Equity Trust
owned
1,632,000 of our common shares that are not subject to this Registration
Statement.
|
| |
(8)
|
As
of October 18, 2006, T. Rowe Price Real Estate Fund, Inc. owned
695,000 of
our common shares that are not subject to this Registration
Statement.
|
| |
(9)
|
As
of October 16, 2006, UBS Securities LLC owned 8,911 of our common
shares
and 834 of our 6.95% Series E Cumulative Redeemable Preferred
Shares.
|
| |
(10)
|
Information
about other selling securityholders will be set forth in amendments
to the
registration statement of which this prospectus forms a part, or
in
prospectus supplements, if
required.
|
| |
(11)
|
Assumes
that any other holders of notes, or any future transferees, pledgees,
donees or successors of or from any such other holders of notes,
do not
beneficially own any common shares other than the common shares
issuable
upon conversion of the notes at the initial conversion
rate.
|
Voting/Investment
Control Table
|
Selling
Securityholder
|
Natural
person or persons with
voting
or dispositive power
|
| |
|
|
1976
Distribution Trust FBO AR Lauder
|
Tracy
Maitland
|
|
2000
Revocable Trust FBO AR - Lauder
|
Tracy
Maitland
|
|
ADI
Alternative Investments
|
Patrick
Hobin
|
|
ADI
Alternative Investments c/o ADI Multistrategies
|
Patrick
Hobin
|
|
ADI
Alternative Investments c/o Axis Pan
|
Patrick
Hobin
|
|
ADI
Alternative Investments c/o Casam ADI CB Arbitrage
|
Patrick
Hobin
|
|
ADI
Alternative Investments c/o Kallista Arbitrage Strategies
|
Patrick
Hobin
|
| Selling
Securityholder |
Natural
person or persons with
voting
or dispositive power
|
| |
|
|
ADI
Alternative Investments c/o Kallista Masterfund Limited
|
Patrick
Hobin
|
|
Advent
Convertible Master Fund LP
|
Tracy
Maitland
|
|
Altma
Fund Sicav PLC in respect of Trinity Subfund
|
AM
Investment Partners serves as investment advisor. Mark Friedman
and Adam
Stern have voting authority.
|
|
AM
International E MAC 63, Ltd.
|
AM
Investment Partners serves as investment advisor. Mark Friedman
and Adam
Stern have voting authority.
|
|
AM
Master Fund I, LP
|
AM
Investment Partners serves as investment advisor. Mark Friedman
and Adam
Stern have voting authority.
|
|
Aristeia
Partners LP
|
Aristeia
Advisors LLC is the general partner of Aristeia Partners LP.
Aristeia
Advisors LLC is jointly owned by Kevin Toner, Robert H. Lynch
Jr., Anthony
Frascella and William R. Techar.
|
|
Bancroft
IAM Limited
|
Silverback
Asset Management is the asset manager, and Elloitt Bossen is
the Principal
and Chief Investment Officer of Silverback.
|
|
Beamtenversicherungskasse
des Kanton Zurich
|
Avtandil
Gigineishvili
|
|
Bernische
Lehrerversicherungskasse
|
Avtandil
Gigineishvili
|
|
Black
Diamond Convertible Offshore LDC
|
Clint
D. Carlson
|
|
Black
Diamond Offshore Ltd.
|
Clint
D. Carlson
|
|
CIBC
World Mkts Corp
|
Greg
Edell
|
|
Citigroup
Global Markets Inc.
|
Kevin
Russell
|
|
CQS
Convertible and Quantitative Strategies Master Fund Limited
|
Alan
Smith, Blair Gauld, Dennis Hunter, Karla Bodden and Jim
Rogers
|
|
Double
Black Diamond Offshore LDC
|
Clint
D. Carlson
|
|
FFVA
Mutual Insurance Company
|
Tracy
Maitland
|
|
Fore
Convertible Master Fund, Ltd.
|
Harresh
Paranjape
|
|
Fore
ERISA Fund, Ltd.
|
Harresh
Paranjape
|
|
Gemini
Sammelstiftung Zur For Der Ung Der Personalvorsorge
|
Avtandil
Gigineishvili
|
|
Georgia
Municipal Employee Benefit System
|
Tracy
Maitland
|
|
Hershey
Foods Corporation Master Retirement Trust
|
No
one individual at T. Rowe Price will be responsible for voting
decisions
and investment control over the purchased Weingarten
securities. T. Rowe Price Associates, Inc. is investment adviser
to
the selling securityholder and has been delegated voting
authority over the Price Funds and the three
other portfolios it manages as investment adviser. The T. Rowe Price
Proxy Committee develops positions on all major corporate issues,
creates
guidelines, and oversees the voting process. The Proxy Committee,
composed
of portfolio managers, investment operations managers, and internal
legal
counsel, analyzes proxy policies based on whether they would
adversely
affect
|
| Selling
Securityholder |
Natural
person or persons with
voting
or dispositive power
|
| |
|
| |
shareholders’
interests and make a company less attractive to own. Once the
Proxy
Committee establishes its recommendations, they are distributed
to the
firm’s portfolio managers as voting guidelines. For the registered
investment companies sponsored and managed by T. Rowe Price,
the portfolio manager of each fund has ultimate responsibility
for the
voting decisions for proxies relating to voting securities held
by the
fund. David M. Lee is the portfolio manager for the T. Rowe
Price Real Estate Fund, Inc. More information on T. Rowe
Price’s proxy voting policies and procedures is available on our website
(http://www.troweprice.com) and in the Price Funds’ Statement of
Additional Information, which is filed with the SEC.
