As filed with the Securities and Exchange Commission on September 16, 2004
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)
TEXAS 74-1464203
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) 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, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities to be Amount to be Aggregate Price Per Aggregate Offering Registration
Registered Registered Share Price Fee (2)
--------------------------------------- ------------ ------------------- ------------------ ------------
Common Shares of Beneficial Interest,
$.03 par value per share $ 50,000,000 (1) $ 50,000,000 $ 6,335
====================================== ============ =================== ================== ============
(1) Omitted pursuant to Rule 457(o).
(2) Calculated pursuant to Rule 457(o) of the Securities Act, based on the
maximum aggregate offering price.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
PROSPECTUS
Subject to Completion, dated September 16, 2004
Weingarten Realty Investors
COMMON SHARES OF BENEFICIAL INTEREST
__________
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Weingarten Realty Investors, a real estate investment trust formed under
the Texas Real Estate Investment Trust Act, intends to offer from time to time,
at prices and on terms to be determined at or prior to the time of sale, common
shares of beneficial interest, par value $.03 per share, having an aggregate
public offering price not to exceed $50,000,000, subject to reduction in the
event we sell other common shares of beneficial interest pursuant to separate
prospectuses under the registration statement of which this prospectus is a
part.
We will specify the number of common shares offered and the underwriters
for the offering, together with the terms and conditions for such offer, the
public offering price, the underwriting discounts and commissions and our net
proceeds from the sale thereof, in supplements to this prospectus. You should
read both the prospectus and the applicable prospectus supplements carefully
before you invest.
Our common shares of beneficial interest trade on the New York Stock
Exchange under the symbol "WRI."
____________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities discussed in the
prospectus, nor have they determined whether this prospectus is accurate or
adequate. Any representation to the contrary is a criminal offense.
The date of this prospectus is September 16, 2004.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND ANY APPLICABLE PROSPECTUS SUPPLEMENT. WE HAVE
NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE
PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON
IT. WE WILL NOT MAKE AN OFFER TO SELL THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING
IN THIS PROSPECTUS, AS WELL AS THE INFORMATION WE PREVIOUSLY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND INCORPORATED BY REFERENCE, IS ACCURATE
ONLY AS OF THE DATE OF THE DOCUMENTS CONTAINING THE INFORMATION.
TABLE OF CONTENTS
Cautionary Statement Concerning Forward-Looking Statements . . . (i)
About This Prospectus. . . . . . . . . . . . . . . . . . . . . . 1
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 1
Description of Capital Shares. . . . . . . . . . . . . . . . . . 1
Restrictions on Ownership. . . . . . . . . . . . . . . . . . . . 3
Federal Income Tax Consequences. . . . . . . . . . . . . . . . . 6
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 15
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 18
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Where You Can Find More Information. . . . . . . . . . . . . . . 18
Incorporation of Documents by Reference. . . . . . . . . . . . . 18
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 of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
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
and the applicable prospectus summary. 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
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
and the applicable prospectus summary 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 and the applicable prospectus summary.
(i)
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the SEC. By using a shelf-registration statement, we may sell, from time to
time, in one or more offerings, our common shares of beneficial interest
described in this prospectus. The total dollar amount of the common shares we
sell through these offerings will not exceed $50,000,000. This prospectus only
provides you with a general description of the Plan. Each time we sell common
shares pursuant to the Plan, we will provide you with a prospectus supplement
that contains the number of shares to be sold in that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information."
THE COMPANY
We are a real estate investment trust based in Houston, Texas. We develop,
acquire and own anchored 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, 2004, we owned or had an equity interest in operating
properties consisting of approximately 45.6 million square feet of building
area. These properties consist of 278 shopping centers generally in the 100,000
to 400,000 square foot range and 62 industrial projects. Our properties are
located in 20 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, 2004, we leased to approximately 5,000 different tenants under 6,800
separate leases. The weighted average occupancy rate of all of our improved
properties as of June 30, 2004 was 94.2%.
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
address is www.weingarten.com. The information contained on our website is not
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part of this prospectus.
USE OF PROCEEDS
Unless otherwise described in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the common shares for:
- repayment or refinancing of debt;
- acquisition of additional properties or real estate-related
securities;
- development of new properties;
- redevelopment of existing properties; and
- working capital and general purposes.
Pending the use thereof, we intend, generally, to invest any net proceeds in
short-term, interest-bearing securities.
DESCRIPTION OF CAPITAL SHARES
We are a Texas real estate investment trust. Your rights as 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.
1
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 August 31, 2004, 88,846,406 common shares, 3,000,000 depositary
shares, each representing one-thirtieth 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 6.95% Series E Cumulative Redeemable Preferred
Shares were issued and outstanding. In addition, we have 1,880,645 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, you will not be personally liable for any obligation of
ours solely because you are 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
directors from funds available therefore. 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 "Restrictions on Ownership."
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
"Restrictions on Ownership," below. 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.
2
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:
- 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 66 2/3% of our common
shares);
- the amendment of our declaration of trust by shareholders (which
requires the affirmative vote of 66 2/3% of all votes entitled to be
cast on the matter);
- our termination, winding up of affairs and liquidation (which requires
the affirmative vote of 66 2/3% of all the votes entitled to be cast
on the matter); and
- 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).
Stock Exchange Listing. Our common shares are traded on the New York Stock
Exchange under the trading symbol "WRI."
RESTRICTIONS ON OWNERSHIP
MAINTAINING REIT STATUS
In order for us to qualify as a REIT under the Internal Revenue Code, not
more than 50% in value of our outstanding capital shares may be owned, directly
or indirectly, by five or fewer individuals during the last half of a taxable
year. In addition, our capital shares must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year of 12 months, or during a
proportionate part of a shorter taxable year. For purposes of restrictions on
ownership, "capital shares" means our common shares and any securities
convertible into common shares.
Because the board believes it is essential for us to continue to qualify as
a REIT, our declaration of trust generally provides that no holder may own, or
be deemed to own by virtue of the attribution provisions of the Internal Revenue
Code, more than 9.8% of our total outstanding capital shares. Any transfer of
shares will not be valid if it would:
- create a direct or indirect ownership of shares in excess of 9.8% of
our total outstanding capital shares;
- result in shares being owned by fewer than 100 persons;
- result in our being "closely held" within the meaning of Section
856(h) of the Internal Revenue Code; or
- result in our disqualification as a REIT.
