As filed with the Securities and Exchange Commission on January 5, 1996
November 26, 2008
Registration No. 33-62779
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333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3
TO
_______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALEXANDER'S,
___________________
ALEXANDERS, INC.
(Exact
(Exact name of registrant as specified in its charter)
Delaware 51-01-00517
(State or other jurisdiction of (IRS employer identification number)
incorporation or organization)
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
(201) 587-8541
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Joseph Macnow
Chief Financial Officer
Alexander's, Inc.
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
(201) 587-8541
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copy to:
Douglas P. Bartner, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Delaware (State or other jurisdiction of incorporation or organization) | | 51-01-00517 (I.R.S. Employer Identification No.) |
210 Route 4 East Paramus, New Jersey 07652 (201) 587-8541 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) ___________________ |
Joseph Macnow Chief Financial Officer Alexanders, Inc. 888 Seventh Avenue New York, New York 10019 (212) 894-7000 (Name, address, and telephone number of agent for service) Copies to: |
Bruce Czachor, Esq. Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 | Alan Rice, Esq. Secretary Alexanders, Inc. 888 Seventh Avenue New York, New York 10019 |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement as determined by
market conditions.
registration statement.
If the only securities being registered on this Formform are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_|
o
If any of the securities being registered on this Formform are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X|
x
If this Formform 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. |_|
o
If this Formform 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. |_|
o
If delivery ofthis form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434, please462(e) under the Securities Act, check the following box. |X|
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The Registrant hereby amendso
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
o Large accelerated filer | x Accelerated filer |
o Non-accelerated filer (Do not check if a smaller reporting company) | o Smaller reporting company |
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED | AMOUNT TO BE REGISTERED(1)(2) | PROPOSED MAXIMUM OFFERING PRICE PER UNIT (4) | PROPOSED MAXIMUM AGGREGATE OFFERING PRICE(1)(2)(3) | AMOUNT OF REGISTRA- TION FEE(2) |
Common stock, par value $1.00 per share | | | | |
Preferred stock, par value $1.00 per share | | | | |
Depositary shares representing preferred stock(5) | | | | |
Debt securities | | | | |
Debt warrants(6) | | | | |
Total | $1,500,000,000 | (4) | (1)(2)(3) | (2) |
(1) An indeterminate aggregate initial offering price or number of the common stock, preferred stock, depositary shares, debt securities and debt warrants is being registered as may from time to time be issued at indeterminate prices in an aggregate amount not to exceed $1,500,000,000 or the equivalent of that amount in one or more other currencies, currency units or composite currencies.
(2) A filing fee of $121,350 was previously paid for the $1,500,000,000 aggregate initial offering price of securities registered under Registration Statement Nos. 333-110673 and 33-62779. Pursuant to Rule 415(a)(6) under the Securities Act, the associated filing fee of $121,350 will be applied to the unsold $1,500,000,000 aggregate initial offering price of common stock, preferred stock, depositary shares representing preferred stock, debt securities and debt warrants of Alexander’s, Inc. registered under Registration Statement Nos. 333-110673 and 33-62779 and the offering of such unsold securities will be deemed terminated as of the date of effectiveness of this Registration Statement on such date
or dates as may be necessary to delay its effective date untilStatement.
(3) Estimated for the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effectivesole purpose of computing the registration fee in accordance with Section 8(a) ofRule 457(o) under the Securities ActAct. Separate consideration may not be received for registered securities that are issuable on conversion or exchange of 1933other securities or until this Registration Statement shall become
effective on such date asrepresented by depositary shares.
(4) Omitted in accordance with General Instruction II.D of Form S-3 under the Commission, acting pursuant to said Section 8(a),Securities Act.
(5) Each depositary share will be issued under a deposit agreement, will represent an interest in a fractional preferred share and will be evidenced by a depositary receipt.
(6) Debt warrants may
determine.
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be sold separately or with other securities.
THE INFORMATION CONTAINED HEREININ THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TONOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES HAS BEENUNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMESCOMMISSION IS EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTEIS NEITHER AN OFFER TO SELL OR THE
SOLICITATION OFTHESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCHTHE OFFER SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 5, 1996
[Alexander's, Inc. Logo]
Prospectus
Debt Securities, Preferred Stock, Depositary Shares, Common
Stock and Debt Warrants
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Alexander's, Inc. (the "Company")NOVEMBER 26, 2008
PROSPECTUS
$1,500,000,000
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
DEBT WARRANTS
We may, offer from time to time, together
or separately, in one or more series (i)offer to sell common stock, preferred stock, debt securities ("Debt Securities"),
whichand debt warrants. The preferred stock may either be sold separately or represented by depositary shares. The debt securities may be either senior debt securities (the "Senior Debt Securities")exchangeable for our common or
subordinated debt securities (the "Subordinated Debt Securities"), (ii) shares
of preferred stock $1.00 par value per share, ofand the Company ("Preferred
Stock"), whichpreferred stock may be issued in the formconvertible into common stock or into preferred stock of depositary shares (the "Depositary
Shares") evidenced by depositary receipts, (iii) sharesanother series. The debt warrants will be to purchase debt securities. The total amount of common stock, $1.00
par value per share, of the Company ("Common Stock") and (iv) warrants to
purchasepreferred stock, depositary shares, debt securities of the Company as shall be designated by the Company at
the time of the offering (the "Debt Warrants") (the Debt Securities, Preferred
Stock, Common Stock and Debt Warrants are collectively referred to as the
"Securities"), atdebt warrants offered under this prospectus will have an initial aggregate initial offering price notof up to exceed U.S.
$250,000,000,$1,500,000,000 or the equivalent amount in amounts, at prices and on terms to be determined at the time of
sale.other currencies, currency units or composite currencies. The Debt Securities, Preferred Stock, Common Stock and Debt Warrantssecurities may be offered separately or together and in one or more separate seriesseries.
We may offer and sell these securities to or through one or more underwriters, dealers and agents or directly to purchasers, on a continuous or delayed basis.
We will provide the specific terms of these securities in amounts, at prices and
on terms to be set forth in a supplementsupplements to this Prospectus (a "Prospectus
Supplement").
The accompanying Prospectus Supplement will set forth with regard to
the particular Securities in respect of whichprospectus. You should read this Prospectus is being delivered
(i) in the case of Debt Securities, the title, aggregate principal amount,
denominations (which may be in United States dollars, or in any other currency,
currencies or currency unit, including the European Currency Unit), maturity,
rate, if any (which may be fixed or variable), or method of calculation thereof,
time of payment of any interest, any terms for redemption at the option of the
Company or the Holder, any terms for sinking fund payments, rank, any conversion
or exchange rights, any listing on a securities exchange,prospectus and the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities, (ii) in the case of Preferred Stock, the specific title,
the aggregate amount and the stated value, any dividend (including the method of
calculating the payment of dividend), liquidation, redemption, conversion,
voting or other rights and the initial public offering price, (iii) in the case
of Common Stock, the number of shares of Common Stock, the initial offering
price and the terms of the offering thereof and (iv) in the case of Debt
Warrants, the duration, purchase price, exercise price and detachability of such
Debt Warrants. The Prospectus Supplement will also contain, as applicable, a
discussion of the material United States federal income tax considerations
relating to the Securities in respect of which this Prospectussupplements carefully before you invest.
Our common stock is being
delivered to the extent not contained herein.
The shares of Common Stock of the Company are listed on the New York Stock Exchange ("NYSE") under the symbol "ALX".
The Company intends to qualify as a real estate investment trust
("REIT") for federal income tax purposes for the year ending December 31, 1995.
See "Risk Factors" beginning on page 5 herein for a discussion of
certain factors“ALX.”
Investing in our securities involves risks that should be carefully considered by prospective investorsare described in the Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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The Company may sell“Risk Factors” section of our periodic reports filed with the Securities toand Exchange Commission or through underwriters, and also
may sell Securities directly to other purchasers or through agents. The
accompanying Prospectus Supplement will set forth the names of any underwriters
or agents involved in the sale ofapplicable prospectus supplement.
Neither the Securities
in respect of which this
Prospectus is being delivered, the amounts of Securities, if any, to be
purchased by underwriters and
the compensation, if any, of such underwriters or
agents. See "Plan of Distribution" herein.
The date of this Prospectus is _______________, 1996.
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus or the accompanying Prospectus Supplement in connection with the
offer contained in this Prospectus and the accompanying Prospectus Supplement
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or any underwriters, agents or
dealers. This Prospectus and the accompanying Prospectus Supplement do not
constitute an offer to sell or solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus and the accompanying
Prospectus SupplementExchange Commission nor any salestate securities commission has approved or disapproved of these securities or offerdetermined if this prospectus is truthful or complete. Any representation to sell the Securities offered
hereby shall, under any circumstances, create an implication that there has been
no change in the affairs of the Companycontrary is a criminal offense. ________________
Prospectus dated November 26, 2008
| 1 |
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FORWARD-LOOKING STATEMENTS | 2 |
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ALEXANDER’S, INC. | 4 |
| |
RATIOS OF EARNINGS TO FIXED CHARGES | 6 |
| |
USE OF PROCEEDS | 6 |
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DESCRIPTION OF DEBT SECURITIES | 7 |
| |
DESCRIPTION OF CAPITAL STOCK | 25 |
| |
DESCRIPTION OF DEBT WARRANTS | 37 |
| |
LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE | 39 |
| |
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS | 44 |
| |
PLAN OF DISTRIBUTION | 61 |
| |
VALIDITY OF THE SECURITIES | 61 |
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EXPERTS | 61 |
| |
In this prospectus, “Alexander’s,” “we,” “our” or “us” refers to Alexander’s, Inc. and its consolidated subsidiaries, sinceunless the respective dates of this Prospectuscontext requires otherwise.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and the accompanying Prospectus Supplement
or that the information contained in this Prospectus or the accompanying
Prospectus Supplement is correct as of any time subsequent to the respective
dates of this Prospectus and the accompanying Prospectus Supplement.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith filescurrent reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"“SEC”). The reports, proxy
statementsYou may read and other information filed by the Company with the Commission can be
inspected and copiedcopy any document we file at the CommissionSEC’s public reference room at Room 1024, Judiciary Plaza, 450 Fifth100 F Street, N.W.N.E., Washington, D.C. 20549, andDC 20549. Please call the SEC at 1-800-SEC-0330 for further information on its public reference room. Our SEC filings are also available to the following regional offices ofpublic through the Commission: 7 World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such information can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549,SEC’s web site at prescribed rates. The Company's Common Stock ishttp://www.sec.gov. Our common shares are listed on the New York Stock Exchange, ("NYSE") and similar information can be inspected and copied at the
NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.
about us is also available there.
This Prospectus constitutesprospectus is a part of a registration statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). As permitted by
the rules and regulations of the Commission, this Prospectus omits certain of
the information contained in the Registration Statement and reference is hereby
made to the Registration Statement and related exhibits for further information
with respect to the Company and the Securities offered hereby. Statements
contained herein concerning the provisions of any documents filed as an exhibit
to the Registration Statement or otherwisethat we filed with the Commission are not
necessarily complete, andSEC. The SEC allows us to “incorporate by reference” the information that we file with it, which means that we can disclose important information to you by referring you to other documents that we identify as part of this prospectus. Any information referred to in each instance referencethis way is made toconsidered part of this prospectus from the copydate we file that document. Our subsequent filings of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 as amended by Form 10-K/A (the "Form 10-K/A") for the fiscal
year ended December 31, 1994 filed on December 8, 1995, (ii) Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1995 as amended by Form
10-Q/A for the quarterly period ended March 31, 1995 filed on December 8, 1995,
(iii) Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995
as amended by Form 10-Q/A for the quarterly period ended June 30, 1995 filed on
December 8, 1995, (iv) Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1995 as amended by Form 10-Q/A for the quarterly period
ended September 30, 1995 filed on December 8, 1995 and (v) Current Reports on
Form 8-K dated January 4, 1995, February 6, 1995, September 18, 1995 and January
3, 1996, have been filed by the Companysimilar documents with the CommissionSEC will automatically update and are hereby
incorporatedsupercede this information. We incorporate by reference into this Prospectus. All otherthe documents listed below and reports
filed pursuant to Sectionsany future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act from
the date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference herein and shall be
deemed to be a part hereof from1934 (1) after the date of the filing of such reportsthis registration statement and before its effectiveness and (2) until our offering of securities has been completed.
We incorporate by reference into this prospectus the documents (provided, however, thatlisted below or information filed with the SEC:
| · | Annual Report on Form 10-K for the fiscal year ended December 31, 2007. |
| · | Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008. |
You may obtain a copy of these filings, at no cost, by writing to or telephoning us at the following address: Alexander’s, Inc., 888 Seventh Avenue, New York, NY 10019, Attention: Corporate Secretary. Telephone (212) 894-7000.
You should rely only on the information incorporated by reference or provided in this prospectus or any supplement. We have not authorized anyone else to provide you with different information. This prospectus is an offer to sell or buy only the securities described in this document, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of the date of this prospectus.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus or the accompanying prospectus supplement, including the documents incorporated by reference, 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 future performance. They involve risks, uncertainties and assumptions. Our future results, financial condition, results of operations 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 “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions. We also note the following forward-looking statements: in the case of our development projects, the estimated completion date, estimated project costs and costs to complete.
These forward-looking statements represent our intentions, plans, expectations and beliefs and 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.
These factors include those listed under the caption “Risk Factors” in the applicable prospectus supplement and in our periodic reports filed with the SEC, as well as the following:
| · | national, regional and local economic conditions, |
| · | consequences of any armed conflict involving, or terrorist attack against, the United States, |
| · | our ability to secure adequate insurance, |
| · | local conditions, such as an oversupply of space or a reduction in demand for real estate in the area, |
| · | competition from other available space, |
| · | whether tenants and other users such as customers and shoppers consider a property attractive, |
| · | the financial condition of our tenants, including the extent of tenant bankruptcies or defaults, |
| · | whether we are able to pass some or all of any increased operating costs through to tenants, |
| · | how well we manage our properties, |
| · | fluctuations in interest rates, |
| · | changes in real estate taxes and other expenses, |
| · | changes in market rental rates, |
| · | the timing and costs associated with property improvements and rentals, |
| · | changes in taxation or zoning laws, |
| · | availability of financing on acceptable terms or at all, |
| · | potential liability under environmental or other laws or regulations, and |
| · | general competitive factors. |
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this prospectus or the date of the applicable prospectus supplement or 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
item 402(a)(8)
of Regulation S-K ofthis section. We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances after the
Commission shall not be deemed specifically
incorporated by reference herein).
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Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposesdate of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on written or oral request of such person, a copy
of any or all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in the document which this Prospectus incorporates).
Requests should be directed to the Secretary of the Company, Park 80 West, Plaza
II, Saddle Brook, New Jersey 07663, telephone number (201) 587-8541.
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................................ 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................. 2
THE COMPANY.................................................................. 4
RISK FACTORS................................................................. 5
USE OF PROCEEDS.............................................................. 11
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES.............................. 12
CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION....................... 13
DESCRIPTION OF DEBT SECURITIES............................................... 15
DESCRIPTION OF CAPITAL STOCK................................................. 23
DESCRIPTION OF DEBT WARRANTS................................................. 34
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.................................... 35
PLAN OF DISTRIBUTION......................................................... 45
EXPERTS...................................................................... 46
VALIDITY OF THE SECURITIES................................................... 46
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THE COMPANY
The Companyprospectus. ALEXANDER’S, INC.
Alexander’s, Inc. is a real estate companyinvestment trust incorporated in Delaware and engaged in leasing, managing, developing and redeveloping its properties. Alexander’s is managed by, and its properties focusing primarily onare leased and developed by, Vornado Realty Trust.
Alexander’s has seven properties in the
properties
where its department stores were formerly located. These department stores
ceased operating in 1992 and are on properties located ingreater New York City
and
Bergen County, New Jersey (the "New York Area"). The Company believes that its
properties offer advantageous retail opportunities, principally because of their
size and location in areas where comparable store sites are not readily
available.
The Company seeks to increase its income and property values by
strategically renovating, expanding and developing its properties. The Company's
general strategy is to lease each of its properties to large-space users,
typically national or large regional retailers, under long-term leases
(generally 20 years or longer) which provide the Company with fixed rents and
also with periodic rent increases (generally every five years). These leases
also generally require the tenant to pay, or reimburse the Company, for commonmetropolitan area
charges (including roof and structure costs), real estate taxes, insurance
costs and certain capital expenditures.
The Company's real estate portfolio consists of the following nine
properties, four of which are currently operating (the "Operating Properties")
and five of which are currently being or will be redeveloped (the "Redevelopment
Properties"):
Property Location Leasable Building Square Footage
-------- -------- --------------------------------
Operating Properties:
Fordham Road Bronx, NY 303,000
Flushing Queens, NY 177,000
Third Avenue Bronx, NY 173,000
Kings Plaza Mall (1) Brooklyn, NY 427,000
Redevelopment Properties:
Rego Park I Queens, NY 359,000
Rego Park II Queens, NY ---(2)---
Kings Plaza Store Brooklyn, NY 320,000
Paramus Paramus, NJ ---(3)---
Lexington Avenue (4) New York, NY 418,000
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(1) The Company owns a 50% interest in this property.
(2) This property consists of 287,500 square feet of vacant land in
approximately one and one-half square blocks adjacent to the Rego Park I
Property.
(3) This property consists of approximately 39 acres. A portion of this
property is subject to condemnation. See "Risk Factors-- Real Estate
Investment Risks."
(4) The Company owns the general partnership interest and 92% of the limited
partnership interests in this property.
The Fordham Road Property and the Flushing Property are 100% leased to The
Caldor Corporation ("Caldor") and the Third Avenue Property is 100% leased to a
subsidiary of Conway Stores, Inc. The Kings Plaza Mall is 88% leased to over 100
tenants. The Rego Park I Property has been entirely pre-leased to Sears, Roebuck
& Company, Marshalls, Inc. and Caldor and the commencement of such tenants'
leases is conditioned upon the completion of certain improvements by the Company
which are under construction and are expected to be completed by March 1996. The
Company is in discussions with prospective tenants for the remaining
Redevelopment Properties. See "Risk Factors -- Bankruptcy of a Major Tenant" and
"Risk Factors -- Real Estate Investment Risks -- Dependence on Rental Income and
Concentration of Rental Income with Certain Lessees; Bankruptcy of a Major
Tenant."
Vornado Realty Trust ("Vornado"), a NYSE-listed REIT and major stockholder
of the Company, manages the properties and business affairs of the Company and
acts as the Company's exclusive leasing agent pursuant to agreements with the
Company. Steven Roth, Chief Executive Officer and a director of the Company, is
also the
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Chairman and Chief Executive Officer of Vornado. See "Risk Factors --
Control-Related Risks; Possible Conflicts of Interest."
In May 1992, at a time when the Company's business consisted of retail
store operations, the Company and its subsidiaries filed petitions for relief
under Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").
In September 1993, the Bankruptcy Court confirmed the Joint Plan of
Reorganization (the "Plan"), pursuant to which the Company and its subsidiaries
reorganized their business as a real estate company. The Company has consummated
the Plan and has complied with all of its obligations thereunder. Pursuant to
the Plan, (i) all holders of allowed general unsecured claims were paid in full,
together with accrued interest in respect of their claims and (ii) all holders
of allowed secured claims received one hundred percent of their claims through
the issuance of new secured debt instruments or by payment in cash or a
combination thereof. The Bankruptcy Court has retained jurisdiction to resolve
the remaining disputed claims and for other limited purposes.
As of September 30, 1995, the Company and its subsidiaries had aggregate
indebtedness outstanding of $173,613,000. The Company currently expects to
borrow and expend, through the first quarter of 1996, up to an additional
$20,000,000 to complete the Rego Park I redevelopment.
The Company is a Delaware corporation whose earliest predecessor
corporation was organized in 1928. The Company intends to file, with its federal
income tax return for 1995, an election to be treated as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), effective for 1995.
The Company's principal executive offices are located at Park 80 West,
Plaza II, Saddle Brook, New Jersey 07663; telephone (201) 587-8541.
RISK FACTORS
Prospective purchasers of the Securities should consider carefully the
factors set forth below, as well as any other applicable risk factors that may
be set forth in the accompanying Prospectus Supplement, before purchasing the
Securities offered hereby.
Adverse Consequences of Financial Leverage; Deficiency of Earnings to Fixed
Charges; Effect of Encumbrances; Covenant Restrictions
The Company has significant debt service obligations. The Company borrowed
$138,425,000 during the nine months ended September 30, 1995 (the "1995
Financings") and at September 30, 1995, the Company's long-term debt was
$173,613,000. For the nine months ended September 30, 1995, the Company's
deficiency of earnings to cover fixed charges was $12,605,000. The Company also
had a deficiency in net assets of $28,203,000 at September 30, 1995. The
Company's ability to operate as a viable real estate company will depend on the
successful and timely completion of the redevelopment and leasing of the
Redevelopment Properties, which will materially affect the Company's ability to
meet its debt service requirements.
Under the 1995 Financings, the Company granted certain lenders mortgages on
all of the Company's assets and/or pledges of the stock of the Company's
subsidiaries owning assets and/or guarantees of such subsidiaries and the
Company. If the Company becomes insolvent or is liquidated, or if its
indebtedness is accelerated, the lenders under the 1995 Financings will be
entitled to payment in full from the proceeds of their security prior to the
payment to Holders of Securities. In such event, it is possible that there would
be no assets remaining from which claims of Holders of Securities could be
satisfied or, if any assets remain, such assets may be insufficient to satisfy
fully such claims.
-5-
The 1995 Financing documents contain certain restrictive covenants. Such
restrictions affect, and in many respects significantly limit or prohibit, among
other things, the ability of the Company and certain of its subsidiaries to
incur indebtedness, make prepayments of certain indebtedness, pay dividends,
make investments, engage in transactions with affiliates, issue or sell capital
stock of subsidiaries, create liens, sell assets, acquire or transfer property
and engage in mergers and consolidations. The covenants may significantly limit
the Company's (and such subsidiaries') operating and financial flexibility and
there can be no assurance that such restrictions will not adversely affect the
Company's (and such subsidiaries') ability to finance future operations or
capital needs or to engage in other business activities which may be beneficial
to the Company. Additional restrictive covenants may be created with respect to
a particular series of Securities and will be set forth in the applicable
Prospectus Supplement.
In the event of a default under the terms of any indebtedness of the
Company, the obligees thereunder would be permitted to accelerate the maturity
of such obligations, which may cause defaults under other obligations of the
Company, including Securities issued pursuant to this Registration Statement. In
such circumstances, Holders of such Securities may be forced to accelerate the
maturity of such Securities to protect their interests at a time when it would
not otherwise be in their interest to do so. Further, such defaults could be
expected to delay or preclude payment of principal of and/or interest on such
Debt Securities.
Lack of Profitability
Because the Company has not yet developed a number of its properties, its
current operating properties (four of its nine properties) do not generate
sufficient cash flow to pay all of its expenses. The Company's five
non-operating properties (Rego Park I, Rego Park II, Lexington Avenue, Paramus,
and the Kings Plaza Store) are in various stages of redevelopment. There can be
no assurance that the Company will attain profitable operations.
Need for Additional Financing
The Company estimates that its capital expenditure requirements for
projects other than Rego Park I and Rego Park II will include (i) the
redevelopment of the Paramus Property estimated to cost between $55,000,000 and
$60,000,000 (ii) the subdivision of the existing space and other improvements at
the Kings Plaza Store Property estimated to cost between $10,000,000 and
$15,000,000, and (iii) the renovation of the existing Lexington Avenue building
estimated to cost between $20,000,000 and $25,000,000. There can be no assurance
that financing for such projects will be obtained, or if obtained, that such
financing will be on terms that are acceptable to the Company. In addition, it
is uncertain as to when these projects will commence. The Company may also
require additional financing as a result of its lack of profitability. See "--
Lack of Profitability" above.
Bankruptcy of a Major Tenant
On September 18, 1995, Caldor filed for relief under Chapter 11 of the
United States Bankruptcy Code. Property rentals from leases with Caldor
represented approximately 63% of the Company's consolidated revenues for the
year ended December 31, 1994 and approximately 54% of the Company's consolidated
revenues for the nine months ended September 30, 1995. Caldor is also the lessee
of a portion of the Rego Park I Property under a lease scheduled to commence
after the completion of the redevelopment of this property. Caldor, which is
responsible for the construction of its store, ceased such construction in
September 1995. The Company believes that the loss of Caldor as a tenant would
have a material adverse effect on the Company. Caldor's filing under Chapter 11
may lead to the termination of, or default under, such leases with Caldor.
Additionally, under the terms of a $25,000,000 loan to the Company, secured
by a mortgage on the Fordham Road Property, the failure of Caldor to meet
certain financial tests may result in the Company being required to escrow net
cash flow of approximately $500,000 per annum from the Fordham Road Property
into an account of the lender as a reserve against future payments under the
loan.
-6-
Holding Company Structure
Since substantially all of the Company's operations are conducted, and
substantially all of the Company's assets are owned, by its subsidiaries, the
Securities will effectively be subordinated to all existing and future
liabilities of the Company's subsidiaries, including the subsidiaries'
guarantees of indebtedness incurred under the 1995 Financings. As of September
30, 1995, the Company's subsidiaries and the Seven Thirty One Limited
Partnership, of which the Company owns a 92.36% interest, had outstanding
$103,410,000 of liabilities (including trade payables and indebtedness) and also
had guarantees of $75,000,000 of Company indebtedness incurred under the 1995
Financings. Any right of the Company to participate in any distribution of the
assets of any of the Company's subsidiaries upon the liquidation, reorganization
or insolvency of such subsidiary (and any consequent right of the Holders of the
Securities to participate in those assets) will be subject to the claims of the
creditors (including trade creditors) and preferred stockholders, if any, of
such subsidiary, except to the extent the Company has a claim against such
subsidiary as a creditor of such subsidiary. The Company has expressly
subordinated certain of its claims against its subsidiaries to the subsidiaries'
guarantees of indebtedness incurred under the 1995 Financings. In addition, in
the event that claims of the Company as a creditor of a subsidiary are
recognized, such claims would be subordinate to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company.
The Company's ability to make required principal and interest payments with
respect to its indebtedness, including any Debt Securities, depends on the
earnings of its subsidiaries and on its ability to receive funds from such
subsidiaries through dividends or other payments. Since the Securities are
obligations of the Company only, the Company's subsidiaries are not obligated or
required to pay any amounts due pursuant to the Securities or to make funds
available therefor in the form of dividends or advances to the Company.
Limited Financial and Operating History; Noncomparability of Financial
Information
Prior to May 1992, the Company operated a retail department store business.
Accordingly, the Company has a limited operating history as a real estate
company upon which prospective investors may evaluate its performance.
Information reflecting the results of operations and financial condition of the
Company for periods subsequent to May 1992 are not comparable to information for
the periods prior to such date due to (i) the termination of the Company's
retail operations, including the sale of the Company's retail inventory, and the
Company's transition to real estate operations and (ii) the Company's bankruptcy
case, including the costs and expenses relating to the administration thereof,
and the payment of the Company's liabilities as a result thereof.
Control-Related Risks; Possible Conflicts of Interest
Vornado, an unincorporated Maryland business trust, owns 29.3% of the
outstanding Common Stock of the Company, including 27.1% purchased in March
1995. Interstate Properties, a New Jersey general partnership ("Interstate"),
which owns an additional 27.1% of the outstanding Common Stock of the Company,
owns 27.7% of the outstanding common shares of beneficial interest of Vornado.
Steven Roth, Chief Executive Officer and a Director of the Company, is also
Chairman of the Board and Chief Executive Officer of Vornado, and the Managing
General Partner of Interstate. Mr. Roth, David Mandelbaum, Richard R. West and
Russell B. Wight, members of the Company's Board of Directors, are also Trustees
of Vornado. Messrs. Roth, Mandelbaum and Wight are the three partners of
Interstate. Messrs. Roth, Mandelbaum and Wight and Interstate own, in the
aggregate, 32.6% of the outstanding Common Shares of beneficial interest of
Vornado. Further, Vornado has provided the Company with a loan to finance its
operations in the principal amount of $45,000,000 (the subordinate portion of a
$75,000,000 facility, the balance of which was provided by an unaffiliated
bank). The loan is secured by liens on substantially all of the Company's
properties.
Based on the foregoing, Mr. Roth, Interstate Properties and Vornado
(collectively, the "Principal Stockholders") may have substantial influence on
the Company and on the outcome of any matters submitted to the Company's
stockholders for approval. In addition, certain decisions concerning the
operations or financial structure
-7-
of the Company may present conflicts of interest between the Principal
Stockholders and the Holders of the Securities. For example, if the Company
encounters financial difficulties, or is unable to pay its debts as they mature,
the interests of the Principal Stockholders might conflict with those of the
Holders of the Securities. In addition, the Principal Stockholders may have an
interest in pursuing acquisitions, divestitures, financings or other
transactions that, in their judgment, could enhance their equity investment,
even though such transactions might involve risk to the Holders of the
Securities. Interstate Properties, Vornado and Mr. Roth engage in a wide variety
of activities in the real estate business which may result in conflicts of
interest with respect to certain matters affecting the Company, such as
potential business opportunities, business dealings between the Company,
Interstate Properties and Vornado and their affiliates, demands on the time of
Mr. Roth and certain of the executive officers of Vornado, changes of existing
arrangements between Mr. Roth, the Company and Vornado (such as the Management
and Development Agreement, dated February 6, 1995 (the "Management and
Development Agreement") and the Retention Agreement, dated July 20, 1992 (the
"Retention Agreement")), potential competition between business activities
conducted, or sought to be conducted, by the Company, Vornado and Interstate
Properties (including competition for properties and tenants), possible
corporate transactions, and other strategic decisions affecting the Company in
the future. Neither Mr. Roth nor Vornado is obligated to present to the Company
any particular investment opportunity which comes to their attention, even if
such opportunity is of a character which might be suitable for investment by the
Company.
Real Estate Investment Risks Applicable to the Company
General
Real property investments are subject to varying degrees of risk. The
Company's success will be affected by, among other factors, the trends of the
national and local economies, the financial condition and operating results of
current and prospective tenants, the availability and cost of capital, interest
rate levels, construction and renovation costs, income tax laws, governmental
regulations and legislation, population trends, the market for real estate
properties in the New York Area, competition from other available space, zoning
laws, potential liability under environmental and other laws and the ability of
the Company to lease or sublease its properties at profitable levels.
Dependence on Rental Income and Concentration of Rental Income with Certain
Lessees; Bankruptcy of a Major Tenant
As substantially all of the Company's income is derived from rentals of
real property, the Company's results of operations will depend on its ability to
lease space in its real estate properties on economically favorable terms.
Although none of the Company's leases are cancelable by the lessee in the
event of default by such lessee, the Company may experience delays in enforcing
its rights as lessor or sublessor and may incur substantial costs in protecting
its investment if the lessee defaults under its lease. In addition, certain
significant expenditures associated with real estate investments (such as
mortgage payments, real estate taxes and maintenance costs) are generally not
reduced when circumstances (such as vacancies or the inability of tenants to
meet their obligations) cause a reduction in income from the investment. Should
such events occur, the Company's income and cash flows would be adversely
affected. The Company's properties are mortgaged to secure payment of
indebtedness, and if the Company were unable to meet its mortgage payments, a
loss could be sustained as a result of a foreclosure on its property by the
mortgagee.
The Company's income and cash flows would be adversely affected if a
significant number of the Company's lessees (or a lessee accounting for a
significant portion of the Company's rental income) were unable to meet their
obligations to the Company. Property rentals from leases with Caldor and the
Conway affiliate represented approximately 63% and 13%, respectively, of the
Company's consolidated revenues for the year ended December 31, 1994 and
approximately 54% and 11%, respectively, of the Company's consolidated revenues
for
-8-
the nine months ended September 30, 1995. The Company believes that the loss of
either of these tenants would have a material adverse effect on the Company.
Caldor's filing of petitions for relief under Chapter 11 of the United States
Bankruptcy Code on September 18, 1995 may lead to the termination of, or default
under, such leases with Caldor.
Limited Number of Properties; Geographic Concentration
The Company concentrates on the redevelopment and leasing of its nine real
estate properties, which are located in the New York Area and are subject to
fluctuations in the real estate market of, and economic conditions particular
to, the New York Area. As a result, the Company's results of operations are
dependent upon the success of a limited number of properties and upon the demand
for retail space in its market area. There can be no assurance that local
economic conditions will be favorable to the Company's operations. An adverse
development affecting any one of the Company's properties could have a material
adverse effect on the Company's financial condition or results of operations.
Condemnation
The State of New Jersey has notified the Company of its intention to
condemn approximately ten acres or 25% of the Paramus Property in connection
with the redesign of a highway intersection. The New Jersey Department of
Transportation ("DOT") has recently made an offer to the Company to purchase the
land which is the subject of the condemnation proceeding for $15,400,000 based
on an appraisal performed on the DOT's behalf. The Company expects to negotiate
with the DOT to attempt to reach agreement on the value. In the event that the
Company and the DOT do not reach agreement on the value, a formal process will
be initiated by the DOT, pursuant to which, among other things, a group of
independent commissioners will be appointed by a court to determine fair market
value. If the condemnation occurs, the Company would be required to change its
redevelopment plans, and the time and cost to redevelop the Paramus Property may
materially increase.
In addition, the Company believes that, along with a number of other
locations, a portion of the Lexington Avenue Property is being considered by the
Port Authority of New York and New Jersey (the "Port Authority") for the site of
the terminus for a rail link from midtown Manhattan to LaGuardia and Kennedy
Airports. Approvals of numerous Federal, New York State and New York City
agencies are required before construction could begin. If the project proceeds
and the Port Authority selects a portion of the Lexington Avenue Property for
such use and can establish that it is needed to serve a public use, benefit or
purpose, the Port Authority, after conducting the requisite public hearings, may
acquire such portion of the Lexington Avenue Property pursuant to its powers of
eminent domain. Since the nature and scope of any plans being considered by the
Port Authority, and whether any such plans would ultimately affect the Lexington
Avenue Property, cannot be fully assessed by the Company at this time, it is
impossible to determine the ultimate effect that a taking, or any uncertainty
with respect thereto, would have on the Company's use or redevelopment of the
Lexington Avenue Property.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real property may be liable for the costs of removal or
remediation of hazardous substances located on, under or in such property. Such
laws often impose liability whether or not the owner or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances and the
liability may continue after the sale or other disposition of the contaminated
property. Other federal and state laws require the removal or encapsulation of
asbestos-containing material in the event of remodeling, renovation or
demolition. Other statutes may require the removal of underground storage tanks
that are out of service or out of compliance. Although compliance with
applicable provisions of federal, state and local laws regulating the discharge
of materials into the environment or otherwise relating to the protection of the
environment has not had a material effect on the Company's financial condition
or results of operations, there can be no assurance that such compliance will
not have such an effect in the future.
-9-
In September 1993, the Company had Phase I environmental assessments (which
generally involve site and records inspection without soil or groundwater
sampling) performed by an environmental engineering firm on each of its
properties. The results of the assessments at the Kings Plaza Shopping Center's
("Center") property show that certain adjacent properties owned by third parties
have experienced petroleum hydrocarbon contamination. Based on this assessment
and preliminary investigation of the Center's property and its history there is
a potential for contamination on the property. If contamination is found on the
property, the Center may be required to engage in remediation activities;
management is unable to estimate the financial impact of potential contamination
if any is discovered in the future.