|
|
HFR
Convertible Arbitrage
|
Tracy
Maitland
|
|
Independence
Blue Cross
|
Tracy
Maitland
|
|
Jefferies
Umbrella Fund Global Convertible Bond
|
Avtandil
Gigineishvili
|
|
John
Hancock Funds II - Real Estate Equity Fund
|
No
one individual at T. Rowe Price will be responsible for voting
decisions
and investment control over the purchased Weingarten
securities. T. Rowe Price Associates, Inc. is investment adviser
to
the selling securityholder and has been delegated voting
authority over the Price Funds and the three
other portfolios it manages as investment adviser. The T. Rowe Price
Proxy Committee develops positions on all major corporate issues,
creates
guidelines, and oversees the voting process. The Proxy Committee,
composed
of portfolio managers, investment operations managers, and internal
legal
counsel, analyzes proxy policies based on whether they would
adversely
affect shareholders’ interests and make a company less attractive to own.
Once the Proxy Committee establishes its recommendations, they
are
distributed to the firm’s portfolio managers as voting guidelines. For the
registered investment companies sponsored and managed by T.
Rowe Price, the portfolio manager of each fund has ultimate responsibility
for the voting decisions for proxies relating to voting securities
held by
the fund. David M. Lee is the portfolio manager for the T. Rowe
Price Real Estate Fund, Inc. More information on T. Rowe
Price’s proxy voting policies and procedures is available on our website
(http://www.troweprice.com)
and in the Price Funds’ Statement of Additional Information, which is
filed with the SEC.
|
|
John
Hancock Trust - Real Estate Equity Trust
|
No
one individual at T. Rowe Price will be responsible for voting
decisions
and investment control over the purchased Weingarten
securities.
|
| Selling
Securityholder |
Natural
person or persons with
voting
or dispositive power
|
| |
|
| |
T.
Rowe Price Associates, Inc. is investment adviser to
the selling securityholder and has been delegated voting
authority over the Price Funds and the three
other portfolios it manages as investment adviser. The T. Rowe Price
Proxy Committee develops positions on all major corporate issues,
creates
guidelines, and oversees the voting process. The Proxy Committee,
composed
of portfolio managers, investment operations managers, and internal
legal
counsel, analyzes proxy policies based on whether they would
adversely
affect shareholders’ interests and make a company less attractive to own.
Once the Proxy Committee establishes its recommendations, they
are
distributed to the firm’s portfolio managers as voting guidelines. For the
registered investment companies sponsored and managed by T.
Rowe Price, the portfolio manager of each fund has ultimate responsibility
for the voting decisions for proxies relating to voting securities
held by
the fund. David M. Lee is the portfolio manager for the T. Rowe
Price Real Estate Fund, Inc. More information on T. Rowe
Price’s proxy voting policies and procedures is available on our website
(http://www.troweprice.com) and in the Price Funds’ Statement of
Additional Information, which is filed with the SEC.
|
|
KBC
Convertible MAC 28 Limited
|
Carlo
Georg, Chief Investment Officer of KBC Alternative Investment
Management
Limited
|
|
KBC
Diversified Fund, a Segregated Portfolio of KBC Diversified Fund,
SPC
|
Carlo
Georg, Chief Investment Officer of KBC Alternative Investment
Management
Limited
|
|
KBC
Financial Products USA Inc.
|
The
securities are under the total control of KBC Financial Products
USA
Inc. KBC Financial Products USA Inc, is a direct wholly-owned
subsidiary of KBC Financial Holdings, Inc., which in turn is
a direct
wholly-owned subsidiary of KBC Bank N.V., which in turn is a
direct
wholly-owned subsidiary of KBC Group N.V., a publicly traded
entity.
Natural persons with voting or investment control are Alex Bezjian,
Darren
Carter, Jason Cuevas, Damir Delic, Luke Edwards, Dennis Fitzgerald,
John
Heffers, Thomas Korossy, Liming Kwan, Dan Lerner, Eric Needleman,
David
Ricciardi, Rupen Soultanian, Walter Staudenmaier, Mark Sullivan,
Tim
Vaughan, Vincenzo Vigliotti and Brandon Way.
|
|
Lyxor/AM
Investment Fund Ltd.
|
AM
Investment Partners serves as investment advisors. Mark Friedman
and Adam
Stern have voting authority.
|
|
Lyxor
Convertible Arbitrage Fund
|
Tracy
Maitland
|
|
Lyxor
Quest Fund Ltd.
|
Frank
Campana
|
| Selling
Securityholder |
Natural
person or persons with
voting
or dispositive power
|
|
|
|
|
Magnetar
Capital Master, Ltd.
|
Magnetar
Financial LLC is the investment advisor of Magnetar Capital Master
Fund,
Ltd ("Magnetar Master Fund") and consequently has voting control
and
investment discretion over securities held by Magnetar Master
Fund.
