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TABLE OF CONTENTS
Table of Contents
As filed with the Securities and Exchange Commission on September 9, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE MACERICH COMPANY
(Exact name of Registrant as specified in its charter)
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Maryland
(State or other jurisdiction of
incorporation or organization)
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99-4448705
(I.R.S. Employer
Identification Number)
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401 Wilshire Boulevard, Suite 700
Santa Monica, California 90401
(310) 394-6000
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
Arthur M. Coppola
Chairman and Chief Executive Officer
The Macerich Company
401 Wilshire Boulevard, Suite 700
Santa Monica, California 90401
(310) 394-6000
(Name, Address, including zip code, and telephone number, including area code, of Agent for Service)
COPY TO:
Gary J. Singer, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660
(949) 760-9600
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
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If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under Securities Act of
1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
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If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration statement for the same offering.
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If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) of the Securities Act, check the following box
ý
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) of the Securities Act, check the following box
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Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company (as defined in Exchange Act Rule 12b-2).
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a
smaller reporting company)
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Smaller reporting company
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities
to be Registered
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Amount to be registered / Proposed maximum
offering price per unit / Proposed maximum
aggregate offering price
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Amount of
Registration Fee
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Common Stock, par value $.01 per share
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Preferred Stock, par value $.01 per share
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Depositary Shares(1)
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Debt Securities
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Warrants
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Rights
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Units
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(2)(3)
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(2)(3)
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(1)
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Each
depositary share will represent an interest in a fractional share or multiple shares of preferred stock and will be evidenced by a depositary receipt.
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(2)
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This
registration statement registers an indeterminate number of securities of each class that may be offered from time to time in amounts and at offering
prices to be determined. It also includes securities that may be issued on exercise, conversion or exchange of other securities with regard to which additional consideration may or may not be
required. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. Pursuant to Rule 416(a) promulgated under the Securities Act of
1933, as amended (the "Securities Act"), this registration statement also covers such additional shares as may hereafter be offered or issued with respect to the shares registered hereby resulting
from stock splits, stock dividends, recapitalizations or similar capital adjustments.
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(3)
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In
accordance with Rules 456(b) and 457(r) promulgated under the Securities Act, we are deferring the payment of all of the registration fees, except
for filing fees aggregating $32,072.33 that have already been paid with respect to an aggregate of 13,731,565 shares of common stock covered by prospectus supplements dated November 26, 2008,
May 22, 2009, June 19, 2009, August 18, 2009, September 18, 2009, November 18, 2009, December 18, 2009, February 18, 2010, February 22, 2010,
March 19, 2010 and July 2, 2010 to the prospectus dated November 26, 2008 included in Registration Statement No. 333-155742 filed on November 26, 2008
(the "Prior Registration Statement"), of which an aggregate of 10,543,912 shares of common stock remain unsold or unissued. Pursuant to Rule 415(a)(6), the filing fee previously paid in
connection with such unsold shares will continue to be applied to such unsold shares which are being carried forward to this registration statement.
EXPLANATORY NOTE
We are filing this registration statement solely to replace the Prior Registration Statement that is expiring pursuant to
Rule 415(a)(5) under the Securities Act. In accordance with Rule 415(a)(6), effectiveness of this registration statement will be deemed to terminate the expiring Prior Registration
Statement.
Table of Contents
PROSPECTUS
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
WARRANTS
RIGHTS
UNITS
We, or any selling securityholders to be identified in the future, may offer from time to time, in one or more series:
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shares of our common stock;
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shares of our preferred stock;
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depositary shares representing an interest in a fractional share or multiple shares of preferred stock;
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senior and/or subordinated debt securities;
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warrants to purchase common stock, preferred stock and/or debt securities;
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rights to purchase common stock, preferred stock and/or debt securities; and
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units consisting of two or more of these classes or series of securities.