In addition, there can be no assurance that the identification of new areas
of contamination, changes in the known scope of contamination, the discovery of
additional sites, or changes in cleanup requirements would not result in
material costs to the Company. The process of investigating and remediating
environmental contamination is lengthy and subject to the uncertainties of
changing legal requirements, developing technology and the allocation of
liability among potentially liable parties. The presence of contamination, or
the failure to properly remediate contamination, may also adversely affect the
Company's ability to borrow money using such real property as collateral or to
sell such property.
Uninsured Loss
The Company carries commercial liability, fire, flood, extended coverage
and rental loss insurance with respect to its properties and with policy
specifications and insured limits and deductibles customarily carried for
similar properties. There are, however, certain types of losses that are
generally not insured either because they are uninsurable or not economically
insurable. Should an uninsured loss occur, the Company could lose both its
invested capital in and anticipated profits from the property and would continue
to be obligated to repay any mortgage indebtedness on the property. Any such
loss could adversely affect the profitability and cash flow of the Company.
Reliance on Key Personnel and Agreements with Vornado
The Company believes that the continued services of Steven Roth, the
Company's Chief Executive Officer, are important to the Company's future
success. Although Mr. Roth has a significant ownership interest in the Company,
there is no assurance that he will remain with the Company. In addition, the
Company has retained Vornado pursuant to the Management and Development
Agreement, to manage all of the Company's business affairs and to manage and
develop the Company's properties, and pursuant to the Retention Agreement, to
act as the Company's exclusive leasing agent with respect to all of the
Company's properties. If, for any reason, Mr. Roth and Vornado do not continue
to be active in the Company's management, the Company's operations could be
adversely affected.
Changes in Operating or Investment Strategy
The Company's operating and investment strategy and its policies with
respect to certain other activities, including growth, capitalization,
distributions and REIT status, will be determined by the Board of Directors of
the Company. The Board of Directors may amend or revise these policies from time
to time at their discretion without a vote of the stockholders of the Company.
Adverse Consequences of the Failure to Qualify or Remain Qualified as a REIT
The Board of Directors of the Company has determined that the Company
should take the necessary actions to qualify as a REIT for federal income tax
purposes under the Code. Although management believes that the Company will be
organized and will operate in such a manner as to so qualify, no assurance can
be given that it will qualify or remain so qualified. Future economic, market,
legal, tax or other considerations may cause management to determine that it is
in the best interest of the Company and its stockholders to revoke the REIT
-10-
election. Qualification as a REIT for federal income tax purposes involves the
application of highly technical and complex Code provisions for which there are
only limited judicial or administrative interpretations, and the determination
of various factual matters and circumstances not entirely within the control of
the Company may affect its ability to qualify as a REIT. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not significantly change the tax laws
with respect to the requirements for qualification as a REIT or the federal
income tax consequences of such qualification.
In order to qualify and maintain its qualification as a REIT for federal
income tax purposes, the Company is required, among other distribution
requirements, to distribute as dividends on shares of Common Stock and/or
Preferred Stock at least 95% of its "real estate investment trust taxable
income." As of December 31, 1994, the Company had reported net operating loss
("NOL") carryovers of approximately $110 million, which generally would be
available to offset the amount of real estate investment trust taxable income
that the Company otherwise would be required to distribute. However, the NOLs
reported on the Company's tax returns are not binding on the Internal Revenue
Service (the "IRS") and are subject to adjustment as a result of future IRS
audits. In addition, under Section 382 of the Code, the Company's ability to use
its NOL carryovers could be limited if, generally, there were significant
changes in the ownership of its outstanding stock. Since its reorganization as a
REIT, the Company has not paid regular dividends and, unless otherwise provided
in an applicable Prospectus Supplement, does not believe that it will be
required to and may not pay regular dividends, until its NOL carryovers have
been fully utilized, on any Common Stock or Preferred Stock issued pursuant to
this Prospectus except for dividends on Preferred Stock as described in any
applicable Prospectus Supplement.
Anti-Takeover Effects of Provisions of the Certificate of Incorporation and
By-laws
Certain provisions of the Certificate of Incorporation and the By-laws of
the Company may be deemed to have anti-takeover effects and may discourage or
make more difficult a takeover attempt that a stockholder might consider in its
best interest. The Certificate of Incorporation provides that the Board of
Directors of the Company be divided into three classes serving staggered
three-year terms and that the number of directors will be no greater than
seventeen or less than three. The classes of directors are as nearly equal in
number as possible. Accordingly, approximately one-third of the Company's Board
of Directors will be elected each year. The By-laws provide that any vacancies
on the Board of Directors may only be filled by the remaining directors and not
by the stockholders. This precludes stockholders from removing incumbent
directors without cause and filling the resulting vacancies with their own
nominees. These provisions, among other things, limit the ability of the
stockholders to amend or repeal the By-laws or certain provisions of the
Certificate of Incorporation.
Additionally, for the Company to qualify as a REIT under the Code, not more
than 50% of the value of the outstanding stock may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year and the stock 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).
Accordingly, the Certificate of Incorporation contains provisions that restrict
the ownership and transfer of shares of capital stock. The Certificate of
Incorporation also contains provisions that restrict the ownership and transfer
of shares of capital stock to reduce the risk that the Company's ability to use
its NOLs would be limited.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
Company anticipates that the net proceeds of the sales of the Securities will be
used for general corporate purposes which may include, without limitation,
redevelopment of the Company's Redevelopment Properties and repayment of
outstanding indebtedness.
-11-
CONSOLIDATED RATIOconsisting of: | · | the 731 Lexington Avenue property, a 1,307,000 square foot multi-use building which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York. The building contains 885,000 and 174,000 of net rentable square feet of office and retail space, respectively, which we own, and 248,000 square feet of residential space consisting of 105 condominium units, which we sold. The building is 100% leased. Principal office tenants include Bloomberg L.P. (697,000 square feet) and Citibank N.A. (176,000 square feet). Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); |
| · | the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 94% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot Sears department store and a 339,000 square foot Macy’s department store, which is owned by Macy’s, Inc.; |
| · | the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains 351,000 square feet and is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; |
| · | the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc.; |
| · | the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; |
| · | Property under development: |
| · | the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard. The development at Rego Park II consists of a 600,000 square foot shopping center on four levels and a parking deck containing approximately 1,400 spaces. Construction has commenced, is expected to be completed in 2009 and estimated to cost approximately $410,000,000, of which $263,000,000 has been expended as of September 30, 2008. The development may also include an apartment tower containing 315 apartments. |
| On December 21, 2007, we obtained a construction loan providing up to $350,000,000 to finance the construction of the shopping center. The loan has an interest rate of LIBOR plus 1.20% (3.68% at September 30, 2008), and a term of three years with a one-year extension option. The shopping center will be anchored by a 134,000 square foot Century 21 department store, a 138,000 square foot Home Depot and 132,000 square foot Kohl’s. |
| There can be no assurance that this project will be completed, completed on time, or completed for the budgeted amount; and |
| · | Property to be developed: |
| · | the Rego Park III property, containing approximately 3.4 acres of land adjacent to our Rego Park II property in Queens, New York, which comprises a one-quarter square block at the intersection of Junction Boulevard and the Horace Harding Service Road. |
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for each of the fiscal years ended December 31, 2003, 2004, 2005, 2006 and 2007 and the nine-month periods ended September 30, 2007 and 2008 are as follows:
| | YEAR ENDED DECEMBER 31, | | | NINE MONTHS ENDED SEPTEMBER 30, | |
| | 2003 | | | 2004 | | | 2005 | | | 2006 | | | 2007 | | | 2007 | | | 2008 | |
Ratio of earnings to fixed charges | | -- | | | -- | | | 1.21 | | | -- | | | 2.56 | | | 2.47 | | | 1.29 | |
Deficiency in earnings available to cover fixed charges | | $ | (56, 464 | ) | | $ | (62,418 | ) | | | -- | | | $ | (89,617 | ) | | | -- | | | | -- | | | | -- | |
For purposes of calculating the followingthese ratios, (i)(a) earnings represent pretax income from continuing operations before income taxes, plus fixed charges less capitalized interest, and (ii)(b) fixed charges represent interest expense on all indebtedness from continuing operations, (including the Company's 50% share of interest expense in
the Kings Plaza Mall andincluding amortization of deferred debt issuance costs) andcosts, plus the portion of operating lease rental expense that ismanagement considers representative of the interest factor (deemed to be one-third(one-third of operating lease rentals). plus capitalized interest. There were no shares
of Preferred Stockpreference securities outstanding during anythe periods shown. The calculation of the periods below indicatedratios and therefore the ratio ofdeficiencies in earnings available to combinedcover fixed charges and preferred share
dividend requirements would have beenis included as Exhibit 12 to this registration statement.
USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, we expect to use the
same asnet proceeds from the
ratiosale of
earnings to fixed
chargesthe securities offered by this prospectus for
each period indicated.
Nine Months Five Months
Ended Year Ended Ended(1) Fiscal Year Ended
----- ---------- -------- -----------------
Sept. 30, Dec. 31, Dec. 31, Dec. 31, July 31, July 25, July 27, July 28,
1995 1994 1993(1) 1993 1993(2) 1992 1991 1990
---- ---- ------- ---- ------- ---- ---- ----
Ratio of earnings to
fixed charges: -- 1.39 4.68 2.49 21.89(3) -- -- 2.35
Deficiency in earnings
available to cover
fixed charges: $12,605,000 -- -- -- -- $14,630,000 $300,000 --
- ----------
(1) In November 1993, the Company changed to a calendar year from a fiscal year
ending on the last Saturday in July. The ratio for the year ended December
31, 1993 is included for comparative purposes only.
(2) Includes 53 weeks.
(3) This amount includes a gain on the sale of leases of $28,779,000, without
which the Company would have had a deficiency in earnings to cover fixed
charges of $1,628,000.
-12-
CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma information set forth below presents the condensed
consolidated statementsgeneral corporate purposes, which may include redevelopment of operations for the Company for the nine months ended
September 30, 1995our properties and the year ended December 31, 1994, as if on January 1,
1994, the Company executed the Management Agreement with Vornado Realty Trust,
issued $75,000,000repayment of new debt ($45,000,000 at a rate of 16.43% and $30,000,000
at a rate of 9.86%) and used the proceeds to pay $39,552,000 ofour outstanding funded debt, $7,000,000 of unpaid real estate taxes, $24,000,000 of amounts due
to unsecured creditors and $4,448,000 of other liabilities.
Nine Months Ended September 30, 1995 Year Ended December 31, 1994
------------------------------------ ----------------------------
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
---------- ----------- --------- ---------- ----------- ---------
(in thousands except per share amounts)
Real estate operating
revenue $ 7,985 $ 7,985 $ 10,853(1) $ 10,853
Equity in income of
unconsolidated joint
venture 2,131 2,131 1,821 1,821
-------- -------- -------- --------
Total revenue 10,116 10,116 12,674 12,674
-------- -------- -------- --------
Expenses:
Operating, general and
administrative 5,683 $ 500(2) 6,183 4,697(1) $ 3,000(2) 7,697
Depreciation and
amortization 1,393 1,393 1,821 1,821
Reorganization costs 1,938 1,938 3,721 3,721
-------- -------- -------- -------- -------- --------
Total expenses 9,014 500 9,514 10,239 3,000 13,239
-------- -------- -------- -------- -------- --------
Operating income (loss) 1,102 (500) 602 2,435 (3,000) (565)
Interest and debt expense (10,208) (1,149)(3) (11,487) (3,331) (5,431)(3) (9,762)
(130)(4) (1,000)(4)
Interest and other income,
net 1,070 1,070 4,768 4,768
Gain on sale of real estate 161 161
-------- -------- -------- -------- -------- --------
(Loss) income before reversal
of deferred taxes (8,036) (1,779) (9,815) 4,033 (9,431) (5,398)
Reversal of deferred taxes 1,406 1,406
-------- -------- -------- -------- -------- --------
Net (Loss) Income $ (6,630) $ (1,779) $ (8,409) $ 4,033 $ (9,431) $ (5,398)
======== ======== ======== ======== ======== ========
Net (Loss) Income Per
Share $ (1.33) $ (1.68) $ .81 $ (1.08)
======== ========= ======== ========
- ----------
(1) Tenant reimbursement of expenses previously offset against operating
expenses, is included in real estate operating revenue to conform to the
current year's presentation.
(2) Reflects management fees payable to Vornado pursuant to the Management
Agreement.
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(3) The adjustments to interest and debt expense reflect the following:
Nine Months
Ended Year Ended
September 30, 1995 December 31, 1994
(in thousands)
Issuance of $75,000,000 of new debt on
March 15, 1995 ($45,000,000 at a rate
of 16.43% and $30,000,000 at a
rate of 9.86%) $ (2,156) $(10,350)
Repayment of outstanding funded debt of
$39,552,000 with proceeds from the
new debt 726 2,895
Elimination of interest on unpaid real
estate taxes and other liabilities
repaid with the proceeds from the
new debt and additional capitalized
interest 281 2,024
--- -----
$ (1,149) $ (5,431)
======== ========
In addition to the $75,000,000 of new debt reflected above, in the first
quarter of 1995 the Company borrowed $21,631,000 (at a rate of LIBOR plus
1.625%, 8.19% at March, 31, 1995) for new construction financing and
$25,000,000 (at a rate of LIBOR plus 4.25%, 10.38% at March 31, 1995) for
other working capital purposes. The interest on these additional borrowings
is not reflected in the adjustments above.
(4) Reflects the amortization of $1,875,000 of debt issuance costs.
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indebtedness. DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be
Please note that in this section references to “Alexander’s,” “we,” “our” and “us” refer to Alexander’s, Inc. and its consolidated subsidiaries unless the context requires otherwise. Also, in this section, references to “holders” mean those who own debt securities registered in their own names, on the books that we or the trustee maintain for this purpose, and not those who own beneficial interests in debt securities registered in street name or in debt securities issued from time to time in book-entry form through one or more series.
The particular termsdepositaries. Owners of each series of Debt Securities offeredbeneficial interests in the debt securities should see “Legal Ownership and Book-Entry Issuance” for more information.
DEBT SECURITIES MAY BE SENIOR OR SUBORDINATED
We may issue senior or subordinated debt securities. Neither the senior debt securities nor the subordinated debt securities will be secured by any Prospectus
Supplementof our property or Prospectus Supplementsassets. Thus, by owning a debt security, you are an unsecured creditor of ours.
The senior debt securities will be described therein. The Senior Debt
Securities are to be issued under an Indenture (the "Senior Indenture") between
the Companyour senior debt indenture described below and State Street Bank & Trust Company, N.A., as trustee (the "Senior
Trustee"). will rank equally with all of our other unsecured and unsubordinated debt.
The Subordinated Debt Securities are tosubordinated debt securities will be issued under a separate
Indenture (the "Subordinated Indenture") betweenour subordinated debt indenture described below and will be subordinate in right of payment to all of our “senior indebtedness,” as defined in the Companysubordinated debt indenture. The prospectus supplement for any series of subordinated debt securities or the information incorporated in this prospectus by reference will indicate the approximate amount of senior indebtedness outstanding as of the end of our most recent fiscal quarter. We did not have any senior indebtedness outstanding as of September 30, 2008. Neither indenture limits our ability to incur additional senior indebtedness, unless otherwise described in the prospectus supplement relating to any series of debt securities. Our senior indebtedness is, and State Street
Bank & Trust Company, N.A, as trustee (the "Subordinated Trustee"). The Senior
Indentureany additional senior indebtedness will be, structurally subordinate to the indebtedness of our subsidiaries.
When we refer to “debt securities” in this prospectus, we mean both the senior debt securities and the Subordinated Indenture are sometimes referred to collectively
as the "Indentures"subordinated debt securities.
THE SENIOR DEBT INDENTURE AND THE SUBORDINATED DEBT INDENTURE
The senior debt securities and the Senior Trustee and Subordinated Trusteesubordinated debt securities are sometimes referred to collectively aseach governed by a document called an indenture, the "Trustees."
The following summaries of certain provisionssenior debt indenture, in the case of the Senior Debt
Securities, the Subordinated Debt Securities, the Senior Indenturesenior debt securities, and the Subordinated Indenture,subordinated debt indenture, in the case of the subordinated debt securities. Each indenture is a contract between Alexander’s, Inc. and The Bank of New York Mellon, which will initially act as modified or superseded by any applicable Prospectus
Supplement,trustee. The indentures are brief summaries of certain provisions thereof, do not purport to
be complete and are subject, and are qualified in their entirety by reference,
to allsubstantially identical, except for the provisions relating to subordination, which are included only in the subordinated debt indenture.
The trustee under each indenture has two main roles:
| · | First, the trustee can enforce your rights against us if we default. There are some limitations on the extent to which the trustee acts on your behalf, which we describe later under “—Default, Remedies and Waiver of Default.” |
| · | Second, the trustee performs administrative duties for us, such as sending interest payments and notices. |
See “—Our Relationship with the Trustee” below for more information about the trustee.
When we refer to the indenture or the trustee with respect to any debt securities, we mean the indenture under which those debt securities are issued and the trustee under that indenture.
WE MAY ISSUE MANY SERIES OF DEBT SECURITIES
We may issue as many distinct series of debt securities as we wish under either indenture. This section of the Indenture applicable to a particular series of Debt
Securities. Wherever particular Sections, Articles or definedprospectus summarizes terms of the Indentures are referreddebt securities that apply generally to hereinall series. The provisions of each indenture allow us not only to issue debt securities with terms different from those of debt securities previously issued under that indenture, but also to “reopen” a previous issue of a series of debt securities and issue additional debt securities of that series. We will describe most of the financial and other specific terms of a series, whether it is
a series of the senior debt securities or in a Prospectus Supplement, such Sections,
Articles or defined terms are incorporated herein or therein by reference.
General
Unless otherwise specifiedsubordinated debt securities, in the prospectus supplement accompanying this prospectus. If there are any differences between your prospectus supplement and this prospectus, your prospectus supplement will control. Thus, the statements we make in this section may not apply to your debt security.
When we refer to a series of debt securities, we mean a series issued under the applicable Prospectus Supplement,indenture. When we refer to your prospectus supplement, we mean the Debt Securities will be general unsecured obligationsprospectus supplement describing the specific terms of the Company.debt security you purchase. The Indentures do not limitterms used in your prospectus supplement have the meanings described in this prospectus, unless otherwise specified.
AMOUNTS THAT WE MAY ISSUE
Neither indenture limits the aggregate amount of Debt Securities whichdebt securities that we may be
issued thereunder,issue or the number of series or the aggregate amount of any particular series. We may issue debt securities and Debt Securities may be issued thereunder from time to
timeother securities in separate seriesamounts that exceed the total amount specified on the cover of this prospectus up to the aggregate amount from time to time authorized by the Companyour board of directors for each series. Unlessseries, at any time without your consent and without notifying you.
The indentures and the debt securities do not limit our ability to incur other indebtedness or to issue other securities, unless otherwise specifieddescribed in the Prospectus
Supplement,prospectus supplement relating to any series of debt securities. Also, we are not subject to financial or similar restrictions by the Senior Debt Securities when issued will be unsubordinated
obligations of the Company and will rank equally and ratably with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities when issued will be subordinated in right of payment to the prior
payment in full of all Senior Debt (as defined in the Subordinated Indenture) of
the Company as described below under "-- Subordination of Subordinated Debt
Securities" and in the Prospectus Supplement applicable to an offering of
Subordinated Debt Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the debt securities, unless otherwise described in the prospectus supplement relating to any series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of such Debt Securities;
(2) any limit on the aggregatedebt securities.
PRINCIPAL AMOUNT, STATED MATURITY AND MATURITY
The principal amount of
such Debt Securities; (3) the
person to whom any interest on any Debt Security of the series shall be payable
if other than the person in whose name the Debt Security is registered on the
regular record date; (4) the date or dates on which such Debt Securities will
mature; (5) the rate or rates of interest, if any, or the method of calculation
thereof, which such Debt Securities will bear, the date or dates from which any
such interest will accrue, the interest payment dates on which any such interest
on such Debt Securities will be payable and the regular record date for any
interest payable on any interest payment date; (6) the place or places where the
principal of, premium, if any, and interest on such Debt Securities will be
payable; (7) the period or periods within which, the events upon the occurrence
of which, and the price or prices at which, such Debt Securities may, pursuant
to any optional or mandatory provisions, be redeemed or purchased, in whole or
in part, by the Company and any terms and conditions relevant thereto; (8) the
obligations of the Company, if any, to redeem or repurchase such Debt Securities
pursuant to any sinking fund provision or analogous provision or at the option
of the Holders and the period or periods within which, and the other terms and
conditions upon which, such Debt Securities shall be redeemed, repaid or
repurchased, in whole or in part, pursuant to such obligations; (9) the
denominations in which any such Debt Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof; (10) any index or
formula used to determine the amount of payments of principal of and any premium
and interest on such Debt Securities; (11) the currency, currencies or currency
unit or units of payment of principal of and any premium and interest on such
Debt Securities if other than U.S. dollars; (12) if the principal of, or
premium, if any, or interest on such Debt Securities is to be payable, at the
election of the Company or a
Holder thereof, in one or more currencies or
currency units other than that or those in which such Debt Securities are stated
to be payable, the currency, currencies or currency units in
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which payment of the principal of and any premium and interest on Debt
Securities of such series as to which such election is made shall be payable,
and the periods within which and the terms and conditions upon which such
election is to be made; (13) if other thandebt security means the principal amount thereof, the
portion ofpayable at its stated maturity, unless that amount is not determinable, in which case the principal amount of such Debt Securitiesa debt security is its face amount. Any debt securities owned by us or any of our affiliates are not deemed to be outstanding for certain determinations under the seriesindenture. The term “stated maturity” with respect to any debt security means the date on which will
be payable upon acceleration of the maturity thereof; (14) if the principal amount of any Debt Securitiesthe debt security is scheduled to become due. The principal may become due sooner, by reason of redemption or acceleration after a default or otherwise in accordance with the terms of the debt security. The date on which will be payablethe principal actually becomes due, whether at the stated maturity thereof will
not be determinable asor earlier, is called the “maturity” of any date prior to such maturity, the amount which will
be deemed to be the outstanding principal amount of such Debt Securities; (15)
the applicability of any provisions described below under "Defeasance"; (16)
whether any of such Debt Securities are to be issuable in permanent global form
("Global Security") and, if so,principal.
We also use the terms “stated maturity” and conditions, if any, upon which“maturity” to refer to the dates when other payments become due. For example, we refer to a regular interest payment date when an installment of interest is scheduled to become due as the “stated maturity” of that installment.
When we refer to the “stated maturity” or the “maturity” of a debt security without specifying a particular payment, we mean the stated maturity or maturity, as the case may be, of the principal.
OUR DEBT SECURITIES ARE STRUCTURALLY SUBORDINATED TO THE INDEBTEDNESS OF OUR SUBSIDIARIES
Because our assets consist principally of interests in such Securities in global form may be exchanged, in whole or in
part, for the individual Debt Securities represented thereby; (17) the
applicability of any covenant with respect to such Debt Securitiessubsidiaries through which we own our properties and the
applicability of any provisions described below under "Events of Default" and
any additional Events of Default applicable thereto; (18) any covenants
applicable to such Debt Securities; (19) the terms and conditions, if any,
pursuant to which the Debt Securities are convertible or exchangeable into
shares of Common Stock or other securities; and (20) any other terms of such
Debt Securities not inconsistent with the provisions of the Indentures. (Section
301) Debt Securities may also be issued under the Indentures upon the exercise
of Debt Warrants. See "Description of Debt Warrants."
Debt Securities may be issued at a discount from their principal amount.
United States federal income tax considerations and other special considerations
applicable to any such original issue discount Securities will be described in
the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities will be set
forth in the applicable Prospectus Supplement.
Since the Company is a holding company, the rights of the Company, and
hence theconduct our businesses, our right of creditors of the Company (including the Holders of Debt
Securities), to participate as an equity holder in any distribution of the assets of any subsidiaryof our subsidiaries upon itsthe subsidiary’s liquidation or reorganization or otherwise, and thus the ability of our security holders to benefit from the distribution, is necessarily subjectjunior to
the prior claims of creditors of any suchthe subsidiary, except to the extent that any claims of the Company itselfwe may have as a creditor of the subsidiary may be recognized. We may also guarantee some obligations of our subsidiaries. Any liability we may have for our subsidiaries’ obligations could reduce our assets that are available to satisfy our direct creditors, including investors in our debt securities.
THIS SECTION IS ONLY A SUMMARY
The Indenturesindentures and their associated documents, including your debt security, contain the full legal text of the matters described in this section and your prospectus supplement. We have filed forms of the indentures as exhibits to our registration statement of which this prospectus is a part. See “Available Information” for information on how to obtain copies of them.
This section and your prospectus supplement summarize all the material terms of the indentures and your debt security. They do not, contain any provisionshowever, describe every aspect of the indentures and your debt security. For example, in this section and your prospectus supplement, we use terms that limithave been given special meaning in the Company's
abilityindentures, but we describe the meaning for only the more important of those terms.
GOVERNING LAW
The indentures and the debt securities will be governed by New York law.
CURRENCY OF DEBT SECURITIES
Amounts that become due and payable on a debt security in cash will be payable in a currency, currencies or currency units specified in the accompanying prospectus supplement. We refer to incur indebtedness. Exceptthis currency, currencies or currency units as the “specified currency.” The specified currency for a debt security will be U.S. dollars, unless your prospectus supplement states otherwise. Some debt securities may be indicatedhave different specified currencies for principal and interest. You will have to pay for your debt securities by delivering the requisite amount of the specified currency for the principal to us or the underwriters, agents or dealers that we name in the applicable Prospectus Supplementprospectus supplement, unless other arrangements have been made between you and us or you and such firm. We will make payments on a debt security in the specified currency, except as described below in “—Payment Mechanics for Debt Securities.”
FORM OF DEBT SECURITIES
We will issue each debt security in global, i.e., book-entry form only, unless we specify otherwise in the applicable prospectus supplement. Debt securities in book-entry form will be represented by a global security registered in the name of a depositary, which will be the holder of all the debt securities represented by that global security. Those who own beneficial interests in a global debt security will do so through participants in the depositary’s securities clearance system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depositary and its participants. We describe book-entry securities below under “— Legal Ownership and Book-Entry Issuance.”
In addition, we will issue each debt security in fully registered form, without coupons.
TYPES OF DEBT SECURITIES
We may issue any of the following types of senior debt securities or subordinated debt securities:
Fixed Rate Debt Securities
A debt security of this type will bear interest at a fixed rate described in the applicable prospectus supplement. This type includes zero coupon debt securities, which bear no interest and are instead issued at a price usually significantly lower than the principal amount. See “—Original Issue Discount Debt Securities” below for more information about zero coupon and other original issue discount debt securities.
Each fixed rate debt security, except any zero coupon debt security, will bear interest from its original issue date or from the most recent date to which interest on the debt security has been paid or made available for payment. Interest will accrue on the principal of a fixed rate debt security at the fixed yearly rate stated in the applicable prospectus supplement, until the principal is paid or made available for payment or the debt security is exchanged. Each payment of interest due on an interest payment date or the date of maturity will include interest accrued from and including the last date to which interest has been paid, or made available for payment, or from the issue date if none has been paid, or made available for payment, to but excluding the interest payment date or the date of
maturity. We will compute interest on fixed rate debt securities on the basis of a 360-day year of twelve 30-day months. We will pay interest on each interest payment date and at maturity as described below under “—Payment Mechanics for Debt Securities.”
Floating Rate Debt Securities
A debt security of this type will bear interest at rates that are determined by reference to an interest rate formula. In some cases, the rates also may be adjusted by adding or subtracting a spread or multiplying by a spread multiplier and may be subject to a minimum rate or a maximum rate. If a debt security is a floating rate debt security, the formula and any adjustments that apply to the interest rate will be specified in the applicable prospectus supplement.
Each floating rate debt security will bear interest from its original issue date or from the most recent date to which interest on the debt security has been paid or made available for payment. Interest will accrue on the principal of a floating rate debt security at the yearly rate determined according to the interest rate formula stated in the applicable prospectus supplement, until the principal is paid or made available for payment or the security is exchanged. We will pay interest on each interest payment date and at maturity as described below under “—Payment Mechanics for Debt Securities.”
Calculation of Interest. Calculations relating to floating rate debt securities will be made by the calculation agent, an institution that we appoint as our agent for this purpose. The prospectus supplement for a particular floating rate debt security will name the institution that we have appointed to act as the calculation agent for that debt security as of its original issue date. We may appoint a different institution to serve as calculation agent from time to time after the original issue date of the debt security without your consent and without notifying you of the change.
For each floating rate debt security, the calculation agent will determine, on the corresponding interest calculation or determination date, as described in the applicable prospectus supplement, the interest rate that takes effect on each interest reset date. In addition, the calculation agent will calculate the amount of interest that has accrued during each interest period, i.e., the period from and including the original issue date, or the last date to which interest has been paid or made available for payment, to but excluding the payment date. For each interest period, the calculation agent will calculate the amount of accrued interest by multiplying the face or other specified amount of the floating rate debt security by an accrued interest factor for the interest period. This factor will equal the sum of the interest factors calculated for each day during the interest period. The interest factor for each day will be expressed as a decimal and will be calculated by dividing the interest rate, also expressed as a decimal, applicable to that day by 360 or by the actual number of days in the year, as specified in the applicable prospectus supplement.
Upon the request of the holder of any floating rate debt security, the calculation agent will provide for that debt security the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date. The calculation agent’s determination of any interest rate, and its calculation of the amount of interest for any interest period, will be final and binding in the absence of manifest error.
All percentages resulting from any calculation relating to a debt security will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point, e.g., 9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655). All amounts used in or resulting from any calculation relating to a floating rate debt security will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward.
In determining the base rate that applies to a floating rate debt security during a particular interest period, the calculation agent may obtain rate quotes from various banks or dealers active in the relevant market, as described in the applicable prospectus supplement. Those reference banks and dealers may include the calculation agent itself and its affiliates, as well as any underwriter, dealer or agent participating in the distribution of the relevant floating rate debt securities and its affiliates.
Indexed Debt Securities
A debt security of this type provides that the principal amount payable at its maturity, and the amount of interest payable on an interest payment date, will be determined by reference to:
| · | securities of one or more issuers, |
| · | one or more commodities, |
| · | any other financial, economic or other measure or instrument, including the occurrence or nonoccurrence of any event or circumstance, or |
| · | one or more indices or baskets of the items described above. |
If you are a holder of an indexed debt security, you may receive an amount at maturity that is greater than or less than the face amount of your debt security depending upon the value of the applicable index at maturity. The value of the applicable index will fluctuate over time.
If you purchase an indexed debt security, your prospectus supplement will include information about the relevant index and about how amounts that are to become payable will be determined by reference to the price or value of that index. The prospectus supplement will also identify the calculation agent that will calculate the amounts payable with respect to the indexed debt security and may exercise significant discretion in doing so.
Original Issue Discount Debt Securities
A fixed rate debt security, a floating rate debt security or an indexed debt security may be an original issue discount debt security. A debt security of this type is issued at a price lower than its principal amount and provides that, upon redemption or acceleration of its maturity, an amount less than its principal amount will be payable. An original issue discount debt security may be a zero coupon debt security. A debt security issued at a discount to its principal amount may, for Federal income tax purposes, be considered an original issue discount debt security, regardless of the amount payable upon redemption or acceleration of maturity. The Federal income tax consequences of owning an original issue discount debt security may be described in the applicable prospectus supplement.
INFORMATION IN THE PROSPECTUS SUPPLEMENT
A prospectus supplement will describe the specific terms of a particular series of
Debt Securities,
Holders of Debt Securitiesdebt securities, which will
not have the benefit of any specific covenantsinclude some or
provisions in the applicable Indenture or Debt Securities that would protect
them in the event the Company engages in or becomes the subject of a highly
leveraged transaction, and the limitations on mergers, consolidations and
transfers of substantially all of the
Company's properties and assets as an
entirety to any person as described below under "-- Consolidation, Merger and
Sale of Assets." Such covenants may not be waived or modified by the Company or
its Board of Directors, although Holders of Debt Securities could waive or
modify such covenants as more fully described below under "-- Modification and
Waiver."
The applicable Prospectus Supplement with respect to any particular series
of Debt Securities that provide for the optional redemption, prepayment or
conversion of such Debt Securities upon the occurrence of certain events (i.e.,
a change of control), will describe the following:
(1) the effects that such
provisions may have in deterring certain mergers, tender offers or other
takeover attempts, as well as that there may be possible adverse effects on the
market price of the Company's securities or ability to obtain financing; (2)
that the Company will comply with the requirements of applicable securities
laws, including Rules 14e-1 and 13e-4 under the Exchange Act, in connection with
such provisions and any related offers by the Company; (3) whether the
occurrence of the specified events may give rise to cross-defaults on other
indebtedness such that payment on the offered Debt Securities may be effectively
subordinated; (4) limitations on the Company's financial or legal ability to
repurchase the offered Debt Securities upon the triggering of an event risk
provision requiring such a repurchase or offer to repurchase; (5) the impact, if
any, under the governing instrument of failure to repurchase, including whether
such failure to make any required repurchases in the event of a change of
control will create an event of default with respect to the offered Debt
Securities or will become an event of
-16-
default only after the continuation of such failure for a specified period of
time after written notice is given to the Company by the Trustee or to the
Company and the Trustee by the holders of a specified percentage in aggregate
principal amount of the debt outstanding; (6) that there can be no assurance
that sufficient funds will be available at the time of the triggering of an
event risk provision to make any required repurchases; (7) if such offered Debt
Securities are to be subordinated to other obligations of the Company or its
subsidiaries that would be accelerated upon the triggering of a change in
control or similar event, the material effect thereof on such acceleration
provision and such offered Debt Securities; and (8) to the extent that there is
a definition of "change of control" in a supplemental indenture relating to such
offered Debt Securities that includes the concept of "all or substantially all,"
the established meaning of such phrase under New York law, including whether
such a Change of Control will be triggered if there is a change of control of
the Board of Directors as a result of a proxy contest involving the solicitation
of revocable proxies.
Conversion or Exchange of Debt Securities
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, such series will be convertible or
exchangeable into shares of Common Stock or other securities on the terms and
conditions set forth therein. Such terms shall include provisions as to whether
conversion is mandatory, at the option of the Holder or at the option of the
Company, and may include provisions pursuant to which the number of shares of
Common Stock or other securities of the Company to be received by the Holders of
Debt Securities would be calculated according to the market price of the Common
Stock or other securities of the Company as of a time stated in the Prospectus
Supplement. The applicable Prospectus Supplement will indicate certain
restrictions on ownership which may apply in the event of a conversion or
exchange. See "Description of Preferred Stock -- Restrictions on Ownership" and
"Description of Common Stock -- Restrictions on Ownership."