Magnetar Financial LLC disclaims beneficial ownership of the
shares held
by Magnetar Master Fund. Alec Litowitz has voting control over
Supernova
Management LLC, the general partner of Magnetar Capital Partners
LP, the
sole managing member of Magnetar Financial LLC. As a result,
Mr. Litowitz
may be considered the beneficial owner of any shares deemed to
be
beneficially owned by Magnetar Financial LLC. Mr. Litowitz disclaims
beneficial ownership of these shares.
|
|
Merced
Partners Limited Partnership
|
John
D. Brandenborg, Stuart Brown, Jeff Deeb, Diana Denhardt, Erik
W. Dieterle,
David A. Ericson, Benjamin Fisher, Michael J. Frey, Becky Fruechte,
Andrew
Kabala, Robert Kerr, Moya Mulqueen, James Musel, Brian L. Naas,
Kent
Rowett, Lucas J. Schaan, Vince Vertin, Hendrik Vroege and Eric
J.
Werwie
|
|
Pendragon
(Convertibles) Fund Ltd.
|
John
Pennells, with Pendragon Capital LLP acting as investment
manager
|
|
Pensionkasse
Der Antalis AG
|
Avtandil
Gigineishvili
|
|
Pensionkasse
Der Lonza AG
|
Avtandil
Gigineishvili
|
|
Pensionkasse
Der Rockwell Automation AG
|
Avtandil
Gigineishvili
|
|
Pensionkasse
Huntsman
|
Avtandil
Gigineishvili
|
|
Police
& Firemen of the City of Detroit
|
Tracy
Maitland
|
|
PV
Promea
|
Avtandil
Gigineishvili
|
|
Quest
Global Convertible Master Fund Ltd.
|
Frank
Campana
|
|
Radcliffe
SPC, Ltd for and on behalf of the Class A Convertible Crossover
Segregated
Portfolio
|
Pursuant
to an investment management agreement, RG Capital Management,
L.P. ("RG
Capital") serves as the investment manager of Radcliffe SPC,
Ltd.'s Class
A Convertible Crossover Segregated Portfolio. RGC Management
Company, LLC
("Management") is the general partner of RG Capital. Steve Katznelson
and
Gerald Stahlecker serve as the managing members of Management.
Each of RG
Capital, Management and Messrs. Katznelson and Stahlecker disclaims
beneficial ownership of the securities owned by Radcliffe SPC,
Ltd. for
and on behalf of the Class A Convertible Crossover Segregated
Portfolio.
|
|
RBC
Capital Markets
|
Dan
White
|
|
Rhythm
Fund, Ltd.
|
Carlo
Georg, Chief Investment Officer of KBC Alternative Investment
Management
Limited
|
|
Satellite
Convertible Arbitrage Masterfund LLC
|
The
discretionary investment manager of the selling security holder
is
Satellite Asset Mgmt, LP ("SAM"). The controlling entity of SAM
is
Satellite
|
| Selling
Securityholder |
Natural
person or persons with
voting
or dispositive power
|
| |
|
| |
Fund
Management, LLC ("SFM"). The managing members of SFM are Lief
Rosenblatt,
Mark Sonnino and Gabe Nechamkin. SAM, SFM and each named individual
disclaims beneficial ownership of the securities.
|
|
Suttonbrook
Capital Portfolio LP
|
SuttonBrook
Capital Management LP is the investment manager of SuttonBrook
Capital
Portolio LP and John London and Steven M. Weinstein are the natural
persons with control and voting power over SuttonBrook Capital
Management
LP.
|
| Tamarack
International Ltd. |
John
D. Brandenborg, Stuart Brown, Jeff Deeb, Diana Denhardt, Erik
W. Dieterle,
David A. Ericson, Benjamin Fisher, Michael J. Frey, Becky Fruechte,
Andrew
Kabala, Robert Kerr, Moya Mulqueen, James Musel, Brian L. Naas,
Kent
Rowett, Lucas J. Schaan, Vince Vertin, Hendrik Vroege and Eric
J.
Werwie
|
|
The
Grable Foundation
|
Tracy
Maitland
|
|
T.
Rowe Price Real Estate Fund, Inc.
|
No
one individual at T. Rowe Price will be responsible for voting
decisions
and investment control over the purchased Weingarten
securities. T. Rowe Price Associates, Inc. is investment adviser
to
the selling securityholder and has been delegated voting
authority over the Price Funds and the three
other portfolios it manages as investment adviser. The T. Rowe Price
Proxy Committee develops positions on all major corporate issues,
creates
guidelines, and oversees the voting process. The Proxy Committee,
composed
of portfolio managers, investment operations managers, and internal
legal
counsel, analyzes proxy policies based on whether they would
adversely
affect shareholders’ interests and make a company less attractive to own.