Shares held by a person in excess of 9.8% of our total outstanding capital
shares will automatically be deemed to be transferred to us as trustee of a
trust for the exclusive benefit of the transferees to whom those shares may
ultimately be transferred without violating the 9.8% ownership limit. Such
excess shares shall be treated as treasury shares. While in trust, these shares
will not be entitled to vote (except as required by law), and will not be
entitled to participate in dividends or other distributions. All certificates
representing capital shares will bear a legend referring to the restrictions
described above.
3
These restrictions on ownership may have the effect of precluding the
acquisition of control unless our board of trust managers and shareholders
determine that maintenance of REIT status is no longer in our best interests.
BUSINESS COMBINATIONS
Our declaration of trust requires that except in certain circumstances, a
business combination between us and a related person must be approved by the
affirmative vote of the holders of not less than 80% of our outstanding common
shares, including the affirmative vote of the holders of not less than 50% of
the outstanding common shares not owned by the related person. However, the 50%
voting requirement is not applicable if the business combination is approved by
the affirmative vote of the holders of not less than 90% of our outstanding
common shares. Our declaration of trust provides that a "business combination"
is:
(1) any merger or consolidation, if and to the extent permitted by law, of
us or our subsidiary, with or into a related person;
(2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of more than 35% of the book value of the total assets of us and our
subsidiaries (taken as a whole) as of the end of the fiscal year ending prior to
the time the determination is being made, to or with a related person;
(3) the issuance or transfer by us or our subsidiary (other than by way of
a pro rata distribution to all shareholders) of any securities by us or our
subsidiary to a related person;
(4) any reclassification of securities (including any reverse share split)
or recapitalization by us, the effect of which would be to increase the voting
power of the related person;
(5) the adoption of any plan or proposal for the liquidation or dissolution
of us proposed by or on behalf of a related person which involves any transfer
of assets, or any other transaction, in which the related person has any direct
or indirect interest (except proportionally as a shareholder);
(6) any series or combination of transactions having, directly or
indirectly, the same or substantially the same effect as any of the foregoing;
and
(7) any agreement, contract or other arrangement providing, directly or
indirectly, for any of the foregoing.
A "related person" generally is defined in the declaration of trust to
include any individual, corporation, partnership or other person and the
affiliates and associates of any such individual, corporation, partnership or
other person which individually or together is the beneficial owner in the
aggregate of more than 50% of our outstanding common shares.
The 80% and 50% voting requirements outlined above will not apply, however,
if:
(1) the trust managers by a vote of not less than 80% of the trust managers
then holding office (a) have expressly approved in advance the acquisition of
our common shares that caused the related person to become a related person or
(b) have expressly approved the business combination prior to the date on which
the related person involved in the business combination shall have become a
related person; or
(2) the business combination is solely between us and another corporation,
100% of the voting stock of which is owned directly or indirectly by us; or
(3) the business combination is proposed to be consummated within one year
of the consummation of a fair tender offer (as defined in the declaration of
trust) by the related person in which the business combination, the cash or fair
market value of the property, securities or other consideration to be received
per share by all remaining holders of our common shares in the business
combination is not less than the price offered in the fair tender offer;
4
(4) all of the following conditions shall have been met:
(a) the business combination is a merger or consolidation, the
consummation of which is proposed to take place within one year of the date
of the transaction pursuant to which such person became a related person
and the cash or fair market value of the property, securities or other
consideration to be received per share by all remaining holders of common
shares in the business combination is not less than the highest per-share
price, with appropriate adjustments for recapitalizations and for share
splits and share dividends, paid by the related person in acquiring any of
its holdings of our common shares, which shall constitute a "fair price;"
(b) the consideration to be received by such holders is either cash
or, if the related person shall have acquired the majority of its holdings
of our common shares for a form of consideration other than cash, in the
same form of consideration with which the related person acquired such
majority;
(c) after such person has become a related person and prior to
consummation of such business combination:
- there shall have been no reduction in the annual rate of
dividends, if any, paid per share on our common shares (adjusted
as appropriate for recapitalizations and for share splits,
reverse share splits and share dividends), except any reduction
in such rate that is made proportionately with any decline in our
net income for the period for which such dividends are declared
and except as approved by a majority of the trust managers
continuing in office; and
- such related person shall not have received the benefit, directly
or indirectly (except proportionately as a shareholder), of any
loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by
us prior to the consummation of such business combination (other
than in connection with financing a fair tender offer); and
(d) proxy statement that conforms in all respects with the provisions
of the Exchange Act and the rules and regulations thereunder shall be
mailed to holders of our common shares at least 30 days prior to the
consummation of the business combination for the purpose of soliciting
shareholder approval of the business combination; or
(5) the "rights" (as defined below) shall have become exercisable.
If a person has become a related person and within one year after the date
of the transaction pursuant to which the related person became a related person,
which shall be considered as the "acquisition date,"
(1) a business combination meeting all of the requirements of paragraphs
(4)(a)(b)(c) and (d) above regarding the applicability of the 80% voting
requirement shall not have been consummated;
(2) a fair tender offer shall not have been consummated; and
(3) we have not been dissolved and liquidated,
then, in such event the beneficial owner of each common share (not
including shares beneficially owned by the related person) shall have the
right (each a "right" and collectively the "rights") which may be exercised
subject to certain conditions, commencing at the opening of business on the
one-year anniversary date of the acquisition date and continuing for a
period of 90 days thereafter, subject to certain extensions, to sell to us
on the terms set forth herein one share upon exercise of such right. At
5:00 P.M., Houston, Texas time, on the last day of the exercise period,
each right not exercised shall become void, all rights in respect thereof
shall cease as of such time and the certificates shall no longer represent
rights.
5
Stock Exchange Listing. Our Series D Cumulative Redeemable Preferred Shares
and our Series E Cumulative Redeemable Preferred Shares are listed for trading
on the New York Stock Exchange.
FEDERAL INCOME TAX CONSEQUENCES
This section summarizes the material federal income tax issues that you, as
a holder of our securities, may consider relevant. Because this section is a
summary, it does not address all of the tax issues that may be important to you.
Locke Liddell & Sapp LLP has acted as our special tax counsel, has reviewed this
summary, and is of the opinion that the discussion contained herein fairly
summarizes the federal income tax consequences that are likely to be material to
a holder of our securities. The discussion does not address all aspects of
taxation that may be relevant to a particular holder of our securities in light
of their personal investment or tax circumstances, or to certain types of
holders of our securities that are subject to special treatment under the
federal income tax laws, such as insurance companies, tax-exempt organizations,
financial institutions or broker-dealers, and non-U.S. individuals or foreign
corporations.