Form, Exchange, Registration, Conversion, Transfer and Payment
| · | the title of the debt securities, |
| · | whether they are senior debt securities or subordinated debt securities, |
| · | any limit on the aggregate principal amount of the debt securities of the same series, |
| · | the person to whom any interest on a debt security of the series will be payable, if other than the person in whose name the debt security is registered at the close of business on the regular record date, |
| · | the specified currency, currencies or currency units for principal and interest, if not U.S. dollars, |
| · | the price at which we originally issue the debt securities, expressed as a percentage of the principal amount, and the original issue date, |
| · | whether the debt securities are fixed rate debt securities, floating rate debt securities or indexed debt securities, |
| · | if the debt securities are fixed rate debt securities, the yearly rate at which the debt securities will bear interest, if any, and the interest payment dates, |
| · | the regular record date for any interest payable on any interest payment date, |
| · | the place or places where the principal of, premium, if any, and interest on the debt securities will be payable, |
| · | the denominations in which the debt securities will be issuable, if other than denominations of $1,000 and any integral multiple of $1,000, |
| · | if the debt securities are floating rate debt securities, the interest rate basis, any applicable index currency or maturity, spread or spread multiplier or initial, maximum or minimum rate, the interest reset, determination, calculation and payment dates, the day count used to calculate interest payments for any period, and the calculation agent, |
| · | any index or formula used to determine the amount of payments of principal of and any premium and interest on the debt securities, |
| · | if the debt securities may be exchanged for shares of our common or preferred stock or any securities of another person, the terms on which exchange may occur, including whether exchange is mandatory, at the option of the holder or at our option, |
| · | if the debt securities are original issue discount debt securities, the yield to maturity, |
| · | if other than the principal amount, the portion of the principal amount of the debt securities of the series which will be payable upon acceleration of the maturity of the debt securities, |
| · | if applicable, the circumstances under which the debt securities may be mandatorily redeemed by us, redeemed at our option or repaid at the holder’s option before the stated maturity, including any redemption commencement date, repayment date(s), redemption price(s) and redemption period(s), |
| · | if the principal amount of the debt securities which will be payable at the maturity of the debt securities will not be determinable as of any date before maturity, the amount which will be deemed to be the outstanding principal amount of the debt securities, |
| · | the applicability of any provisions described under “—Defeasance and Covenant Defeasance,” |
| · | the depositary for the debt securities, if other than the Depository Trust Company, known as DTC, and any circumstances under which the holder may request securities in non-global form, |
| · | the applicability of any provisions described under “—Default, Remedies and Waiver of Default,” |
| · | any additional covenants applicable to the debt securities and any elimination of or modification to the covenants described under “—Covenants,” |
| · | the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents or registrars for the debt securities, |
| · | the Federal income tax consequences to holders of fixed rate debt securities that are zero coupon or original issue discount debt securities, floating rate debt securities or indexed debt securities, and |
| · | any other terms of the debt securities, which could be different from those described in this prospectus. |
REDEMPTION AND REPAYMENTUnless otherwise indicated in the applicable
Prospectus Supplement, the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof. (Section 302) Unless otherwise indicated
in the applicable Prospectus Supplement, payment of principal, premium, if any,
and interest on the Debt Securities will be payable, and the exchange,
conversion and transfer of Debt Securities will be registerable, at the office
or agency of the Company maintained for such purposes and at any other office or
agency maintained for such purpose. (Sections 301, 305 and 1002) No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment ofprospectus supplement, a
sum sufficient to cover any
tax or other governmental charge imposed in connection therewith. (Section 305)
All monies paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to the Company and thereafter the Holder of such Debt
Security may look only to the Company for payment thereof. (Section 1003)
Book-Entry Debt Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Global Depositary") or its nominee identified in the
applicable Prospectus Supplement. In such a case, one or more Global Securities
will be issued in a denomination or aggregate denomination equal to the portion
of the aggregate principal amount of Outstanding Debt Securities of the series
to be represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Global Depositary for such Global Security to a nominee of such Global
Depositary or by a nominee of such Global Depositary to such Global Depositary
or another nominee of such Global Depositary or by such Global Depositary or any
nominee to a successor Global Depositary or a nominee of such successor Global
Depositary and except in the circumstances described in the applicable
Prospectus Supplement. (Sections 204 and 305)
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The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements, although no
assurance can be given that such will be the case.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Global Depositary will be represented by a Global Security
registered in the name of such Global Depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Global Depositary for such Global Security, the Global
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Global
Depositary or its nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents for the sale of such Debt Securities or
by the Company, if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interest in such Global Security will be
limited to participants or Persons that may hold interests through participants.
Ownership of beneficial interests by participants in such Global Security will
be shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Global Depositary or its nominee for such
Global Security. Ownership of beneficial interests in such Global Security by
Persons that hold through participants will be shown on, and the transfer of
such ownership interests within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Global Depositary for a Global Security, or its nominee, is
the registered owner of such Global Security, such Global Depositary or such
nominee, as the case may be, will be considered the sole owner or Holder of the
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, unless otherwise specified in
the applicable Prospectus Supplement, owners of beneficial interests in such
Global Securitydebt security will not be entitled to have Debt Securitiesthe benefit of the series
represented by such Global Security registered in their names,any sinking fund. That is, we will not receive
ordeposit money on a regular basis into any separate custodial account to repay the debt securities. In addition, we will not be entitled to receive physical delivery of Debt Securities of such series in
certificated form andredeem a debt security before its stated maturity unless the applicable prospectus supplement specifies a redemption commencement date. You will not be considered the Holders thereof for any
purposes under the applicable Indenture. (Sections 204 and 305) Accordingly,
each Person owning a beneficial interest in such Global Security must rely on
the procedures of the Global Depositary and, if such Person is not a
participant, on the procedures of the participant through which such Person owns
its interest, to exercise any rights of a Holder under the applicable Indenture.
The Company understands that under existing industry practices, if the Company
requests any action of Holders or an owner of a beneficial interest in such
Global Security desires to give any notice or take any action a Holder is
entitled to give or take under the applicable Indenture, the Global Depositary
would authorize the participantsrequire us to give such notice or take such action, and
participants would authorize beneficial owners owning through such participants
to give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
If the Global Depositary for Debt Securities ofbuy a series is at any time
unwilling, unable or ineligible to continue as Global Depositary and a successor
Global Depositary is not appointed by the Company within 90 days or an Event of
Default under the applicable Indenture has occurred and is continuing, the
Company will issue Debt Securities of such series in definitive form in exchange
for the Global Security or Securities representing the Debt Securities of such
series. In addition, the Company may at any time and indebt security from you before its sole discretion,
subject to any limitations described in the applicable Prospectus Supplement,
determine not to have any Debt Securities of a series represented bystated maturity unless your prospectus supplement specifies one or more Global Securities and, in such event,repayment dates.If your applicable prospectus supplement specifies a redemption commencement date or a repayment date, it also will
issue Debt Securities of such series
in definitive form in exchange for the Global Securityspecify one or
Securities
representing such Debt Securities. Further, if the Company so specifies with
respect to the Debt Securities of a series, an owner of a beneficial interest in
a Global Security representing Debt Securities of such series may, on terms
acceptable to the Company and the Global Depositary for such Global Security,
receive Debt Securities of such series in definitive form in exchange for such
beneficial interests, subject to any limitations described in the applicable
Prospectus Supplement relating to such Debt Securities. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of Debt Securities of the series represented
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by such Global Security equal in principal amount to such beneficial interest
and to have such Debt Securities registered in its name (if the Debt Securities
of such series are issuable as registered securities).
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
Certain Covenants of the Company
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, the Company will be subject to the
covenants described therein.
Events of Default
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay principal ofmore redemption prices or premium, if
any, on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure in the deposit of any sinking fund payment in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indentures (other than a covenant included in the applicable
Indenture solely for the benefit of a series of Debt Securities other than that
series), continued for 60 days after written notice to the Company as provided
in the applicable Indenture; (e) the acceleration of, or failure to pay at
maturity (including any applicable grace period), any indebtedness for money
borrowed by the Company with at least $50,000,000 in principal amount
outstanding,repayment prices, which acceleration or failure to pay is not rescinded or annulled
or such indebtedness paid, in each case within 10 days after the date on which
written notice thereof shall have first been given to the Company as provided in
the applicable Indenture; (f) certain events of bankruptcy, insolvency or
reorganization; and (g) any other Event of Default provided with respect to Debt
Securities of that series. (Section 501)
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the applicable Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indentures may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities, such portion of the principal amount as may be specified in the termsexpressed as a percentage of that series) of all Debt Securities of that series to
be due and payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. (Section 502) For information as to waiver or defaults, see "--
Modification and Waiver" below.
The Indentures provide that, subject to the duty of the applicable Trustee
thereunder during an Event of Default to act with the required standard of care,
such Trustee will be under no obligation to exercise any of its rights or powers
under the applicable Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to such Trustee reasonable
security or indemnity. (Sections 601 and 603) Subject to certain provisions,
including those requiring security or indemnification of the Trustees, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustees, or
exercising any trust or power conferred on such Trustees, with respect to the
Debt Securities of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indentures or for any remedy thereunder,
unless (i) such Holder shall have previously given to the applicable Trustee
written notice of a continuing Event of Default (as defined) with respect to
Debt Securities of that series; (ii) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Debt Securities of the same series
shall have made written request, and offered reasonable indemnity, to the
applicable Trustee to institute proceedings in respect of such Event of Default
in its own name as trustee under the applicable Indenture; (iii) the Trustee
shall have failed to institute
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such proceedings within 60 days; and (iv) the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of the same series a direction inconsistent with such request
(Section 507); provided, however, that such limitations do not apply to a suit
instituted by a Holder of a Debt Security for enforcement of payment of the
principal of and any premium and interest on such Debt Security on or after the
respective due dates expressed in such Debt Security, or in the case of
convertible Debt Securities, for enforcement of a right of conversion. (Section
508)
The Company will be required to furnish to the Trustees annually a
statement as to the performance by the Company of its obligations under the
Indentures and as to any default in such performance. (Section 1004)
Modification and Waiver
Without the consent of any Holder of Outstanding Debt Securities, the
Company and the applicable Trustee may amend or supplement the applicable
Indenture or Debt Securities to cure any ambiguity, defect or inconsistency, or
to make any change that does not materially adversely affect the rights of any
Holder of Debt Securities. (Section 901) Other modifications and amendments of
the Indentures may be made by the Company and the applicable Trustee only with
the consent of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby: (a)
change the Stated Maturity of the principal of, or any installment of principal
of, or interest on, any Debt Security; (b) reduce the principal amount of the rate of interest on,debt security. It also may specify one or the premium, if any, payable uponmore redemption periods during which the redemption or
repurchaseprices relating to a redemption of debt securities during those periods will apply. If we redeem less than all the debt securities of any Debt Security; (c) reduceseries, we will, at least 60 days before the redemption date set by us or any shorter period that is satisfactory to the trustee, notify the trustee of the redemption date, of the principal amount of principal of an
Original Issue Discount Security payable upon accelerationdebt securities to be redeemed and, if applicable, of the Maturity
thereof; (d) changetenor of the place or currencydebt securities to be redeemed. The trustee will select from the outstanding securities of payment of principal of, or
premium, if any, or interest on any Debt Security; (e) impair the rightseries the particular debt securities to institute suit forbe redeemed not more than 60 days before the enforcement of any payment on or with respectredemption date. This procedure will not apply to any Debt
Securityredemption of a single debt security.
If your prospectus supplement specifies a redemption commencement date, the debt security will be redeemable at our option at any time on or after that date or at a specified time or times. If we redeem the Stated Maturity or Redemption Date thereof; (f) modifydebt security, we will do so at the conversion provisions applicable to convertible Debt Securities in a manner
adversespecified redemption price, together with interest accrued to the Holders thereof; (g) modifyredemption date. If different prices are specified for different redemption periods, the subordination provisions
applicable to any series of Debt Securities in a manner adverseprice we pay will be the price that applies to the Holders
thereof; or (h) reduceredemption period during which the percentage in principal amountdebt security is redeemed.
If your prospectus supplement specifies a repayment date, the debt security will be repayable at the holder’s option on the specified repayment date at the specified repayment price, together with interest accrued to the repayment date.
If we exercise an option to redeem any debt security, we will give to the holder written notice of Outstanding Debt
Securities of any series, the consent of the Holders of which is required for
modification or amendment of the Indentures or for waiver of compliance with
certain provisions of the applicable Indenture or for waiver of certain
defaults. (Section 902)
The Holders of at least a majority in aggregate principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the Indentures. (Section
1008) The Holders ofdebt security to be redeemed, not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of the Holders of all
Debt Securities of that series, waive any past default under30 days nor more than 60 days before the applicable Indenture with respect to that series, except a defaultredemption date. We will give the notice in the payment ofmanner described below in “—Notices.”
If a debt security represented by a global debt security is subject to repayment at the principal of,holder’s option, the depositary or premium, if any,its nominee, as the holder, will be the only person that can exercise the right to repayment. Any indirect owners who own beneficial interests in the global debt security and wish to exercise a repayment right must give proper and timely instructions to their banks or interestbrokers through which they hold their interests, requesting that they notify the depositary to exercise the repayment right on any Debt Security oftheir behalf. Different firms have different deadlines for accepting instructions from their customers, and you should take care to act promptly enough to ensure that seriesyour request is given effect by the depositary before the applicable deadline for exercise. Street name and other indirect owners should contact their banks or brokers for information about how to exercise a repayment right in a timely manner.
We or our affiliates may purchase debt securities from investors who are willing to sell from time to time, either in the open market at prevailing prices or in respect of a provision which under such applicable Indenture cannotprivate transactions at negotiated prices. Debt securities that we or they purchase may, at our discretion, be modifiedheld, resold or amended without the consent of the Holder of each Outstanding
Debt Security of that series affected. (Section 513)
Consolidation, Merger and Sale of Assets
The Company, without the consent of any Holders of outstanding Debt
Securities, maycancelled.
MERGERS AND SIMILAR TRANSACTIONS
We generally are permitted to merge or consolidate with or merge into, or transfer or lease itsanother entity. We also are permitted to sell our assets substantially as an entirety to another entity. With regard to any Person, andseries of debt securities, however, unless otherwise indicated in the applicable prospectus supplement, we may not take any other Personof these actions unless all the following conditions are met:
| · | if the successor entity in the transaction is not Alexander’s, Inc., the successor entity must be a corporation, partnership or trust organized under the laws of the United States, any state in the United States or the District of Columbia and must expressly assume all of our obligations under the debt securities of that series and the indenture with respect to that series, |
| · | immediately after giving effect to the transaction, no default under the debt securities of that series has occurred and is continuing. For this purpose, “default under the debt securities of that series” means an event of default with respect to that series or any event that would be an event of default with respect to that series if the notice requirements and the required existence of the default for a specific period of time were disregarded. We describe these matters below under “—Default, Remedies and Waiver of Default,” |
| · | we or any successor entity, as the case may be, must take such steps as will be necessary to secure the debt securities of that series equally and ratably with or senior to all new indebtedness if, as a result of the transaction, our properties or assets would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by the applicable indenture, and |
| · | we have delivered to the trustee an officers’ certificate and opinion of counsel, each stating that the transaction complies in all respects with the indenture. |
If the conditions described above are satisfied with respect to the debt securities of any series, we will not need to obtain the approval of the holders of those debt securities in order to merge or consolidate or to sell our assets. Also, these conditions will apply only if we wish to merge or consolidate with another entity or merge into, or transfer or lease itssell our assets substantially as an entirety to another entity. We will not need to satisfy these conditions if we enter into other types of transactions, including any transaction in which we acquire the Company, provided that (a) the Person (if other than the
Company) formed by such consolidationstock or into which the Company is merged or
which acquires or leases the assets of another entity, any transaction that involves a change of control of Alexander’s, Inc. but in which we do not merge or consolidate and any transaction in which we sell less than substantially all our assets.
SUBORDINATION PROVISIONS
Holders of subordinated debt securities should recognize that contractual provisions in the
Company substantiallysubordinated debt indenture may prohibit us from making payments on those securities. Subordinated debt securities are subordinate and junior in right of payment, to the extent and in the manner stated in the subordinated debt indenture, to all of our senior debt, as
an entirety
assumesdefined in the
Company's obligations on the Debt Securitiessubordinated debt indenture, including all debt securities we have issued and
will issue under the
Indenture
relating thereto and (b) after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing. (Article Eight) A
Prospectus Supplement may set forth any additional provisions regarding a
consolidation with, merger
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into, or transfer or lease of its assets substantiallysenior debt indenture. The subordinated debt indenture defines “senior debt” as
an entirety to, any
Person (or of such Person with, into or to the Company).
Defeasance
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Company, at its option (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of the
Debt Securities and hold moneys for payment in trust) or (ii) will be released
from its obligations to comply with any covenants that may be specified in the
applicable Prospectus Supplement with respect to the Debt Securities of such
series, and the occurrence of an event described in clause (d) under "Events of
Default" above with respect to any defeased covenants shall no longer be an
Event of Default, if in either case the Company irrevocably deposits with the
applicable Trustee, in trust, money or U.S. Government Obligations that through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all of the principal of and premium, if any, and
any interest on
the Debt Securities of such series on
the dates such payments are due (which may include one or more redemption dates
designated by the Company) in accordance with the terms of such Debt Securities.
Such a trust may only be established if, among other things, (a) no Event of
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the applicable Indenture shall have
occurred and be continuing on the date of such deposit, (b) no Event of Default
described under clause (e) under "Events of Default" above or event which with
the giving of notice or lapse of time, or both, would become an Event of Default
described under such clause (e) shall have occurred and be continuing at any
time during the period ending on the 91st day following such date of deposit,
and (c) the Company shall have delivered an Opinion of Counsel to the effect
that the Holders of the Debt Securities will not recognize gain or loss for
United States federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States federal income tax in the same
manner as if such deposit and defeasance had not occurred, which Opinion of
Counsel, in the case of a deposit and defeasance of such Indenture with respect
to the Debt Securities of any series as described under clause (i) above, shall
be based on either (A) a ruling to such effect that the Company has received
from, or that has been published by, the Internal Revenue Service or (B) a
change in the applicable federal income tax law, occurring after the date of the
applicable Indenture, to such effect. In the event the Company omits to comply
with its remaining obligations under such Indenture after a defeasance of such
Indenture with respect to the Debt Securities of any series as described under
clause (ii) above and the Debt Securities of such series are declared due and
payable because of the occurrence of any undefeased Event of Default, the amount
of money and U.S. Government Obligations on deposit with the applicable Trustee
may be insufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However, the
Company will remain liable for such payments. (Article Thirteen)
Subordination of Subordinated Debt Securities
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all
Senior Debt, including the Senior Debt Securities. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of the Subordinated
Debt Securities will be entitled to receive or retain any payment in respect of
the principal of (and premium, if any) or interest, if any, on the Subordinated
Debt Securities. (Article Fifteen of the Subordinated Indenture)
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By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are not holders of Senior Debt or Subordinated Debt
Securities may recover less, ratably, than holders of Senior Debt and may
recover more, ratably, than the holders of the Subordinated Debt Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon before the holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of (or premium, if any) or
interest, if any, on the Subordinated Debt Securities.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. For purposes of the subordination
provisions, the payment, issuance and delivery of cash, property or securities
(other than stock and certain subordinated securities of the Company) upon
conversion of a Subordinated Debt Security will be deemed to constitute payment
on account of the principal of such Subordinated Debt Security.
"Senior Debt" is defined to mean the principal of (and premium, if any) and
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent such
claim for post-petition interest is allowed in such proceeding) on allour indebtedness of the Company (including indebtedness of others guaranteed by the
Company), other than the Subordinated Debt Securitiessubordinated debt securities, whether outstanding on the date of the Subordinated Indentureindenture or thereafter created, incurred or assumed, which is: (i)is (a) for money borrowed, (ii)(b) evidenced by a note or similar instrument given in connection with the acquisition of any businesses, properties or assets of any kind or (iii)(c) obligations of the CompanyAlexander’s, Inc. as lessee under leases required to be capitalized on the balance sheet of the lessee under accounting principles generally accepted accounting principlesin the United States of America or leases of property or assets made as part of any sale and lease-back transaction to which we are a party. For the Companypurpose of this definition, “interest” includes interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Alexander’s to the extent that the claim for post-petition interest is a party, includingallowed in the proceeding. Also for the purpose of this definition, “indebtedness of Alexander’s, Inc.” includes indebtedness of others guaranteed by us and amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation unlessof the kinds described in the first sentence of this paragraph. However, “indebtedness of Alexander’s, Inc.” for the purpose of this definition, does not include any case inindebtedness or obligation if the instrument creating or evidencing any suchthe indebtedness or obligation, or pursuant tounder which the sameindebtedness or obligation is outstanding, it is providedprovides that suchthe indebtedness or obligation is not superior in right of payment to the Subordinated Debt Securities.
subordinated debt securities. The Subordinated Indenture does not limitsubordinated debt indenture provides that, unless all principal of and any premium or prohibitinterest on the incurrencesenior debt has been paid in full, no payment or other distribution may be made in respect of additional Senior Debt, which may include indebtednessany subordinated debt securities in the following circumstances:
| · | in the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceeding involving us or our assets, |
| · | in the event of any liquidation, dissolution or other winding-up of our affairs, whether voluntary or involuntary, and whether or not involving insolvency or bankruptcy, |
| · | in the event of any assignment for the benefit of creditors or any other marshalling of our assets and liabilities, |
| · | if any of our subordinated debt securities have been declared due and payable before their stated maturity, or |
| · | (a) in the event and during the continuation of any default in the payment of principal, premium or interest on any senior debt beyond any applicable grace period or if any event of default with respect to any of our senior debt has occurred and is continuing, permitting the holders of that senior debt or a trustee to accelerate the maturity of that senior debt, unless the event of default has been cured or waived or ceased to exist and any related acceleration has been rescinded, or (b) if any judicial proceeding is pending with respect to a payment default or an event of default described in (a). |
If the trustee under the subordinated debt indenture or any holders of the subordinated debt securities receive any payment or distribution that they know is seniorprohibited under the subordination provisions, then the trustee or the holders will have to repay that money to the Subordinated Debt Securities,holders of the senior debt.
Even if the subordination provisions prevent us from making any payment when due on the subordinated debt securities of any series, we will be in default on our obligations under that series if we do not make the payment when due. This means that the trustee under the subordinated debt indenture and the holders of that series can take action against us, but subordinatethey will not receive any money until the claims of the holders of senior debt have been fully satisfied.
COVENANTS
The following covenants apply to us with respect to the debt securities of each series unless otherwise specified in the applicable prospectus supplement.
Maintenance of Properties. We must maintain all properties used in our business in good condition. However, we may discontinue the maintenance or operation of any of our properties if in our judgment, discontinuance is desirable in the conduct of our business and is not disadvantageous in any material respect to the holders of debt securities.
Existence. Except as described under “—Mergers and Similar Transactions,” we must do or cause to be done all things necessary to preserve and keep in full force and effect our existence, rights and franchises. However, we are not required to preserve any right or franchise if our board of directors determines that the preservation of the right or franchise is no longer desirable in the conduct of our business and that the loss of the right or franchise is not disadvantageous in any material respect to the holders of the debt securities.
Payment of Taxes and Other Claims. We are required to pay or discharge or cause to be paid or discharged (a) all taxes, assessments and governmental charges levied or imposed upon us or any subsidiary or upon our income, profits or property or the income, profits or property of any subsidiary and (b) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon our property or the property of any subsidiary. We must pay these taxes and other claims before they become delinquent. However, we are not required to pay or discharge or cause to be paid or discharged any tax, assessment, and charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
DEFEASANCE AND COVENANT DEFEASANCE
The provisions for full defeasance and covenant defeasance described below apply to each senior and subordinated debt security if so indicated in the applicable prospectus supplement. In general, we expect these
provisions to apply to each debt security that has a specified currency of U.S. dollars and is not a floating rate or indexed debt security.
Full Defeasance. If there is a change in Federal income tax law, as described below, we can legally release ourselves from all payment and other obligations on any debt securities. This is called full defeasance. For us to do so, each of the Company. The Senior Debt Securities,following must occur:
| · | we must deposit in trust for the benefit of all holders of those debt securities money in an amount or a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on those debt securities on their various due dates, |
| · | (a) no event of default under the indenture may have occurred and be continuing and (b) no event of default described in the sixth bullet point under “—Default, Remedies and Waiver of Default—Events of Default” may have occurred and be continuing at any time during the 90 days following the deposit in trust, |
| · | there must be a change in current Federal income tax law or an IRS ruling that lets us make the above deposit without causing the holders to be taxed on those debt securities any differently than if we did not make the deposit and just repaid those debt securities ourselves. Under current Federal income tax law, the deposit and our legal release from your debt security would be treated as though we took back your debt security and gave you your share of the cash and notes or bonds deposited in trust. In that event, you could recognize gain or loss on your debt security, and |
| · | we must deliver to the trustee a legal opinion of our counsel confirming the Federal income tax law change described above. |
If we ever fully defeased your debt security, you would have to rely solely on the trust deposit for payments on your debt security. You would not be able to look to us for payment if there was any shortfall.
Covenant Defeasance. Under current Federal income tax law, we can make the same type of deposit described above and be released from the restrictive covenants relating to your debt security listed in the bullets below and any additional restrictive covenants that may be described in your prospectus supplement. This is called covenant defeasance. In that event, you would lose the protection of those restrictive covenants. In order to achieve covenant defeasance for any debt securities, we must take the same steps as are required for defeasance.
If we accomplish covenant defeasance with regard to your debt security, the following provisions of the applicable indenture and your debt security would no longer apply:
| · | the requirement to secure the debt securities equally and ratably with all new indebtedness in the event of a consolidation, |
| · | the covenants regarding existence, maintenance of properties, payment of taxes and other claims, |
| · | any additional covenants that your prospectus supplement states are applicable to your debt security, and |
| · | the events of default resulting from a breach of covenants, described below in the fourth, fifth and seventh bullet points under “—Default, Remedies and Waiver of Default—Events of Default.” |
If we accomplish covenant defeasance on your debt security, we must still repay your debt security if there is any shortfall in the trust deposit. You should note, however, that if one of the remaining events of default occurred, such as our bankruptcy, and your debt security became immediately due and payable, there may be a shortfall. Depending on the event causing the default, you may not be able to obtain payment of the shortfall.
DEFAULT, REMEDIES AND WAIVER OF DEFAULT
You will have special rights if an event of default, with respect to your series of debt securities, occurs and is continuing, as described in this subsection.
Events of Default. Unless your prospectus supplement says otherwise, when issued,we refer to an event of default with respect to any series of debt securities, we mean any of the following:
| · | we do not pay interest on any debt security of that series within 30 days after the due date, |
| · | we do not pay the principal or any premium of any debt security of that series on the due date, |
| · | we do not deposit a sinking fund payment with regard to any debt security of that series on the due date, but only if the payment is required under the applicable prospectus supplement, |
| · | we remain in breach of any covenant we make in the indenture for the benefit of the relevant series for 60 days after we receive a written notice of default stating that we are in breach and requiring us to remedy the breach. The notice must be sent by the trustee or the holders of at least 10% in principal amount of the relevant series of debt securities, |
| · | we do not pay an indebtedness of $50,000,000 or more in principal amount outstanding when due after the expiration of any applicable grace period, or we default on an indebtedness of this amount resulting in acceleration of the indebtedness, in either case, within ten days after written notice of the default is sent to us. The notice must be sent by the trustee or the holders of at least 10% in principal amount of the relevant series of debt securities, |
| · | we file for bankruptcy, or |
| · | if your prospectus supplement states that any additional event of default applies to the series, that event of default occurs. |
REMEDIES IF AN EVENT OF DEFAULT OCCURS
If you are the holder of a subordinated debt security, all the remedies available upon the occurrence of an event of default under the subordinated debt indenture will constitute Senior Debt.
The Prospectus Supplement will set forthbe subject to the aggregaterestrictions on the subordinated debt securities described above under “—Subordination Provisions.”
If an event of default has occurred with respect to any series of debt securities and has not been cured or waived, the trustee or the holders of not less than 25% in principal amount of outstanding indebtedness asdebt securities of that series may declare the entire principal amount of the most recent practicable datedebt securities of that series to be due immediately.
Each of the situations described above is called an acceleration of the maturity of the affected series of debt securities. If the maturity of any series is accelerated, a judgment for payment has not yet been obtained, we pay or deposit with the trustee an amount sufficient to pay all amounts due on the securities of the series, and all events of default with respect to the series, other than the nonpayment of the accelerated principal, have been cured or waived, then the holders of a majority in principal amount of the outstanding debt securities of that series may cancel the acceleration for the entire series.
If an event of default occurs, the trustee will have special duties. In that situation, the trustee will be obligated to use those of its rights and powers under the relevant indenture, and to use the same degree of care and skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.
Except as described in the prior paragraph, the trustee is not required to take any action under the relevant indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This is called an indemnity. If the trustee is provided with an indemnity reasonably satisfactory to it, the holders of a majority in principal amount of all debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee with respect
to that series. These majority holders may also direct the trustee in performing any other action under the applicable indenture with respect to the debt securities of that series.
Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to any debt security, all of the following must occur:
| · | the holder of your debt security must give the trustee written notice of a continuing event of default, |
| · | the holders of not less than 25% in principal amount of all debt securities of your series must make a written request that the trustee take action because of the default, and they or other holders must offer to the trustee indemnity reasonably satisfactory to the trustee against the cost and other liabilities of taking that action, |
| · | the trustee must not have taken action for 60 days after the above steps have been taken, and |
| · | during those 60 days, the holders of a majority in principal amount of the debt securities of your series must not have given the trustee directions that are inconsistent with the written request of the holders of not less than 25% in principal amount of the debt securities of your series. |
You are entitled at any time, however, to bring a lawsuit for the payment of money due on your debt security on or after its due date.
Waiver of Default. The holders of not less than a majority in principal amount of the outstanding debt securities of a series may waive a default for all debt securities of that series. If this happens, the default will be treated as if it has not occurred. No one can waive a payment default on your debt security or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each outstanding debt security of the series, however, without the approval of the particular holder of that debt security.
Book-entry and other indirect owners should consult their banks or brokers for information on how to give notice or direction to, or make a request of, the trustee and how to declare or cancel an acceleration of the maturity. Book-entry and other indirect owners are described below under “Legal Ownership and Book-Entry Issuance.”
CHANGES OF THE INDENTURES REQUIRING EACH HOLDER’S APPROVAL
There are certain changes that cannot be made without the approval of each holder of a debt security affected by the termschange under a particular indenture. Here is a list of such indebtednessthose types of changes:
| · | changes to the stated maturity for any principal or interest payment on a debt security, |
| · | reduction of the principal amount or the interest rate or the premium payable upon the redemption of any debt security, |
| · | reduction of the amount of principal of an original issue discount security or any other debt security payable upon acceleration of its maturity, |
| · | changes to the currency of any payment on a debt security, |
| · | changes to the place of payment on a debt security, |
| · | impairment of a holder’s right to sue for payment of any amount due on its debt security, |
| · | reduction of the percentage in principal amount of the debt securities of any series, the approval of whose holders is needed to change the applicable indenture or those debt securities, |
| · | reduction of the percentage in principal amount of the debt securities of any series, the consent of whose holders is needed to waive our compliance with the applicable indenture or to waive defaults, and |
| · | changes to the provisions of the applicable indenture dealing with modification and waiver in any other respect, except to increase any required percentage referred to above or to add to the provisions that cannot be changed or waived without approval of the holder of each affected debt security. |
MODIFICATION OF SUBORDINATION PROVISIONS
We may not amend the terms of the offered Subordinated Debt
Securities would rank seniorsubordinated debt indenture to or pari passu with such Subordinated Debt
Securities and any limitation on the issuance of additional senior or pari passu
indebtedness. The Prospectus Supplement may further describe the provisions, if
any, applicable toalter the subordination of any outstanding subordinated debt securities without the Subordinatedwritten consent of each holder of senior debt then outstanding who would be adversely affected. In addition, we may not modify the subordination provisions of the subordinated debt indenture in a manner that would adversely affect the outstanding subordinated debt securities of any one or more series in any material respect, without the consent of the holders of a majority in aggregate principal amount of all affected series, voting together as one class.
CHANGES OF THE INDENTURES NOT REQUIRING APPROVAL
Another type of change does not require any approval by holders of the debt securities of an affected series. These changes are limited to clarifications and changes that would not adversely affect the debt securities of that series in any material respect. Nor do we need any approval to make changes that affect only debt securities to be issued under the applicable indenture after the changes take effect.
We also may make changes or obtain waivers that do not adversely affect a particular debt security, even if they affect other debt securities. In those cases, we do not need to obtain the approval of the holder of the unaffected debt security, we need only obtain any required approvals from the holders of the affected debt securities.
CHANGES OF THE INDENTURES REQUIRING MAJORITY APPROVAL
Any other change to a particular indenture and the debt securities issued under that indenture would require the following approval:
| · | if the change affects only the debt securities of a particular series, it must be approved by the holders of a majority in principal amount of the debt securities of that series, or |
| · | if the change affects the debt securities of more than one series of debt securities issued under the applicable indenture, it must be approved by the holders of a majority in principal amount of each series affected by the change. |
In each case, the required approval must be given by written consent.
The same majority approval would be required for us to obtain a waiver of any of our covenants in either indenture. Our covenants include the promises we make about merging and similar transactions, which we describe above under “—Mergers and Similar Transactions.” If the requisite holders approve a waiver of a covenant, we will not have to comply with it. The holders, however, cannot approve a waiver of any provision in a particular debt security, or in the applicable indenture as it affects that debt security, that we cannot change without the approval of the holder of that debt security as described above in “—Changes of the Indentures Requiring Each Holder’s Approval,” unless that holder approves the waiver.
Book-entry and other indirect owners should consult their banks or brokers for information on how approval may be granted or denied if we seek to change an indenture or any debt securities or request a waiver.
SPECIAL RULES FOR ACTION BY HOLDERS
When holders take any action under either debt indenture, such as giving a notice of default, declaring an acceleration, approving any change or waiver or giving the trustee an instruction, we will apply the following rules:
ONLY OUTSTANDING DEBT SECURITIES ARE ELIGIBLE
Only holders of outstanding debt securities of the applicable series will be eligible to participate in any action by holders of debt securities of that series. Also, we will count only outstanding debt securities in
determining whether the various percentage requirements for taking action have been met. For these purposes, a debt security will not be “outstanding”:
| · | if it has been surrendered for cancellation or cancelled, |
| · | if we have deposited or set aside, in trust for its holder, money for its payment or redemption, |
| · | if we have fully defeased it as described above under “—Defeasance and Covenant Defeasance—Full Defeasance,” |
| · | if it has been exchanged for other debt securities of the same series due to mutilation, destruction, loss or theft, or |
| · | if we or one of our affiliates is the owner, unless the debt security is pledged under certain circumstances described in the indenture. |
ELIGIBLE PRINCIPAL AMOUNT OF SOME DEBT SECURITIES
In some situations, we may follow special rules in calculating the principal amount of a debt security that is to be treated as outstanding for the purposes described above. This may happen, for example, if the principal amount is payable in a non-U.S. dollar currency, increases over time or is not to be fixed until maturity.