Once the Proxy Committee establishes its recommendations, they
are
distributed to the firm’s portfolio managers as voting guidelines. For the
registered investment companies sponsored and managed by T.
Rowe Price, the portfolio manager of each fund has ultimate responsibility
for the voting decisions for proxies relating to voting securities
held by
the fund. David M. Lee is the portfolio manager for the T. Rowe
Price Real Estate Fund, Inc. More information on T. Rowe
Price’s proxy voting policies and procedures is available on our website
(http://www.troweprice.com)
and in the Price Funds’ Statement of Additional Information, which is
filed with the SEC.
|
|
Trustmark
|
Tracy
Maitland
|
|
UBS
AG London F/B/O HFS
|
Pasquale
Riccio
|
|
UBS
Securities LLC
|
Roy
Irwin
|
|
Universal
Investment Gesellschaft MBH Ref Aventis
|
Avtandil
Gigineishvili
|
|
Vicis
Capital Master Fund
|
John
Succo, Sky Lucas and Shad Stastney
|
|
Waterstone
Market Neutral Master Fund, Ltd.
|
Martin
Kalish, Shawn Bergerson
|
|
Waterstone
Market Neutral MAC 51, Ltd.
|
Martin
Kalish, Shawn Bergerson
|
|
Zurich
Institutional Funds, Wandelanleihen
|
Avtandil
Gigineishvili
|
We
prepared the above tables based solely on the information supplied to us by
the
selling securityholders named in the tables.
The
selling securityholders listed in the tables may sell, pledge, gift or otherwise
transfer, in transactions exempt from the registration requirements of the
Securities Act, some or all of their notes. If such an event occurs, we may
file
a prospectus supplement identifying any purchaser, pledgee, donee or other
transferee. In addition, we may from time to time include additional selling
securityholders who hold notes not specifically identified above in an amendment
to this registration statement or a supplement to this prospectus. Additional
selling securityholders not named in this prospectus will not be able to use
this prospectus for resales until they are named in the selling securityholder
table by prospectus supplement or post-effective amendment. Successors of
identified selling securityholders, including without limitation their
transferees, pledges and donees or their successors, will not be able to use
this prospectus for resales until they are named in the selling securityholder
table by prospectus supplement or post-effective amendment.
Because
the selling securityholders may offer all or some of their notes or the
underlying common shares from time to time, we cannot estimate the amount of
the
notes or underlying common shares that will be held by the selling
securityholders upon the termination of any particular offering. See “Plan of
Distribution.”
None
of
the selling securityholders nor any of their affiliates, officers, directors
or
principal equity holders has held any position or office or has had any material
relationship with us within the past three years, except that Citigroup Global
Markets Inc. was an initial purchaser in the private placement in
which the notes were initially issued and a co-bookrunner in the subsequent
resales. All of the notes are “restricted securities” under the Securities Act
prior to their sale under this registration statement.
PLAN
OF DISTRIBUTION
We
will
not receive any of the proceeds of the sale of the notes or the common shares
issued upon conversion of the notes offered by this prospectus. The notes and
the underlying common shares may be sold from time to time to purchasers:
| · |
directly
by the selling securityholders; or
alternatively,
|
| · |
through
underwriters, broker-dealers or agents who may receive compensation
in the
form of underwriting discounts or commissions or agent’s commissions from
the selling securityholders or the purchasers of the common
shares.
|
The
selling securityholders and any such broker-dealers or agents who participate
in
the distribution of the notes and the underlying common
shares may be deemed to be “underwriters.” As a result, any profits on the sale
of the notes and the underlying common shares by selling securityholders and
any
discounts, commissions or concessions received by any such broker-dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. If the selling securityholders were to be deemed underwriters,
the selling securityholders may be subject to certain statutory liabilities
of,
including, but not limited to, Sections 11, 12 and 17 of the Securities Act
and Rule 10b-5 under the Exchange Act.
If
the
notes and the underlying common shares are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent’s commissions.
The
notes
and the underlying common shares may be sold in one or more transactions at:
| · |
fixed
prices, which may be changed;
|
| · |
prevailing
market prices at the time of sale;
|
| · |
varying
prices determined at the time of sale;
or
|
These
sales may be effected in transactions (which may involve block transactions):
| · |
on
any national securities exchange or quotation service on which the
notes
and underlying common shares may be listed or quoted at the time
of the
sale, including the New York Stock Exchange in the case of the common
shares;
|
| · |
in
the over-the-counter market;
|
| · |
in
transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
|
| · |
through
the writing of options.
|
These
transactions may include block transactions or crosses. Crosses are transactions
in which the same broker acts as an agent on both sides of the trade.