We,
or any selling securityholders to be identified in the future, may offer these securities in amounts, at prices and on terms determined at the time of offering. The specific plan of
distribution for any securities to be offered will be provided in a prospectus supplement. If we use agents, underwriters or dealers to sell these securities, a prospectus supplement will name them
and describe their compensation.
The
specific terms of any securities to be offered will be described in a supplement to this prospectus. The prospectus supplement may also add, update or change information contained in
this prospectus. You should read this prospectus and any prospectus supplement, together with additional information described under the heading "Where You Can Find More Information," before you make
an investment decision.
Our
common stock is listed on the New York Stock Exchange under the symbol "MAC."
Investing in our securities involves a high degree of risk. See the "Risk Factors" section contained in the applicable prospectus supplement and
in the documents we incorporate by reference in this prospectus to read about factors you should consider before investing in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is September 9, 2011.
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TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of an "automatic shelf" registration statement that we filed with the U.S. Securities and Exchange Commission,
or the SEC, as a "well-known seasoned issuer" as defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act, using a "shelf" registration process. By
using a shelf registration statement, we may sell any combination of our common stock, preferred stock, depositary shares, debt securities, warrants, rights and units from time to time and in one or
more offerings. Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about the securities being offered (if other than common stock) and the
specific terms of that offering. The supplement may also add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and
any prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you should carefully read both this prospectus and any prospectus supplement, together with
the additional information described under the heading "Where You Can Find More Information" and "Incorporation of Certain Documents by Reference."
You
should rely only on the information contained or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized any other person to provide you
with different information. If anyone provides you with different or inconsistent information, you should not rely on
it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any
prospectus supplement is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference,
unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
Unless
otherwise stated, or the context otherwise requires, references in this prospectus to the "Company," "we," "us" and "our" refer to The Macerich Company, those entities owned or
controlled by The Macerich Company and predecessors of The Macerich Company.
WHERE YOU CAN FIND MORE INFORMATION
We have filed our registration statement on Form S-3 with the SEC under the Securities Act. We also file annual,
quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document that we file with the SEC, including the registration statement and the exhibits
to the registration statement, at the SEC's Public Reference Room located at100 F Street, N.E., Washington D.C. 20549. You may obtain further information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public at the SEC's website at www.sec.gov.
This
prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The
full registration statement may be obtained from the SEC or us as indicated above. Forms of the indenture and other documents establishing the terms of the offered securities are filed as exhibits to
the registration statement or will be filed through an amendment to our registration statement on Form S-3 or under cover of a Current Report on Form 8-K and
incorporated in this prospectus by reference. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by
reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" in this prospectus the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the SEC will
update and supersede the information included or incorporated by reference in this prospectus. We incorporate by reference in this prospectus the following information (other than, in each case,
documents or information deemed to have been furnished and not filed in accordance with SEC rules):
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our Annual Report on Form 10-K for the year ended December 31, 2010, filed on
February 25, 2011;
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those portions of our definitive Proxy Statement on Schedule 14A, filed with the SEC on April 15, 2011, that
are incorporated by reference in our Form 10-K;
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our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30,
2011, filed on May 6, 2011 and August 5, 2011, respectively;
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the descriptions of our common stock which are contained in registration statements filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including any amendments or reports filed for the purpose of updating such descriptions;
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our Current Reports on Form 8-K filed on May 6, 2011, May 27, 2011 and
September 9, 2011; and
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all documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus supplement and prior to the termination of this offering, except as to any portion of any future report or document that is not deemed filed under such provisions.