For any debt security of the kind described below, we will decide how much principal amount to attribute to the debt security as follows:
| · | for an original issue discount debt security, we will use the principal amount that would be due and payable on the action date if the maturity of the debt security were accelerated to that date because of a default, |
| · | for a debt security whose principal amount is not determinable, we will use any amount that we indicate in the applicable prospectus supplement for that debt security. The principal amount of a debt security may not be determinable, for example, because it is based on an index that changes from time to time and the principal amount is not to be determined until a later date, or |
| · | for debt securities with a principal amount denominated in one or more non-U.S. dollar currencies or currency units, we will use the U.S. dollar equivalent, which we will determine. |
DETERMINING RECORD DATES FOR ACTION BY HOLDERS
We generally will be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take action under either indenture. In certain limited circumstances, only the trustee will be entitled to set a record date for action by holders. If we or the trustee set a record date for an approval or other action to be taken by holders, that vote or action may be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for this purpose, or that the trustee specifies if it sets the record date. We or the trustee, as applicable, may shorten or lengthen this period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In addition, record dates for any global debt security may be set in accordance with procedures established by the depositary from time to time. Accordingly, record dates for global debt securities may differ from those for other debt securities.
FORM, EXCHANGE AND TRANSFER OF DEBT SECURITIES
Unless we indicate otherwise in your prospectus supplement, the debt securities will be issued:
| · | only in fully registered form, and |
| · | in denominations of $1,000 and integral multiples of $1,000. |
Holders may exchange their debt securities for debt securities of the same series in any authorized denominations, as long as the total principal amount is not changed.
Holders may exchange or transfer their debt securities at the corporate trust office of the trustee. They may also replace lost, stolen, destroyed or mutilated debt securities at that office. We have appointed the trustee to act as our agent for registering debt securities in the names of holders and transferring and replacing debt securities.
Holders will not be required to pay a service charge to transfer or exchange their debt securities, but they may be required to pay for any tax or other governmental charge associated with the registration, exchange or transfer. The transfer or exchange, and any replacement, will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership. The transfer agent may require an indemnity before replacing any debt securities.
If a debt security is issued as a global debt security, only the depositary, e.g., DTC, Euroclear and Clearstream, will be entitled to transfer and exchange the debt security as described in this subsection, since the depositary will be the sole holder of the debt security.
The rules for exchange described above apply to exchange of debt securities for other debt securities of the same series and kind.
PAYMENT MECHANICS FOR DEBT SECURITIES
Who Receives Payment?
If interest is due on a debt security on an interest payment date, we will pay the interest to the person in whose name the debt security is registered at the close of business on that regular record date as described below under “—Payment and Record Dates for Interest.” If interest is due at maturity but on a day that is not an interest payment date, we will pay the interest to the person entitled to receive the principal of the debt security. If principal or another amount besides interest is due on a debt security at maturity, we will pay the amount to the holder of the debt security against surrender of the debt security at a proper place of payment or, in the case of a global debt security, in accordance with the applicable policies of the depositary, e.g., DTC, Euroclear and Clearstream, as applicable.
Payment and Record Dates for Interest
The regular record date relating to an interest payment date for any floating rate debt security will be the 15th calendar day before that interest payment date. These record dates will apply regardless of whether a particular record date is a “business day,” as defined below. For the purpose of determining the holder at the close of business on a regular record date when business is not being conducted, the close of business will mean 5:00 P.M., New York City time, on that day.
Business Day. The term “business day” means, with respect to the debt securities of a series, a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in the place of payment for the debt securities of that series are authorized or obligated by law or executive order to close and that satisfies any other criteria specified in the applicable prospectus supplement.
How We Will Make Payments Due in U.S. Dollars
We will follow the practice described in this subsection when paying amounts due in U.S. dollars. Payments of amounts due in other currencies will be made as described in the next subsection.
Payments on Global Debt Securities. We will make payments on a global debt security in accordance with the applicable policies of a
particular series.
Governing Law
The Indenturesthe depositary as in effect from time to time. Under those policies, we will make payments directly to the depositary, or its nominee, and not to any indirect owners who own beneficial interests in the Debt Securitiesglobal debt security. An indirect owner’s right to receive those payments will be governed by the rules and construedpractices of the depositary and its participants, as described below in the section entitled “Legal Ownership and Book-Entry Issuance—What Is a Global Security?”
Payments on Non-Global Debt Securities. We will make payments on a debt security in non-global, registered form as follows. We will pay interest that is due on an interest payment date by check mailed on the interest payment date to the holder at his or her address shown on the trustee’s records as of the close of business on the regular record date. We will make all other payments by check to the paying agent described below, against surrender of the debt security. All payments by check will be made in next-day funds, i.e., funds that become available on the day after the check is cashed.
Alternatively, if a non-global debt security has a face amount of at least $1,000,000 and the holder asks us to do so, we will pay any amount that becomes due on the debt security by wire transfer of immediately available funds to an account at a bank in New York City, on the due date. To request a wire payment, the holder must give the paying agent appropriate wire transfer instructions at least five business days before the requested wire payment is due. In the case of any interest payment due on an interest payment date, the instructions must be given by the person or entity who is the holder on the relevant regular record date. In the case of any other payment, payment will be made only after the debt security is surrendered to the paying agent. Any wire instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described above.
Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive payments on their debt securities.
How We Will Make Payments Due in Other Currencies
We will follow the practice described in this subsection when paying amounts that are due in a specified currency other than U.S. dollars.
Payments on Global Debt Securities. We will make payments on a global debt security in accordance with the lawsapplicable policies of the Statedepositary as in effect from time to time, which will be DTC, Euroclear or Clearstream. Unless we specify otherwise in the applicable prospectus supplement, DTC will be the depositary for all debt securities in global form. We understand that DTC’s policies, as currently in effect, are as follows.
Unless otherwise indicated in your prospectus supplement, if you are an indirect owner of global debt securities denominated in a specified currency other than U.S. dollars and if you have the right to elect to receive payments in that other currency and do so elect, you must notify the participant through which your interest in the global debt security is held of your election:
| · | on or before the applicable regular record date, in the case of a payment of interest, or |
| · | on or before the 16th day before the stated maturity, or any redemption or repayment date, in the case of payment of principal or any premium. |
Your participant must, in turn, notify DTC of your election on or before the third DTC business day after that regular record date, in the case of a payment of interest, and on or before the 12th DTC business day prior to the stated maturity, or on the redemption or repayment date if your debt security is redeemed or repaid earlier, in the case of a payment of principal or any premium.
DTC, in turn, will notify the paying agent of your election in accordance with DTC’s procedures.
If complete instructions are received by the participant and forwarded by the participant to DTC, and by DTC to the paying agent, on or before the dates noted above, the paying agent, in accordance with DTC’s instructions, will make the payments to you or your participant by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the country issuing the specified currency or in another jurisdiction acceptable to us and the paying agent.
If the foregoing steps are not properly completed, we expect DTC to inform the paying agent that payment is to be made in U.S. dollars. In that case, we or our agent will convert the payment to U.S. dollars in the manner described below under “—Conversion to U.S. Dollars.” We expect that we or our agent will then make the payment in U.S. dollars to DTC, and that DTC in turn will pass it along to its participants.
Indirect owners of a global debt security denominated in a currency other than U.S. dollars should consult their banks or brokers for information on how to request payment in the specified currency.
Payments on Non-Global Debt Securities. Except as described in the last paragraph under this heading, we will make payments on debt securities in non-global form in the applicable specified currency. We will make these payments by wire transfer of immediately available funds to any account that is maintained in the applicable specified currency at a bank designated by the holder and which is acceptable to us and the trustee. To designate an account for wire payment, the holder must give the paying agent appropriate wire instructions at least five business days before the requested wire payment is due. In the case of any interest payment due on an interest payment date, the instructions must be given by the person or entity who is the holder on the regular record date. In the case of any other payment, the payment will be made only after the debt security is surrendered to the paying agent. Any instructions, once properly given, will remain in effect unless and until new instructions are properly given in the manner described above.
If a holder fails to give instructions as described above, we will notify the holder at the address in the trustee’s records and will make the payment within five business days after the holder provides appropriate instructions. Any late payment made in these circumstances will be treated under the applicable indenture as if made on the due date, and no interest will accrue on the late payment from the due date to the date paid.
Although a payment on a debt security in non-global form may be due in a specified currency other than U.S. dollars, we will make the payment in U.S. dollars if the holder asks us to do so. To request U.S. dollar payment, the holder must provide appropriate written notice to the trustee at least five business days before the next due date for which payment in U.S. dollars is requested. In the case of any interest payment due on an interest payment date, the request must be made by the person or entity who is the holder on the regular record date. Any request, once properly made, will remain in effect unless and until revoked by notice properly given in the manner described above.
Book-entry and other indirect owners of a debt security with a specified currency other than U.S. dollars should contact their banks or brokers for information about how to receive payments in the specified currency or in U.S. dollars.
Conversion to U.S. Dollars. When we are asked by a holder to make payments in U.S. dollars of an amount due in another currency, either on a global debt security or a non-global debt security as described above, the exchange rate agent described below will calculate the U.S. dollar amount the holder receives in the exchange rate agent’s discretion.
A holder that requests payment in U.S. dollars will bear all associated currency exchange costs, which will be deducted from the payment.
When the Specified Currency Is Not Available. If we are obligated to make any payment in a specified currency other than U.S. dollars, and the specified currency or any successor currency is not available to us due to circumstances beyond our control, such as the imposition of exchange controls or a disruption in the currency markets, we will be entitled to satisfy our obligation to make the payment in that specified currency by making the payment in U.S. dollars, on the basis of the exchange rate determined by the exchange rate agent described below, in its discretion.
The foregoing will apply to any debt security, whether in global or non-global form, and to any payment, including a payment at maturity. Any payment made under the circumstances and in a manner described above will not result in a default under any debt security or the applicable indenture.
The Euro. The Euro may be a specified currency for some debt securities. On January 1, 1999, the Euro became the legal currency for the 11 member states participating in the European Economic and Monetary Union.
Exchange Rate Agent. If we issue a debt security in a specified currency other than U.S. dollars, we will appoint a financial institution to act as the exchange rate agent and will name the institution initially appointed when the debt security is originally issued in the applicable prospectus supplement. We may change the exchange rate agent from time to time after the original issue date of the debt security without your consent and without notifying
you of the change. All determinations made by the exchange rate agent will be in its sole discretion unless we state in the applicable prospectus supplement that any determination requires our approval. In the absence of manifest error, those determinations will be conclusive for all purposes and binding on you and us, without any liability on the part of the exchange rate agent.
Payment When Offices Are Closed
If any payment is due on a debt security on a day that is not a business day, we will make the payment on the next day that is a business day. Payments postponed to the next business day in this situation will be treated under the applicable indenture as if they were made on the original due date. Postponement of this kind will not result in a default under any debt security or the applicable indenture, and no interest will accrue on the postponed amount from the original due date to the next day that is a business day. The term business day has a special meaning, which we describe above under “—Payment and Record Dates for Interest.”
Paying Agent
We may appoint one or more financial institutions to act as our paying agents, at whose designated offices debt securities in non-global entry form may be surrendered for payment at their maturity. We call each of those offices a paying agent. We may add, replace or terminate paying agents from time to time.
We also may choose to act as our own paying agent. Initially, we have appointed the trustee, at its corporate trust office in New York City, as the paying agent. We must notify the trustee of changes in the paying agents.
NOTICES
Notices to be given to holders of a global debt security will be given only to the depositary, in accordance with its applicable policies as in effect from time to time. Notices to be given to holders of debt securities not in global form will be sent by mail to the respective addresses of the holders as they appear in the trustee’s records. Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will affect the sufficiency of any notice given to another holder.
Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive notices.
OUR RELATIONSHIP WITH THE TRUSTEE
The Bank of New York. (Section 112)
Regarding the Trustees
The CompanyYork Mellon has provided commercial banking and certain of its subsidiariesother services for us and our affiliates in the ordinary coursepast and may do so in the future.
The Bank of
business maintain general banking relationsNew York Mellon is initially serving as the trustee for our senior debt securities and subordinated debt securities. Consequently, if an actual or potential event of default occurs with
State Street Bank & Trust
Company, N.A. Pursuantrespect to
any of these securities, the
provisionstrustee may be considered to have a conflicting interest for purposes of the Trust Indenture Act of
1939,
upon a default under either1939. In that case, the
Senior Indenture or the Subordinated Indenture,
State Street Bank & Trust Company, N.A.
-22-
trustee may be deemed to have a conflicting interest by virtue of its acting as both the
Senior Trustee and the Subordinated Trustee requiring itrequired to resign under one or more of the indentures, and we would be replaced byrequired to appoint a successor trustee in onetrustee. For this purpose, a “potential” event of such positions.
default means an event that would be an event of default if the requirements for giving us default notice or for the default having to exist for a specific period of time were disregarded. DESCRIPTION OF CAPITAL STOCK
The following descriptions are summaries of the material terms and provisions of our preferred stock and our common stock contained in our certificate of incorporation and our by-laws. Copies of our certificate of incorporation and the descriptions contained in "--
Description of Preferred Stock" and "-- Description of Common Stock" do not
purport to be complete andby-laws are subject to, and qualified in their entirety by
referenceexhibits to the more complete descriptions thereof set forth in the following
documents: (i) the Company's Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation"), which is filed as an exhibit to the
Registration Statementregistration statement of which this Prospectus is a part and (ii) its By-laws,
which is incorporated by reference to the Registration Statement of which this
Prospectusprospectus is a part. For the CompanySee “Available Information” for information on how to qualify as a REIT under the Code, not more than 50%obtain copies of the valueour certificate of the outstanding stock may be owned, directly or indirectly, by five
or fewer individuals (as defined in the Code to include certain entities) during
the last halfincorporation and by-laws.
The certificate of a taxable year and the stock 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). Accordingly, the
Certificate of Incorporation contains provisions that restrict the ownership and
transfer of shares of capital stock. The Certificate of Incorporation also
contains provisions that restrict the ownership and transfer of shares of
capital stock to reduce the risk that the Company's ability to use its NOLs
would be limited.
The Certificate of Incorporationincorporation authorizes the issuance of up to 26,000,000 shares of capital stock, consisting of 10,000,000 shares of Common
Stock,common stock, $1.00 par value per share (the "Common Stock"“common stock”), 3,000,000 shares of preferred stock, $1.00 par value per share (the "Preferred Stock"“preferred stock”), and 13,000,000 shares of excess stock, $1.00 par value per share (the "Excess
Stock"“excess stock”). As of November 2, 1995, 5,000,85024, 2008, 5,173,450 and 5,081,590 shares of Common Stockcommon stock were issued and outstanding.outstanding, respectively. No shares of Preferred Stockpreferred stock or shares of Excess Stockexcess stock are issued and outstanding.
Descriptionoutstanding as of Preferred Stock
the date of this prospectus.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particularmaterial terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated inour preferred stock is only a Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in its entirety by reference to the provisions of the Certificateour certificate of Incorporationincorporation and the certificate of designations relating to each series of the Preferred Stockpreferred stock (the "Certificate“certificate of Designation"designations”), which will be filed as an exhibit to or incorporated by reference in the Registration Statementregistration statement of which this Prospectusprospectus is a part, at or prior to the time of issuance of such series of the Preferred
Stock.preferred stock. The Certificateparticular terms of Incorporation authorizesany series of preferred stock will be described in the issuance of 3,000,000
shares of Preferred Stock. No shares of Preferred Stock are outstanding as ofapplicable prospectus supplement, which will supplement the date of this Prospectus. information below.
General
The
Preferred Stockpreferred stock authorized by
the Certificateour certificate of
Incorporationincorporation may be issued from time to time in one or more series in
suchthe amounts and with
suchthe designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption as may be fixed by
our board of directors. The preferred stock, upon issuance against full payment of the
Boardapplicable purchase price, will be fully paid and nonassessable. The liquidation preference is not indicative of
Directors.the price at which the shares of preferred stock will actually trade on or after the date of issuance. Under certain circumstances, the issuance of
Preferred Stockpreferred stock could have the effect of delaying, deferring or preventing a change of control of
the Companyour company and may adversely affect the voting and other rights of the
Holdersholders of
Common
Stock. See "Risk Factors--Anti-takeover Effectscommon stock. The certificate of
Provisionsincorporation authorizes our board of
the Certificate
of Incorporation and By-laws." The Certificate of Incorporation authorizes the
Board of Directorsdirectors to classify or
reclassify, in one or more series, any unissued shares of preferred stock and to reclassify any unissued shares of
Preferred
Stockany series of preferred stock by setting or changing the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption of
such Preferred Stock.
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the preferred stock.The Preferred Stockpreferred stock shall have the dividend, liquidation, redemption and voting rights set forthdescribed below, unless otherwise described in a Prospectus
Supplementas supplemented by the applicable prospectus supplement relating to aeach particular series of the Preferred Stock.preferred stock. The applicable Prospectus Supplementprospectus supplement will describe the following terms of the series of Preferred Stock in respect of which this Prospectus is being delivered: (1)
the title of such Preferred Stock and the number of shares offered; (2) the
amount of liquidation preference per share; (3) the initial public offering
price at which shares of such Preferred Stock will be issued; (4) the dividend
rate (or method of calculation), the dates on which dividends shall be payable
and the dates from which dividends shall commence to cumulate, if any; (5) any
redemption or sinking fund provisions; (6) any conversion or exchange rights;
(7) any additional voting, dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions; (8) any
listing of such Preferred Stock on any securities exchange; (9)preferred stock:
| · | the title of the preferred stock and the number of shares offered, |
| · | the amount of liquidation preference per share, |
| · | the initial public offering price at which the shares of preferred stock will be issued, |
| · | the dividend rate or method of calculation, the dates on which dividends will be payable and the dates from which dividends will commence to accumulate, if any, |
| · | any redemption or sinking fund provisions, |
| · | any conversion or exchange rights, |
| · | any additional voting, dividend, liquidation, redemption, sinking fund and other rights, preferences, limitations and restrictions, |
| · | any listing of the preferred stock on any securities exchange, |
| · | the relative ranking and preferences of such preferred stock as to dividend rights and rights upon our liquidation, dissolution or winding-up of our affairs, |
| · | any limitations on issuance of any series of preferred stock ranking senior to or equally with the series of preferred stock as to dividend rights and rights upon our liquidation, dissolution or winding-up, |
| · | any limitations on direct or beneficial ownership and restrictions on transfer as may be appropriate to preserve our status as a REIT or to preserve our net operating loss carryovers, if any, and |
| · | any other specific terms, preferences or rights of, or limitations or restrictions on, the preferred stock. |
The applicable prospectus supplement also may include a discussion of federalFederal income tax considerations applicable to such Preferred Stock; (10) the relative ranking and preferences of such Preferred Stock as to dividend rights
and rights upon liquidation, dissolution or winding up of the affairs of the
Company; (11) any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (12) any limitations on direct or beneficial ownership
and restrictions on transfer, in each case as may be appropriate to preserve the
status of the Company as a REIT; and (13) any other specific terms, preferences
or rights of, or limitations or restrictions on, such Preferred Stock.
General
The shares of Preferred Stock offered hereby will be issued in one or more
series. Shares of Preferred Stock, upon issuance against full payment of the
purchase price therefor, will be fully paid and nonassessable. The liquidation
preference is not indicative of the price at which the shares of Preferred Stock
will actually trade on or after the date of issuance.
Rank
The Preferred Stock shall, withpreferred stock.
Ranking
With respect to dividend rights and rights upon liquidation, dissolution and winding up ofwinding-up, the Company,preferred stock will rank priorsenior to the Common
Stockour common stock and Excess Stock (otherexcess stock, other than certain Excess Stockexcess stock resulting from the conversion of Preferred Stock)preferred stock and to all other classes and series of our equity securities of the Company now or hereafterlater authorized, issued or outstanding, (the Common Stockother than any classes or series of our equity securities which by their terms specifically rank equal or senior to the preferred stock as to dividend rights and suchrights upon our liquidation, dissolution or winding-up. We refer to the common stock and the other classes and series of equity securities collectively may be referred to herein aswhich the "Junior Stock"), other than any
classes or seriesshares of equity securities of the Company which by their terms
specifically provide for a ranking on a parity with (the "Parity Stock") orpreferred stock rank senior to (the "Senior Stock") the Preferred Stock as to dividend rights and rights upon our liquidation, dissolution or winding upwinding-up of as the Company.“junior stock,” we refer to our equity securities that by their terms rank equal to the shares of preferred stock as the “parity stock,” and we refer to our equity securities that by their terms rank senior to the shares of preferred stock as the “senior stock.” The Preferred
Stock shall beshares of preferred stock are junior to all our outstanding debt of the Company. The Preferred
Stock shall be subject to creation of Senior Stock, Parity Stockdebt. We may create and Junior
Stockissue senior stock, parity stock and junior stock to the extent not expressly prohibited by the Certificateour certificate of Incorporation.
incorporation.
Dividends
Holders of shares of Preferred Stock shall beour preferred stock are entitled to receive, when, as and if declared by the Boardour board of Directorsdirectors, out of our assets of the Company legally available for payment, dividends, or distributions in cash, property or other assets of the Companyour company or in Securitiessecurities of the Companyour company or from any other source as the Boardour board of Directorsdirectors in theirits discretion shall determinedetermines and at suchthe dates and at such rates per share per annumannual rate as described in the applicable Prospectus
Supplement. Suchprospectus supplement. This rate may be fixed or variable or both. Each declaredauthorized dividend shall beis payable to Holdersholders of record as they appear at the close of business on the books of our company on the Company on such record dates,date, not more than 90 calendar days preceding the payment dates therefor,date, as are determined by the Boardour board of Directors (each of such dates, a "Record Date").
Suchdirectors.
These dividends may be cumulative or noncumulative, as described in the applicable
Prospectus Supplement.prospectus supplement. If dividends on a series of
Preferred Stockpreferred stock are noncumulative and if
the Boardour board of
Directorsdirectors fails to
declareauthorize a dividend in respect of a dividend period with respect to
suchthat series, then
Holdersholders of
those shares of
such Preferred Stockpreferred stock will have no
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right to receive a dividend in respect of suchthat dividend period, and the Companywe will have no obligation to pay the dividend for suchthat period, whether or not dividends are declared payableauthorized on any future dividend payment dates. If dividends of a series of Preferred Stockpreferred stock are cumulative, the dividends on suchthose shares will accrue from and after the date set forthstated in the applicable Prospectus Supplement.
prospectus supplement. No full dividends shall be declaredauthorized or paid or set apart for payment on Preferred Stockpreferred stock of any series ranking, as to dividends, on a parityequally with or junior to the series of Preferred Stockpreferred stock offered by the applicable Prospectus
Supplementprospectus supplement for any period unless full dividends for the immediately preceding dividend period on such Preferred Stock (includingthe preferred stock, including any accumulation in respect of unpaid dividends for prior dividend periods, if dividends on such Preferred
Stockthe preferred stock are cumulative)cumulative, have been or contemporaneously are declaredauthorized and paid or declaredauthorized and a sum sufficient for the payment thereof is set apart for such payment. When dividends are not so paid in full, (oror a sum sufficient for such
full payment is not so set apart)apart, upon such shares of Preferred Stockthe preferred stock offered by the applicable prospectus supplement and any other Preferred Stock of the Companypreferred stock ranking on a parityequally as to dividends with the Preferred Stock,those shares of preferred stock, dividends upon such Preferred Stockthose shares of preferred stock and dividends on suchthe other Preferred Stock ranking on a parity with the Preferred Stock shallpreferred stock must be declared pro rataauthorized proportionately so that the amount of
dividends declaredauthorized per share on such
Preferred Stockthose shares of preferred stock and suchthe other Preferred Stock ranking on a parity with the
Preferred Stock shallpreferred stock in all cases bear to each other the same ratio that accrued dividends for the then-current dividend period per share on such
Preferred Stock (includingthose shares of preferred stock, including any accumulation in respect of unpaid dividends for prior dividend periods, if dividends on such Preferred Stockthose shares of preferred stock are cumulative)cumulative, and accrued dividends, including required or permitted accumulations, if any, on shares of suchthe other Preferred Stock,preferred stock, bear to each other. No interest, or sum of money in lieu of interest, shallwill be payable in respect of any dividend payment(s) on Preferred Stock which may beshares of preferred stock that are in arrears. Unless full dividends on the series of Preferred Stockpreferred stock offered by the applicable Prospectus Supplementprospectus supplement have been declaredauthorized and paid or set apart for payment for the immediately preceding dividend period, (includingincluding any accumulation in respect of unpaid dividends for prior dividend periods, if dividends on such Preferred Stock are cumulative), (a) no cash dividend or distribution (other than in shares of
Junior Stock) may be declared, set aside or paid on the Junior Stock, (b) the
Company may not, directly or indirectly, repurchase, redeem or otherwise acquire
any shares of its Junior Stock (or pay any monies into a sinking fund for the
redemption of any shares) except by conversion into or exchange for Junior
Stock, and (c) the Company may not, directly or indirectly, repurchase, redeem
or otherwise acquire any Preferred Stock or Parity Stock (or pay any monies into
a sinking fund for the redemption of any shares of any such stock) otherwise
than pursuant to pro rata offers to purchase or a concurrent redemption of all,
or a pro rata portion, of the shares of outstanding Preferred Stock and shares
of Parity Stock (except by conversion into or exchange for Junior Stock).
cumulative:
| · | no cash dividend or distribution, other than in shares of junior stock, may be authorized, set aside or paid on the junior stock, |
| · | we may not, directly or indirectly, repurchase, redeem or otherwise acquire any shares of junior stock, or pay any money into a sinking fund for the redemption of any shares, except by conversion into or exchange for junior stock, and |
| · | we may not, directly or indirectly, repurchase, redeem or otherwise acquire any preferred stock or parity stock, or pay any money into a sinking fund for the redemption of any shares, otherwise than in accordance with proportionate offers to purchase or a concurrent redemption of all, or a proportionate portion, of the outstanding preferred stock and shares of parity stock, except by conversion into or exchange for junior stock. |
Any dividend payment made on a series of Preferred Stock shallpreferred stock will first be credited against the earliest accrued but unpaid dividend due with respect to shares of suchthe series.
Redemption
The terms, if any, on which shares of Preferred Stockpreferred stock of any series may be redeemed will be set forthdescribed in the applicable Prospectus Supplement.
prospectus supplement.
Liquidation
In
If we voluntarily or involuntarily liquidate, dissolve or wind up our affairs, the
event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, the Holdersholders of a series of
Preferred
Stockpreferred stock will be entitled, subject to the rights of creditors, but before any distribution or payment to the
Holdersholders of
Common Stock, Excess Stock (otherour common stock, excess stock, other than certain
Excess Stockshares of excess stock resulting from the conversion of
Preferred Stock)shares of preferred stock, or any
Junior Stock on liquidation, dissolution or winding up of the Company,junior stock, to receive a liquidating distribution in the amount of the liquidation preference per share
as set forthstated in the applicable
Prospectus Supplementprospectus supplement plus accrued and unpaid dividends for the then-current dividend period,
(includingincluding any accumulation in respect of unpaid dividends for prior dividend periods, if dividends on such series of
Preferred Stockpreferred stock are
cumulative).cumulative. If the amounts available for distribution with respect to
the Preferred Stockour preferred stock and all other outstanding
Parity Stockparity stock are not sufficient to satisfy the full liquidation rights of all the outstanding shares of
Preferred Stockpreferred stock and
Parity Stock,parity stock, then the
Holdersholders of each series of
suchthe stock will share ratably in
any suchthe distribution of assets in proportion to the full
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respective preferential amount, (whichwhich in the case of Preferred Stockpreferred stock may include accumulated dividends)dividends, to which they are entitled. After payment of the full amount of the liquidation distribution, the Holdersholders of Preferred Stockpreferred stock will not be entitled to any further participation in any distribution of assets by the
Company.
us. Voting
Except as set forth
Unless provided in the Prospectus Supplement relating to a particular
series of Preferred Stockapplicable prospectus supplement or except as expressly required by applicable law, Holdersholders of shares of Preferred Stockpreferred stock will have no voting rights.
No Other Rights
The shares of a series of Preferred Stockpreferred stock will not have any preferences, conversion or other rights, voting powers, or relative, participating, optional orrestrictions, limitations as to dividends and other special rightsdistributions, qualifications, and terms and conditions of
redemption except as set forthdescribed above or in the applicable Prospectus Supplement, the
Certificateprospectus supplement, our certificate of Incorporationincorporation and in the applicable Certificatecertificate of Designationdesignations or as otherwise required by law.
Transfer Agent and Registrar
The transfer agent for each series of Preferred Stockpreferred stock will be described in the related Prospectus Supplement.
prospectus supplement.
Restrictions on Ownership As discussed below, forof Preferred Stock
The Preferred Stock Beneficial Ownership Limit. Our certificate of incorporation contains a number of provisions that restrict the Companyownership and transfer of shares and are designed to qualifyprotect us against an inadvertent loss of REIT status. In order to maintain our qualification as a REIT under the Internal Revenue Code, not more than 50% in value of itsour outstanding shares of capital stock may be owned, directly or constructively, by five or fewer individuals (as defined in
the Code to include certain entities)at any time during the last half of a taxable year, and the shares of capital stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months, (oror during a proportionate part of a shorter taxable year). Therefore,year. The Internal Revenue Code defines “individuals” to include some entities for the Certificate of
Incorporation contains, and the Certificate of Designation for each series of
Preferred Stock may contain, provisions restricting the ownership and transferpurposes of the Preferred Stock.
In orderpreceding sentence. All references to prevent any Company stockholder from owning sharesa holder’s ownership of preferred stock in an amount
which would cause more than 50%this section assumes application of the valueapplicable attribution rules of the outstandingInternal Revenue Code under which, for example, a holder is deemed to own shares owned by his or her spouse.
Our certificate of the
Company to be held by five or fewer individuals, the Certificate of
Incorporationincorporation contains a limitation that restricts stockholders from owning under the applicable attribution rules of the Code, more than that percentage
(which generally should not exceed 9.9%) of the outstanding shares of Preferred
Stockpreferred stock of any series as is established by the Board of Directors at the time it
authorizes the issuance of such series (the "Preferred Stock Beneficial
Ownership Limit"“preferred stock beneficial ownership limit”). The attribution rules which apply for purposes of the Common
Stock Beneficial Ownership Limit (as defined below) also apply for purposes of
the Preferred Stock Beneficial Ownership Limit. See "Description of Common Stock
- -- Restrictions on Ownership." StockholdersInvestors should be aware that events other than a purchase or other transfer of Preferred Stockpreferred stock may result in ownership, under the applicable attribution rules of the Internal Revenue Code, of Preferred Stockpreferred stock in excess of the Preferred Stock Beneficialpreferred stock beneficial ownership limit. The attribution rules which apply for purposes of the common stock beneficial ownership limit also apply for purposes of the preferred stock beneficial ownership limit. For more information about these attribution rules, see “Description of Common Stock—Restrictions on Ownership—Attribution Rules.” You should consult your own tax advisors concerning the application of the attribution rules of the Internal Revenue Code in your particular circumstances.
The Constructive Ownership Limit. StockholdersLimit. Holders of preferred stock also are urgedsubject to the constructive ownership limit, which restricts them from owning, under the applicable attribution rules of the Internal Revenue Code, more than 9.9% of the outstanding shares of preferred stock of any series. See “Description of Common Stock—Restrictions on Ownership—The Constructive Ownership Limit” below for more information about the constructive ownership limit.
The attribution rules of the Internal Revenue Code that apply for purposes of the constructive ownership limit differ from those that apply for purposes of the preferred stock beneficial ownership limit. See “Description of Common Stock—Restrictions on Ownership—The Constructive Ownership Limit” for more information about these attribution rules. Investors should be aware that under the applicable attribution rules of the Internal Revenue Code, events other than a purchase or other transfer of preferred stock may result in ownership of preferred stock in excess of the constructive ownership limit. We urge investors to consult their own tax advisors concerning the application of the attribution rules of the Internal Revenue Code in their particular circumstances.
Holders
Issuance of PreferredExcess Stock are also subject toif the Constructive Ownership Limit (as defined below in "DescriptionLimits Are Violated. Our certificate of Common Stock -- Restrictions on
Ownership"), which restricts them from owning, under the applicable attribution
rules of the Code, more than 9.9% of the outstanding shares of Preferred Stock
of any series. The attribution rules which apply for purposes of the
Constructive Ownership Limit differ from those that apply for purposes of the
Preferred Stock Beneficial Ownership Limit. See "Description of Common Stock --
Restrictions on Ownership." Stockholders should be aware that events other than
a purchase or other transfer of Preferred Stock may result in ownership, under
the applicable attribution rules of the Code, of Preferred Stock in excess of
the Constructive Ownership Limit. Stockholders are urged to consult their own
tax advisors concerning the application of the attribution rules of the Code in
their particular circumstances.
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The Certificate of Incorporationincorporation provides that a transfer of shares of Preferred Stockpreferred stock that would otherwise result in ownership, under the applicable attribution rules of the Internal Revenue Code, of Preferred Stockpreferred stock in excess of the Preferred
Stock Beneficial Ownership Limitpreferred stock beneficial ownership limit or the Constructive Ownership Limit,constructive ownership limit, or which would cause the shares of capital stock of the CompanyAlexander’s to be beneficially owned by fewer than 100 persons, will be null and voidhave no effect and the purported transferee will acquire no rights or economic interest in such Preferred Stock.preferred stock. In addition, Preferred Stockpreferred stock that would otherwise be owned, under the applicable attribution rules of the Internal Revenue Code, in excess of the Preferred Stock Beneficial
Ownership Limitpreferred stock beneficial ownership limit or the Constructive Ownership Limitconstructive ownership limit will be automatically exchanged for shares of Excess Stock thatexcess stock. These shares of excess stock will be transferred, by operation of law, to the Companyus as trustee of a trust for the exclusive benefit of a beneficiary designated by the purported transferee or purported Holder.holder. While so held in trust, the trustee shall vote the shares of Excess Stockexcess stock in the same proportion as the Holdersholders of the Common Stock and Preferred Stock, respectively,
shall vote and suchoutstanding shares of Excess Stock are not entitled to participate in
any dividends or distributions made by the Company.preferred stock have voted. Any dividends or distributions received by the purported transferee or other purported Holderholder of such Excess Stock prior to the excess stock before our discovery by the Company of the automatic exchange for shares of Excess Stock shallexcess stock must be repaid to the Companyus upon demand.