In
connection with sales of the notes and the underlying common shares, the selling
securityholders may enter into hedging transactions with broker-dealers. These
broker-dealers may in turn engage in short sales of the notes and the underlying
common shares in the course of hedging their positions. The selling
securityholders may also sell the notes and the underlying common shares short
and deliver notes and the underlying common shares to close out short positions,
or loan or pledge notes and the underlying common shares to broker-dealers
that
in turn may sell the notes and the underlying common shares.
The
selling securityholders identified by the symbol “#” in the table in the
preceding section are broker-dealers, and, as such they are underwriters within
the meaning of Section 2(a)(11) of the Securities Act with respect to the
shares each of them may offer for sale, and are subject to the prospectus
delivery requirements of the Securities Act as well as to statutory liabilities,
including, but not limited to, liabilities under Sections 11, 12 and 17 of
the
Securities Act. With respect to selling securityholders that are affiliates
of
broker-dealers, identified by the symbol “+” in the table in the preceding
section, we believe that such entities acquired their notes or underlying common
shares in the ordinary course of business, and at the time of the purchase
such
selling securityholders had no agreements or understandings, directly or
indirectly, with any person to distribute the notes or underlying common shares.
To the extent that we become aware that any such entities did not acquire their
notes or underlying common shares in the ordinary course of business or did
have
such an agreement or understanding, we will file a post-effective amendment
to
the registration statement of which this prospectus forms a part or a prospectus
supplement, as applicable, to designate such affiliate as an underwriter within
the meaning of the Securities Act.
To
our
knowledge, there are currently no plans, arrangements or understandings between
any selling securityholders and any underwriter, broker-dealer or agent
regarding the sale of the notes and the underlying common shares by the selling
securityholders. Selling securityholders may be able to sell the notes and
the
underlying common shares pursuant to an exemption from the registration
requirements of the Securities Act rather than making sales pursuant to this
prospectus. In addition, we cannot assure you that any such selling
securityholder will not transfer, devise or gift the notes and the underlying
common shares by other means not described in this prospectus.
Our
common shares are traded on the New York Stock Exchange under the symbol “WRI.”
We do not intend to apply for listing of the notes on any securities exchange
or
on the Nasdaq National Market. Accordingly, we cannot assure you that the notes
will be liquid or that any trading market for the notes will develop.
There
can
be no assurance that any selling securityholder will sell any or all of the
notes and the underlying common shares pursuant to this prospectus. In addition,
any notes and the underlying common shares covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities
Act may be sold under Rule 144 or Rule 144A rather than pursuant to
this prospectus.
The
selling securityholders and any other person participating in such distribution
will be subject to the
Exchange
Act. The Exchange Act rules include, without limitation, Regulation M,
which may limit the timing of purchases and sales of any of the notes and the
underlying common shares by the selling securityholders and any other such
person. In addition, Regulation M of the Exchange Act may restrict the
ability of any person engaged in the distribution of the notes and the
underlying common shares to engage in market-making activities with respect
to
the particular notes and the underlying common shares being distributed for
a
period of up to five business days prior to the commencement of such
distribution. This may affect the marketability of the notes and the underlying
common shares and the ability of any person or entity to engage in market-making
activities with respect to the notes and the underlying common shares.
Pursuant
to the registration rights agreement filed as an exhibit to this registration
statement, we and the selling securityholders will be indemnified by the other
against certain liabilities, including certain liabilities under the Securities
Act or will be entitled to contribution in connection with these liabilities.
We
have
agreed to pay substantially all of the expenses incidental to the registration,
offering and sale of the notes and the underlying common shares to the public
other than commissions, fees and discounts of underwriters, brokers, dealers
and
agents.
Electronic
Distribution
In
connection with this offering, certain of the selling securityholders may
distribute this prospectus electronically.
LEGAL
MATTERS
The
validity of the notes and common shares issuable upon conversion of the notes,
as well as certain tax matters, has been passed upon for us by Locke Liddell
& Sapp LLP, Dallas, Texas.
EXPERTS
The
consolidated financial statements incorporated in this prospectus by reference
from Weingarten Realty Investors’ Current Report on Form 8-K dated September 14,
2006, and the related financial statement schedules and management’s report on
the effectiveness of internal control over financial reporting both incorporated
in this prospectus by reference from Weingarten Realty Investors’ Annual Report
on Form 10-K for the year ended December 31, 2005, have been audited by Deloitte
& Touche LLP, an independent registered public accounting firm, as stated in
their reports, which are incorporated herein by reference, and have been
so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The
combined statements of revenues and certain expenses of Woolbright
Properties Portfolio and North American Properties Portfolio incorporated
in
this prospectus by reference from Weingarten Realty Investors’ Current Report on
Form 8-K dated October 31, 2006, have been audited by Deloitte & Touche LLP,
an independent auditor, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and
auditing.