Upon
request, we will provide, without charge, to each person to whom a copy of this prospectus is delivered a copy of the documents incorporated by reference in this prospectus. You may
request a copy of these filings, and any exhibits we have specifically incorporated by reference as an exhibit to this prospectus, by writing or telephoning us at the following:
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The Macerich Company
401 Wilshire Boulevard, # 700
Santa Monica, CA 90401-1452
Attention: Corporate Secretary
(310) 394-6000
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FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference, and any prospectus supplement will contain or incorporate by reference,
statements that constitute forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward-looking
statements. You can identify some of the forward-looking statements by the use of forward-looking words, such as "may," "will," "could," "should," "expects," "anticipates," "intends," "projects,"
"predicts," "plans," "believes," "seeks," "estimates, "scheduled" and variations of these words and similar expressions. Statements concerning current conditions may also be forward-looking if they
imply a continuation of current conditions. Forward-looking statements include statements regarding, among other matters:
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expectations regarding our growth;
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our beliefs regarding our acquisition, redevelopment, development, leasing and operational activities and opportunities,
including the performance of our retailers;
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our acquisition, disposition and other strategies;
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regulatory matters pertaining to compliance with governmental regulations;
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our expectations regarding income tax benefits;
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our capital expenditure plans and expectations for obtaining capital for expenditures;
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our expectations regarding our financial condition or results of operations; and
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our expectations for refinancing our indebtedness, entering into and servicing debt obligations and entering into joint
venture arrangements.
We
caution you that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause our actual results,
performance or achievements or the industry to differ materially from our future results, performance or achievements, or those of the industry, expressed or implied in such forward-looking
statements. We urge you to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made in "Item 1A. Risk
Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010, as such risk factors may be amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future, including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and in any prospectus supplement,
which disclosures are incorporated herein by reference. We caution you not to place undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus, any prospectus supplement or any other document incorporated by reference into this prospectus or any prospectus supplement. We do not intend, and we
undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this prospectus or any prospectus supplement or to reflect the occurrence of
unanticipated events, unless required by law to do so.
RISK FACTORS
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider any
risk factors set forth in the applicable prospectus supplement and the documents incorporated by reference in this prospectus, including our Annual Reports on Form 10-K and our
Quarterly Reports on Form 10-Q, as well as other information we include or incorporate by reference in this prospectus and in the applicable prospectus supplement. See "Where You
Can Find More Information."
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THE MACERICH COMPANY
We are involved in the acquisition, ownership, development, redevelopment, management, and leasing of regional and community shopping
centers located throughout the United States. We are the sole general partner of, and own a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"). As of September 1, 2011, the Operating Partnership owned or had an ownership interest in 70 regional shopping centers and 15 community shopping
centers totaling approximately 72 million square feet of gross leasable area.
We
are a self-administered and self-managed real estate investment trust, or REIT, and we conduct all of our operations through the Operating Partnership and our
management companies.
We
were organized as a Maryland corporation in September 1993. Our principal executive offices are located at 401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401.
Our telephone number is
(310) 394-6000. Our website address is www.macerich.com. Information on our website does not constitute part of this prospectus or any prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED SHARE DISTRIBUTIONS
The table below presents our consolidated ratios of earnings to fixed charges for each of the periods indicated. We computed these
ratios by dividing earnings by fixed charges. For this purpose, earnings consist of pre-tax income from continuing operations before equity in income of unconsolidated joint venture
entities, co-venture expense, (loss) gain on sale or write-down of assets, net, and (loss) gain on early extinguishment of debt. We further adjusted earnings by adding cash
distributions from unconsolidated joint ventures instead of the equity in their income and adding fixed charges net of capitalized interest. Fixed charges consist of interest expense, including
amortization of debt issuance costs and premiums and discounts related to indebtedness, capitalized interest and preferred dividend requirements of consolidated subsidiaries, if any. The ratios are
based solely on historical financial information and no pro forma adjustments have been made.
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Year Ended December 31,
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Six Months Ended
June 30, 2011
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2010
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2009
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2008
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2007
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2006
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1.24x
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1.23x
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1.26x
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1.24x
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1.78x
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1.57x
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The
table below presents our consolidated ratios of earnings to combined fixed charges and preferred share distributions for each of the periods indicated. We computed these ratios by
dividing earnings by combined fixed charges and preferred share distributions. The terms "earnings" and "fixed charges" have the meanings assigned above. The ratios are based solely on historical
financial information and no pro forma adjustments have been made.