If the purported transferee or purported Holderholder elects to designate a beneficiary of an interest in the trust with respect to such Excess Stock,the excess stock, he or she may only designate a person whose ownership of the shares will not violate the Preferred Stock
Beneficial Ownership Limitpreferred stock beneficial ownership limit or the Constructive Ownership Limit may be
designated, at which timeconstructive ownership limit. When the shares of Excess Stockdesignation is made, the excess stock will be automatically exchanged for shares of Preferred Stockpreferred stock of the same class as the Preferred Stock
whichpreferred stock that were originally exchanged for such Excess Stock. The Certificatethe excess shares. Our certificate of Incorporationincorporation contains provisions designed to ensure that the purported transferee or other purported Holderholder of the Excess Stockshares of excess stock may not receive, in return for such a transfertransferring an interest in the trust with respect to the excess stock, an amount that reflects any appreciation in the shares of Preferred Stockpreferred stock for which suchthe shares of Excess Stockexcess stock were exchanged during the period that suchthe shares of Excess Stockexcess stock were outstanding but will bear the burden of any decline in value during suchthat period. Any amount received by a purported transferee or other purported Holderholder for designating a beneficiary in excess of the amount permitted to be received must be turned over to the Company. The Certificateus. Our certificate of Incorporationincorporation provides that the Companywe may purchase any shares of Excess Stockexcess stock that have been automatically exchanged for shares of Preferred Stockpreferred stock as a result of a purported transfer or other event. The price at which the Companywe may purchase such Excess Stock shallthe shares of excess stock will be equal to the lesser of (i) in the case of shares of Excess Stock resulting from a
purported transfer for value, the price per share in the purported transfer that
resulted in the automatic exchange for shares of Excess Stock or, in the case of
Excess Stock resulting from some other event, the market price of the shares of
Preferred Stock exchanged on the date of the automatic exchange for shares of
Excess Stock and (ii) the market price of the shares of Preferred Stock
exchanged for such shares of Excess Stock on the date that the Company accepts
the deemed offer to sell such Excess Stock. The Company'sof:
| · | in the case of shares of excess stock resulting from a purported transfer for value, the price per share in the purported transfer that resulted in the automatic exchange for shares of excess stock or, in the case of excess stock resulting from some other event, the market price of the shares of preferred stock exchanged on the date of the automatic exchange for shares of excess stock, and |
| · | the market price of the shares of preferred stock exchanged for such shares of excess stock on the date that we accept the deemed offer to sell the excess stock. |
Our purchase right with respect to Excess Stock shallexcess stock will exist for 90 days, beginning on the date that the automatic exchange for shares of Excess Stockexcess stock occurred or, if the Companywe did not receive a notice concerning the purported transfer that resulted in the automatic exchange for shares of Excess Stocks,excess stock, the date that the Boardour board of Directorsdirectors determines in good faith that an exchange for Excess Stockexcess stock has occurred.
The Board
Other Provisions Concerning the Restrictions on Ownership. Our board of Directorsdirectors may in its discretion exempt certain persons from the Preferred Stock Beneficial Ownership Limitpreferred stock beneficial ownership limit or the Constructive Ownership
Limitconstructive ownership limit if evidence satisfactory to the Boardour board of Directorsdirectors is presented showing that such exemption will not jeopardize the Company'sour status as a REIT under the Internal Revenue Code. As a conditionBefore granting an exemption of such exemption, the Boardthis kind, our board of Directorsdirectors may require a ruling from the Internal Revenue Service and/orIRS, an opinion of counsel satisfactory to it and/orand representations and undertakings from the applicant with respect to preserving theour REIT status of the Company.
status.
The Board of Directors may, at any time, determine that the foregoing restrictions on ownership and transfer shallwill not apply if our board of directors determines that it is no longer apply.
in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
Sections 382 and 383 of the Internal Revenue Code
of 1986, as amended,
impose limitations upon the utilization of a
corporation'scorporation’s net operating loss and credit carryforwards and certain other tax attributes, following significant changes in the
corporation'scorporation’s stock ownership. In order to preserve
the Company'sour ability to use
its net operating loss
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carryforwards to reduce its taxable income, the Certificateour certificate of Incorporationincorporation also contains, and the Certificatecertificate of Designationdesignations for each series of Preferred
Stockpreferred stock may contain, additional provisions restricting the ownership of Preferred
Stockour outstanding stock (the "Section“Section 382 Ownership Restrictions"ownership restrictions”). The Section 382 Ownership
Restrictionsownership restrictions merely reduce the risk of certain occurrences that could cause such a limitation to arise. It is still possible that, due to transfers (either directly or indirectly) of the Company'sour outstanding shares, the Companywe could become subject to a limitation under SectionsSection 382 andor 383.
The CertificateOur certificate of Incorporationincorporation provides, in general, that, subject to the exceptions described in the next paragraph, no person may acquire shares of the
Company (orour company, or options or warrants to acquire such shares)shares, if as a result such person (or another person to which such shares were attributed under certain complex attribution rules, which differ in certain respects from those that apply for purposes of the Preferred Stock Beneficial Ownership Limitpreferred stock beneficial ownership limit or the Constructive Ownership Limit)constructive ownership limit) would own, directly or under such attribution rules, 5% or more of the class of such outstanding shares (hereinafter, such person's "Ownership Interest Percentage"person’s “ownership interest percentage”). In addition, subject to the exceptions described in the next paragraph, no person whose Ownership Interest
Percentageownership interest percentage of a class of shares equals or exceeds 5% can acquire or transfer such shares, (oror options or warrants to acquire such shares).shares. The foregoing restrictions apply independently to each class of the Company'sour outstanding stock.
The foregoing restrictions do not apply to (i) acquisitions and transfers of Common Stockcommon stock by certain persons (orand their affiliates whose ownership interest percentage of persons), whose Ownership
Interest Percentage of Common Stockcommon stock on September 21, 1993 was 5% or more, (ii) transfers of shares pursuant to an offering by the Company,us, to the extent determined by the Boardour board of Directors,directors, and (iii) other transfers of shares specifically approved by the Company's Boardour board of Directors.
directors.
Transfers of shares, options or warrants in violation of the Section 382 Ownership Restrictionsownership restrictions would be void, and the transferee would acquire no rights in such shares, options or warrants. Thus, a purported acquiror would have no right to vote such shares or to receive dividends. Moreover, upon our demand, by the
Company, a purported acquiror of shares, options or warrants would be required to transfer them to an agent designated by the Company.us. The agent, generally, would sell such shares, options or warrants, remit the proceeds thereof to the purported acquiror to the extent of such person'sperson’s purchase price for suchthe shares and, to the extent possible, remit the balance of the proceeds to such person'sperson’s transferor. A similar procedure would be applied to any dividends paid to, and to the proceeds of any resale of shares, options or warrants by, the purported acquiror.
The Board
Our board of Directorsdirectors has the authority to designate a date as of which the Section 382 Ownership Restrictionsownership restrictions will no longer apply.
All certificates representing shares of Preferred Stockpreferred stock will bear a legend referring to the restrictions described above.
All persons who own, directly or by virtue of the applicable attribution rules of the Internal Revenue Code, more than 2% of the outstanding Preferred Stockpreferred stock of any series must give a written notice to the Companyus containing the information specified in the Certificateour certificate of Incorporationincorporation by January 3031 of each year. In addition, each stockholder shall upon demandwill be required to disclose to the Company suchus any information as the Companywe may request, in good faith, in order to determine the
Company'sour status as a REIT or to comply with Treasury Regulations promulgated under the REIT provisions of the Internal Revenue Code.
Depositary Shares
We may, at our option, elect to offer depositary shares, which represent receipts for fractional interests in shares of preferred stock rather than full shares of preferred stock. Each depositary share will be evidenced by a depositary receipt which will represent a fraction of a share of a particular series of preferred stock and will be issued as described below. The prospectus supplement relating to any series of depositary shares will state the fraction of a preferred share represented by each depositary share.
The description
set forth below
and in any Prospectus Supplement of
certainthe material provisions of the
Deposit Agreementdeposit agreement and of the
Depositary Sharesdepositary shares and
Depositary
Receipts (each as defined below) does not purport to be completedepositary receipts is only a summary and is
subject
to and qualified in its entirety by reference to the forms of
Deposit Agreementdeposit agreement and
Depositary Receiptsdepositary receipts relating to each series of the
Preferred Stock whichdepositary shares that have been or will be filed
withas an exhibit to or incorporated by reference in the
Commissionregistration statement of which this prospectus is a part, at or
prior tobefore the time of the
offeringissuance of
sucha series of
the Preferred Stock. If so indicated in a Prospectus
Supplement, thedepositary shares. The particular terms of
any series of Depositary Shares may differ from the
terms set forth herein.
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General
The Company may, at its option, elect to offer receipts fordepositary shares representing fractional interests ("Depositary Shares") in shares of Preferred Stock, rather than full
shares of Preferred Stock. In such event, receipts ("Depositary Receipts") for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to aany particular series of Preferred Stock) of
a share of a particular series of Preferred Stock,preferred stock will be issued as described below.
in the applicable prospectus supplement, which will supplement the information in this prospectus.The shares of any series of Preferred Stockpreferred stock represented by Depositary
Sharesdepositary shares will be deposited under a Deposit Agreement (the "Deposit Agreement")deposit agreement between the Companyus and the depositary (the "Depositary").depositary. Subject to the terms
of the Deposit Agreement,deposit agreement, each owner of a Depositary Sharedepositary share will be entitled, in proportion to the applicable fraction of a share of Preferred Stockpreferred stock represented by such Depositary Share,depositary share, to all the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and preferencesother distributions, qualifications and terms and conditions of redemption of the Preferred
Stockpreferred stock represented thereby (including dividend, voting, redemption, subscription
and liquidation rights).
by the depositary share.
Dividends and Other Distributions
The Depositarydepositary will distribute all cash dividends or other cash distributions received in respect of the Preferred Stockpreferred stock to the record Holdersholders of Depositary Sharesdepositary shares relating to such shares of Preferred Stockpreferred stock in proportion to the numbers of such Depositary Sharesdepositary shares owned by such Holders.
In the event ofholders.
If we make a distribution other than in cash, the Depositarydepositary will distribute property received by it to the record Holdersholders of Depositary Sharesdepositary shares in an equitable manner, unless the Depositarydepositary determines that it is not feasible to make suchthe distribution, in which case the Depositarydepositary may sell such property and distribute the net proceeds from such sale to such Holders.
the holders.
Withdrawal of Preferred Stock
Upon surrender of Depositary Receiptsdepositary receipts at the corporate trust office of the Depositary (unlessdepositary, unless the related Depositary Sharesdepositary shares have previously been called for redemption or converted into Excess Sharesexcess shares or otherwise), the holders thereofotherwise, each depositary receipt holder will be entitled to delivery at suchthe depositary’s corporate trust office, to or upon such holder'sthe holder’s order, of the number of whole or fractional shares of the class or series of Preferred
Sharespreferred stock and any money or other property represented by the Depositary Sharesdepositary shares evidenced by such Depositary Receipts.the depositary receipts. Holders of Depository Receiptsdepositary receipts will be entitled to receive whole or fractional shares of the related class or series of Preferred Sharespreferred stock on the basis of the proportionfraction of Preferred Sharesa share of preferred stock represented by each Depositary Sharedepositary share as specified in the applicable Prospectus Supplement,prospectus supplement, but holders of such Preferred Sharesthe preferred stock will not thereafter be entitled to receive Depositary Shares thereof.depositary shares representing the preferred stock after exchanging the depositary shares for preferred stock. If the Depositary Receiptsdepositary receipts delivered by the holder evidence a number of Depositary Sharesdepositary shares in excess of the number of Depositary
Sharesdepositary shares representing the number of shares of Preferred Sharespreferred stock to be withdrawn, the Depositarydepositary will deliver to suchthe holder at the same time a new Depositary
Receiptdepositary receipt evidencing such excess number of Depositary Shares.
depositary shares.
Redemption of Depositary Shares
If a series of
Preferred Stockpreferred stock represented by
Depositary Sharesdepositary shares is subject to redemption, the
Depositary Sharesdepositary shares will be redeemed from the proceeds received by the
Depositarydepositary resulting from the redemption, in whole or in part, of
suchthe series of
Preferred Stockpreferred stock held by the
Depositary.depositary. The redemption price per
Depositary Sharedepositary share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of the
Preferred Stock.preferred stock. Whenever
the Company redeemswe redeem shares of
Preferred Stockpreferred stock held by the
Depositary,depositary, the
Depositarydepositary will redeem as of the same redemption date the number of
Depositary Sharesdepositary shares representing the
redeemed shares of
Preferred Stock so redeemed.preferred stock. If fewer than all the
Depositary Sharesdepositary shares are to be redeemed, the
Depositary Sharesdepositary shares to be redeemed will be selected by lot,
pro rataproportionately or by any other equitable method as may be determined by the
Depositary.
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depositary.Voting the Preferred Stock
Upon receipt of notice of any meeting at which the Holdersholders of the Preferred
Stockpreferred stock are entitled to vote, the Depositarydepositary will mail the information contained in such noticesthe notice of meeting to the record Holdersholders of the Depositary Sharesdepositary shares relating to such Preferred Stock.the preferred stock. Each record Holderholder of such Depositary Sharesthese depositary shares on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositarydepositary as to the exercise of the voting rights pertaining to the amount of the Preferred Stockpreferred stock represented by such Holder's Depositary Shares.the holder’s depositary shares. The Depositaryrecord date for voting the depositary shares will be the same as the record date for voting the preferred stock. The depositary will endeavor, insofar as practicable, to vote the amount of the Preferred Stockpreferred stock represented by such
Depositary Sharesthe depositary shares in accordance with suchthe instructions, and the Companywe will
agree to take all reasonable action which may be deemed necessary by the Depositarydepositary in order to enable the Depositarydepositary to do so. The Depositarydepositary will abstain from voting the Preferred Stockpreferred stock to the extent it does not receive specific instructions from the Holderholder of Depositary Sharesdepositary shares representing such
Preferred Stock.
those shares of preferred stock.
Amendment and Termination of the Deposit Agreement
The
We and the depositary may amend the form of Depositary Receiptdepositary receipt evidencing the Depositary Sharesdepositary shares and any provision of the Deposit Agreement maydeposit agreement at any time be amended by agreement
between the Company and the Depositary.time. However, any amendment whichthat materially and adversely alters the rights of the Holdersholders of Depositary Sharesdepositary shares will not be effective unless such amendment has been approved by the Holdersholders of at least a majority of the Depositary Sharesdepositary shares then outstanding.outstanding approve the amendment. The Deposit Agreementdeposit agreement will only terminate if (i)(a) all outstanding Depositary Sharesdepositary shares have been redeemed or (ii)(b) there has been a final distribution in respect of the Preferred Stockpreferred stock in connection with any liquidation, dissolution or winding upwinding-up of the Companyour affairs and suchthat distribution has been distributed to the Holdersholders of the related Depositary
Shares.
depositary shares.
Charges of Depositary
The Company
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The CompanyWe will pay charges of the Depositarydepositary in connection with the initial deposit of the Preferred Stockpreferred stock and issuance of Depositary Receipts,depositary receipts, all withdrawals of Preferred Stockpreferred stock by owners of Depositary Sharesdepositary shares and any redemption of the Preferred Stock.preferred stock. Holders of Depositary Receiptsdepositary receipts will pay other transfer and other taxes and governmental charges and such other charges as are expressly provided in the Deposit Agreementdeposit agreement to be for their accounts.
account.
Resignation and Removal of Depositary
The Depositarydepositary may resign at any time by delivering to the Companyus notice of its election to do so, and the Companywe may at any time remove the Depositary,
any suchdepositary. The resignation or removal towill take effect upon the appointment of a successor Depositarydepositary and its acceptance of suchthe appointment. SuchThe successor Depositarydepositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000.
Restrictions on Ownership
In order to safeguard the Company against an inadvertent loss of our REIT status, the Deposit Agreementdeposit agreement will contain provisions similar to those in the
Certificateour certificate of Incorporationincorporation restricting the ownership and transfer of Depositary Shares.depositary shares. Such restrictions will be described in the applicable Prospectus Supplement.
Miscellaneous
prospectus supplement.
Reports; Liability of Depositary and Alexander’s, Inc.
The
Depositarydepositary will forward all reports and communications from
the Companyus which are delivered to the
Depositarydepositary and which
the Company iswe are required, or otherwise
determinesdetermine, to furnish to the
Holdersholders of the
Preferred Stock.
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preferred stock.Neither the Depositarydepositary nor the CompanyAlexander’s will be liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the Deposit Agreement.deposit agreement. The obligations of the CompanyAlexander’s and the Depositarydepositary under the Deposit Agreementdeposit agreement will be limited to performance in good faith of their duties thereunderunder the deposit agreement, and they will not be obligated to prosecute or defend any legal proceeding in respect of any Depositary Sharesdepositary shares or Preferred
Stockpreferred stock unless satisfactory indemnity is furnished. They may rely upon written advice of counsel or accountants, or information provided by persons presenting Preferred Stockpreferred stock for deposit, Holdersholders of Depositary Sharesdepositary shares or other persons believed to be competent and on documents believed to be genuine.
Description
DESCRIPTION OF COMMON STOCK
The following description of Common Stock
the material terms of our common stock is only a summary and is qualified in its entirety by reference to, the provisions contained in our certificate of incorporation and the by-laws governing the common stock.
As of November 2, 1995, 5,000,85024, 2008, 5,173,450 and 5,081,590 shares of Common Stockcommon stock were issued and outstanding. The Common Stock of the Companyoutstanding, respectively. Our common stock is listed on the NYSE under the symbol "ALX".
The“ALX.”
Dividend and Voting Rights of Holders of Common Stock
Holders of our common stock are entitled to receive dividends when, if and as declaredauthorized by the Boardour board of Directors of the Companydirectors out of assets legally available therefor, provided that if any shares of Preferred Stock are atto pay dividends.
Each common share entitles the time outstanding, the payment of dividends on Common Stock or other
distributions (including purchases of Common Stock) may be subject to the
declaration and payment of full cumulative dividends, and the absence of
arrearages in any mandatory sinking fund, on outstanding Preferred Stock.
The Holders of Common Stock are entitledholder to one vote for each share on all matters voted on by stockholders, including elections of directors. There is no cumulative voting in the election of directors, which means that the Holdersholders of a majority of the outstanding Common Stockcommon stock can elect all of the directors then standing for election. The
Our certificate of incorporation requires the affirmative vote of two-thirds of the outstanding shares of our stock entitled to vote before we may merge with another corporation.
Holders of Common Stockcommon stock do not have any conversion, redemption or preemptive rights to subscribe to any securities of the Company.our company. In the event of theour dissolution, liquidation or winding up, Holderswinding-up, after the payment or provision of Common
Stockour debts and other liabilities and the preferential amounts to which holders of our preferred stock are entitled, if any such preferred stock is outstanding, the holders of the common stock are entitled to share ratably in any assets remaining after the
satisfaction in full of the prior rights of creditors, including holders of the
Company's indebtedness, and the aggregate liquidation preference of any
Preferred Stock then outstanding.
for distribution to shareholders.
The Common Stockcommon stock has equal dividend, distribution, liquidation and other rights, and shall havethere are no preference, appraisal or exchange rights.rights applicable thereto. All outstanding shares of Common Stockcommon stock are, and any shares of Common Stockcommon stock offered by a Prospectus Supplement,prospectus supplement, upon issuance, will be, fully paid and non-assessable.
Thenonassessable.
Wachovia Bank, N.A., is the transfer agent for the Common Stock is First Fidelity Bank, N.A.,
Newark, New Jersey.
common stock.
Restrictions on Ownership of Common Stock
The CertificateCommon Stock Beneficial Ownership Limit. Our certificate of Incorporationincorporation contains a number of provisions whichthat restrict the ownership and transfer of shares and which are designed to safeguard the Companyus against an inadvertent loss of REIT status. These provisions also seek to deter non-negotiated acquisitions of, and proxy fights for, us by third parties. In order to prevent any Company stockholder from owning shares in an amount which would
causemaintain our qualification as a REIT under the Internal Revenue Code, not more than 50% inof the value of theour outstanding shares of the Company tocapital stock may be owned, directly or constructively, by five or fewer individuals at any time during the Certificatelast half of Incorporation contains a limitation that restricts, with certain exceptions, stockholders from owning,
undertaxable year and the shares of capital stock 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. The Internal Revenue Code defines “individuals” to include some entities for purposes of the preceding sentence. All references to a holder’s ownership of common stock in this section assumes application of the applicable attribution rules of the Internal Revenue Code under which, for example, a holder is deemed to own shares owned by his or her spouse.
Our certificate of incorporation contains a limitation that restricts stockholders from owning more than 4.9% of the outstanding shares of Common Stock (the "Common Stock Beneficial Ownership
Limit").common stock. In certain circumstances, the Boardour board of Directorsdirectors may reduce the Common
Stock Beneficial Ownership Limitcommon stock beneficial ownership limit to as lowlittle as 2%, but only if any person who would ownowns shares in excess of such new limit could continue to do so. The BoardOur board of Directorsdirectors has, subject to certain conditions and limitations, exempted our manager, Vornado Realty Trust, and certain of its affiliates from the Common Stock Beneficial Ownership
Limitation.
Stockholderscommon stock beneficial ownership limit. As a result, it is less likely as a practical matter that another holder of common stock could obtain an exemption.
Attribution Rules. Investors should be aware that under the applicable attribution rules of the Internal Revenue Code, events other than a purchase or other transfer of Common Stockcommon stock can result in ownership under the applicable
attribution rules of the Code, of Common Stockcommon stock in excess of the Common Stock
Beneficial Ownership Limit.common stock beneficial ownership limit. For instance, if two stockholders, each of whom owns under the applicable attribution rules of the Code 3% of the outstanding Common Stock,common stock, were to marry, then after their marriage both stockholders would be deemed to own under the applicable attribution rules of the Code, 6% of the outstanding shares of Common Stock,common stock, which is in -31-
excess of the Common Stock Beneficial Ownership Limit.common stock beneficial ownership limit. Similarly, if a stockholder who owns under the applicable attribution rules of the Code, 4% of the outstanding Common Stockcommon stock were to purchase a 50% interest in a corporation which owns 3% of the outstanding Common Stock,common stock, then the stockholder would be deemed to own
under the applicable attribution rules of the Code, 5.5% of the outstanding shares of Common Stock. Stockholders are urged tocommon stock. You should consult theiryour own tax advisersadvisors concerning the application of the attribution rules of the Internal Revenue Code in theiryour particular circumstances. The Constructive Ownership Limit. Under the Internal Revenue Code, rental income received by a REIT from persons inwith respect to which the REIT is treated, under the applicable attribution rules of the Internal Revenue Code, as owning a 10% or greater interest does not constitute qualifying income for purposes of the income requirements that REITs must satisfy. For these purposes, a REIT is treated as owning any stock owned, under the applicable attribution rules of the Internal Revenue Code, by a person that owns 10% or more of the value of the outstanding shares of the REIT. Therefore,The attribution rules of the Internal Revenue Code applicable for these purposes are different from those applicable with respect to the common stock beneficial ownership limit. All references to a stockholder’s ownership of common stock in this section assume application of the applicable attribution rules of the Internal Revenue Code.
In order to ensure that our rental income of the Company will not be treated as nonqualifying income under the rule described above,in the preceding paragraph, and thus to ensure that therewe will not be an inadvertent loss ofinadvertently lose our REIT status as a result of the ownership of shares of a tenant, or a person that holds an interest in a tenant, the Certificateour certificate of Incorporation also
incorporation contains an ownership limit that restricts, with certain exceptions, stockholders from owning under the applicable attribution rules of the Code (which are different
from those applicable with respect to the Common Stock Beneficial Ownership
Limit), more than 9.9% of the outstanding shares of any class (the "Constructive
Ownership Limit"“common stock beneficial ownership limit”).
Stockholders should be aware that events other than a purchase or other transfer of shares can result in ownership, under the applicable attribution rules of the Internal Revenue Code, of shares in excess of the Constructive Ownership Limit.constructive ownership limit. As the attribution rules that apply with respect to the Constructive Ownership
Limitconstructive ownership limit differ from those that apply with respect to the Common Stock Beneficial
Ownership Limit,common stock beneficial ownership limit, the events other than a purchase or other transfer of shares which can result in share ownership in excess of the Constructive Ownership
Limitconstructive ownership limit can differ from those which can result in share ownership in excess of the Common Stock Beneficial Ownership Limit. Stockholderscommon stock beneficial ownership limit. You should consult theiryour own tax advisersadvisors concerning the application of the attribution rules of the Internal Revenue Code in theiryour particular circumstances.
The Certificate
Issuance of IncorporationExcess Stock if the Ownership Limits Are Violated. Our certificate of incorporation provides that a transfer of shares of Common Stockcommon stock that would otherwise result in ownership, under the applicable attribution rules of the Internal Revenue Code, of Common Stockcommon stock in excess of the Common Stock
Beneficial Ownership Limitcommon stock beneficial ownership limit or the Constructive Ownership Limit,constructive ownership limit, or which would cause the shares of beneficial interestcapital stock of the CompanyAlexander’s to be beneficially owned by fewer than 100 persons, will be null and voidwould have no effect and the purported transferee willwould acquire no rights or economic interest in such Common Stock.common stock. In addition, Common Stockcommon stock that would otherwise be owned, under the applicable attribution rules of the Internal Revenue Code, in excess of the Common Stock Beneficial Ownership Limitcommon stock beneficial ownership limit or the Constructive Ownership Limitconstructive ownership limit will be automatically exchanged for shares of Excess Stock that willexcess stock. These shares of excess stock would be transferred, by operation of law, to the Companyus as trustee of a trust for the exclusive benefit of a beneficiary designated by the purported transferee or purported Holder.holder. While so held in trust, the trustee shall vote the shares of Excess Stockexcess stock in the same proportion as the Holdersholders of the Common Stock and Preferred Stock, respectively, shall vote and suchoutstanding shares of Excess Stock are not entitled to participate in any dividends or
distributions made by the Company.common stock have voted. Any dividends or distributions received by the purported transferee or other purported Holderholder of such Excess Stock prior to
the excess stock before our discovery by the Company of the automatic exchange for Excess Stock shallshares of excess stock must be repaid to the Companyus upon demand.
If the purported transferee or purported
Holderholder elects to designate a beneficiary of an interest in the trust with respect to
such Excess Stock,the excess stock, he or she may only
designate a person whose ownership of the shares will not violate the
Common Stock
Beneficial Ownership Limitcommon stock beneficial ownership limit or the
Constructive Ownership Limit may be
designated, at which timeconstructive ownership limit. When the
shares of Excess Stockdesignation is made, the excess stock will be automatically exchanged for
sharescommon stock. Our certificate of
Common Stock. The Certificate of Incorporationincorporation contains provisions designed to ensure that the purported transferee or other purported
Holderholder of shares of
Excess Stockexcess stock may not receive in return for
such a transfertransferring an interest in the trust with respect to the excess stock, an amount that reflects any appreciation in the shares of
Common Stockcommon stock for which
suchthe shares of
Excess Stockexcess stock were exchanged during the period that
suchthe shares of
Excess Stockexcess stock were outstanding but will bear the burden of any decline in value during
suchthat period. Any amount received by a purported transferee or other purported
Holderholder for designating a beneficiary in excess of the amount permitted to be received must be turned over to
the Company. The Certificateus. Our certificate of
Incorporationincorporation provides that
the Companywe may purchase any shares of
Excess Stockexcess stock that have been automatically exchanged for shares of
Common Stockcommon stock as a result of a purported transfer or other event. The
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price at which the Companywe may purchase such Excess Stock shallthe excess stock will be equal to the lesser of (i) in the case of Excess Stock resulting from a purported transfer
for value, the price per share in the purported transfer that resulted in the
automatic exchange for Excess Stock or, in the case of Excess Stock resulting
from some other event, the market price of the Common Stock exchanged on the
date of the automatic exchange for Excess Stock and (ii) the market price of the
Common Stock exchanged for such Excess Stock on the date that the Company
accepts the deemed offer to sell such Excess Stock. The Company'sof: | · | in the case of shares of excess stock resulting from a purported transfer for value, the price per share in the purported transfer that resulted in the automatic exchange for shares of excess stock or, in the case of excess stock resulting from some other event, the market price of the shares of common stock exchanged on the date of the automatic exchange for excess stock, and |
| · | the market price of the shares of common stock exchanged for the excess stock on the date that we accept the deemed offer to sell the excess stock. |
Our purchase right with respect to Excess Stock shallexcess stock will exist for 90 days, beginning on the date that the automatic exchange for shares of Excess Stockexcess stock occurred or, if the Companywe did not receive a notice concerning the purported transfer that resulted in the automatic exchange for shares of Excess Stock,excess stock, the date that the Boardour board of Directorsdirectors determines in good faith that an exchange for Excess Stockexcess stock has occurred.
The Board
Other Provisions Concerning the Restrictions on Ownership. Our board of Directors of the Companydirectors may in its discretion exempt certain persons from the Common Stock Beneficial Ownership Limitcommon stock beneficial ownership limit or the Constructive
Ownership Limit,constructive ownership limit if evidence satisfactory to the Boardour board of Directorsdirectors is presented showing that such exemption will not jeopardize the Company'sour status as a REIT under the Internal Revenue Code. As a conditionBefore granting an exemption of such exemption, the Boardthis kind, our board of Directorsdirectors may
require a ruling from the Internal Revenue Service and/orIRS, an opinion of counsel satisfactory to it and/orand representations and undertakings from the applicant with respect to preserving theour REIT statusstatus.
Our board of the Company.
The Board of Directorsdirectors has, subject to certain conditions and limitations, exempted our manager, Vornado Realty Trust, and certain of its affiliates from the Common Stock Beneficial
Ownership Limitation.common stock beneficial ownership limit. As a result, it is unlikelyless likely as a practical matter that another Holderholder of Common Stockcommon stock could obtain an exemption.
The Board of Directors may, at any time, determine that the foregoing restrictions on ownership and transfer shallwill not apply if our board of directors determines that it is no longer apply.
in our best interests to attempt to qualify, or continue to qualify, as a REIT.
Sections 382 and 383 of the Internal Revenue Code of 1986, as amended,
impose limitations upon the utilization of a corporation'scorporation’s net operating loss and credit carryforwards and certain other tax attributes, following significant changes in the corporation'scorporation’s stock ownership. In order to preserve the Company'sour ability to use its net operating loss carryforwards to reduce its taxable income, the Certificateour certificate of Incorporationincorporation also contains additional provisions restricting the ownership of the Company'sour outstanding shares (the "Section“Section 382 Ownership Restrictions"ownership restrictions”). The Section 382 Ownership Restrictionsownership restrictions merely reduce the risk of certain occurrences that could cause such a limitation to arise. It is still possible that, due to transfers (either directly or indirectly) of the
Company'sour outstanding shares, the Companywe could become subject to a limitation under SectionsSection 382 andor 383.
The Certificate
Our certificate of Incorporationincorporation provides, in general, that, subject to the exceptions described in the next paragraph, no person may acquire shares of the
Company (orour company, or options or warrants to acquire such shares)shares, if as a result such person (or another person to which such shares were attributed under certain complex attribution rules, which differ in certain respects from those that apply for purposes of the Common Stock Beneficial Ownership Limitcommon stock beneficial ownership limit or the Constructive Ownership Limit)constructive ownership limit) would own, directly or under such attribution rules, 5% or more of the class of such outstanding shares (hereinafter, such person's "Ownership Interest Percentage"person’s “ownership interest percentage”). In addition, subject to the exceptions described in the next paragraph, no person whose Ownership Interest
Percentageownership interest percentage of a class of shares equals or exceeds 5% can acquire or transfer such shares, (oror options or warrants to acquire such shares).shares. The foregoing restrictions apply independently to each class of the Company'sour outstanding stock.
The foregoing restrictions do not apply to (i) acquisitions and transfers of shares of Common Stockcommon stock by certain persons (orand their affiliates whose ownership interest percentage of persons), whose
Ownership Interest Percentage of Common Stockcommon stock on September 21, 1993 was 5% or more, (ii) transfers of shares pursuant to an offering by the Company,us, to the extent determined by the Boardour board of Directors,directors, and (iii) other transfers of shares specifically approved by the Company's Boardour board of Directors.
directors.
Transfers of shares, options or warrants in violation of the Section 382
Ownership Restrictionsownership restrictions would be void, and the transferee would acquire no rights in such shares, options or warrants. Thus, a purported acquiror would have no right to vote such shares or to receive dividends. Moreover, upon
our demand,
by the
Company, a purported acquiror of
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shares, options or warrants would be required to transfer them to an agent designated by the Company.us. The agent, generally, would sell such shares, options or warrants, remit the proceeds thereof to the purported acquiror to the extent of such person'sperson’s purchase price for suchthe shares and, to the extent possible, remit the balance of the proceeds to such person'sperson’s transferor. A similar procedure would be applied to any dividends paid to, and to the proceeds of any resale of shares, options or warrants by, the purported acquiror.
The BoardOur board of Directorsdirectors has the authority to designate a date as of which the Section 382 Ownership Restrictionsownership restrictions will no longer apply.
All certificates representing shares of common stock will bear a legend referring to the restrictions described above.
All persons who own, directly or by virtue of the applicable attribution rules of the Internal Revenue Code, more than 2% of the shares of outstanding Common Stockcommon stock must give a written notice to the Companyus containing the information specified in the
Certificateour certificate of Incorporationincorporation by January 31 of each year. In addition, each stockholder shall upon demand be required to disclose to the Companyus such information as the Companywe may request, in good faith, in order to determine the
Company'sour status as a REIT or to comply with Treasury Regulations promulgated under the REIT provisions of the Internal Revenue Code.
IMPORTANT PROVISIONS OF DELAWARE LAW AND OUR CERTIFICATE OF INCORPORATION AND BY-LAWS
The ownership restrictions described abovefollowing is a summary of important provisions of Delaware law and our certificate of incorporation and by-laws which affect us and our stockholders. The description below is intended as only a summary. You can access complete information by referring to Delaware General Corporation Law and our certificate of incorporation and by-laws.
Business Combinations with Interested Stockholders Under Delaware Law
Section 203 of the Delaware General Corporation Law prevents a publicly held corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:
| · | before the date on which the person became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction in which the person became an interested stockholder, |
| · | the interested stockholder owned at least 85% of the outstanding voting stock of the corporation at the beginning of the transaction in which it became an interested stockholder, excluding stock held by directors who are also officers of the corporation and by employee stock plans that do not provide participants with the rights to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or |
| · | after the date on which the interested stockholder became an interested stockholder, the business combination is approved by the board of directors and the holders of two-thirds of the outstanding voting stock of the corporation voting at a meeting, excluding the voting stock owned by the interested stockholder. |
As defined in Section 203, an “interested stockholder” is generally a person owning 15% or more of the outstanding voting stock of the corporation. As defined in Section 203, a “business combination” includes mergers, consolidations, stock and assets sales and other transactions with the interested stockholder.
The provisions of Section 203 may have the effect of precluding acquisitiondelaying, deferring or preventing a change of control of Alexander’s, Inc.
Amendment of Our Certificate of Incorporation and By-Laws
Amendments to our certificate of incorporation must be approved by our board of directors. Unless otherwise required by law, our board of directors may amend our by-laws by a majority vote of the Company.directors then in office.
Meetings of Stockholders
Under our by-laws, we will hold annual meetings of our stockholders at a date and time as determined by our board of directors, chairman, vice chairman or president. Our by-laws require advance notice for our stockholders to make nominations of candidates for our board of directors or bring other business before an annual meeting of our stockholders. The chairman or vice chairman shall call special meetings of our stockholders whenever stockholders owning at least a majority of our issued and outstanding shares entitled to vote on matters to be submitted to stockholders shall request in writing such a meeting.
Board of Directors
Our board of directors is divided into three classes. As the term of each class expires, directors in that class will be elected for a term of three years and until their successors are duly elected and qualified. These staggered terms may reduce the possibility of an attempt to change control of Alexander’s.
DESCRIPTION OF DEBT WARRANTS
The Company
We may issue, Debt Warrantseither together with other debt securities or separately, debt warrants to purchase Debt Securities ("Debt
Warrants"). Debt Warrants may be issued independently or together withunderlying debt securities. We will issue debt warrants, if any, Debt
Securities and may be attached to or separate from such Debt Securities. The
Debt Warrants are to be issued under warrant agreements (each, a "Warrant
Agreement"“debt warrant agreement”) tothat would be entered into between the Companyus and a bank or trust company, as warrant agent (the "Warrant Agent"“debt warrant agent”), all as shall be set forth in the
Prospectus Supplement relating to Debt Warrants being offered pursuant thereto.