$575,000,000
Weingarten
Realty
Investors
3.95%
Convertible Senior Notes due 2026 and
the
Common Shares Issuable Upon Conversion
of
the Notes
_______________
PROSPECTUS
October
31, 2006
_______________
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The
following table sets forth the estimated expenses in connection with the
offering contemplated by this Registration Statement:
|
SEC
Registration Fee
|
|
$
|
61,525.00
|
|
|
Accounting
Fees and Expenses
|
|
|
25,000.00*
|
|
|
Legal
Fees and Expenses
|
|
|
35,000.00*
|
|
|
Miscellaneous
|
|
|
25,000.00*
|
|
|
Total
|
|
$
|
146,525.00*
|
|
|
*Estimated
|
|
|
|
|
ITEM
15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section
9.20 of the Texas REIT Act empowers a real estate investment trust to indemnify
any person who was, is, or is threatened to be made a named defendant or
respondent in any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, arbitrative, or investigative, any
appeal in such an action, suit, or proceeding, or any inquiry or investigation
that can lead to such an action, suit or proceeding because the person is or
was
a trust manager, officer, employee or agent of the real estate investment trust
or is or was serving at the request of the real estate investment trust as
a
trust manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another real estate investment trust,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise against expenses (including court costs and
attorney fees), judgments, penalties, fines and settlements if he conducted
himself in good faith and reasonably believed his conduct was in or not opposed
to the best interests of the real estate investment trust and, in the case
of
any criminal proceeding, had no reasonable cause to believe that his conduct
was
unlawful.
The
Texas
REIT Act further provides that, except to the extent otherwise permitted
therein, a trust manager may not be indemnified in respect of a proceeding
in
which the person is found liable on the basis that a personal benefit was
improperly received by him or in which the person is found liable to the real
estate investment trust. Indemnification pursuant to Subsection (B) of Section
9.20 of the Texas REIT Act is limited to reasonable expenses actually incurred
and may not be made in respect of any proceeding in which the person has been
found liable for willful or intentional misconduct in the performance of his
duty to the real estate investment trust.
Subsection
(C) of Section 15.10 of the Texas REIT Act provides that a trust manager shall
not be liable for any claims or damages that may result from his acts in the
discharge of any duty imposed or power conferred upon him by the real estate
investment trust, if, in the exercise of ordinary care, he acted in good faith
and in reliance upon information, opinions, reports or statements, including
financial statements and other financial data, concerning the real estate
investment trust or another person, that were prepared or presented by officers
or employees of the real estate investment trust, legal counsel, public
accountants, investment bankers, or certain other professionals, or a committee
of trust managers of which the trust manager is not a member. In addition,
no
trust manager shall be liable to the real estate investment trust for any act,
omission, loss, damage, or expense arising from the performance of his duty
to a
real estate investment trust, save only for his own willful misfeasance, willful
malfeasance or gross negligence.
Article
Sixteen of our amended and restated declaration of trust provides that we shall
indemnify officers and trust managers, as set forth below:
(a) We
shall
indemnify, to the extent provided in our bylaws, every person who is or was
serving as our or our corporate predecessor's director, trust manager or officer
and any person who is or was serving at our request as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation, partnership, joint venture, sole
proprietorship,
trust, employee benefit plan or other enterprise with respect to all costs
and
expenses incurred by such person in connection with any proceeding in which
he
was, is, or is threatened to be named as a defendant or respondent, or in which
he was or is a witness without being made a defendant or respondent, by reason,
in whole or in part, of his holding or having held a position named above in
this paragraph.
(b) If
the
indemnification provided in paragraph (a) is either (i) insufficient to cover
all costs and expenses incurred by any person named in such paragraph as a
result of such person being made or threatened to be made a defendant or
respondent in a proceeding by reason of his holding or having held a position
named in such paragraph or (ii) not permitted by Texas law, we shall indemnify,
to the fullest extent that indemnification is permitted by Texas law, every
person who is or was serving as our or our corporate predecessor's director,
trust manager or officer and any person who is or was serving at our request
as
a director, officer, partner, venturer, proprietor, trustee, employee, agent
or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise with respect to all costs and expenses incurred by such person in
connection with any proceeding in which he was, is or is threatened to be named
as a defendant or respondent, or in which he was or is a witness without being
made a defendant or respondent, by reason, in whole or in part, of his holding
or having held a position named above in this paragraph.
Our
bylaws provide that we may indemnify any trust manager or officer who was,
is or
is threatened to be made a party to any suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, because the person
is or
was serving as our trust manager, officer, employee or agent, or is or was
serving at our request in the same or another capacity in another corporation
or
business association, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred if it is determined that the person:
(1)
conducted himself in good faith; (2) reasonably believed that, in the case
of
conduct in his official capacity, his conduct was in our best interests, and
that, in all other cases, his conduct was at least not opposed to our best
interests; and (3) in the case of any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful; provided that, if the person is
found
liable to us, or is found liable on the basis that personal benefit was
improperly received by the person, the indemnification (A) is limited to
reasonable expenses actually incurred by the person in connection with the
proceeding and (B) will not be made in respect of any proceeding in which the
person shall have been found liable to us for willful or intentional misconduct
in the performance of his duty.