The statements in this section and the opinion of Locke Liddell & Sapp LLP
are based on the current federal income tax laws governing qualification as a
REIT. We cannot assure you that new laws, interpretations of law or court
decisions, any of which may take effect retroactively, will not cause any
statement in this section to be inaccurate.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES TO YOU OF OWNERSHIP OF OUR SECURITIES AND OF OUR TAXATION AS A
REIT. SPECIFICALLY, YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE STATE,
LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH OWNERSHIP AND TAXATION, AND
REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF OUR COMPANY
We elected to be taxed as a REIT under the federal income tax laws
commencing with our taxable year ended December 31, 1985. We believe that we
have been organized and have operated in such a manner so as to qualify for
taxation as a REIT under the federal income tax laws, and we intend to continue
to operate in such a manner, but no assurance can be given that we will operate
in a manner so as to qualify or remain qualified as a REIT. This section
discusses the laws governing the federal income tax treatment of a REIT. These
laws are highly technical and complex.
In the opinion of Locke Liddell & Sapp LLP, we qualified to be taxed as a
REIT for our taxable year ended December 31, 2003, and our organization and
currently proposed method of operation will enable us to continue to qualify as
a REIT for our taxable year ending December 31, 2004. Investors should be aware
that Locke Liddell & Sapp LLP's opinion is based upon customary assumptions, is
conditioned upon certain representations made by us, including representations
regarding the nature of our properties and the conduct of our business, and is
not binding upon the Internal Revenue Service or any court. In addition, Locke
Liddell & Sapp LLP's opinion is based on existing federal income tax law
governing qualification as a REIT, which is subject to change either
prospectively or retroactively. Moreover, our qualification and taxation as a
REIT depend upon our ability to meet on a continuing basis, through actual
annual operating results, certain qualification tests set forth in the federal
tax laws. Those qualification tests involve the percentage of income that we
earn from specified sources, the percentage of our assets that falls within
specified categories, the diversity of our stock ownership, and the percentage
of our earnings that we distribute. Locke Liddell & Sapp LLP will not review our
compliance with those tests on a continuing basis. Accordingly, no assurance can
be given that the actual results of our operations for any particular taxable
year will satisfy such requirements. For a discussion of the tax consequences of
our failure to qualify as a REIT, see "-Failure to Qualify."
If we qualify as a REIT, we generally will not be subject to federal income
tax on the taxable income that we distribute to our shareholders. The benefit of
that tax treatment is that it avoids the "double taxation," or taxation at both
the corporate and shareholder levels, that generally results from owning stock
in a corporation. However, we will be subject to federal tax in the following
circumstances:
6
- We will pay federal income tax on taxable income, including net
capital gain, that we do not distribute to shareholders during, or
within a specified time period after, the calendar year in which the
income is earned.
- We may be subject to the "alternative minimum tax" on any items of tax
preference that we do not distribute or allocate to shareholders.
- We will pay income tax at the highest corporate rate on:
- Net income from the sale or other disposition of property
acquired through foreclosure ("foreclosure property") that we
hold primarily for sale to customers in the ordinary course of
business, and
- Other non-qualifying income from foreclosure property.
- We will pay 100% tax on net income from sales or other
dispositions of property, other than foreclosure property, that
we hold primarily for sale to customers in the ordinary course of
business.
- If we fail to satisfy the 75% gross income test or the 95% gross
income test, as described below under "Requirements for
Qualification-Income Tests," and nonetheless continue to qualify as a
REIT because we meet other requirements, we will pay a 100% tax on:
- The gross income attributable to the greater of (i) the
amount by which we fail the 75% gross income test and (ii)
the amount by which 90% of our gross income exceeds the
amount of income qualifying under the 95% gross income test;
multiplied, in each case, by
- A fraction intended to reflect our profitability.
- If we fail to distribute during a calendar year at least the sum of:
- 85% or our REIT ordinary income for the year;
- 95% of our REIT capital gain net income for the year; and
- any undistributed taxable income from the earlier periods,
we will pay a 4% nondeductible excise tax on the excess of the
required distribution over the amount we actually distributed.
- We may elect to retain any pay income tax on our net long-term capital
gain. In that case, a U.S. shareholder would be taxed on its
proportionate share of our undistributed long-term capital gain (to
the extent that we make a timely designation of such gain to the
shareholder) and would receive a credit or refund for its
proportionate share of the tax we paid.
- We will be subject to a 100% tax on transactions with a taxable REIT
subsidiary that are not conducted on an arm's-length basis.
- If we acquire any asset from a C corporation, or a corporation that
generally is subject to full corporate-level tax, in a merger or other
transaction in which we acquire a basis in the asset that is
determined by reference either to the C corporation's basis in the
asset or to another asset, we will pay tax at the highest regular
corporate rate applicable if we recognize gain on the sale or
disposition of the asset during the 10-year period after we acquire
the asset. The amount of gain on which we will pay tax is the lesser
of:
- The amount of gain that we recognize at the time of the sale
or disposition; and
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- The amount of gain we would have recognized if we had sold
the asset at the time we acquired it.
REQUIREMENTS FOR QUALIFICATION
A REIT is a corporation, trust or association that meets each of the
following requirements:
1. It is managed by one or more trustees or directors;
2. Its beneficial ownership is evidenced by transferable shares, or by
transferable certificates of beneficial interest;
3. It would be taxable as a domestic corporation, but for the REIT provisions
of the federal income tax laws;
4. It is neither a financial institution nor an insurance company subject to
special provisions of the federal income tax laws;
5. At least 100 persons are beneficial owners of its shares or ownership
certificates;
6. Not more than 50% in value of its outstanding shares or ownership
certificates is owned, directly or indirectly, by five or fewer
individuals, which the federal income tax laws define to include certain
entities, during the last half of any taxable year;
7. It elects to be a REIT, or has made such election for a previous taxable
year, and satisfies all relevant filing and other administrative
requirements established by the Internal Revenue Service that must be met
to elect and maintain REIT status; and
8. It meets certain other qualification tests, described below, regarding the
nature of its income and assets.
We must meet requirements 1 through 4 during our entire taxable year and
must meet requirement 5 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. For
purposes of determining share ownership under requirement 6, an "individual"
generally includes a supplemental unemployment compensation benefits plan, a
private foundation, or a portion of a trust permanently set aside or used
exclusively for charitable purposes. An "individual," however, generally does
not include a trust that is a qualified employee pension or profit sharing trust
under the federal income tax laws, and beneficiaries of such a trust will be
treated as holding our shares in proportion to their actuarial interests in the
trust for purposes of requirement 6.