If so indicatedthat we will describe in a Prospectus Supplement,prospectus supplement.
General
You should read the applicable prospectus supplement for the terms of any Debt Warrants may
differ from the terms set forth below.
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants,warrants, including the following: (1) the title of such Debt Warrants; (2) the aggregate number of such
Debt Warrants; (3) the price or prices at which such Debt Warrants will be
issued and the procedures for adjusting such price; (4) the currency or
currencies, including composite currencies or currency units, in which the price
of such Debt Warrants may be payable; (5) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of such Debt
Warrants, and the procedures and conditions relating to the exercise of such
Debt Warrants; (6) the designation and terms of any related Debt Securities with
which such Debt Warrants are issued, and the number of such Debt Warrants issued
with each such Debt Security; (7) the currency or currencies, including
composite currencies or currency units, in which the principal of (or premium,
if any), or interest, if any, on the Debt Securities purchasable upon exercise
of such Debt Warrants will be payable; (8) the date, if any, on and after which
such Debt Warrants and the related Debt Securities will be separately
transferable; (9) the principal amount of Debt Securities purchasable upon
exercise of each Debt Warrant, and the price at which and the currency,
including composite currency or currency unit, in which such principal amount of
Debt Securities may be purchased upon such exercise; (10) the date on which the
right to exercise such Debt Warrants shall commence, and the date on which such
right shall expire; (11) the maximum or minimum number of such Debt Warrants
which may be exercised at any time; (12) a discussion of material federal income
tax considerations, if any; and (13) any other terms of such Debt Warrants and
terms, procedures and limitations relating to the exercise of such Debt
Warrants.
| · | the title and aggregate number of such debt warrants, |
| · | the initial offering price and the procedures for adjusting the initial offering price, |
| · | the currency, currencies or currency units in which the debt warrants are payable, |
| · | the designation, aggregate principal amount and other terms of the debt securities purchasable upon exercise of the debt warrants, |
| · | if applicable, the designation and terms of the debt securities with which the debt warrants are issued and the number of debt warrants issued with each debt security, |
| · | the currency, currencies or currency units in which the principal of, premium, if any, or interest, if any, is payable on the debt securities purchasable upon exercise of the debt warrants, |
| · | if applicable, the date on and after which the debt warrants and the related debt securities will be separately transferable, |
| · | the principal amount of debt securities purchasable upon exercise of one debt warrant and the price at which such principal amount of debt securities may be purchased upon such exercise, |
| · | the date on which the right to exercise the debt warrants will commence and the date on which such right will expire, |
| · | the maximum or minimum number of debt warrants which may be exercised at any time, |
| · | if applicable, a discussion of the material Federal income tax consequences applicable to the exercise of the debt warrants and to the debt securities purchasable upon the exercise of the debt warrants, and |
| · | any other terms of the debt warrants. |
Debt warrant certificates
willmay be
exchangeableexchanged for new debt warrant certificates of different denominations and,
Debt Warrantsif in registered form, may be presented for registration of transfer, and may be exercised at the corporate trust office of the
Warrant Agentdebt warrant agent or any other office indicated in the
Prospectus Supplement.prospectus supplement relating thereto. Prior to the exercise of
their Debt Warrants, Holders
of Debt Warrantsthe debt warrants, holders will not have any of
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the rights of Holdersholders of the Debt Securitiesdebt securities purchasable upon such exercise and will not be entitled to payments of principal, of (or premium, if any)any, or interest, if any, on the Debt Securities purchasable upon such exercise.
debt securities.Exercise of Debt Warrants
Each Debt Warrantoffered debt warrant will entitle the Holder of such Debt Warrantholder thereof to purchase
for cash such principal amount of Debt Securitiesunderlying debt securities at suchthe exercise price as
shall in each case be set forth in, or be determinable as set forth in,calculable from, the Prospectus Supplementprospectus supplement relating to the Debt Warrantssuch offered thereby. Debt
Warrants may be exercised at any time up to the close of business on the
expiration date set forth in the Prospectus Supplement relating to the Debt
Warrants offered thereby.debt warrants. After the close of business on the expiration date, unexercised Debt Warrantsdebt warrants will become void.
Debt Warrants
You may be exercised as set forth in the Prospectus Supplement
relatingexercise debt warrants by payment to the Debt Warrants offered thereby.debt warrant agent of the applicable exercise price and by delivery to the debt warrant agent of the related debt warrant certificate, properly completed. Upon receipt of such payment and the warrant certificate properly completed and duly executeddebt warrant certificates at the corporate trust office of the Warrant Agentdebt warrant agent or any other office indicated in the Prospectus
Supplement, the Companyprospectus supplement, we will, as soon as practicable, forwarddeliver the Debt
Securities purchasableamount of the underlying debt securities purchased upon such exercise. If lessfewer than all of the Debt Warrantsdebt warrants represented by suchany debt warrant certificate are exercised, a new debt warrant certificate will be issued for the remaining Debt Warrants.
unexercised debt warrants. If you hold a debt warrant, you must pay any tax or other governmental charge that may be imposed in connection with any transfer involved in the issuance of underlying debt securities purchased upon such exercise.
LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE
In this section, we describe special considerations that will apply to registered securities issued in global, i.e., book-entry form. First we describe the difference between legal ownership and indirect ownership of registered securities. Then we describe special provisions that apply to global securities.
WHO IS THE LEGAL OWNER OF A REGISTERED SECURITY?
Each debt security, share of common or preferred stock and depositary share in registered form will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities. We refer to those who have securities registered in their own names, on the books that we or the trustee or other agent maintain for this purpose, as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those who, indirectly through others, own beneficial interests in securities that are not registered in their own names as indirect owners of those securities. As we discuss below, indirect owners are not legal holders, and investors in securities issued in book-entry form or in street name will be indirect owners.
BOOK-ENTRY OWNERS
We expect to issue debt securities, shares of preferred stock and depositary shares in book-entry form only. However, we may issue shares of common stock in book-entry form. This means those securities will be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Under each indenture or other applicable agreement, only the person in whose name a security is registered is recognized as the holder of that security. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the securities and we will make all payments on the securities, including deliveries of shares of common or preferred stock in exchange for exchangeable debt securities, to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect owners, and not holders, of the securities.
STREET NAME OWNERS
In the future we may terminate a global security or issue securities initially in non-global form. In these cases, investors may choose to hold their securities in their own names or in street name. Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of those securities and we will make all payments on those securities, including deliveries of common or preferred shares in exchange for exchangeable debt securities, to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect owners, not holders, of those securities.
LEGAL HOLDERS
Our obligations, as well as the obligations of the trustee under either indenture and the obligations, if any, of any other third parties employed by us, the trustee or any agents, run only to the holders of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect owner of a security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for that payment or notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to the indirect owners but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose, e.g., to amend the indenture for a series of debt securities or to relieve us of the consequences of a default or of our obligation to comply with a particular provision of an indenture, we would seek the approval only from the holders, and not the indirect owners, of the relevant securities. Whether and how the holders contact the indirect owners is up to the holders.
When we refer to “you” in this section of the prospectus, we mean those who invest in the securities being offered by this prospectus, whether they are the holders or only indirect owners of those securities. When we refer to “your securities” in this section of the prospectus, we mean the securities in which you will hold a direct or indirect interest.
SPECIAL CONSIDERATIONS FOR INDIRECT OWNERS
If you hold securities through a bank, broker or other financial institution, either in book-entry form or in street name, you should check with your own institution to find out:
| · | how it handles securities payments and notices, |
| · | whether it imposes fees or charges, |
| · | how it would handle a request for the holders’ consent, if ever required, |
| · | whether and how you can instruct it to send you securities registered in your own name so you can be a holder, if that is permitted in the future, |
| · | how it would exercise rights under the securities if there were a default or other event triggering the need for holders to act to protect their interests, and |
| · | if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters. |
WHAT IS A GLOBAL SECURITY?
A global security is issued in book-entry form only. Each security issued in book-entry form will be represented by a global security that we deposit with and register in the name of one or more financial institutions or clearing systems, or their nominees, which we select. A financial institution or clearing system that we select for any security for this purpose is called the “depositary” for that security. A security will usually have only one depositary but it may have more.
Each series of these securities will have one or more of the following as the depositaries:
| · | The Depository Trust Company, New York, New York, which is known as “DTC,” |
| · | a financial institution holding the securities on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear system, which is known as “Euroclear,” |
| · | a financial institution holding the securities on behalf of Clearstream Banking, societe anonyme, Luxembourg, which is known as “Clearstream,” and |
| · | any other clearing system or financial institution named in the applicable prospectus supplement. |
The depositaries named above may also be participants in each other’s systems. Thus, for example, if DTC is the depositary for a global security, investors may hold beneficial interests in that security through Euroclear or Clearstream, as DTC participants. The depositary or depositaries for your securities will be named in your prospectus supplement and if none is named, the depositary will be DTC.
A global security may represent one or any other number of individual securities. Generally, all securities represented by the same global security will have the same terms. We may, however, issue a global security that represents multiple securities of the same kind, such as debt securities, that have different terms and are issued at different times. We call this kind of global security a master global security. Your prospectus supplement will indicate whether your securities are represented by a master global security.
A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations arise. We describe those situations below under “—Holder’s Option to Obtain a Non-Global Security; Special Situations When a Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all securities represented by a global security, and investors will be permitted to own only indirect interests in a global security. Indirect interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. ��Thus, an investor whose security is represented by a global security will not be a holder of the security, but only an indirect owner of an interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be issued in global form only, then the security will be represented by a global security at all times unless and until the global security is terminated. We describe the situations in which this can occur below under “—Holder’s Option to Obtain a Non-Global Security; Special Situations When a Global Security Will Be Terminated.” If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry clearing system.
SPECIAL CONSIDERATIONS FOR GLOBAL SECURITIES
As an indirect owner, an investor’s rights relating to a global security will be governed by the account rules of the depositary and those of the investor’s financial institution or other intermediary through which it holds its interest (e.g., Euroclear or Clearstream, if DTC is the depositary), as well as general laws relating to securities transfers. We do not recognize this type of investor or any intermediary as a holder of securities and instead deal only with the depositary that holds the global security.
If securities are issued only in the form of a global security, an investor should be aware of the following:
| · | an investor cannot cause the securities to be registered in his or her own name, and cannot obtain non-global certificates for his or her interest in the securities, except in the special situations we describe below, |
| · | an investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection of his or her legal rights relating to the securities, as we describe above under “—Who Is the Legal Owner of a Registered Security?,” |
| · | an investor may not be able to sell interests in the securities to some insurance companies and other institutions that are required by law to own their securities in non-book-entry form, |
| · | an investor may not be able to pledge his or her interest in a global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective, |
| · | the depositary’s policies will govern payments, deliveries, transfers, exchanges, notices and other matters relating to an investor’s interest in a global security, and those policies may change from time to |
| | time. We, the trustee and any agents will have no responsibility for any aspect of the depositary’s policies, actions or records of ownership interests in a global security. We, the trustee and any agents also do not supervise the depositary in any way, |
| · | the depositary will require that those who purchase and sell interests in a global security within its book-entry system use immediately available funds and your broker or bank may require you to do so as well, and |
| · | financial institutions that participate in the depositary’s book-entry system and through which an investor holds its interest in the global securities, directly or indirectly, may also have their own policies affecting payments, deliveries, transfers, exchanges, notices and other matters relating to the securities, and those policies may change from time to time. For example, if you hold an interest in a global security through Euroclear or Clearstream, when DTC is the depositary, Euroclear or Clearstream, as applicable, will require those who purchase and sell interests in that security through them to use immediately available funds and comply with other policies and procedures, including deadlines for giving instructions as to transactions that are to be effected on a particular day. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the policies or actions or records of ownership interests of any of those intermediaries. |
HOLDER’S OPTION TO OBTAIN A NON-GLOBAL SECURITY; SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED
If we issue any series of securities in book-entry form but we choose to give the beneficial owners of that series the right to obtain non-global securities, any beneficial owner entitled to obtain non-global securities may do so by following the applicable procedures of the depositary, any transfer agent or registrar for that series and that owner’s bank, broker or other financial institution through which that owner holds its beneficial interest in the securities. For example, in the case of a global security representing shares of preferred stock or depositary shares, a beneficial owner will be entitled to obtain a non-global security representing its interest by making a written request to the transfer agent or other agent designated by us. If you are entitled to request a non-global certificate and wish to do so, you will need to allow sufficient lead-time to enable us or our agent to prepare the requested certificate.
In addition, in a few special situations described below, a global security will be terminated and interests in it will be exchanged for certificates in non-global form representing the securities it represented. After that exchange, the choice of whether to hold the securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders. We have described the rights of holders and street name investors above under “—Who Is the Legal Owner of a Registered Security?”
The special situations for termination of a global security are as follows:
| · | if the depositary notifies us that it is unwilling or unable to continue as depositary for that global security or the depositary has ceased to be a clearing agency registered under the Securities Exchange Act of 1934, and in either case we do not appoint another institution to act as depositary within 90 days, |
| · | in the case of a global security representing debt securities, if an event of default has occurred with regard to the debt securities and has not been cured or waived, or |
| · | any other circumstances specified for this purpose in the applicable prospectus supplement. |
If a global security is terminated, only the depositary, and not we or the trustee for any debt securities, is responsible for deciding the names of the institutions in whose names the securities represented by the global security will be registered and, therefore, who will be the holders of those securities.
CONSIDERATIONS RELATING TO EUROCLEAR AND CLEARSTREAM
Euroclear and Clearstream are securities clearance systems in Europe. Both systems clear and settle securities transactions between their participants through electronic, book-entry delivery of securities against payment.
Euroclear and Clearstream may be depositaries for a global security. In addition, if DTC is the depositary for a global security, Euroclear and Clearstream may hold interests in the global security as participants in DTC.
As long as any global security is held by Euroclear or Clearstream, as depositary, you may hold an interest in the global security only through an organization that participates, directly or indirectly, in Euroclear or Clearstream. If Euroclear or Clearstream is the depositary for a global security and there is no depositary in the United States, you will not be able to hold interests in that global security through any securities clearance system in the United States.
Payments, deliveries, transfers, exchanges, notices and other matters relating to the securities made through Euroclear or Clearstream must comply with the rules and procedures of those systems. Those systems could change their rules and procedures at any time. We have no control over those systems or their participants and we take no responsibility for their activities. Transactions between participants in Euroclear or Clearstream, on one hand, and participants in DTC, on the other hand, when DTC is the depositary, would also be subject to DTC’s rules and procedures.
SPECIAL TIMING CONSIDERATIONS FOR TRANSACTIONS IN EUROCLEAR AND CLEARSTREAM
Investors will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers, exchanges, notices and other transactions involving any securities held through those systems only on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
In addition, because of time-zone differences, U.S. investors who hold their interests in the securities through these systems and wish to transfer their interests, or to receive or make a payment or delivery or exercise any other right with respect to their interests, on a particular day may find that the transaction will not be affected until the next business day in Luxembourg or Brussels, as applicable. Thus, investors who wish to exercise rights that expire on a particular day may need to act before the expiration date. In addition, investors who hold their interests through both DTC and Euroclear or Clearstream may need to make special arrangements to finance any purchases or sales of their interests between the U.S. and European clearing systems, and those transactions may settle later than would be the case for transactions within one clearing system.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary ofdiscussion summarizes the taxation of the CompanyAlexander’s, Inc. and the material federalFederal income tax consequences to Holdersholders of the Securities. The summary sets
forth the opinion of Shearman & Sterling, counsel to the Company, as to the
material federal incomecommon stock, preferred stock, debt warrants and debt securities that are not original issue discount or zero coupon debt securities for your general information only. It is not tax consequences to Holders of the Securities.advice. The tax treatment of a Holder of Securitiesthese holders will vary depending upon the Holder'sholder’s particular situation, and this discussion addresses only Holdersholders that hold Securitiesthese securities as capital assets and does not purport to deal with all aspects of taxation that may be relevant to particular Holdersholders in light of their personal investment or tax circumstances, orcircumstances. This section also does not deal with all aspects of taxation that may be relevant to certain types of Holders (including
dealers in securities or currencies, banks, tax-exempt organizations, life
insurance companies, persons that hold Securities that are a hedge or that are
hedged against currency risks or that are partholders to which special provisions of a straddle or conversion
transaction) subject to special treatment under the federalFederal income tax laws.
laws apply, including:
| · | dealers in securities or currencies, |
| · | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, |
| · | tax-exempt organizations, |
| · | certain insurance companies, |
| · | persons liable for the alternative minimum tax, |
| · | persons that hold securities that are a hedge, that are hedged against interest rate or currency risks or that are part of a straddle or conversion transaction, and |
| · | U.S. shareholders or U.S. debt security holders whose functional currency is not the U.S. dollar. |
This summary is based on the Internal Revenue Code, its legislative history, existing and proposed regulations thereunder,under the Internal Revenue Code, published rulings and court decisions, alldecisions. This summary describes the provisions of these sources of law only as they are currently in effect and all subject toeffect. All of these sources of law may change at any time, perhaps with
retroactive effect.
INVESTORS ARE URGEDand any change in the law may apply retroactively.
WE URGE YOU TO CONSULT WITH THEIRYOUR OWN TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEMYOU OF THE ACQUISITION, OWNERSHIPACQUIRING, OWNING AND SALESELLING SHARES OF COMMON STOCK, PREFERRED STOCK AND FIXED RATE DEBT SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SUCH ACQUISITION, OWNERSHIPACQUIRING, OWNING AND SALESELLING THESE SECURITIES IN THEIRYOUR PARTICULAR CIRCUMSTANCES AND POTENTIAL CHANGES IN APPLICABLE LAWS.
Taxation
TAXATION OF ALEXANDER’S, INC. AS A REIT
In the opinion of the Company as a REIT
General
The Company believes that,Shearman & Sterling LLP, commencing with its taxable year endingended December 31, 1995, itAlexander’s, Inc. has been organized and has operated in such a manner as to qualifyconformity with the requirements for qualification and taxation as a REIT under Sections 856 through 860the Internal Revenue Code, and Alexander’s, Inc.’s proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Internal Revenue Code. Investors should be aware, however, that opinions of counsel are not binding upon the IRS or any court.
In providing its opinion, Shearman & Sterling LLP is relying, as to certain factual matters, upon the statements and representations contained in certificates provided to Shearman & Sterling LLP by Alexander’s, Inc.
Alexander’s, Inc.’s qualification as a REIT will depend upon the continuing satisfaction by Alexander’s, Inc. of the Code. The Companyrequirements of the Internal Revenue Code relating to qualification for REIT status. Some of these requirements depend upon actual operating results, distribution levels, diversity of stock ownership, asset composition, source of income and record keeping. Accordingly, while Alexander’s, Inc. intends to continue to qualify to be taxed as a REIT, but no assurancethe actual results of continuedAlexander’s, Inc.’s operations for any particular year might not
satisfy these requirements. Shearman & Sterling LLP will not monitor the compliance of Alexander’s, Inc. with the requirements for REIT qualification can be given.
on an ongoing basis.
The sections of the
Internal Revenue Code applicable to REITs are highly technical and complex. The
following discussion summarizes material aspects
thereof are summarized below.
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of these sections of the Internal Revenue Code.As a REIT, the CompanyAlexander’s, Inc. generally will not be subjecthave to federalpay Federal corporate income taxes on its net income that isit currently distributeddistributes to stockholders. This treatment substantially eliminates the "double taxation" (at“double taxation” at the corporate and stockholder levels)levels that generally results from investment in a regular corporation.
However, the CompanyAlexander’s, Inc. will be subjecthave to federalpay Federal income tax as follows. First, the Company will be taxedfollows:
| · | First, Alexander’s, Inc. will have to pay tax at regular corporate rates on any undistributed real estate investment trust taxable income, including undistributed net capital gains. |
| · | Second, under certain circumstances, Alexander’s, Inc. may have to pay the alternative minimum tax on its items of tax preference. |
| · | Third, if Alexander’s, Inc. has (a) net income from the sale or other disposition of “foreclosure property,” as defined in the Internal Revenue Code, which is held primarily for sale to customers in the ordinary course of business, or (b) other non-qualifying income from foreclosure property, it will have to pay tax at the highest corporate rate on that income. |
| · | Fourth, if Alexander’s, Inc. has net income from “prohibited transactions,” as defined in the Internal Revenue Code, Alexander’s, Inc. will have to pay a 100% tax on that income. Prohibited transactions are, in general, certain sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. |
| · | Fifth, if Alexander’s, Inc. fails to satisfy the 75% gross income test or the 95% gross income test, as discussed below under “—Requirements for Qualification—Income Tests,” but has nonetheless maintained its qualification as a REIT because Alexander’s, Inc. has satisfied some other requirements, it will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the greater of (i) 75% of Alexander’s, Inc.’s gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and (ii) 90% of Alexander’s, Inc.’s gross income (95% for taxable years ending before January 1, 2001) over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied by (b) a fraction intended to reflect Alexander’s, Inc.’s profitability. |
| · | Sixth, if Alexander’s, Inc. fails to distribute during each calendar year at least the sum of (1) 85% of its REIT ordinary income for that year, (2) 95% of its REIT capital gain net income for that year and (3) any undistributed taxable income from prior periods, Alexander’s, Inc. would have to pay a 4% excise tax on the excess of that required distribution over the amounts actually distributed. |
| · | Seventh, if Alexander’s, Inc. acquires any asset from a C corporation in certain transactions in which Alexander’s, Inc. must adopt the basis of the asset or any other property in the hands of the C corporation as the basis of the asset in the hands of Alexander’s, Inc., and Alexander’s, Inc. recognizes gain on the disposition of that asset during the 10-year period beginning on the date on which Alexander’s, Inc. acquired that asset, then Alexander’s, Inc. will have to pay tax on the built-in gain at the highest regular corporate rate. A C corporation means generally a corporation that has to pay full corporate-level tax. |
| · | Eighth, if Alexander’s, Inc. receives non-arm’s length income from a taxable REIT subsidiary (as defined under “—Requirements for Qualification—Asset Tests”), or as a result of services provided by a taxable REIT subsidiary to tenants of Alexander’s, Inc., Alexander’s, Inc. will be subject to a 100% tax on the amount of Alexander’s, Inc.’s non-arm’s length income. |
| · | Ninth, if Alexander’s, Inc. fails to satisfy a REIT asset test, as described below, due to reasonable cause and Alexander’s, Inc. nonetheless maintains its REIT qualification because of specified cure provisions, |
| Alexander’s, Inc. will generally be required to pay a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the nonqualifying assets that caused Alexander’s, Inc. to fail such test. |
| · | Tenth, if Alexander’s, Inc. fails to satisfy any provision of the Code that would result in its failure to qualify as a REIT (other than a violation of the REIT gross income tests or a violation of the asset tests described below) and the violation is due to reasonable cause, Alexander’s, Inc. may retain its REIT qualification but will be required to pay a penalty of $50,000 for each such failure. |
Alexander’s, Inc. has a net operating loss carryover as of December 31, 2007 of approximately $4,212,000. The net operating loss carryover would be available to reduce its REIT taxable income including
undistributed net capital gains. Second, under certain circumstances, the
Company may be subject to the "alternative minimum tax" on its items of tax
preference. Third, if the Company has (i) net income from the sale or other
disposition of "foreclosure property" which is held primarily for sale to
customers in the ordinary course of business or (ii) other non-qualifying income
from foreclosure property,as well as any built-in gain that it will be subject to tax at the highest corporate
rate on such income. Fourth, if the Company has net income from "prohibited
transactions" (which are, in general, certain sales or other dispositions of
property, other than foreclosure property, held primarily for sale to customers
in the ordinary course of business), such income will be subject to a 100% tax.
Fifth, if the Company should fail to satisfy the 75% gross income test or the
95% gross income test (as discussed below), but has nonetheless maintained its
qualification as a REIT because certain other requirements have been met, it
will be subject to a 100% tax on an amount equal to (a) the gross income
attributable to the greater of the amount by which the Company fails the 75% or
95% test, multiplied by (b) a fraction intended to reflect the Company's
profitability. Sixth, if the Company should fail to distribute during each
calendar year at least the sum of (i) 85% of its real estate investment trust
ordinary income for such year, (ii) 95% of its real estate investment trust
capital gain net income for such year, and (iii) any undistributed taxable
income from prior periods, the Company would be subject to a 4% excise tax on
the excess of such required distribution over the amounts actually distributed.
Seventh, if during the 10-year period (the "Recognition Period") beginning on
the first day of the first taxable year for which the Company qualified as a
REIT, the Company recognizes gain on the disposition of any asset held by the
Company as of the beginning of the Recognition Period, then, to the extent of
the excess of (a) fair market value of such asset as of the beginning of the
Recognition Period over (b) the Company's adjusted basis in such asset as of the
beginning of the Recognition Period (the "Built-in Gain"), such gain will be
subject to tax at the highest regular corporate rate pursuant to Treasury
regulations that have not been promulgated; provided, however, that the Company
shall not be subject to tax on recognized Built-in Gain with respect to assets
held as of the first day of the Recognition Period to the extent that the
aggregate amount of such recognized Built-in Gain exceeds the net aggregaterecognizes. The amount of the Company's unrealized Built-in Gain as of the first day of the
Recognition Period. Eighth, if the Company acquires any asset from a C
corporation (i.e., generally a corporationnet operating loss carryover is subject to full corporate-level tax)
in certain transactions in which the basis of the asset in the hands of the
Company is determined by reference to the basis of the asset (or any other
property) in the hands of the C corporation,audit and the Company recognizes gain on
the disposition of such asset during the Recognition Period beginning on the
date on which such asset was acquiredadjustment by the Company, then, pursuant to the
Treasury regulations that have not yet been issued and to the extent of the
Built-in Gain, such gain will be subject to tax at the highest regular corporate
rate.
Requirements for Qualification
IRS.
REQUIREMENTS FOR QUALIFICATION
The Internal Revenue Code defines a REIT as a corporation, trust or association (1) which is managed by one or more trustees or directors, (2) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest, (3) which would otherwise be taxable as a domestic
corporation, but for Sections 856 through 859 of the Code, (4) which is neither
a financial institution nor an insurance company subject to certain provisions
of the Code, (5) the beneficial ownership of which is held by 100 or more
persons, (6) during the last half of each taxable year, not more than 50% in
value of the outstanding stock of which is owned, directly or constructively, by
five or fewer individuals (as defined in the Code to include certain entities)
and (7) which meets certain other tests, described below, regarding the nature
of its income and assets. directors:
| · | the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest, |
| · | which would otherwise be taxable as a domestic corporation, but for Sections 856 through 859 of the Internal Revenue Code, |
| · | which is neither a financial institution nor an insurance company to which certain provisions of the Internal Revenue Code apply, |
| · | the beneficial ownership of which is held by 100 or more persons, |
| · | during the last half of each taxable year, not more than 50% in value of the outstanding stock of which is owned, directly or constructively, by five or fewer individuals, as defined in the Internal Revenue Code to include certain entities, and |
| · | which meets certain other tests, described below, regarding the nature of its income and assets. |
The Internal Revenue Code provides that the conditions (1) to (4)described in the first through fourth bullet points above must be met during the entire taxable year and that the condition (5)described in the fifth bullet point above must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Conditions (5) and (6) do not apply until
after
Alexander’s, Inc. has satisfied the conditions described in the first
taxable year for which an election is made to be taxed as a
REIT.
The Company has satisfied condition (5)through fifth bullet points of the preceding paragraph and believes that it
also has
also
satisfied
the condition
(6).described in the sixth bullet point of the preceding paragraph. In addition,
the Company's CertificateAlexander’s, Inc.’s certificate of
Incorporationincorporation provides for restrictions regarding the ownership and transfer of
the Company's
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shares, whichAlexander’s, Inc.’s shares. These restrictions are intended to assist the CompanyAlexander’s, Inc. in continuing to satisfy the share ownership requirements described in (5)the fourth and (6) above.fifth bullet points of the preceding paragraph. The ownership and transfer restrictions pertaining to the Common Stockcommon stock are described abovein this prospectus under the headings "Description of Capital Stock--Description of Preferred
Stock--Restrictions on Ownership" and "Description of Capital Stock--Descriptionheading “Description of Common Stock-RestrictionsStock—Restrictions on Ownership."
The CompanyOwnership of Common Stock.” Alexander’s, Inc. owns and operates a number of properties through wholly-owned corporate subsidiaries. Internal Revenue Code Section 856(i) provides that unless a REIT makes an election to treat the corporation as a taxable REIT subsidiary, a corporation which is a "qualified“qualified REIT subsidiary" shallsubsidiary,” as defined in the Internal Revenue Code, will not be treated as a separate corporation, and all assets, liabilities and items of income, deduction and credit of a "qualifiedqualified REIT subsidiary" shallsubsidiary will be treated as assets, liabilities and such
items (as the case may be)of these kinds of the REIT. Thus, in applying the requirements described herein, the Company's "qualifiedin this section, Alexander’s, Inc.’s qualified REIT subsidiaries"subsidiaries will be ignored, and all assets, liabilities and items of income, deduction and credit of suchthese subsidiaries will be treated as assets, liabilities and such items (as the case
may be) of the Company. The Companythese kinds of Alexander’s, Inc. Alexander’s, Inc. believes that all of its wholly-owned corporate subsidiaries are "qualifiedqualified REIT subsidiaries."
In the casesubsidiaries, except
Alexander’s of Brooklyn II LLC, Kings Plaza Lender LLC and Rego Park Residential LLC, whch are taxable REIT subsidiaries, as are SMB Tenant Services, SMB Tenant Services Floaters LLC, SMB Holding LLC and Vornado Office Inc.
If a REIT that is a partner in a partnership, Treasury regulations provide that the REIT will be deemed to own its proportionate share of the assets of the partnership and will be deemed to be entitled to the income of the partnership attributable to suchthat share. In addition, the character of the assets and gross income of the partnership will retain the same character in the hands of the REIT for purposes of Section 856 of the Internal Revenue Code, including satisfying the gross income tests and the asset tests. Thus, the Company'sAlexander’s, Inc.’s proportionate share of the assets, liabilities and items of income of any partnership in which the CompanyAlexander’s, Inc. is a partner will be treated as assets, liabilities and items of income of the CompanyAlexander’s, Inc. for purposes of applying the requirements described herein.
in this section. Thus, actions taken by partnerships in which Alexander’s, Inc. owns an interest, either directly or through one or more tiers of partnerships or qualified REIT subsidiaries, can affect Alexander’s, Inc.’s ability to satisfy the REIT income and assets tests and the determination of whether Alexander’s, Inc. has net income from prohibited transactions. See the fourth bullet point under “—Taxation of Alexander’s, Inc. as a REIT” above for a discussion of prohibited transactions. Alexander’s, Inc. is not currently a partner in a partnership.
Taxable REIT Subsidiaries. A taxable REIT subsidiary is any corporation in which a REIT directly or indirectly owns stock, provided that the REIT and that corporation make a joint election to treat that corporation as a taxable REIT subsidiary. The election can be revoked at any time as long as the REIT and the taxable REIT subsidiary revoke such election jointly. In addition, if a taxable REIT subsidiary holds, directly or indirectly, more than 35% of the securities of any other corporation other than a REIT (by vote or by value), then that other corporation is also treated as a taxable REIT subsidiary. A corporation can be a taxable REIT subsidiary with respect to more than one REIT.
A taxable REIT subsidiary is subject to Federal income tax at regular corporate rates (currently a maximum rate of 35%), and may also be subject to state and local taxation. Any dividends paid or deemed paid by any one of Alexander’s, Inc.’s taxable REIT subsidiaries will also be taxable, either (1) to Alexander’s, Inc. to the extent the dividend is retained by Alexander’s, Inc., or (2) to Alexander’s, Inc.’s shareholders to the extent the dividends received from the taxable REIT subsidiary are paid to Alexander’s, Inc.’s shareholders. Alexander’s, Inc. may hold more than 10% of the stock of a taxable REIT subsidiary without jeopardizing its qualification as a REIT notwithstanding the rule described below under “—Asset Tests” that generally precludes ownership of more than 10% of any issuer’s securities. However, as noted below, in order for Alexander’s, Inc. to qualify as a REIT, the securities of all of the taxable REIT subsidiaries in which it has invested either directly or indirectly may not represent more than 20% (25% for taxable years beginning on or after January 1, 2009) of the total value of its assets. Alexander’s, Inc. expects that the aggregate value of all of its interests in taxable REIT subsidiaries will represent less than 20% (or 25%, after 2008) of the total value of its assets; however, Alexander’s, Inc. cannot assure that this will always be true. Other than certain activities related to operating or managing a lodging or health care facility as more fully described below under “—Income Tests.Tests,” a taxable REIT subsidiary may generally engage in any business including the provision of customary or non-customary services to tenants of the parent REIT.
INCOME TESTS. In order to maintain its qualification as a REIT, the CompanyAlexander’s, Inc. annually must satisfy threetwo gross income requirements. First, at least 75% of
the Company's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property"--which term generally includes expenses of the Company
| · | First, Alexander’s, Inc. must derive at least 75% of its gross income, excluding gross income from prohibited transactions, for each taxable year directly or indirectly from investments relating to real property or mortgages on real property, including “rents from real property,” as defined in the Internal Revenue Code, or from certain types of temporary investments. Rents from real property generally include expenses of Alexander’s, Inc. that are paid or reimbursed by tenants. |
| · | Second, at least 95% of Alexander’s, Inc.’s gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from real property investments as described in the preceding bullet point, dividends, interest and gain from the sale or disposition of stock or securities, or from any combination of these types of source. |
Rents that are
paid or reimbursed by tenants--and, in certain circumstances, interest) or from
certain types of temporary investments. Second, at least 95% of the Company's
gross income (excluding gross income from prohibited transactions) for each
taxable year must be derived from such real property investments, dividends,
interest and gain from the sale or disposition of stock or securities (or from
any combination of the foregoing). Third, short-term gain from the sale or other
disposition of stock or securities, gain from prohibited transactions and gain
on the sale or other disposition of real property held for less than four years
(apart from involuntary conversions and sales of foreclosure property) must
represent less than 30% of the Company's gross income (including gross income
from prohibited transactions) for each taxable year.