ITEM
16. EXHIBITS.
|
3.1
|
Amended
and Restated Declaration of Trust, as amended (filed as Exhibit 3.1
to our
Registration Statement on Form S-3 (No. 33-49206) and incorporated
herein
by reference).
|
|
3.2
|
Amendment
to the Restated Declaration of Trust (filed as Exhibit 3.2 to our
Registration Statement on Form 8-A filed January 19, 1999 and incorporated
herein by reference).
|
|
3.3
|
Second
Amendment to the Restated Declaration of Trust (filed as Exhibit
3.3 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
|
|
3.4
|
Third
Amendment to the Restated Declaration of Trust (filed as Exhibit
3.4 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
|
|
3.5
|
Fourth
Amendment of the Restated Declaration of Trust dated April 28, 1999
(filed
as Exhibit 3.5 to our Annual Report on Form 10-K for the year ended
December 31, 2001 and incorporated herein by
reference).
|
|
3.6
|
Fifth
Amendment of the Restated Declaration of Trust dated April 20, 2001
(filed
as Exhibit 3.6 to our Annual Report on Form 10-K for the year ended
December 31, 2001 and incorporated herein by
reference).
|
|
3.7
|
Amended
and Restated Bylaws (filed as Exhibit 3.2 to our Registration Statement
on
Form S-3 (No. 33-49206) and incorporated herein by
reference).
|
|
4.1
|
Form
of common share certificate (filed as Exhibit 4.1 to our Registration
Statement on Form S-3 (No. 333-104559) and incorporated herein by
reference).
|
|
4.2
|
First
Supplemental Indenture, dated as of August 2, 2006, among the Company
and
JPMorgan Chase Bank, National Association (filed as Exhibit 4.1 to
our
Form 8-K filed on August 2, 2006 and incorporated herein by
reference).
|
|
4.3
|
Form
of 3.95% Convertible Senior Note due 2026 (attached as Exhibit A
to the
First Supplemental Indenture (filed as Exhibit 4.2 to our Form 8-K
filed
on August 2, 2006 and incorporated herein by
reference).
|
|
4.4
|
Registration
Rights Agreement, dated as of June 27, 2006, among the Company and
Citigroup Global Markets Inc., as representative of the Initial Purchasers
(filed as Exhibit 4.3 to our Form 8-K filed on August 2, 2006 and
incorporated herein by reference).
|
|
5.1
|
Opinion
of Locke Liddell & Sapp LLP as to the legality of the securities being
registered.
|
|
8.1
|
Form
of opinion of Locke Liddell & Sapp LLP as to certain tax
matters.
|
|
12.1
|
Statements
regarding computations of ratios (filed as Exhibit 12.1 to our Form
8-K
filed on September 14, 2006 and as Exhibit 12.1 to our Form 10-Q
filed on
August 9, 2006, and incorporated herein by
reference).
|
|
23.1
|
Consent
of Deloitte & Touche LLP.
|
|
23.2
|
Consent
of Locke Liddell & Sapp LLP (included in Exhibit 5.1
hereto).
|
|
23.3
|
Consent
of Locke Liddell & Sapp LLP (included in Exhibit 8.1
hereto).
|
|
24.1
|
Power
of Attorney (included on signature page).
|
| 25.1 |
Statement
of Eligibility of Trustee. |
ITEM
17. UNDERTAKINGS.
|
(a)
|
The
undersigned registrant hereby
undertakes:
|
(1) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act");
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commissions pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement.
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the Registration Statement;
provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply
if
information required to be included in a post-effective amendment by those
paragraphs is contained in the reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act
of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in
the Registration Statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of this registration
statement.
(2) That,
for
the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
(4) That,
for
the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i)
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii)
Each
prospectus required to be filed pursuant to Rule
424(b)(2),
(b)(5),
or
(b)(7)
as part
of a registration statement in reliance on Rule 430B relating to an offering
made pursuant to Rule
415(a)(1)(i),
(vii),
or
(x)
for the
purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus
is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date.
(b) The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 15 of this Registration Statement
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
in
payment by the registrant of expenses incurred or paid by a trust manager,
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted against the registrant by such trust manager,
director, officer or controlling person in connection with the securities being
registered hereby, the registrant will, unless in the opinion of its counsel
the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
(d) The
undersigned registrant hereby undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Act.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on the 31st day of October, 2006.
|
WEINGARTEN
REALTY INVESTORS
|
| |
|
| |
|
| |
|
|
By:
|
/s/
Andrew M. Alexander |
| |
Andrew
M. Alexander
|
| |
Chief
Executive Officer and President
|
POWER
OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints Stanford Alexander, Stephen C. Richter and Andrew
M.