Our outstanding common shares are owned by a sufficient number of investors
and in appropriate proportions to permit us to satisfy the share ownership
requirements. To protect against violations of the share ownership requirements,
our declaration of trust generally provides that no person is permitted to own,
applying constructive ownership tests set forth in the Internal Revenue Code,
more than 9.8% of our outstanding common shares. 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 in the next sentence, 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 the
section below entitled "-Failure to Qualify."
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.
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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, the share
ownership 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.
A corporation that is a "qualified REIT subsidiary" is not treated as a
corporation separate from its parent REIT. All assets, liabilities, and items of
income, deduction, and credit of a "qualified REIT subsidiary" are treated as
assets, liabilities, and items of income, deduction, and credit of the REIT. A
"qualified REIT subsidiary" is a corporation, all of the capital stock of which
is owned by the REIT. Thus, in applying the requirements described herein, any
"qualified REIT subsidiary" that we own will be ignored, and all assets,
liabilities, and items of income, deduction, and credit of such subsidiary will
be treated as our assets, liabilities, and items of income, deduction, and
credit.
An unincorporated domestic entity, such as a partnership or limited
liability company, that has a single owner, generally is not treated as an
entity separate from its parent for federal income tax purposes. An
unincorporated domestic entity with two or more owners is generally treated as a
partnership for federal income tax purposes. In the case of a REIT that is a
partner in a partnership that has other partners, the REIT is treated as owning
its proportionate share of the assets of the partnership and as earning its
allocable share of the gross income of the partnership for purposes of the
applicable REIT qualification tests. Thus, our proportionate share of the
assets, liabilities and items of income of any partnership, joint venture, or
limited liability company that is treated as a partnership for federal income
tax purposes in which we acquire an interest, directly or indirectly, will be
treated as our assets and gross income for purposes of applying the various REIT
qualification requirements.
A REIT is permitted to own up to 100% of the stock of one or more "taxable
REIT subsidiaries." A taxable REIT subsidiary is a fully taxable corporation
that may earn income that would not be qualifying income if earned directly by
the parent REIT. However, a taxable REIT subsidiary may not directly or
indirectly operate or manage any hotels or health care facilities or provide
rights to any brand name under which any hotel or health care facility is
operated. The subsidiary and the REIT must jointly elect to treat the subsidiary
as a taxable REIT subsidiary. A taxable REIT subsidiary will pay income tax at
regular corporate rates on any income that it earns. In addition, the taxable
REIT subsidiary rules limit the deductibility of interest paid or accrued by a
taxable REIT subsidiary to its parent REIT to assure that the taxable REIT
subsidiary is subject to an appropriate level of corporate taxation. Further,
the rules impose a 100% excise tax on transactions between a taxable REIT
subsidiary and its parent REIT or the REIT's tenants that are not conducted on
an arm's-length basis.
INCOME TESTS
We must satisfy two gross income tests annually to maintain our
qualification as a REIT. First, at least 75% of our gross income for each
taxable year must consist of defined types of income that we derive, directly or
indirectly, from investments relating to real property or mortgages on real
property or qualified temporary investment income. Qualifying income for
purposes of that 75% gross income test generally includes:
- Rents from real property;
- Interest on loans secured by real property;
- Dividends or other distributions on, and gains from the sale of,
shares in other REITs;
- Gain from the sale of real estate assets;
- Income derived from the temporary investment of new capital that is
attributable to the issuance of our shares of beneficial interest or a
public offering of our debt with a maturity date of at least five
years and that we receive during the one-year period beginning on the
date on which we received such new capital;
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- Income from the operation and gain from the sale of property acquired
in connection with the foreclosure of a mortgage securing that
property;
- Abatements and refunds of real property taxes; and
- Amounts received as consideration for entering into agreements to make
loans secured by real property or to purchase or lease real property.
Second, in general, at least 95% of our gross income for each taxable year
must consist of income that is qualifying income for purposes of the 75% gross
income test, other types of interest and dividends, gain from the sale or
disposition of stock or securities, income from certain hedging instruments or
any combination of these. Gross income from our sale of property that we hold
primarily for sale to customers in the ordinary course of business is excluded
from both the numerator and the denominator in both income tests. The following
paragraphs discuss the specific application of the gross income tests to us.
Rents from Real Property. Rent that we receive from our real property will
qualify as "rents from real property," which is qualifying income for purposes
of the 75% and 95% gross income tests, only if the following conditions are met.
First, the rent must not be based in whole or in part on the income or
profits of any person. Participating rent, however, will qualify as "rents from
real property" if it is based on percentages of receipts or sales and the
percentages:
- Are fixed at the time the leases are entered into;
- Are not renegotiated during the term of the leases in a manner that
has the effect of basing rent on income or profits; and
- Conform with normal business practice.
More generally, the rent will not qualify as "rents from real property" if,
considering the lease and all the surrounding circumstances, the arrangement
does not conform with normal business practice, but is in reality used as a
means of basing the rent on income or profits. We generally do not intend to
lease property and receive rentals based on the tenant's income or profit.
Second, we must not own, actually or constructively, 10% or more of the
stock or the assets or net profits of any lessee (a "related party tenant")
other than a taxable REIT subsidiary. The constructive ownership rules generally
provide that, if 10% or more in value of our stock is owned, directly or
indirectly, by or for any person, we are considered as owning the stock owned,
directly or indirectly, by or for such person.
As described above, we may own up to 100% of the stock of the stock of one
or more taxable REIT subsidiaries. As an exception to the related party tenant
rule described in the preceding paragraph, rent that we receive from a taxable
REIT subsidiary will qualify as "rents from real property" as long as (1) the
taxable REIT subsidiary is a qualifying taxable REIT subsidiary, (2) at least
90% of the leased space in the property is leased to persons other than taxable
REIT subsidiaries and related party tenants, and (3) the amount paid by the
taxable REIT subsidiary to rent space at the property is substantially
comparable to rents paid by other tenants of the property for comparable space.
Third, the rent attributable to the personal property leased in connection
with the lease of a party must not be greater than 15% of the total rent
received under the lease. The rent attributable to the personal property
contained in a property is the amount that bears the same ratio to total rent
for the taxable year as the average of the fair market values of the personal
property at the beginning and at the end of the taxable year bears to the
average of the aggregate fair market values of both the real and personal
property contained in the property at the beginning and at the end of such
taxable year (the "personal property ratio").