Rents received by the CompanyAlexander’s, Inc. receives will qualify as "rentsrents from real property"property in satisfying the gross income requirements for a REIT described above only if the rents satisfy several conditions are met. First, the amount of rent must not be based 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 terms "rents from real
property" solely by reason of being based on a fixed percentage or percentages
of receipts or sales. Second, the Code provides that rents received from a
tenant will not qualify as "rents from real property" in satisfying the gross
income tests if the REIT, directly or under the applicable attribution rules,
owns a 10% or greater interest in such tenant (a "Related Party Tenant"). Third,
if rent attributable to personal property leased in connection with a lease of
real property is greater than 15% of the total rent received under the lease,
then the portion of rent attributable to such personal property will not qualify
as "rents from real property". Finally, for rents received to qualify as "rents
from real property," the REIT generally must not operate or manage the property
or furnish or render services to the tenants of such property, other than
through an independent contractor from whom the REIT derives no revenue;
provided, however, that the Company is not required to use an independent
contractor to perform certain services that are "usually or customarily
rendered" in connection with the rental of space for occupancy only and are not
otherwise considered "rendered to the occupant" of the property. The Companyconditions.
| · | First, the amount of rent must not be based 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 rents from real property solely because it is based on a fixed percentage or percentages of receipts or sales. |
| · | Second, the Internal Revenue Code provides that rents received from a tenant will not qualify as rents from real property in satisfying the gross income tests if the REIT, directly or under the applicable attribution rules, owns a 10% or greater interest in that tenant; except that for tax years beginning after December 31, 2000, rents received from a taxable REIT subsidiary under certain circumstances qualify as rents from real property even if Alexander’s, Inc. owns more than a 10% interest in the subsidiary. We refer to a tenant in which Alexander’s, Inc. owns a 10% or greater interest as a “related party tenant.” |
| · | Third, if rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to the personal property will not qualify as rents from real property. |
| · | Finally, for rents received to qualify as rents from real property, the REIT generally must not operate or manage the property or furnish or render services to the tenants of the property, other than through an independent contractor from whom the REIT derives no revenue or through a taxable REIT subsidiary. However, Alexander’s, Inc. may directly perform certain services that landlords usually or customarily render when renting space for occupancy only or that are not considered rendered to the occupant of the property. |
Alexander’s, Inc. does not and will not charge rent for any property to a Related Party Tenant,
and the Companyderive significant rents from related party tenants. Alexander’s, Inc. also does not and will not derive rental income attributable to personal property, (otherother than personal property leased in connection with the lease of real property, the amount of which is less than 15% of the total rent received under the lease). The Companylease.
Alexander’s, Inc. directly performs services for some of its tenants. Alexander’s, Inc. does not believe that
anythe provision of
the
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these services that are performed for its tenants will cause its gross income attributable to suchthese tenants to fail to be treated as "rentsrents from real property."
If Alexander’s, Inc. were to provide services to a tenant that are other than those landlords usually or customarily provide when renting space for occupancy only, amounts received or accrued by Alexander’s, Inc. for any of these services will not be treated as rents from real property for purposes of the REIT gross income tests. However, the amounts received or accrued for these services will not cause other amounts received with respect to the property to fail to be treated as rents from real property unless the amounts treated as received in respect of the services, together with amounts received for certain management services, exceed 1% of all amounts received or accrued by Alexander’s, Inc. during the taxable year with respect to the property. If the sum of the amounts received in respect of the services to tenants and management services described in the preceding sentence exceeds the 1% threshold, then all amounts received or accrued by Alexander’s, Inc. with respect to the property will not qualify as rents from real property, even if Alexander’s, Inc. provides the impermissible services to some, but not all, of the tenants of the property. The term "interest"“interest” generally does not include any amount received or accrued, (directlydirectly or indirectly)indirectly, if the determination of suchthat 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"interest solely by reason of beingbecause it is based on a fixed percentage or percentages of receipts or sales.
From time to time, Alexander’s, Inc. may enter into hedging transactions with respect to one or more of its assets or liabilities. Alexander’s, Inc.’s hedging activities may include entering into interest rate swaps, caps, and floors, options to purchase these items, and futures and forward contracts. Except to the extent provided by Treasury Regulations, any income Alexander’s, Inc. derives from a hedging transaction that is clearly identified as such as specified in the Code, including gain from the sale or disposition of such a transaction, will not constitute gross income for purposes of the 75% or 95% gross income tests, and therefore will be exempt from these tests, but only to the extent that the transaction hedges indebtedness incurred or to be incurred by us to acquire or carry real estate.
The term “hedging transaction,” as used above, generally means any transaction Alexander’s, Inc. enters into in the normal course of its business primarily to manage risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, by Alexander’s, Inc. Alexander’s, Inc. intends to structure any hedging transactions in a manner that does not jeopardize its status as a REIT.
If the CompanyAlexander’s, Inc. fails to satisfy one or both of the 75% or 95% gross income tests for any taxable year, it may nevertheless qualify as a REIT for suchthat year if it is entitled to relief under certainsatisfies the requirements of other provisions of the Code.Internal Revenue Code that allow relief from disqualification as a REIT. These relief provisions generally will generally be available if the Company's failure to meet suchif:
| · | Alexander’s, Inc.’s failure to meet the income tests was due to reasonable cause and not due to willful neglect; and |
| · | Alexander’s, Inc. files a schedule of each item of income in excess of the limitations described above in accordance with regulations to be prescribed by the IRS |
Alexander’s, Inc. might not due to willful neglect, the Company
attaches a schedule of the sources of its income to its federal income tax
return, and any incorrect information on the schedule was not due to fraud with
intent to evade tax. It is not possible, however, to state whether in all
circumstances the Company would be entitled to the benefit of these relief provisions.provisions, however. As discussed abovein the fifth bullet point under "-- General,"“—Taxation of Alexander’s, Inc. as a REIT” above, even if these relief provisions apply, Alexander’s, Inc. would have to pay a tax would be imposed with respect toon the excess net income.
Asset Tests. The Company,
ASSET TESTS. Alexander’s, Inc., at the close of each quarter of its taxable year, also must also satisfy threevarious tests relating to the nature of its assets.
| · | First, at least 75% of the value of Alexander’s, Inc.’s total assets must be represented by real estate assets, including (a) real estate assets held by Alexander’s, Inc.’s qualified REIT subsidiaries, Alexander’s, Inc.’s allocable share of real estate assets held by partnerships in which Alexander’s, Inc. owns an interest and stock issued by another REIT, (b) for a period of one year from the date of Alexander’s, Inc.’s receipt of proceeds of an offering of its shares of beneficial interest or publicly offered debt with a term of at least five years, stock or debt instruments purchased with these proceeds and (c) cash, cash items and government securities. |
| · | Second, not more than 25% of Alexander’s, Inc.’s total assets may be represented by securities other than those in the 75% asset class. |
| · | Third, for taxable years beginning after December 31, 2000, but before January 1, 2009, not more than 20% (25% for taxable years beginning on or after January 1, 2009) of Alexander’s, Inc.’s total assets may constitute securities issued by taxable REIT subsidiaries and, of the investments included in the 25% asset class, the value of any one issuer’s securities, other than equity securities issued by another REIT or by a taxable REIT subsidiary, owned by Alexander’s, Inc. may not exceed 5% of the value of Alexander’s, Inc.’s total assets. Moreover, Alexander’s, Inc. may not own more than 10% of the vote or value of the outstanding securities of any one issuer, except for issuers that are REITs, qualified REIT subsidiaries or taxable REIT subsidiaries, or certain securities that qualify under a safe harbor provision of the Code (such as so-called “straight-debt” securities). Also, solely for the purposes of the 10% value test described above, the determination of Alexander’s, Inc.’s interest in the assets of any partnership or limited liability company in which it owns an interest will be based on Alexander’s, Inc.’s proportionate interest in any securities issued by the partnership or limited liability company, excluding for this purpose certain securities described in the Code. As a consequence, if the IRS successfully challenges the partnership status of any of the partnerships in which Alexander’s, Inc. maintains an interest, and the partnership is reclassified as a corporation or a publicly traded partnership taxable as a corporation Alexander’s, Inc. could lose its REIT status. |
Certain relief provisions may be available to Alexander’s, Inc. if it fails to satisfy the asset tests described above after the 30 day cure period. Under these provisions, Alexander’s, Inc. will be deemed to have met the 5% and 10% REIT asset tests if the value of its nonqualifying assets (i) does not exceed the Company'slesser of (a) 1% of the total value of its assets must be represented by real
estateat the end of the applicable quarter and (b) $10,000,000, and (ii) Alexander’s, Inc. disposes of the nonqualifying assets (including (i) real estate assets held bywithin (a) six months after the Company's qualified
REIT subsidiaries andlast day of the Company's allocable share of real estate assets held
by partnershipsquarter in which the Company owns an interest, (ii) stockfailure to satisfy the asset
tests is discovered or debt
instruments held for(b) the period of time prescribed by Treasury Regulations to be issued. For violations due to reasonable cause and not more than one year purchased withwillful neglect that are not described in the proceeds ofpreceding sentence, Alexander’s, Inc. may avoid disqualification as a stock offering or long-term (at least five years) debt offeringREIT under any of the Companyasset tests, after the 30 day cure period, by taking steps including (i) the disposition of the nonqualifying assets to meet the asset test within (a) six months after the last day of the quarter in which the failure to satisfy the asset tests is discovered or (b) the period of time prescribed by Treasury Regulations to be issued, (ii) paying a tax equal to the greater of (a) $50,000 or (b) the highest corporate tax rate multiplied by the net income generated by the nonqualifying assets, and (iii) stock issued by another REIT), cash, cash items and government
securities. Second, not more than 25% ofdisclosing certain information to the Company's total assets may be
represented by securities other than those in the 75% asset class. Third, of the
investments included in the 25% asset class, the value of any one issuer's
securities (other than securities issued by another REIT) owned by the Company
may not exceed 5% of the value of the Company's total assets and the Company may
not own more than 10% of any one issuer's outstanding voting securities.
Annual Distribution Requirements. The Company,IRS.
ANNUAL DISTRIBUTION REQUIREMENTS. Alexander’s, Inc., in order to qualify as a REIT, is required to distribute dividends, (otherother than capital gain dividends)dividends, to its stockholders in an amount at least equal to (A)(1) the sum of (i) 95%(a) 90% of the
Company's "realAlexander’s, Inc.’s “real estate investment trust taxable income" (computedincome,” computed without regard to the dividends paid deduction and the Company'sAlexander’s, Inc.’s net capital gain)gain, and (ii) 95%(b) 90% of the net after-tax income, (after tax), if any, from foreclosure property minus (B)(2) the sum of certain items of non-cash income.
For taxable years beginning before January 1, 2001, the required amount of distributions described above and below was 95% of the amount of Alexander’s, Inc.’s income or gain, as the case may be.
In addition, if the CompanyAlexander’s, Inc. disposes of any asset during its Recognition Period, the Companywithin 10 years of acquiring it, Alexander’s, Inc. will be required pursuant
to Treasury regulations which have not yet been promulgated, to distribute at least 95%90% of the Built-in Gain (after tax),after-tax built-in gain, if any, recognized on the disposition of such asset. Suchthe asset after taking into account net operating loss carryovers and capital loss carryovers.
These distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before the
CompanyAlexander’s, Inc. timely files its tax return for suchthe year to which they relate and if paid on or before the first regular dividend payment after suchthe declaration.
To the extent that the
CompanyAlexander’s, Inc. does not distribute all of its net capital gain or distributes at least 95%90%, but less than 100%, of its "realreal estate investment trust taxable income," as adjusted, it will be subjecthave to pay tax thereonon those amounts at regular ordinary and capital gain corporate tax rates. Furthermore, if the Company should failAlexander’s, Inc. fails to distribute during each calendar year at least the sum of (i)(a) 85% of its ordinary income for suchthat year, (ii)(b) 95% of its capital gain net income for suchthat year and (iii)(c) any undistributed taxable income from prior periods, the CompanyAlexander’s, Inc. would be subjecthave to pay a 4% excise tax on the excess of suchthe required distribution over the amounts actually distributed. The Company
Alexander’s, Inc. intends to satisfy the annual distribution requirements.
As of December 31, 1994, the Company had reported net operating loss
("NOL") carryovers aggregating approximately $110 million. These NOL carryovers
expire in 2005, 2006, 2007, 2008 and 2009. Under the Code, the Company's NOL
carryovers generally would be available
From time to
offset the amount of the Company's
"real estate investment trust taxable income" that otherwise would be required
to be distributed to its stockholders. As a result, until the NOL carryovers are
utilized, the Company does not expect to be required to pay dividends (except
with respect to any recognized Built-in Gain) in order to continue to qualify as
a REIT. However, the NOLs reported on the Company's
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tax returns are not binding on the Internal Revenue Service (the "IRS") and are
subject to adjustment as a result of future IRS audits of the Company's tax
returns. In addition, under Section 382 of the Code, the Company's ability to
use its NOL carryovers could be limited if, generally, there were significant
changes in the ownership of its outstanding stock.
If the Company is required to make a distribution to its stockholders, it
is possible that the Companytime, Alexander’s, Inc. may not have sufficient cash or other liquid assets to meet the 95%90% distribution requirementsrequirement due to various circumstances,
including debt amortization requirements or timing differences between (i) the
actual receipt of(a) when Alexander’s, Inc. actually receives income and actual payment ofwhen it actually pays deductible expenses and (ii)(b) when Alexander’s, Inc. includes the
inclusion of such income and deduction of suchdeducts the expenses in arriving at its taxable incomeincome. If timing differences of the Company. In the event that such insufficiency occurs,this kind occur, in order to meet the 95%90% distribution requirements, the Companyrequirement, Alexander’s, Inc. may find it necessary to arrange for short-term, or possibly long-term, borrowings or to pay dividends in the form of taxable stock dividends or subordinated notes.
dividends. Under certain circumstances, the CompanyAlexander’s, Inc. may be able to rectify a failure to meet the distribution requirement for a year by paying "deficiency dividends"“deficiency dividends” to stockholders in a later year, which may be included in the Company'sAlexander’s, Inc.’s deduction for dividends paid for the earlier year. Thus, the CompanyAlexander’s, Inc. may be able to avoid being taxed on amounts distributed as deficiency dividends; however, the CompanyAlexander’s, Inc. will be required to pay interest based upon the amount of any deduction taken for deficiency dividends.
Failure to Qualify
FAILURE TO QUALIFY AS A REIT
If the CompanyAlexander’s, Inc. fails to qualify for taxation as a REIT in any taxable year, and the relief provisions do not apply, the CompanyAlexander’s, Inc. will be subjecthave to pay tax, (includingincluding any applicable alternative minimum tax)tax, on its taxable income at regular corporate rates. DistributionsAlexander’s, Inc. will not be able to deduct distributions to stockholders in any year in which the
Companyit fails to qualify, will not be deductible by the Company nor will theyAlexander’s, Inc. be required to be made.make distributions to stockholders. In suchthis event, to the extent of current and accumulated earnings and profits, all distributions to stockholders will be taxable to the stockholders as ordinarydividend income and,(which may be subject to certain limitations of the Code,tax at preferential rates) and corporate distributees may be eligible for the dividends received deduction.deduction if they satisfy the relevant provisions of the Internal Revenue
Code. Unless entitled to relief under specific statutory provisions, the CompanyAlexander’s, Inc. also will also be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost. It isAlexander’s, Inc. might not possible to state whether in
all circumstances the Company would be entitled to suchthe statutory relief.
Taxation of Holders of Debt Securities
relief described in this paragraph in all circumstances.
TAXATION OF HOLDERS OF COMMON STOCK OR PREFERRED STOCK
U.S. STOCKHOLDERS
As used
herein,in this section, the term
"U.S. Holder"“U.S. stockholder” means a holder of
a Debt Securitycommon stock or preferred stock who,
(for United States federal income tax purposes) is (i) a citizen or resident
of the United States, (ii) a domestic corporation or (iii) otherwise subject to
United States federal income taxation on a net income basis in respect of the
Debt Security and "U.S. Alien Holder" means a holder of a Debt Security who (for
United States federal income tax purposes) is (i) a nonresident alien individual
or (ii) a foreign corporation, partnership or estate or trust which is not
subject to United States federal income tax on a net income basis in respect of
income or gain from the Debt Security.
U.S. Holders
Payments of Interest. Interest on a Debt Security will be taxable to a U.S.
Holder as ordinary income at the time it is received or accrued, depending on
the holder's method of accounting for tax purposes.
Purchase, Sale and Retirement of the Debt Securities. A U.S. Holder's tax
basis in a Debt Security will generally be its U.S. dollar cost (including, in
the case of a Debt Security acquired through the exercise of a Debt Warrant,
both the cost of the Debt Warrant and the amount paid on exercise of the Debt
Warrant). A U.S. Holder will generally recognize gain or loss on the sale or
retirement of a Debt Security equal to the difference between the amount
realized on the sale or retirement and the U.S. Holder's tax basis in the Debt
Security. Except to the extent attributable to accrued but unpaid interest, gain
or loss recognized on the sale or retirement of a Debt Security will be capital
gain or loss and will be long-term capital gain or loss if the Debt Security was
held for more than one year.
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U.S. Alien Holders
This discussion assumes that the Debt Security is not subject to the rules
of Section 871(h)(4)(A) of the Code (relating to interest payments that are
determined by reference to the income, profits, changes in the value of property
or other attributes of the debtor or a related party).
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
(i) payments of principal, premium (if any) and interest by the Company or
any of its paying agents to any holder of a Debt Security that is a U.S. Alien
Holder will not be subject to United States federal withholding tax if, in the
case of interest (a) the beneficial owner of the Debt Security does not actually
or constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (b) the beneficial owner of
the Debt Security is not a controlled foreign corporation that is related to the
Company through stock ownership, and (c) either (A) the beneficial owner of the
Debt Security certifies to the Company or its agent, under penalties of perjury,
that it is not a U.S. person and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Debt Security certifies to the Company or
its agent under penalties of perjury that such statement has been received from
the beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof;
(ii) a U.S. Alien Holder of a Debt Security will not be subject to United
States federal withholding tax on any gain realized on the sale or exchange of a
Debt Security; and
(iii) a Debt Security held by an individual who at death is not a citizen
or resident of the United States will not be includible in the individual's
gross estate for purposes of the United States federal estate tax as a result of
the individual's death if (a) the individual did not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote and (b) the income on the Debt Security would not
have been effectively connected with a United States trade or business of the
individual at the time of the individual's death.
Information Reporting and Backup Withholding
U.S. Holders. In general, information reporting requirements will apply to
payments of principal, any premium and interest on a Debt Security and the
proceeds of the sale of a Debt Security before maturity within the United States
to non-corporate U.S. Holders, and "backup withholding" at a rate of 31% will
apply to such payments if the U.S. Holder fails to provide an accurate taxpayer
identification number or to report all interest and dividends required to be
shown on its federal income tax returns.
U.S. Alien Holders. Information reporting and backup withholding will not
apply to payments of principal, premium (if any) and interest made by the
Company or a paying agent to a U.S. Alien Holder on a Debt Security if the
certification described in clause (i)(c) under "U.S. Alien Holders" above is
received, provided that the payor does not have actual knowledge that the holder
is a U.S. person.
Payments of the proceeds from the sale by a U.S. Alien Holder of a Debt
Security made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is a U.S.
person, a controlled foreign corporation for United States federalFederal income tax purposes, or a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period, information reporting may apply to such payments. Payments of the
proceeds from the sale of a Debt Security to or through the United States office
of a broker is subject to information reporting and backup withholding unless
the holder or beneficial owner certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding.
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The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Debt Securities
that are issued at a discount or premium or as a unit with other Securities,
have a maturity of one year or less, provide for conversion rights, contingent
payments, early redemption or payments that are denominated in or determined by
reference to a currency other than the U.S. dollar or otherwise subject to
special United States federal income tax rules.
Taxation of Holders of Debt Warrants
Sale or Expiration
Generally, a holder of a Debt Warrant will recognize gain or loss upon the
sale or other disposition of a Debt Warrant in an amount equal to the difference
between the amount realized on such sale or other disposition and the holder's
tax basis in the Debt Warrant. A holder of a Debt Warrant that expires
unexercised will generally recognize loss in an amount equal to such holder's
tax basis in the Debt Warrant. Gain or loss resulting from the sale, other
disposition or expiration of a Debt Warrant will generally be capital gain or
loss and will be long-term if the Debt Warrant was held for more than one year.
Exercise
The exercise of a Debt Warrant with cash will not be a taxable event for
the exercising holder. Such holder's basis in the Debt Securities received on
exercise of the Debt Warrant will equal the sum of such holder's tax basis in
the exercised Debt Warrant and the exercise price of the Debt Warrant. The
holding period in a Debt Security received on exercise of a Debt Warrant will
not include the period during which the Debt Warrant was held.
The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Debt Warrants
that are issued as a unit with other Securities.
Taxation of Holders of Common Stock or Preferred Stock
U.S. Stockholders
As used herein, the term "U.S. Stockholder" means a holder of Common Stock
or Preferred Stock ("Stock") who (for United States federal income tax purposes)
is (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
| · | a citizen or resident of the United States; |
| · | an estate whose income is subject to United States Federal income taxation regardless of its source; or |
| · | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons have authority to control all substantial decisions of the trust. |
As long as the CompanyAlexander’s, Inc. qualifies as a REIT, distributions made by the
CompanyAlexander’s, Inc. out of its current or accumulated earnings and profits, (andand not designated as capital gain dividends)dividends, will constitute dividends taxable to its taxable U.S. Stockholdersstockholders as ordinary income. Such distributionsIndividual U.S. shareholders will generally not be entitled to the lower tax rate applicable to certain types of dividends except with respect to the portion of any distribution (a) that represents income from dividends Alexander’s, Inc. received from a corporation in which it owns shares (but only if such dividends would be eligible for the lower rate on dividends if paid by the corporation to its individual shareholders), or (b) that is equal to Alexander’s, Inc.’s real estate investment trust taxable income (taking into account the dividends paid deduction available to Alexander’s, Inc.) for Alexander’s, Inc.’s previous taxable year and less any taxes paid by Alexander’s, Inc. during its previous taxable year, provided that certain holding period and other requirements are satisfied at both the REIT and individual shareholder level. Individual U.S. stockholders should consult their own tax advisors to determine the impact of this new legislation. Distributions of this kind will not be eligible for the dividends-receiveddividends received deduction in the case of U.S. Stockholdersstockholders that are corporations. Distributions made by the CompanyAlexander’s, Inc. that areAlexander’s, Inc. properly designated by the Companydesignates as capital gain dividends will be taxable to U.S. Stockholdersstockholders as long-termgain from the sale of a capital gains (toasset held for more than one year, to the extent that they do not exceed the Company'sAlexander’s, Inc.’s actual net capital gain for the taxable year)year, without regard to the period for which a U.S. Stockholderstockholder has held his shares. Thus, with certain limitations, capital gain dividends received by an individual U.S. Stockholdersstockholder may be eligible for preferential rates of taxation. U.S. stockholders that are corporations may, however, be required to treat up to 20% of certain capital gain dividends as ordinary income.
To the extent that
the CompanyAlexander’s, Inc. makes distributions,
(notnot designated as capital gain
dividends)dividends, in excess of its current and accumulated earnings and profits,
suchthese distributions will be treated first as a tax-free return of capital to each U.S.
Stockholder, reducingshareholder. Thus, these distributions will reduce the adjusted basis
which suchthat the U.S.
Stockholdershareholder has in his
or her shares for tax purposes by the amount of
suchthe distribution,
(butbut not below
zero), with distributionszero. Distributions in excess of a U.S.
Stockholder'sshareholder’s adjusted basis in his shares
will be taxable as capital gains,
(providedprovided that the shares have been held as a capital
asset).asset. For purposes of determining the
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portion of distributions on separate classes of Stockshares that will be treated as a
dividends for federalFederal income tax purposes, current and accumulated earnings and profits will be allocated to distributions resulting from priority rights of Preferred Stockpreferred shares before being allocated to other distributions.Dividends declaredauthorized by the CompanyAlexander’s, Inc. in October, November, or December of any year and payable to a stockholder of record on a specified date in any such month shallof these months will be treated as both paid by the CompanyAlexander’s, Inc. and received by the stockholder on December 31 of suchthat year, provided that Alexander’s, Inc. actually pays the dividend is actually paid by the
Company on or before January 31 of the following calendar year. Stockholders may not include in their own income tax returns any net operating losses or capital losses of Alexander’s, Inc.
U.S. stockholders holding shares at the Company.
close of Alexander’s, Inc.’s taxable year will be required to include, in computing their long-term capital gains for the taxable year in which the last day of Alexander’s, Inc.’s taxable
year falls, the amount that Alexander’s, Inc. designates in a written notice mailed to its stockholders. Alexander’s, Inc. may not designate amounts in excess of Alexander’s, Inc.’s undistributed net capital gain for the taxable year. Each U.S. stockholder required to include the designated amount in determining the stockholder’s long-term capital gains will be deemed to have paid, in the taxable year of the inclusion, the tax paid by Alexander’s, Inc. in respect of the undistributed net capital gains. U.S. stockholders to whom these rules apply will be allowed a credit or a refund, as the case may be, for the tax they are deemed to have paid. U.S. stockholders will increase their basis in their shares by the difference between the amount of the includible gains and the tax deemed paid by the stockholder in respect of these gains.
Distributions made by the CompanyAlexander’s, Inc. and gain arising from thea U.S. stockholder’s sale or exchange by a U.S. Stockholder of shares of Stock will not be treated as passive activity income, and, asincome. As a result, U.S. Stockholdersstockholders generally will not be able to apply any "passive losses"passive losses against suchthat income or gain. Distributions made by
the Company (to the extent they do not constitute
When a return of capitalU.S. stockholder sells or capital
gain dividends) generally will be treated as investment income for purposes of
computing the investment interest deduction limitation. Gain arising from the
sale or other dispositionotherwise disposes of shares, of Stock, however, will not be treated as
investment income unless the U.S. Stockholder elects to reduce the amount of his
total net capital gain eligible for the 28% maximum capital gains rate by the
amount of such gain with respect to the Stock.
Upon any sale or other disposition of shares of Stock, a U.S. Stockholderstockholder will recognize gain or loss for federalFederal income tax purposes in an amount equal to the difference between (i)(a) the amount of cash and the fair market value of any property received on suchthe sale or other disposition, and (ii)(b) the holder'sholder’s adjusted basis in the shares of Stock for tax purposes. SuchThis gain or loss will be capital gain or loss if the shares have beenU.S. stockholder has held by the U.S. Stockholdersshares as a capital asset, andasset. The gain or loss will be long-term gain or loss if such Stockthe U.S. stockholder has been held the shares for more than one year. Long-term capital gain of an individual U.S. stockholder is generally taxed at preferential rates. In general, any loss recognized by a U.S. Stockholder
uponstockholder when the salestockholder sells or other dispositionotherwise disposes of shares of Alexander’s, Inc. that the Company that have beenstockholder has held for six months or less, (afterafter applying certain holding period rules)rules, will be treated as a long-term capital loss, to the extent of distributions received by such U.S. Stockholderthe stockholder from the CompanyAlexander’s, Inc. which were required to be treated as long-term capital gains.
Backup Withholding. The Company
BACKUP WITHHOLDING. Alexander’s, Inc. will report to its U.S. Stockholdersstockholders and the Internal Revenue Service (the "IRS")IRS the amount of dividends paid during each calendar year, and the amount of tax withheld, if any. Under the backup withholdingswithholding rules, a stockholder may be subject to backup withholding at the
rate of 31%may apply to a stockholder with respect to dividends paid unless suchthe holder (a) is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. AThe IRS also may impose penalties on a U.S. Stockholderstockholder that does not provide the CompanyAlexander’s, Inc. with his correct taxpayer identification numbernumber. A stockholder may also be subject to penalties imposed by the IRS. Anycredit any amount paid as backup withholding will be creditable against the stockholder'sstockholder’s income tax liability. In addition, the CompanyAlexander’s, Inc. may be required to withhold a portion of capital gain distributions to any stockholders who fail to certify their non-foreign status to the Company.
Taxation of Tax-Exempt Stockholders. Generally,Alexander’s, Inc.
TAXATION OF TAX-EXEMPT STOCKHOLDERS. The IRS has ruled that amounts distributed as dividends by a REIT generally do not constitute unrelated business taxable income when received by a tax-exempt investorentity. Based on that ruling, provided that a tax-exempt stockholder is exemptnot one of the types of entity described in the next paragraph and has not held its shares as “debt financed property” within the meaning of the Internal Revenue Code, and the shares are not otherwise used in a trade or business, the dividend income from tax on its investment income, such as an individual retirement
account (IRA) or a 401(k) plan, that holds shares of Stock as an investment will not be subjectunrelated business taxable income to a tax-exempt stockholder. Similarly, income from the sale of shares will not constitute unrelated business taxable income unless the tax-exempt stockholder has held the shares as “debt financed property” within the meaning of the Internal Revenue Code or has used the shares in a trade or business.
Income from an investment in Alexander’s, Inc.’s shares will constitute unrelated business taxable income for tax-exempt stockholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans exempt from Federal income taxation under the applicable subsections of Section 501(c) of the Internal Revenue Code, unless the organization is able to properly deduct amounts set aside or placed in reserve for certain purposes so as to offset the income generated by its shares. Prospective investors of the types described in the preceding sentence should consult their own tax onadvisors concerning these “set aside” and reserve requirements.
Notwithstanding the foregoing, however, a portion of the dividends paid by the Company. However, if such
tax-exempt investor isa “pension-held REIT” will be treated as having purchased its shares with borrowedunrelated business taxable income to any trust which:
| · | is described in Section 401(a) of the Internal Revenue Code, |
| · | is tax-exempt under Section 501(a) of the Internal Revenue Code, and |
| · | holds more than 10% (by value) of the equity interests in the REIT. |
Tax-exempt pension, profit-sharing and stock bonus funds somethat are described in Section 401(a) of the Internal Revenue Code are referred to below as “qualified trusts.” A REIT is a “pension-held REIT” if:
| · | it would not have qualified as a REIT but for the fact that Section 856(h)(3) of the Internal Revenue Code provides that stock owned by qualified trusts will be treated, for purposes of the “not closely held” requirement, as owned by the beneficiaries of the trust (rather than by the trust itself), and |
| · | either (a) at least one qualified trust holds more than 25% by value of the interests in the REIT or (b) one or more qualified trusts, each of which owns more than 10% by value of the interests in the REIT, hold in the aggregate more than 50% by value of the interests in the REIT. |
The percentage of any REIT dividend treated as unrelated business taxable income to a qualifying trust is equal to the ratio of (a) the gross income of the REIT from unrelated trades or allbusinesses, determined as though the REIT were a qualified trust, less direct expenses related to this gross income, to (b) the total gross income of the REIT, less direct expenses related to the total gross income. A de minimis exception applies where this percentage is less than 5% for any year. Alexander’s, Inc. does not expect to be classified as a pension-held REIT.
The rules described above under the heading “U.S. Stockholders” concerning the inclusion of Alexander’s, Inc.’s designated undistributed net capital gains in the income of its dividendsstockholders will apply to tax-exempt entities. Thus, tax-exempt entities will be subject to tax.
Non-U.S. Stockholders
allowed a credit or refund of the tax deemed paid by these entities in respect of the includible gains.
NON-U.S. STOCKHOLDERS
The rules governing
United States federalU.S. Federal income taxation of
the ownership
and dispositions of shares of Stock by persons that are, for purposes of such
taxation, nonresident alien individuals, foreign corporations, foreign partnerships
or foreignand estates or trusts
(collectively, "Non-U.S.
Stockholders")that in either case are
complex, and no attemptnot subject to United States Federal income tax on a net income basis who own common stock or preferred stock, which we call “non-U.S. stockholders,” are complex. The following discussion is
made herein to provide more thanonly a
brieflimited summary of
suchthese rules.
Accordingly, the discussion does not address all
aspects of United States federal income taxation and does not address state,
local or foreign tax consequences that may be relevant to a Non-U.S. Stockholder
in light of its particular circumstances. In addition, this discussion is based
on current law, which
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is subject to change, and assumes that the Company qualifies for taxation as a
REIT. Prospective Non-U.S. Stockholders are urged tonon-U.S. stockholders should consult with their own tax advisersadvisors to determine the impact of federal,U.S. Federal, state local and foreignlocal income tax laws with regard to an investment in common stock or preferred stock, including any reporting requirements.
Distributions.ORDINARY DIVIDENDS. Distributions, by the Company to a Non-U.S. Stockholderother than distributions that are neithertreated as attributable to gain from sales or exchanges by the CompanyAlexander’s, Inc. of United StatesU.S. real property interests, noras discussed below, and other than distributions designated by the CompanyAlexander’s, Inc. as a capital gainsgain dividends, will be treated as dividends of ordinary income to the extent that they are made out of current or accumulated earnings and profits of Alexander’s, Inc. A withholding tax equal to 30% of the Company. Suchgross amount of the distribution will ordinarily apply to distributions ordinarily will be subjectof this kind to withholdingnon-U.S. stockholders, unless an applicable tax treaty reduces that tax. However, if income from the investment in the shares is treated as effectively connected with the non-U.S. stockholder’s conduct of a U.S. trade or business or is attributable to a permanent establishment that the non-U.S. stockholder maintains in the United States federal tax on a gross basis (thatif that is without allowance of deductions)
at a 30% rate or such lower rate as may be specifiedrequired by an applicable income tax treaty unlessas a condition for subjecting the dividends are treated as effectively connected with the
conduct by the Non-U.S. Stockholder of a United States trade or business.
Dividends that are effectively connected with such a trade or business will be
subjectnon-U.S. stockholder to taxU.S. taxation on a net income basis, (that is, after allowance of deductions)tax at graduated rates generally will apply to the non-U.S. stockholder in the same manner as domesticU.S. stockholders are taxed with respect to such dividends, and are generally not subject to withholding. Any such
dividends received by a Non-U.S. Stockholder thatthe 30% branch profits tax also may apply if the stockholder is a corporation may alsoforeign corporation. Alexander’s, Inc. expects to withhold U.S. tax at the rate of 30% on the gross amount of any dividends, other than dividends treated as attributable to gain from sales or exchanges of U.S. real property interests and capital gain dividends, paid to a non-U.S. stockholder, unless (a) a lower treaty rate applies and the required form evidencing eligibility for that reduced rate is filed with Alexander’s, Inc. or the appropriate withholding agent or (b) the non-U.S. stockholder files an IRS Form W-8 ECI or a successor form with Alexander’s, Inc. or the appropriate withholding agent claiming that the distributions are effectively connected with the non-U.S. stockholder’s conduct of a U.S. trade or business and, in either case, other applicable requirements are met.
Distributions to a non-U.S. stockholder that are designated by Alexander’s, Inc. at the time of distribution as capital gain dividends which are not attributable to or treated as attributable to the disposition by Alexander’s,
Inc. of a U.S. real property interest generally will not be subject to an additional branch profits tax at a 30% rate or such lower rateU.S. Federal income taxation, except as may be specified by an applicable income tax treaty.
Pursuant to current Treasury regulations, dividends paid to an address in a
country outside the United States are generally presumed to be paid to a
resident of such country for purposes of determining the applicability of
withholding discussed above and the applicability of a tax treaty rate. Under
proposed Treasury regulations, which are not currently in effect, however, a
Non-U.S. Stockholder who wished to claim the benefit of an applicable treaty
rate would be required to satisfy certain certification and other requirements.
Under certain treaties, lower withholding rates generally applicable to
dividends do not apply to dividends from a REIT, such as the Company. Certain
certification and disclosure requirements must be satisfied to be exempt from
withholding under the effectively connected income exemption discussed above.described below.
RETURN OF CAPITAL. Distributions in excess of Alexander’s, Inc.’s current orand accumulated earnings and profits, which are not treated as attributable to the gain from Alexander’s, Inc.’s disposition of the Companya U.S. real property interest, will not be taxable to a Non-U.S. Stockholdernon-U.S. stockholder to the extent that they do not exceed the adjusted basis of the stockholder's sharesnon-U.S. stockholder’s shares. Distributions of Stock, but
ratherthis kind instead will reduce the adjusted basis of such stock.the shares. To the extent that such
distributions of this kind exceed the adjusted basis of a Non-U.S. Stockholder's stock,non-U.S. stockholder’s shares, they will give rise to tax liability if the non-U.S. stockholder otherwise would have to pay tax on any gain from the sale or exchangedisposition of his stock, the tax treatment
of which isits shares, as described below. For withholding purposes,If it cannot be determined at the Companytime a distribution is required
to treat all distributions as if made outwhether the distribution will be in excess of current orand accumulated earnings and profits.profits, withholding will apply to the distribution at the rate applicable to dividends. However, the non-U.S. stockholder may seek a refund of these amounts thus withheld are generally refundablefrom the IRS if it is subsequently determined that suchthe distribution was, in fact, in excess of current or accumulated earnings and profits of the Company.Alexander’s, Inc.