Alexander, and each of them, with the full power to act without the other,
such
person’s true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in
any and all capacities, to sign, execute and file this Registration Statement,
and any or all amendments thereto (including, without limitation, post-effective
amendments), any subsequent Registration Statements pursuant to Rule 462 of
the
Securities Act of 1933, as amended, and any amendments thereto and to fill
the
same, with all exhibits and schedules thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do
and perform each and every act and thing necessary or desirable to be done
in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
| |
Signature
|
Title
|
Date
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Stanford Alexander
|
Chairman
of the Board,
|
October
31, 2006
|
| |
Stanford
Alexander
|
Trust
Manager
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Andrew M. Alexander
|
President,
Chief Executive Officer,
|
|
| |
Andrew
M. Alexander
|
and
Trust Manager
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
J. Murry Bowden
|
Trust
Manager
|
|
| |
J.
Murry Bowden
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
James W. Crownover
|
Trust
Manager
|
|
| |
James
W. Crownover
|
|
|
|
By:
|
/s/
Robert J. Cruikshank
|
Trust
Manager
|
|
| |
Robert
J. Cruikshank
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Melvin A. Dow
|
Trust
Manager
|
|
| |
Melvin
A. Dow
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Stephen A. Lasher
|
Trust
Manager
|
|
| |
Stephen
A. Lasher
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Stephen C. Richter
|
Executive
Vice President and
|
|
| |
Stephen
C. Richter
|
Chief
Financial Officer
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Douglas W. Schnitzer
|
Trust
Manager
|
|
| |
Douglas
W. Schnitzer
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Marc J. Shapiro
|
Trust
Manager
|
|
| |
Marc
J. Shapiro
|
|
|
| |
|
|
|
| |
|
|
|
|
By:
|
/s/
Joe D. Shafer
|
Vice
President/Chief Accounting Officer
|
|
| |
Joe
D. Shafer
|
(Principal
Accounting Officer)
|
|
EXHIBIT
INDEX
Exhibit
Number
|
3.1
|
Amended
and Restated Declaration of Trust, as amended (filed as Exhibit 3.1
to our
Registration Statement on Form S-3 (No. 33-49206) and incorporated
herein
by reference).
|
|
3.2
|
Amendment
to the Restated Declaration of Trust (filed as Exhibit 3.2 to our
Registration Statement on Form 8-A filed January 19, 1999 and incorporated
herein by reference).
|
|
3.3
|
Second
Amendment to the Restated Declaration of Trust (filed as Exhibit
3.3 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
|
|
3.4
|
Third
Amendment to the Restated Declaration of Trust (filed as Exhibit
3.4 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
|
|
3.5
|
Fourth
Amendment of the Restated Declaration of Trust dated April 28, 1999
(filed
as Exhibit 3.5 to our Annual Report on Form 10-K for the year ended
December 31, 2001 and incorporated herein by
reference).
|
|
3.6
|
Fifth
Amendment of the Restated Declaration of Trust dated April 20, 2001
(filed
as Exhibit 3.6 to our Annual Report on Form 10-K for the year ended
December 31, 2001 and incorporated herein by
reference).
|
|
3.7
|
Amended
and Restated Bylaws (filed as Exhibit 3.2 to our Registration Statement
on
Form S-3 (No. 33-49206) and incorporated herein by
reference).
|
|
4.1
|
Form
of common share certificate (filed as Exhibit 4.1 to our Registration
Statement on Form S-3 (No. 333-104559) and incorporated herein by
reference).
|
|
4.2
|
First
Supplemental Indenture, dated as of August 2, 2006, among the Company
and
JPMorgan Chase Bank, National Association (filed as Exhibit 4.1 to
our
Form 8-K filed on August 2, 2006 and incorporated herein by
reference).
|
|
4.3
|
Form
of 3.95% Convertible Senior Note due 2026 (attached as Exhibit A
to the
First Supplemental Indenture (filed as Exhibit 4.2 to our Form 8-K
filed
on August 2, 2006 and incorporated herein by
reference).
|
|
4.4
|
Registration
Rights Agreement, dated as of June 27, 2006, among the Company and
Citigroup Global Markets Inc., as representative of the Initial Purchasers
(filed as Exhibit 4.3 to our Form 8-K filed on August 2, 2006 and
incorporated herein by reference).
|
|
5.1
|
Opinion
of Locke Liddell & Sapp LLP as to the legality of the securities being
registered.
|
|
8.1
|
Form
of opinion of Locke Liddell & Sapp LLP as to certain tax
matters.
|
|
12.1
|
Statements
regarding computations of ratios (filed as Exhibit 12.1 to our Form
8-K
filed on September 14, 2006 and as Exhibit 12.1 to our Form 10-Q
filed on
August 9, 2006, and incorporated herein by
reference).
|
|
23.1
|
Consent
of Deloitte & Touche LLP.
|
|
23.2
|
Consent
of Locke Liddell & Sapp LLP (included in Exhibit 5.1
hereto).
|
|
23.3
|
Consent
of Locke Liddell & Sapp LLP (included in Exhibit 8.1
hereto).
|
|
24.1
|
Power
of Attorney (included on signature page).
|
| 25.1 |
Statement
of Eligibility of Trustee. |