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Fourth, we cannot furnish or render noncustomary services to the tenants of
our properties, or manage or operate our properties, other than through an
independent contractor who is adequately compensated and from whom we do not
derive or receive any income or through a taxable REIT subsidiary. However, we
need not provide services through an "independent contractor," but instead may
provide services directly or indirectly to our tenants, if the services are
"usually or customarily rendered" in connection with the rental of space for
occupancy only and are not considered to be provided for the tenants'
convenience. In addition, we may provide a minimal amount of noncustomary
services to the tenants of a property, other than through an independent
contractor, as long as our income from the services does not exceed 1% of our
income from the related property. Finally, we may own up to 100% of the stock of
one or more taxable REIT subsidiaries, which may provide noncustomary services
to our tenants without tainting our rents from the related properties.
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.
Consequently, we believe that substantially all of our rental income will be
qualifying income under gross income tests, and that our provision of services
will not cause the rental income to fail to be included under that test.
If a portion of the rent that we receive from a property does not qualify
as "rents from real property" because the rent attributable to personal property
exceeds 15% of the total rent for a taxable year, the portion of the rent that
is attributable to personal property will not be qualifying income for purposes
of either the 75% or 95% gross income test.
In addition to the rent, the lessees are required to pay certain additional
charges. To the extent that such additional charges represent (1) reimbursements
of amounts that we are obligated to pay to third parties, such as a lessee's
proportionate share of a property's operational or capital expenses, or (2)
penalties for nonpayment or late payment of such amounts, such charges should
qualify as "rents from real property." However, to the extent that such charges
do not qualify as "rents from real property," they instead may be treated as
interest that qualifies for the 95% gross income test.
Interest. The term "interest" generally does not include any amount
received or accrued, directly or indirectly, if the determination of such amount
depends in whole or in part on the income or profits of any person. However, an
amount received or accrued generally will not be excluded from the term
"interest" solely by being based on a fixed percentage or percentages of
receipts of sales. Furthermore, to the extent that interest from a loan that is
based on the residual cash proceeds from the sale of the property securing the
loan constitutes a "shared appreciation provision," income attributable to such
participation feature will be treated as gain from the sale of the secured
property.
Prohibited Transactions. A REIT will incur a 100% tax on the net income
derived from any sale or other disposition of property, other than foreclosure
property, that the REIT holds primarily for sale to customers in the ordinary
course of trade or business. We believe that none of our assets will be held
primarily for sale to customers and that a sale of any of our assets will not be
in the ordinary course of our business. Whether a REIT holds an asset "primarily
for sale to customers in the ordinary course of business" depends, however, on
the facts and circumstances in effect from time to time, including those related
to a particular asset. Nevertheless, we will attempt to comply with the terms of
safe-harbor provisions in the federal income tax laws prescribing when an asset
sale will not be characterized as a prohibited transaction. We cannot assure
you, however, that we can comply with the safe-harbor provisions or that we will
avoid owning property that may be characterized as property that we hold
"primarily for sale to customers in the ordinary course of a trade or business."
Foreclosure Property. We will be subject to tax at the maximum corporate
rate on any income from foreclosure property, other than income that otherwise
would be qualifying income for purposes of the 75% gross income test, less
expenses directly connected with the production of that income. However, gross
income from foreclosure property will qualify under the 75% and 95% gross income
tests. Foreclosure property is any real property, including interests in real
property, and any personal property incident to such real property:
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- That is acquired by a REIT as the result of the REIT having bid on
such property at foreclosure, or having otherwise reduced such
property to ownership or possession by agreement or process of law,
after there was a default or default was imminent on a lease of such
property or on indebtedness that such property secured;
- For which the related loan was acquired by the REIT at a time when the
default was not imminent or anticipated; and
- For which the REIT makes a proper election to treat the property as
foreclosure property.
Property generally ceases to be foreclosure property at the end of the
third taxable year following the taxable year in which the REIT acquired the
property or longer if an extension is granted by the Secretary of the Treasury.
This grace period terminates and foreclosure property ceases to be foreclosure
property on the first day;
- On which a lease is entered into for the property that, by its terms,
will give rise to income that does not qualify for purposes of the 75%
gross income test, or any amount is received or accrued, directly or
indirectly, pursuant to a lease entered into on or after such day that
will give rise to income that does not qualify for purposes of the 75%
gross income test;
- On which any construction takes place on the property, other than
completion of a building or any other improvement, where more than 10%
of the construction was completed before default became imminent; or
- Which is more than 90 days after the day on which the REIT acquired
the property and the property is used in a trade or business which is
conducted by the REIT, other than through an independent contractor
from whom the REIT does not derive or receive any income.
Failure to Satisfy Gross Income Tests. If we fail to satisfy one or both of
the gross income tests for any taxable year, we nevertheless may qualify as a
REIT for that year if we qualify for relief under certain provisions of the
federal income tax laws Those relief provisions generally will be available if:
- Our failure to meet such tests is due to reasonable cause and not due
to willful neglect;
- We attach a schedule of the sources of our income to our tax return;
and
- Any incorrect information on the schedule was not due to fraud with
intent to evade tax.
We cannot predict, however, whether in all circumstances we would qualify
for the relief provisions. In addition, as discussed above in "-Taxation of Our
Company," even if the relief provisions apply, we would incur a 100% tax on the
gross income attributable to the greater of (i) the amount by which we fail the
75% gross income test and (ii) the amount by which 90%, of our gross income
exceeds the amount of qualifying income under the 95% gross income test,
multiplied by a fraction intended to reflect our profitability.
ASSET TESTS
To maintain our qualification as a REIT, we also must satisfy the following
asset tests at the end of each quarter of each taxable year.
First, at least 75% of the value of our total assets must consist of:
- cash or cash items, including certain receivables;
- government securities;
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- interests in real property, including leaseholds and options to
acquire real property and leaseholds;
- interests in mortgages on real property;
- shares in other REITs; and
- investments in stock or debt instruments during the one-year period
following our receipt of new capital that we raise through equity
offerings or public offerings of debt with at least a five-year term.
Second, of our investments not included in the 75% asset class, the value
of our interest in any one issuer's securities may not exceed 5% of the value of
our total assets.
Third, we may not own more than 10% of the voting power or value of any one
issuer's outstanding securities.
Fourth, no more than 20% of the value of our total assets may consist of
the securities of one or more taxable REIT subsidiaries.
Fifth, no more than 25% of the value of our total assets may consist of
securities, other than government securities and securities that constitute real
estate assets.