CAPITAL GAIN DIVIDENDS. Distributions to a Non-U.S. Stockholder that are designated by the Company
at the time of distribution as capital gains dividends (other than those arising
from the disposition of a United States real property interest) generally will
not be subject to United States federal income taxation, unless (i) the
investment in the shares of Stock is effectively connected with the Non-U.S.
Stockholder's United States trade or business, in which case the Non-U.S.
Stockholder will be subject to the same treatment as domestic stockholders with
respect to such gain (except that a stockholder that is a foreign corporation
may also be subject to the 30% branch profits tax, as discussed above), or (ii)
the Non-U.S. Stockholder is a nonresident alien individual who is present in the
United States for 183 or more days during the taxable year and has a "tax home"
in the United States, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains.
Distributions to a Non-U.S. Stockholder that are attributable to gain from sales or exchanges by Alexander’s, Inc. of U.S. real property interests that are paid with respect to any class of stock which is regularly traded on an established securities market located in the Company of United States and held by a non-U.S. holder who does not own more than 5% of such class of stock at any time during the one year period ending on the date of distribution will be treated as a normal distribution by us, and such distributions will be taxed as described above in “—Ordinary Dividends.”
Distributions that are not described in the preceding paragraph that are attributable to gain from sales or exchanges by Alexander’s, Inc. of U.S. real property interests will
cause the Non-U.S. Stockholder to be treated as recognizing such gain as income
effectively connected with a United States trade or business. Non-U.S.
Stockholders would thus generally be taxed
at the same rates applicable to
domestic stockholders (subject to a
special alternative minimum tax innon-U.S. stockholder under the
case
of nonresident alien individuals). The Company is required to withhold 35% of
any such distribution. That amount is creditable against the Non-U.S.
Stockholder's United States federal income tax liability. Also, such
distribution may be subject to a 30% branch profits tax in the hands of a
Non-U.S. Stockholder that is a corporation, as discussed above.
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Sale of Stock. Gain recognized by a Non-U.S. Stockholder upon the sale or
exchange of shares of Stock generally will not be subject to United States
taxation unless the Stock constitutes a "United States real property interest"
within the meaningprovisions of the Foreign Investment in Real Property Tax Act of 1980, ("FIRPTA").as amended. Under this statute, these distributions are taxed to a non-U.S. stockholder as if the gain were effectively connected with a U.S. business. Thus, non-U.S. stockholders will be taxed on the distributions at the normal capital gain rates applicable to U.S. stockholders, subject to any applicable alternative minimum tax and special alternative minimum tax in the case of individuals. Alexander’s, Inc. is required by applicable Treasury regulations under this statute to withhold 35% of any distribution that Alexander’s, Inc. could designate as a capital gain dividend. However, if Alexander’s, Inc. designates as a capital gain dividend a distribution made before the day Alexander’s, Inc. actually effects the designation, then although the distribution may be taxable to a non-U.S. stockholder, withholding does not apply to the distribution under this statute. Rather, Alexander’s, Inc. must effect the 35% withholding from distributions made on and after the date of the designation, until the distributions so withheld equal the amount of the prior distribution designated as a capital gain dividend. The Stocknon-U.S. stockholder may credit the amount withheld against its U.S. tax liability. SALES OF SHARES. Gain recognized by a non-U.S. stockholder upon a sale or exchange of common stock generally will not constitute a "United States real property
interest" so long asbe taxed under the CompanyForeign Investment in Real Property Tax Act if Alexander’s, Inc. is a "domestically“domestically controlled REIT." A
"domestically controlled REIT" isREIT,” defined generally as a REIT, less than 50% in whichvalue of whose stock is and was held directly or indirectly by foreign persons at all times during a specified testing period less than 50% in value of its stockperiod. Alexander’s, Inc. believes that it is held directly or
indirectly by Non-U.S. Stockholders. Notwithstanding the foregoing, gain fromand will continue to be a domestically controlled REIT, and, therefore, that taxation under this statute generally will not apply to the sale or exchange of StockAlexander’s, Inc. shares. However, gain to which this statute does not otherwise subject to FIRPTAapply will be taxable to a Non-U.S. Stockholder (i)non-U.S. stockholder if the investment in the Stockshares is treated as effectively connected with the Non-U.S. Stockholder'snon-U.S. stockholder’s U.S. trade or business or is attributable to a permanent establishment that the non-U.S. stockholder maintains in whichthe United States if that is required by an applicable income tax treaty as a condition for subjecting the non-U.S. stockholder to U.S. taxation on a net income basis. In this case,
the Non-U.S. Stockholder will be subject to the same treatment will apply to the non-U.S. stockholder as domesticto U.S. stockholders with respect to suchthe gain. In addition, gain or (ii)to which the Foreign Investment in Real Property Tax Act does not apply will be taxable to a non-U.S. stockholder if the Non-U.S. Stockholdernon-U.S. stockholder is a nonresident alien individual who iswas present in the United States for 183 days or more during the taxable year and has a "tax home"“tax home” in the United States, or maintains an office or a fixed place of business in the United States to which the gain is attributable. In this case, a 30% tax will apply to the nonresident alien individualindividual’s capital gains. A similar Rule will be subjectapply to capital gain dividends to which this statute does not apply.
If Alexander’s, Inc. was not a domestically controlled REIT, tax under the Foreign Investment in Real Property Tax Act would apply to a 30% United States
withholding tax in the amount of such individual's gain.
If the Company is not or ceases to be a "domestically-controlled REIT,"
whether gain arising from thenon-U.S. stockholder’s sale or exchange by a Non-U.S. Stockholder of shares only if the selling non-U.S. stockholder
owned more than 5% of Stock would be subject to United States taxation under FIRPTA asthe class of shares sold at any time during a salespecified period. This period is generally the shorter of a "United States real property interest" will depend on whetherthe period that the non-U.S. stockholder owned the shares are "regularly traded" (as defined by applicable Treasury regulations) on
an established securities market (e.g.,sold or the New York Stock Exchange) andfive-year period ending on the sizedate when the stockholder disposed of the selling Non-U.S. Stockholder's interest inshares. If tax under this statute applies to the Company. If gain on the sale or exchange of shares, of Stock was subjectthe same treatment would apply to taxation under FIRPTA,
the Non-U.S. Stockholder would be subjectnon-U.S. stockholder as to regular United States income taxU.S. stockholders with respect to suchthe gain, in the same manner as a U.S. Stockholder (subjectsubject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals) and the purchaser of the Stock would
be required to withhold and remit to the IRS 10% of the purchase price.
Backup Withholding and Information Reporting. Backup withholding tax (which
generally isindividuals.
FEDERAL ESTATE TAXES
Common stock or preferred stock held by a withholding tax imposednon-U.S. stockholder at the ratetime of 31% on certain payments to
persons that fail to furnish certain information underdeath will be included in the stockholder’s gross estate for United States information reporting requirements) and information reporting willFederal estate tax purposes, unless an applicable estate tax treaty provides otherwise.
BACKUP WITHHOLDING AND INFORMATION REPORTING
If you are a non-U.S. stockholder, you are generally not
apply to distributions paid to Non-U.S. Stockholders outside the United States
that are treated as (i) dividends subject to the 30% (or lower treaty rate)
withholding tax discussed above, (ii) capital gains dividends or (iii)
distributions attributable to gainexempt from the sale or exchange by the Company of
United States real property interests. As a general matter, backup withholding and information reporting will not apply to arequirements with respect to:
| · | the payment of the proceeds from the sale of common shares effected at a United States office of a broker, |
as long as the income associated with these payments is otherwise exempt from United States Federal income tax, and:
| · | the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished to the payor or broker: |
| · | a valid IRS Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or |
| · | other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury regulations, or |
| · | you otherwise establish an exemption. |
Payment of the proceeds of afrom the sale of shares of Stock by or throughcommon stock effected at a foreign office of a foreign broker.
Informationbroker generally will not be subject to information reporting (but notor backup withholding) will apply, however, to a
payment of the proceeds ofwithholding. However, a sale of Stock bycommon stock or throughpreferred stock that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if:
| · | the proceeds are transferred to an account maintained by you in the United States, |
| · | the payment of proceeds or the confirmation of the sale is mailed to you at a United States address, or |
| · | the sale has some other specified connection with the United States as provided in U.S. Treasury regulations, |
unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption.
In addition, a sale of common stock or preferred stock will be subject to information reporting if it is effected at a foreign office of a broker that (a) is a U.S. person, (b) derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United States
or (c) is a "controlled foreign corporation" (generally, a foreign corporation
controlled by United States stockholders) for United States federal income tax
purposes, is:
| · | a controlled foreign corporation for United States tax purposes, |
| · | a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period, or |
| · | a foreign partnership, if at any time during its tax year: |
| · | one or more of its partners are “U.S. persons,” as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or |
| · | such foreign partnership is engaged in the conduct of a United States trade or business, |
unless the broker has documentary evidence in its recordsdoes not have actual knowledge or reason to know that you are a United States person and the holder is a Non-U.S. Stockholder and certain other conditionsdocumentation requirements described above are met or the
stockholderyou otherwise establishesestablish an exemption. PaymentBackup withholding will apply if the sale is subject to or throughinformation reporting and the broker has actual knowledge that you are a United States office of a broker of the proceeds of a sale of shares of Stock is
subject to both backup withholding and information reporting unless the
stockholder certifies under penalties of perjury that the stockholder is a
Non-U.S. Stockholder, or otherwise establishes an exemption. A Non-U.S.
Stockholderperson.
You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by timely filing the appropriatea refund claim for refund with the IRS.
Estate Tax. Shares of Stock owned by an individual who is not a citizen
OTHER TAX CONSEQUENCES
State or
resident of the United States (as determined for purposes of U.S. federal estate
tax law) at the time of death will generally be includible in such individual's
gross estate for federal estate tax purposes unless an applicable estate tax
treaty provides otherwise.
Other Tax Consequences
The Companylocal taxation may apply to Alexander’s, Inc. and its stockholders
may be subject to state or local taxation in various state or local jurisdictions, including those in which it or they transact business or reside. The state and local tax treatment of
the CompanyAlexander’s, Inc. and its stockholders may not conform to the
federalFederal income tax consequences discussed above. Consequently, prospective
-44-
stockholders are urged toshould consult their own tax advisors regarding the effect of state and local tax laws on an investment in Alexander’s, Inc. TAXATION OF HOLDERS OF DEBT WARRANTS
SALE OR EXPIRATION
Generally, you will recognize gain or loss upon the Company.
sale or other disposition of your debt warrant in an amount equal to the difference between the amount you realize on such sale or other disposition and your tax basis in the debt warrant. Your tax basis in your debt warrant generally will be its cost. If you hold a debt warrant that expires unexercised you generally will recognize loss in an amount equal to your tax basis in the debt warrant. Gain or loss resulting from the sale, other disposition or expiration of a debt warrant generally will be capital gain or loss and will be long-term if the debt warrant was held for more than one year.
EXERCISE
If you exercise your debt warrant with cash it will not be a taxable event for you. Your basis in the debt securities received on exercise of the debt warrant will equal the sum of your tax basis in the exercised debt warrant and the exercise price of the debt warrant. The holding period in a debt security received on exercise of a debt warrant will not include the period during which the debt warrant was held.
The applicable prospectus supplement will contain a discussion of any special United States Federal income tax rules with respect to debt warrants that are issued as a unit with other securities.
TAXATION OF HOLDERS OF DEBT SECURITIES
This section describes the material United States Federal income tax consequences of owning a debt security that Alexander’s, Inc. may offer for your general information only. It is not tax advice. It applies to you only if the debt security you purchase is not an original issue discount or zero coupon debt security and you acquire the debt security in the initial offering at the offering price. If you purchase a debt security at a price other than the offering price, the amortizable bond premium or market discount rules also may apply to you. You should consult your own tax advisors regarding this possibility.
The tax consequences of owning any debt security that is a zero coupon debt security or an original issue discount debt security, a floating rate debt security, or an indexed debt security that we offer will be discussed in the applicable prospectus supplement.
UNITED STATES DEBT SECURITY HOLDERS
This subsection describes the tax consequences to a United States holder of a debt security. You are a United States holder of a debt security if you are a beneficial owner of a debt security to which this section applies and you are:
| · | a citizen or resident of the United States, |
| · | an estate whose income is subject to United States Federal income tax regardless of its source, or |
| · | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust. |
If you are not a United States holder of a debt security, this subsection does not apply to you and you should refer to “—United States Alien Debt Security Holders” below.
PAYMENTS OF INTEREST. You will be taxed on the interest on your debt security as ordinary income at the time you receive the interest or when it accrues, depending on your method of accounting for tax purposes.
PURCHASE, SALE AND RETIREMENT OF DEBT SECURITIES. Your tax basis in your debt security generally will be its cost (including, in the case of a debt security acquired through the exercise of a debt warrant, both the cost of the debt warrant and the amount paid on exercise of the debt warrant). You generally will recognize capital gain or loss on the sale or retirement of your debt security equal to the difference between the amount you realize on the sale or retirement, excluding any amounts attributable to accrued but unpaid interest, and your tax basis in your debt security. Capital gain of a noncorporate United States debt security holder is generally taxed at preferential rates where the holder has a holding period greater than one year.
UNITED STATES ALIEN DEBT SECURITY HOLDERS
This subsection describes the tax consequences to a United States alien debt security holder. You are a United States alien debt security holder if you are the beneficial owner of a debt security to which this section applies and are, for United States Federal income tax purposes:
| · | a nonresident alien individual, |
| · | a foreign partnership, or |
| · | an estate or trust that in either case is not subject to United States Federal income tax on a net income basis on income or gain from a debt security. |
If you are a United States debt security holder, this subsection does not apply to you.
Under United States Federal income and estate tax law, and subject to the discussion of backup withholding below, if you are a United States alien debt security holder:
| · | we and other U.S. payors generally will not be required to deduct United States withholding tax from payments of principal and interest to you if, in the case of payments of interest: |
(1) you do not actually or constructively own 10% or more of the capital or profits interest of Alexander’s, Inc.,
(2) you are not a controlled foreign corporation that is related to Alexander’s, Inc. through stock ownership, and
(3) the U.S. payor does not have actual knowledge or reason to know that you are a United States person and:
(a) you have furnished to the U.S. payor an Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person,
(b) in the case of payments made outside the United States to you at an offshore account (generally, an account maintained by you at a bank or other financial institution at any location outside the United States), you have furnished to the U.S. payor documentation that establishes your identity and your status as a non-United States person,
(c) the U.S. payor has received a withholding certificate (furnished on an appropriate IRS Form W-8 or an acceptable substitute form) from a person claiming to be:
(i) a withholding foreign partnership (generally, a foreign partnership that has entered into an agreement with the IRS to assume primary withholding responsibility with respect to distributions and guaranteed payments it makes to its partners),
(ii) a qualified intermediary (generally, a non-United States financial institution or clearing organization or a non-United States branch or office of a United States financial institution or clearing organization that is a party to a withholding agreement with the IRS), or
(iii) a U.S. branch of a non-United States bank or of a non-United States insurance company, and the withholding foreign partnership, qualified intermediary or U.S. branch has received documentation upon which it may rely to treat the payment as made to a non-United States person in accordance with U.S. Treasury regulations (or, in the case of a qualified intermediary, in accordance with its agreement with the IRS), or
(d) the U.S. payor receives a statement from a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business,
(i) certifying to the U.S. payor under penalties of perjury that an IRS Form W-8BEN or an acceptable substitute form has been received from you by it or by a similar financial institution between it and you, and
(ii) to which is attached a copy of the IRS Form W-8BEN or acceptable substitute form, or
(4) the U.S. payor otherwise possesses documentation upon which it may rely to treat the payment as made to a non-United States person in accordance with U.S. Treasury regulations, and
| · | no deduction for any United States Federal withholding tax will be made from any gain that you realize on the sale or exchange of your debt security. |
Further, a debt security held by an individual who at the individual’s time of death is not a citizen or resident of the United States will not be includible in the individual’s gross estate for United States Federal estate tax purposes if:
| · | the individual did not actually or constructively own 10% or more of the capital or profits interest of Alexander’s, Inc. at the time of the individual’s death and |
| · | the income on the debt security would not have been effectively connected with a United States trade or business of the individual at the time of the individual’s death. |
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, if you are a noncorporate United States debt security holder, we and other payors are required to report to the IRS all payments of principal and interest on your debt security. In addition, we and other payors are required to report to the IRS any payment of proceeds of the sale of your debt security before maturity within the United States. Additionally, backup withholding will apply to any payments if you fail to provide an accurate taxpayer identification number, or you are notified by the IRS that you have failed to report all interest and dividends required to be shown on your federal income tax returns.
In general, if you are a United States alien debt security holder, payments of principal or interest made by us and other payors to you will not be subject to backup withholding and information reporting, provided that the certification requirements described above under “—United States Alien Debt Security Holders” are satisfied or you otherwise establish an exemption. However, we and other payors are required to report payments of interest on your debt securities on IRS Form 1042-S even if the payments are not otherwise subject to information reporting requirements. In addition, payment of the proceeds from the sale of debt securities effected at a United States office of a broker will not be subject to backup withholding and information reporting provided that:
| · | the broker does not have actual knowledge or reason to know that you are a United States person and you have furnished to the broker: |
| · | an appropriate IRS Form W-8 or an acceptable substitute form upon which you certify, under penalties of perjury, that you are not a United States person, or |
| · | other documentation upon which it may rely to treat the payment as made to a non-United States person in accordance with U.S. Treasury regulations, or |
| · | you otherwise establish an exemption. |
If you fail to establish an exemption and the broker does not possess adequate documentation of your status as a non-United States person, the payments may be subject to information reporting and backup withholding. However, backup withholding will not apply with respect to payments made to an offshore account maintained by you unless the broker has actual knowledge that you are a United States person.
In general, payment of the proceeds from the sale of debt securities effected at a foreign office of a broker will not be subject to information reporting or backup withholding. However, a sale effected at a foreign office of a broker will be subject to information reporting and backup withholding if:
| · | the proceeds are transferred to an account maintained by you in the United States, |
| · | the payment of proceeds or the confirmation of the sale is mailed to you at a United States address, or |
| · | the sale has some other specified connection with the United States as provided in U.S. Treasury regulations, |
unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above (relating to a sale of debt securities effected at a United States office of a broker) are met or you otherwise establish an exemption.
In addition, payment of the proceeds from the sale of debt securities effected at a foreign office of a broker will be subject to information reporting if the broker is:
| · | a controlled foreign corporation for United States tax purposes, |
| · | a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period, or |
| · | a foreign partnership, if at any time during its tax year: |
| · | one or more of its partners are “U.S. persons,” as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or |
| · | such foreign partnership is engaged in the conduct of a United States trade or business, |
unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above (relating to a sale of debt securities effected at a United States office of a broker) are met or you otherwise establish an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person.
You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by timely filing a refund claim with the IRS.
PLAN OF DISTRIBUTION
The Company
We may sell the Securities offered securities as follows:
| · | to or through underwriters, or |
| · | directly to other purchasers. |
We will identify any underwriters or agents and describe their compensation in a prospectus supplement.
We, directly or through agents, may sell, and the underwriters may resell, the offered securities in one or more underwriters for public
offering and sale by them ortransactions, including negotiated transactions. These transactions may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
the Securities will be named in the related Prospectus Supplement. The Company
has reserved the right to sell the Securities directly to investors on its own
behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell the Securities at a fixed price or prices
that may be changed or at negotiated prices. The Company also may, from time to
time, authorize dealers, acting as the Company's agents, to offer and sell the
Securities upon such terms and conditions as set forth in the related Prospectus
Supplement. be:
| · | at a fixed public offering price or prices, which may be changed, |
| · | at market prices prevailing at the time of sale, |
| · | at prices related to such prevailing market prices, or |
In connection with the sale of offered securities, the Securities, underwriters or agents may receive compensation from the Company in the form of underwriting discountsus or
commissions and may also receive commissions from purchasers of the Securities
for whom they may act as agent. Underwriters may sell the Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concession or commissions from the underwriters and/or commissions
(which may be changed from time to time) from the purchasersoffered securities for whom they may act as agents. Any underwritingThe underwriters may sell offered securities to or through dealers, who may also receive compensation paid by the Company to underwriters or agents
in connection with the offeringfrom purchasers of the Securities, and anyoffered securities for whom they may act as agents. Compensation may be in the form of discounts, concessions or commissions allowed by underwriters to participatingcommissions. Underwriters, dealers
will be set forth in the related Prospectus Supplement. Dealers and agents participatingthat participate in the distribution of the Securitiesoffered securities may be deemed to be
underwriters as defined in the Securities Act of 1933, and any discounts andor commissions received by them from us and any profit realized by them on the resale of the Securitiesoffered securities by them may be deemed to betreated as underwriting discounts and commissions under the Securities Act. Act of 1933.
We will indemnify the underwriters and agents against certain civil liabilities, including liabilities under the Securities Act of 1933.
Underwriters, dealers and agents may
be entitled, under agreements entered into with the Company, to
indemnification against and contribution towards certain civil liabilities,
including any liabilities under the Securities Act.
If so indicated in the related Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit agreements by
certain institutions to purchase the Securities from the Company at the public
offering price set forth in the related Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in a Prospectus Supplement. Each Contract will be for
an amount specified in the applicable Prospectus Supplement. Institutions, with
whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except that (i) the purchase by an institution of the Securities covered by
Contracts will not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters such amount specified in the applicable Prospectus Supplement.
Any Securities issued hereunder (other than Common Stock) will be new
issues of securities with no established trading market. Any underwriters or
agents to or through whom such Securities are sold by the Company for public
offering and sale may make a market in such Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any such market making
at any time without notice. No assurance can be given as to the liquidity of the
trading market for any such Securities.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with,
andor perform services for,
the Company and certain
of itsus or our affiliates in the ordinary course of
business.
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their businesses. VALIDITY OF THE SECURITIES
The validity of the securities issued under this prospectus will be passed upon for us by Shearman & Sterling LLP, New York, New York, counsel to Alexander’s, Inc. The validity of any securities issued under this prospectus will be passed upon for any underwriters by the counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, and the related consolidated
financial statement schedules of the Company and the financial statements of
Kings Plaza Shopping Center and Marina incorporated in this Prospectus by reference from the Company'sAlexander’s, Inc.’s Annual Report on Form 10-K/A for10-K, and the year ended
December 31, 1994effectiveness of Alexander’s, Inc.’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent auditors,registered public accounting firm, as stated in (i) their report dated March 29, 1995,reports and incorporated in this Prospectus by reference, which expressesreports (1) express an unqualified opinion on the financial statements and financial statement schedules and includes an explanatory paragraphs relatingparagraph referring to Alexander’s, Inc.’s adoption of the needprovisions of FASB Interpretation No. 48, “Accounting for additional borrowingsUncertainty in Income Taxes, an Interpretation of FASB Statement No. 109.” on January 1, 2007, and to change in(2) express an unqualified opinion on the methodeffectiveness of accounting for
postretirement healthcare benefits related to the Company for the year ended
December 31, 1994internal control over financial reporting. Such consolidated financial statements and (ii) their report dated September 15, 1995 related to the
Kings Plaza Shopping Center and Marina for the year ended June 30, 1995, andfinancial statement schedules have been so incorporatedincluded in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
VALIDITY OF THE SECURITIES
The validity
With respect to the unaudited interim financial information for the periods ended September 30, 2008 and 2007 and June 30, 2008 and 2007 and March 31, 2008 and 2007 which is incorporated herein by reference, Deloitte & Touche LLP, an independent registered public accounting firm, have applied limited procedures in accordance with the standards of the Public Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their reports included in Alexander’s, Inc.’s Quarterly Reports on Form 10-Q for the quarters ended September 30, 2008, June 30, 2008 and March 31, 2008 and incorporated by reference herein, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities
issued hereunder will be passed uponAct of 1933 for
their reports on the
Companyunaudited interim financial information because those reports are not “reports” or a “part” of the Registration Statement prepared or certified by
Shearman & Sterling, New York, New York, counsel toan accountant within the
Company. The
validitymeaning of
anySections 7 and 11 of the Securities
issued hereunder will be passed upon for any
underwriters by the counsel named in the applicable Prospectus Supplement.
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Act of 1933.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
ITEM 14. Other ExpensesOTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of Issuance and Distribution.
Theexpenses (all of which are estimated expensesother than the SEC registration fee) in connection with the issuance and distribution of the securities being registered, other than Underwriting Compensation, are as
follows:
SEC registration fee.......................................... $ 86,207
Printing and engraving expenses............................... 100,000
Legal fees and disbursements.................................. 200,000
Accounting fees and disbursements............................. 60,000
Transfer Agent's, Depositary's and Trustee's fees
and disbursements . ........................................ 20,000
Blue Sky fees and expenses.................................... 67,785
Miscellaneous (including listing fees, if applicable, and
rating agency fees)......................................... 66,008
------------
Total $ 600,000
============
Itemunderwriting compensation:
SEC registration fee | | $ | 121,350 | |
Printing and engraving expense | | | * | |
Legal fees and disbursements | | | * | |
Accounting fees and disbursements | | | * | |
Transfer agent’s, depositary’s and trustee’s fees and disbursements | | | * | |
Blue sky fees and expenses | | | * | |
Miscellaneous (including listing and rating agency fees) | | | * | |
Total | | $ | * | |
| | | | |
* Not presently known. | | | | |
ITEM 15. Indemnification of Directors and Officers.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a corporation to indemnify its directors and officers or former directors and officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers under certain circumstances. Such law provides further that the indemnification permitted thereunder shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under a corporation's Certificatecorporation’s certificate of Incorporation, By-laws,incorporation, by-laws, agreement or otherwise.
The Company's Certificate
Alexander’s, Inc.’s certificate of Incorporationincorporation provides that the Company'sour officers and directors will be indemnified to the fullest extent permitted by Delaware law. The Companydirectors shall be liable to the Companyus or the stockholders for monetary damages for breach of the director'sdirector’s fiduciary duty. Such provision does not limit a director'sdirector’s liability to the Companyus or itsour stockholders resulting from: (i) any breach of the director'sdirector’s duty of loyalty to the Companyus or itsour stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in sectionSection 174 of the Delaware General Corporation Law or (iv) any transaction from which the director derived an improper personal benefit.
The Company's Certificate
Alexander’s, Inc.’s certificate of
Incorporationincorporation provides that
the Companywe shall pay the expenses incurred by
an officerour officers or
a director of the Companydirectors in defending a civil or criminal action, suit, or proceeding involving such
person'sperson’s acts or omissions as an officer or a director of
the Companyours if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of
the Companyus or
itsour stockholders and, with respect to a criminal action or proceeding, if the person had no reasonable cause to believe his or her conduct was unlawful. Unless ordered by a court, indemnification of an officer shall be made by
the Companyus only as authorized in a specific case upon the determination that indemnification of the officer or director is proper under the circumstances because he or she has met the applicable standard of conduct. Such determination shall be made (i) by majority vote of
theour directors
of the Company who are not parties to the action, suit or proceeding, (ii) by independent legal counsel in a written opinion, or (iii) by
the stockholdersour stockholders. Alexander’s, Inc.’s certificate of
the Company. The Company's Certificate of Incorporationincorporation authorizes
the Companyus to pay the expenses incurred by an officer or a director in defending a civil or criminal action, suit, or
II-1
proceeding in advance of the final disposition thereof, upon receipt of an undertaking by or on behalf of such person to repay the expenses if it is ultimately determined that the person is not entitled to be indemnified by the
Company.
The Company hasus. We have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Company
or is liable as aour director, of the Company, or is or was serving, at theour request,
of the Company, as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, regardless of whether the Companywe would have power to indemnify him against such liability.
The Company has
We have purchased a policy of directors'directors’ and officers'officers’ insurance that insures both the Companyus and itsour officers and directors against expenses and liabilities of the type normally insured against under such policies, including the expense of the indemnifications described above.
Pursuant to the form of Underwriting Agreement, to be filed by amendment hereto or by Form 8-K, the underwriters will agree, subject to certain conditions, to indemnify the Company,Alexander’s, Inc., its directors, certain of its officers and persons who control the CompanyAlexander’s, Inc. within the meaning of the Securities Act of 1933, as amended (the "Securities Act"“Securities Act”), against certain liabilities.
Item
ITEM 16. Exhibits.EXHIBITS
See the Exhibit
Number Description
------ -----------
1.1** Form of Underwriting Agreement (for Common Stock)
1.2** Form of Underwriting Agreement (for Preferred Stock)
1.3** Form of Underwriting Agreement (for Debt Securities)
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* By-laws of the Company (incorporatedIndex which is incorporated herein by
reference to Exhibit 3(B)
to the Company's Annual Report on Form 10-K, filed on July 27,
1991)
4.2* Form of Indenture for Senior Debt Securities
4.3* Form of Senior Debt Security (included in Exhibit 4.2)
4.4* Form of Indenture for Subordinated Debt Securities
4.5* Form of Subordinated Debt Security (included in Exhibit 4.4)
4.6* Form of Deposit Agreement
4.7* Form of Depositary Receipt (included in Exhibit 4.6)
- --------
* Filed previously.
** To be filed by amendment or 8-K.
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5.1* Opinion of Shearman & Sterling
8.1* Tax Opinion of Shearman & Sterling
12.1* Statement Regarding Computation of Consolidated Ratios of Earnings
to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2* Consent of Shearman & Sterling (included in its opinion filed as
Exhibit 5.1)
24.1* Powers of Attorney (included on signature page)
25.1* Statement of Eligibility of Senior Trustee on Form T-1
25.2* Statement of Eligibility of Subordinated Trustee on Form T-1
- -------------
* Filed previously.
Itemreference. ITEM 17. Undertakings.
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 of this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the 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 Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
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(2) That, for the purpose of determining any liability under the Securities Act of 1933, 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 of 1933, each filing of the registrant's annual reportregistrant’s Annual Report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual reportplan’s Annual Report pursuant to sectionSection 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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Exhibit Index
Exhibit No.
23.1 Consent of Deloitte & Touche LLP
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Alexander's,Alexander’s, Inc. 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 Amendment No. 3
to its Registration Statementregistration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in theThe City of Saddle BrookNew York and State of New Jersey,York, on January 5, 1996.
ALEXANDER'S, INC.
By /s/November 26, 2008.
| ALEXANDER’S, INC. |
| |
| |
| By: | /s/ Joseph Macnow |
| | Joseph Macnow |
| | Executive Vice President and Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Steven Roth, Michael D. Fascitelli and Joseph Macnow, ____________________________
Joseph Macnow
Vice President -- Chief Financial Officer
and Principal Accounting Officer
each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, to any related Rule 462(b) registration statement and to any other documents filed with the Securities and Exchange Commission and to file the same, with all exhibits to the registration statement and other documents in connection with the registration statement, with the Securities and Exchange Commission or any other regulatory authority, grants to the attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, and ratifies and confirms all that the attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue of this power of attorney.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statementregistration statement has been signed below by the following persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
SIGNATURE | TITLE | DATE |
/s/ Steven Roth | Chief Executive Officer January 5, 1996
*_____________________________ and Director
Steven Roth
Chairman of the Board of January 5, 1996
*_____________________________ Directors
Stephen Mann
*_____________________________ Director January 5, 1996
David Mandelbaum
*_____________________________ Director January 5, 1996
Thomas R. DiBenedetto
*_____________________________ Director January 5, 1996
Richard R. West
*_____________________________ Director January 5, 1996
Arthur I. Sonnenblick
*_____________________________ Director January 5, 1996
Russell B. Wight, Jr.
*_____________________________ Director January 5, 1996
Neil Underberg
/s/ Joseph Macnow Vice President -- Chief
______________________________ Financial Officer and January 5, 1996
Joseph Macnow Principal Accounting Officer and Chairman of the | November 26, 2008 |
Steven Roth | Board of Directors (Principal Executive Officer) | |
| | |
/s/ Michael D. Fascitelli | President and Director | November 26, 2008 |
Michael D. Fascitelli | | |
| | |
/s/ Joseph Macnow | Executive Vice President Chief Financial Officer | November 26, 2008 |
Joseph Macnow | (Principal Financial and Accounting Officer) | |
| | |
/s/ Thomas R. DiBenedetto | Director | November 25, 2008 |
Thomas R. DiBenedetto | | |
| | |
/s/ David Mandelbaum | Director | November 26, 2008 |
David Mandelbaum | | |
| | |
/s/ Arthur I. Sonnenblick | Director | November 19, 2008 |
Arthur I. Sonnenblick | | |
| | |
/s/ Neil Underberg | Director | November 20, 2008 |
Neil Underberg | | |
| | |
/s/ Richard West | Director | November 26, 2008 |
Richard West | | |
| | |
/s/ Russell B. Wight, Jr. | Director | November 26, 2008 |
Russell B. Wight, Jr. | | |
EXHIBIT INDEX
NUMBER | DESCRIPTION |
| |
1.1** | Form of Underwriting Agreement (for Common Stock) |
| |
1.2** | Form of Underwriting Agreement (for Preferred Stock) |
| |
1.3** | Form of Underwriting Agreement (for Debt Securities) |
| |
3.1* | Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 033-62779) filed September 20, 1995) |
| |
3.2* | By-laws of the Company (incorporated by reference to the Company’s Quarterly Report on Form 10-Q (No. 001-06064) filed May 9, 2000) |
| |
4.1 | Specimen Common Stock Certificate |
| |
4.2 ** | Form of Preferred Stock Certificate of Designation |
| |
4.3* | Form of Indenture for Senior Debt Securities (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.4* | Form of Senior Debt Security (included in Exhibit 4.1, incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.5* | Form of Indenture for Subordinated Debt Securities (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.6* | Form of Subordinated Debt Security (included in Exhibit 4.3, incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.7* | Form of Deposit Agreement (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.8* | Form of Depositary Receipt (included in Exhibit 4.5, incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-110673)) |
| |
4.9** | Form of Warrant Agreement |
| |
4.10** | Form of Warrant (included in Exhibit 4.9) |
| |
5.1 | Opinion of Shearman & Sterling LLP |
| |
8.1 | Tax Opinion of Shearman & Sterling LLP |
| |
12.1 | Statement Regarding Computation of Consolidated Ratios of Earnings to Fixed Charges |
| |
15.1 | Letter Regarding Unaudited Interim Financial Information |
| |
23.1 | Consent of Deloitte & Touche LLP |
| |
23.2 | Consent of Shearman & Sterling LLP (included in Exhibit 5.1) |
| |
23.3 | Consent of Shearman & Sterling LLP (included in Exhibit 8.1) |
| |
24.1 | Powers of Attorney (included on signature page) |
25.1 | Statement of Eligibility of Senior Trustee on Form T-1 |
| |
25.2 | Statement of Eligibility of Subordinated Trustee on Form T-1 |
___________
* By: /s/ Joseph Macnow
________________________
Joseph Macnow
Attorney-in-Fact
Filed previously.
** To be filed by amendment or on a Form 8-K.