For purposes of the second and third asset tests, the term "securities"
does not include stock in another REIT, equity or debt securities of a qualified
REIT subsidiary or taxable REIT subsidiary, mortgage loans that constitute real
estate assets, or equity interests in a partnership. The term "securities,"
however, generally includes debt securities issued by a partnership or another
REIT, except that certain "straight debt" securities are not treated as
"securities" for purposes of the 10% value test (for example, qualifying debt
securities of a corporation of which we own no equity interest or of a
partnership if we own at least a 20% profits interest in the partnership).
We will monitor the status of our assets for purposes of the various asset
tests and will manage our portfolio in order to comply at all times with such
tests. If we fail to satisfy the asset test at the end of a calendar quarter, we
will not lose our REIT status if:
- We satisfied the asset tests at the end of the preceding calendar
quarter; and
- The discrepancy between the value of our assets and the asset test
requirements arose from changes in the market values of our assets and
was not wholly or partly caused by the acquisition of one or more
non-qualifying assets.
If we did not satisfy the condition described in the second item, above, we
still could avoid disqualification by eliminating any discrepancy within 30 days
after the close of the calendar quarter in which it arose.
DISTRIBUTION REQUIREMENTS
Each taxable year, we must distribute dividends, other than capital gain
dividends and deemed distributions of retained capital gain, to our shareholders
in an aggregate amount at least equal to:
- The sum of:
- 90% of our "REIT taxable income," computed without regard to the
dividends paid deduction and our net capital gain or loss; and
- 90% of our after-tax net income, if any, from foreclosure
property; minus
- the sum of certain items of non-cash income.
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We must pay such distributions in the taxable year to which they relate, or
in the following taxable year if we declare the distribution before we timely
file our federal income tax return for the year and pay the distribution on or
before the first regular dividend payment date after such declaration.
We will pay federal income tax on taxable income, including net capital
gain, that we do not distribute to shareholders. Furthermore, if we fail to
distribute during a calendar year, or by the end of January following the
calendar year in the case of distributions with declaration and record dates
falling in the last three months of the calendar year, at least the sum of:
- 85% of our REIT ordinary income for such year;
- 95% of our REIT capital gain income for such year; and
- any undistributed taxable income for prior periods.
We will incur a 4% nondeductible excise tax on the excess of such required
distribution over the amounts we actually distribute. We may elect to retain and
pay income tax on the net long-term capital gain we receive in a taxable year.
If we so elect, we will be treated as having distributed any such retained
amount for purposes of the 4% nondeductible excise tax described above. We have
made, and we intend to continue to make, timely distributions sufficient to
satisfy the annual distribution requirements and to avoid corporate income tax
and the 4% nondeductible excise tax.
It is possible that, from time to time, we may experience timing
differences between the actual receipt of income and actual payment of
deductible expenses and the inclusion of that income and deduction of such
expenses in arriving at our REIT taxable income. For example, we may not deduct
recognized capital losses from our "REIT taxable income." Further, it is
possible that, from time to time, we may be allocated a share of net capital
gain attributable to the sale of depreciated property that exceeds our allocable
share of cash attributable to that sale. As a result of the foregoing, we may
have less cash than is necessary to distribute all of our taxable income and
thereby avoid corporate income tax and the excise tax imposed on certain
undistributed income. In such a situation, we may need to borrow funds or issue
additional securities.
Under certain circumstances, we may be able to correct a failure to meet
the distribution requirement for a year by paying "deficiency dividends" to our
shareholders in a later year. We may include such deficiency dividends in our
deduction for dividends paid for the earlier year. Although we may be able to
avoid income tax on amounts distributed as deficiency dividends, we will be
required to pay interest to the Internal Revenue Service based upon the amount
of any deduction we take for deficiency dividends.
RECORDKEEPING REQUIREMENTS
We must maintain certain records in order to qualify as a REIT. In
addition, to avoid a monetary penalty, we must request on an annual basis
information from our shareholders designated to disclose the actual ownership of
our outstanding shares. We have complied, and intend to continue to comply, with
these requirements.
FAILURE TO QUALIFY
If we fail to qualify as a REIT in any taxable year, and no relief
provision applies, we would be subject to federal income tax and any applicable
alternative minimum tax on our taxable income at regular corporate rates. In
calculating our taxable income in a year in which we fail to qualify as a REIT,
we would not be able to deduct amounts paid out to shareholders. In fact, we
would not be required to distribute any amounts to shareholders in that year. In
such event, to the extent of our current and accumulated earnings and profits,
all distributions to shareholders would be taxable as ordinary income. Subject
to certain limitations of the federal income tax laws, corporate shareholders
might be eligible for the dividends received deduction. Unless we qualified for
relief under specific statutory provisions, we also would be disqualified from
taxation as a REIT for the four taxable years following the year during which we
ceased to qualify as a REIT. We cannot predict whether in all circumstances we
would qualify for such statutory relief.
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TAXABLE REIT SUBSIDIARIES
As described above, we may own up to 100% of the stock of one or more
taxable REIT subsidiaries. A taxable REIT subsidiary is a fully taxable
corporation that may earn income that would not be qualifying income if earned
directly by us. A taxable REIT subsidiary may provide services to our lessees
and perform activities unrelated to our lessees, such as third-party management,
development, and other independent business activities. However, a taxable REIT
subsidiary may not directly or indirectly operate or manage any hotels or health
care facilities or provide rights to any brand name under which any hotel or
health care facility is operated. We and our corporate subsidiary must elect for
the subsidiary to be treated as a taxable REIT subsidiary. A corporation of
which a qualifying taxable REIT subsidiary directly or indirectly owns more than
35% of the voting power or value of the stock will automatically be treated as a
taxable REIT subsidiary. Overall, no more than 20% of the value of our assets
may consist of securities of one or more taxable REIT subsidiaries, and no more
than 25% of the value of our assets may consist of the securities of taxable
REIT subsidiaries and other taxable subsidiaries and other assets that are not
qualifying assets for purposes of the 75% asset test.
STATE AND LOCAL TAXES
We and/or you may be subject to taxation by various states and localities,
including those in which we or you transact business, own property or reside.
The state and local tax treatment may differ from the federal income tax
treatment described above. Consequently, you should consult your own tax
advisors regarding the effect of state and local tax laws upon an investment in
our securities.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus:
- to or through one or more underwriters or dealers,
- directly to purchasers,
- through agents, or
- through a combination of any of these methods of sale.
We may sell the securities at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices relating to
the prevailing market prices or at negotiated prices. The distribution of the
securities may be effected from time to time in one or more transactions, by
means of one or more of the following transactions, which may include:
- block trades,
- fixed-price offerings;
- at-the-market offerings,
- negotiated transactions,
- put or call option transactions relating to the securities,
- under delayed delivery contracts or other contractual commitments, or
- a combination of such methods of sale.
We may determine the price or other terms of the securities offered in this
prospectus or any applicable prospectus supplement by use of an electronic
auction. We will describe how any auction will determine the price or any other
15
terms, how potential investors may participate in the auction and the nature of
the obligations of the underwriter, dealer or agent in the applicable prospectus
supplement.
Each time we offer securities pursuant to this prospectus, the prospectus
supplement, if required, will set forth:
- the name of any underwriter, dealer or agent, if any, involved in
the offer and sale of the securities;
- the terms of the offering;
- any discounts, concessions or commissions and other items that
may constitute compensation received by the underwriters,
dealers, agents or broker-dealers;
- any initial public offering price,
- any discounts or concessions allowed or reallowed or paid to
dealers,
- any securities exchanges on which the securities will be listed;
and
- the anticipated delivery date of the securities.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or from our purchasers (as their
agents in connection with the sale of securities). The compensation received may
be in excess of customary discounts, concessions or commissions. Any
underwriters, dealers, agents or other purchasers participating in the
distribution of the securities may be considered "underwriters" under the
Securities Act of 1933, as amended. As a result, discounts, commissions, or
profits on resale received by them on the sale of the securities may be treated
as underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered
into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribution with respect to payments made by the underwriters, dealers or
agents, under agreements between us and the underwriters, dealers and agents.
We may grant underwriters who participate in the distribution of securities
an option to purchase additional securities to cover over-allotments, if any, in
connection with the distribution. Underwriters or agents and their associates
may be customers of, engage in transactions with, or perform services for, us in
the ordinary course of business.
If underwriters or dealers are used in the sale, the securities will be
acquired by the underwriters or dealers for their own account and may be resold
from time to time in one or more transactions, at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, or at prices
relating to such prevailing market prices, or at negotiated prices. The
securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more of
such firms. Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters or dealers to purchase the securities offered
will be subject to certain conditions precedent and the underwriters or dealers
will be obligated to purchase all the offered securities if any are purchased.
The securities may be sold directly by us or through agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named in the prospectus
supplement. Unless otherwise indicated, any such agent will be acting on a best
efforts only basis for the period of its appointment.
We may engage J.P. Morgan Securities Inc. (JPMorgan) to act as agent or
principal for offerings from time to time of shares of our common stock in one
or more placements pursuant to the terms of a distribution agreement. The terms
16
of sales to or through JPMorgan pursuant to any distribution agreement will be
set out in more detail in a prospectus supplement to this prospectus. In its
capacity as agent, JPMorgan would use commercially reasonable efforts to sell
the shares pursuant to the terms agreed to with us, including the number of
shares to be offered in the placement and any minimum price below which sales
may not be made. JPMorgan, in its capacity as agent or principal, could arrange
for or make sales in privately negotiated transactions, at the market in the
existing trading market for our common stock, including sales made to or through
a market maker or through an electronic communications network, or in any other
manner that may be deemed to be an "at the market offering" as defined in Rule
415 promulgated under the Securities Act and/or any other method permitted by
law.
Any common stock sold through JPMorgan or any other underwriters or agents
in any at-the-market offerings will be sold at prices related to the prevailing
market price for such securities, and therefore exact figures regarding proceeds
which will be raised or commissions to be paid are impossible to determine. We
will report at least quarterly the number of shares of common stock sold in
at-the-market offerings, the net proceeds to us and the compensation paid by us
to JPMorgan or any other underwriters or agents in connection with such sales of
common stock. Pursuant to the terms of any distribution agreement with JPMorgan
or any other distribution agreement we may enter into, we also may agree to
sell, and the relevant underwriters or agents may agree to solicit offers to
purchase, blocks of our common stock or other securities.
The number of shares that we may sell in at-the-market offerings pursuant
to this prospectus may not exceed 10% of the aggregate market value of our
outstanding voting securities held by non-affiliates on a date within 60 days
prior to the filing of the registration statement of which this prospectus is a
part.
In connection with the offering of the securities, certain underwriters and
selling group members and their respective affiliates, may engage in
transactions that stabilize, maintain or otherwise affect the market price of
the applicable securities. These transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M promulgated by
the SEC pursuant to which these persons may bid for or purchase securities for
the purpose of stabilizing their market price.
The underwriters in an offering of securities may also create a "short
position" for their account by selling more securities in connection with the
offering than they are committed to purchase from us. In that case, the
underwriters could cover all or a portion of the short position by either
purchasing securities in the open market following completion of the offering of
these securities or by exercising any over-allotment option granted to them by
us. In addition, any managing underwriter may impose "penalty bids" under
contractual arrangements with other underwriters, which means that they can
reclaim from an underwriter (or any selling group member participating in the
offering) for the account of the other underwriters, the selling concession for
the securities that are distributed in the offering but subsequently purchased
for the account of the underwriters in the open market. Any of the transactions
described in this paragraph or comparable transactions that are described in any
accompanying prospectus supplement may result in the maintenance of the price of
the securities at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph or in an
accompanying prospectus supplement are required to be taken by any underwriters
and, if they are undertaken, may be discontinued at any time.
If indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers by institutional investors to
purchase securities from us pursuant to contracts providing for payment and
delivery at a future date. In all cases, these purchasers must be approved by
us. Unless otherwise set forth in the applicable prospectus supplement, the
obligations of any purchaser under any of these contracts will not be subject to
any conditions, except that the purchase of the securities must not at the time
17
of delivery be prohibited under the laws of any jurisdiction to which that
purchaser is subject and if securities also are being sold to underwriters, we
must have sold to these underwriters the securities not subject to delayed
delivery. Underwriters and other agents will not have any responsibility in
respect of the validity or performance of these contracts.
Our common stock is listed on the New York Stock Exchange under the symbol
"WRI." Any shares of common stock sold pursuant to a prospectus supplement will
be listed on the New York Stock Exchange, subject to official notice of
issuance. Any underwriters or agents to or through which we may sell securities
may make a market in the securities, but these underwriters or agents will not
be obligated to do so and any of them may discontinue any market making at any
time without notice. We cannot, therefore, give any assurance as to the
liquidity of our trading market for any securities that we may sell.
Under the securities laws of some states, the securities registered by the
registration statement that includes this prospectus may be sold in those states
only through registered or licensed brokers or dealers.
Any person participating in the distribution of the securities registered
under the registration statement that includes this prospectus will be subject
to applicable provisions of the Securities Exchange Act of 1934, and the
applicable rules and regulations of the SEC, including, among others, Regulation
M noted above, which may limit the timing of purchases and sales of any of the
securities by any such person. Furthermore, Regulation M may restrict the
ability of any person engaged in the distribution of the securities to engage in
market-making activities with respect to the securities. These restrictions may
affect the marketability of the securities and the ability of any person or
entity to engage in market-making activities with respect to the securities.
LEGAL MATTERS
Unless otherwise noted in a prospectus supplement, Locke Liddell & Sapp
LLP, Dallas, Texas, will pass on the legality of the securities offered through
this prospectus and certain tax matters. Counsel for any underwriters or agents
will be noted in the applicable prospectus supplement.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 2003, as amended in the Current Report on Form
8-K filed on September 8, 2004, and the Current Report on Form 8-K filed on
September 9, 2004, 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.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities and Exchange
Act of 1934, as amended, and 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 450 Fifth Street, N.W.,
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
www.sec.gov. In addition, you may read and copy our SEC filings at the offices
-----------
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 or at
the SEC's Public Reference Room at Room 1200, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Our website address is www.weingarten.com.
------------------
This prospectus is only part of a registration statement we filed with the
SEC under the Securities Act of 1933, as amended, and therefore omits certain
information contained in the registration statement. We have also filed exhibits
and schedules to the registration statement that we have excluded from this
prospectus, and you should refer to the applicable exhibit or schedule for a
complete description of any statement referring to any contract or document. You
may inspect or obtain a copy of the registration statement, including exhibits
and schedules, as described in the previous paragraph.
INCORPORATION OF DOCUMENTS BY REFERENCE
This prospectus "incorporates by reference" information that we have filed
with the SEC under the Exchange Act, which means that we are disclosing
important information to you by referring you to those documents. Any statement
contained in this prospectus or in any document incorporated or deemed to be
incorporated by reference into this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or any subsequently filed document which also is,
18
or is deemed to be, incorporated by reference into this prospectus modifies or
supercedes that statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus. We incorporate by reference the following documents listed below and
any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act (other than Current Reports furnished under Items 2.02 or 7 of
Form 8-K):
- Annual Report on Form 10-K for the year ended December 31, 2003.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2004.
- Current Report on Form 8-K filed with the SEC under Item 8.01 on
September 8, 2004.
- Current Report on Form 8-K filed with the SEC under Item 2.01 on
September 9, 2004.
- Schedule 14A filed with the SEC on March 17, 2004.
- The description of our common shares of beneficial interest contained
in our registration statement on Form 8-A filed March 17, 1988.
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
19
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 . . . . . . . . . . . . . . $ 6,335
Printing and Engraving Costs . . . . . . . . . . 17,500
Accounting Fees and Expenses . . . . . . . . . . 15,000
Legal Fees and Expenses. . . . . . . . . . . . . 25,000
Miscellaneous. . . . . . . . . . . . . . . . . . 6,165
---------
Total. . . . . . . . . . . . . . . . . $ 70,000
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (B) of 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 trust
manager or officer and any person who is or was serving at our request as a
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trust manager, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another real estate investment trust,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise with respect to all costs and expenses incurred by
such person 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 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 trust
manager or officer and any person who is or was serving at our request as a
trust manager, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another real estate investment trust,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise with respect to all costs and expenses incurred by
such person 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 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.
* 1.1 Form of Distribution Agreement for common shares.
* 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 of 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 of the Restated Declaration of Trust (filed as
Exhibit 3.3 to our Registration Statement on Form 8-A dated January
19, 1999 and incorporated herein by reference).
* 3.4 Third Amendment of 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 99.2 to our
Registration Statement on Form 8-A dated February 23, 1998 and
incorporated herein by reference).
* 4.1 Form of common share certificate.
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.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1 hereto).
II-2
23.3 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1 hereto).
24.1 Power of Attorney (included on signature page).
-------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the securities.
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;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at 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.
(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) The undersigned Registrant hereby further undertakes to supplement the
applicable prospectus supplement, after the expiration of the subscription
period, to set forth the results of the subscription offer, the transactions by
the underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters, and the terms of any subsequent
reoffering thereof. If any public offering by the underwriters is to be made on
terms differing from those set forth on the cover page of the prospectus, a
post-effective amendment will be filed to set forth the terms of such offering.
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(d) 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 Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 16th day of
September, 2004.
WEINGARTEN REALTY INVESTORS
By: /s/ Andrew M. Alexander
----------------------------------------
Andrew M. Alexander, President and Chief
Executive Officer
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, Trust Manager September 16, 2004
Stanford Alexander
By: /s/ Andrew M. Alexander
----------------------------- President, Chief Executive Officer
Andrew M. Alexander and Trust Manager September 16, 2004
By: /s/ J. Murry Bowden
----------------------------- Trust Manager September 16, 2004
J. Murry Bowden
By: /s/ James W. Crownover
----------------------------- Trust Manager September 16, 2004
James W. Crownover
II-5
By: /s/ Robert J. Cruikshank
----------------------------- Trust Manager September 16, 2004
Robert J. Cruikshank
By: /s/ Melvin A. Dow
----------------------------- Trust Manager September 16, 2004
Melvin A. Dow
By: /s/ Stephen A. Lasher
----------------------------- Trust Manager September 16, 2004
Stephen A. Lasher
By: /s/ Stephen C. Richter
----------------------------- Sr. Vice President and Chief Financial Officer September 16, 2004
Stephen C. Richter
By: /s/ Douglas W. Schnitzer
----------------------------- Trust Manager September 16, 2004
Douglas W. Schnitzer
By: /s/ Marc J. Shapiro
----------------------------- Trust Manager September 16, 2004
Marc J. Shapiro
By: /s/ Joe D. Shafer
----------------------------- Vice President/Controller
Joe D. Shafer (Principal Accounting Officer) September 16, 2004
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EXHIBIT INDEX
Exhibit
Number
* 1.1 Form of Distribution Agreement for common shares.
* 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 of 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 of the Restated Declaration of Trust (filed as
Exhibit 3.3 to our Registration Statement on Form 8-A dated January
19, 1999 and incorporated herein by reference).
* 3.4 Third Amendment of 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 99.2 to our
Registration Statement on Form 8-A dated February 23, 1998 and
incorporated herein by reference).
* 4.1 Form of common share certificate.
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.
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).
____________
* To be filed by amendment or incorporated by reference in connection with the
offering of the securities.
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