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Year Ended December 31,
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Six Months Ended
June 30, 2011
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2010
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2009
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2008
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2007
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2006
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1.24x
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1.23x
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1.26x
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1.22x
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1.72x
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1.51x
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USE OF PROCEEDS
When we offer particular securities, we will describe in a prospectus supplement relating to the securities offered how we intend to
use the proceeds from their sale. We may invest funds not required immediately for such purposes in short-term investment grade securities. We will not receive any proceeds from the sale
of securities by selling securityholders.
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DESCRIPTION OF OUR CAPITAL STOCK
The following is a summary description of the material terms of our capital stock. Provisions of our charter and our bylaws fix or may
affect some of the terms of our capital stock. For a complete description of the terms of all of our capital stock, including our common stock, we refer you to the Maryland General Corporation Law,
our charter and our bylaws. Our charter and our bylaws are incorporated by reference as exhibits to the registration statement of which this prospectus is a part.
Capitalization
Our charter authorizes us to issue up to 325,000,000 shares of capital stock, consisting of 250,000,000 shares of common stock, $.01
par value per share, 15,000,000 shares of preferred stock, $.01 par value per share, and 60,000,000 shares of excess stock, $.01 par value per share ("excess stock"). As of September 1, 2011,
we had
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131,938,463 shares of common stock (including shares of unvested restricted common stock) issued and outstanding; and
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1,961,345 shares of Series D Preferred Stock authorized, none of which are outstanding.
In
addition, as of September 1, 2011, 1,179,287 shares of our common stock were reserved for issuance upon exercise of outstanding director stock options and employee stock
appreciation rights, 787,958 shares of our common stock were reserved for issuance upon the payment of stock units issued under our Director Phantom Stock Plan and 2003 Equity Incentive Plan,
11,222,537 shares of our common stock were reserved for issuance upon redemption of outstanding limited partnership units and long-term incentive plan units of the Operating Partnership,
218,317 shares of our common stock were reserved for issuance upon redemption of outstanding limited partnership units of MACWH, LP and 935,358 shares of our common stock were reserved for
issuance upon exercise of a warrant issued to Heitman M-rich Investors LLC on September 30, 2009.
Shares
of Series D Preferred Stock, if issued, could be converted into shares of our common stock based on a formula set forth in the applicable Articles Supplementary. Rights of
holders of Series D Preferred Stock include dividend and liquidation preferences over the holders of shares of our common stock and voting rights in some circumstances.
Our
charter and Maryland law permit our board of directors, or any duly authorized committee thereof, to classify and reclassify any unissued shares of our capital stock by setting or
changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications or terms and
conditions of redemption of the classified or reclassified shares of our capital stock. The terms of any stock classified or reclassified by our board of directors or a duly authorized committee
thereof in accordance with our charter will be set forth in articles supplementary filed with the State Department of Assessments and Taxation of Maryland prior to the issuance of any classified or
reclassified stock.
Issuance of Excess Stock
Our charter provides that in the case of a "prohibited event," the relevant stock will automatically be exchanged for excess stock, to
the extent necessary to ensure that the purported transfer or other event does not result in a prohibited event. A prohibited event is a
purported transfer of stock or other event that will, if effective, result in any of the following:
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a person owning shares of our stock in excess of the ownership limit as determined in accordance with our charter or
owning (directly or indirectly) more than a specified percentage of our common stock as determined in accordance with our charter (that person's "percentage limitation");
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shares of our common stock and preferred stock being owned by fewer than 100 persons (determined without reference to any
rules of attribution);
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our becoming "closely held" under Section 856(h) of the Internal Revenue Code (the "Code") (determined without
regard to Code Section 856(h)(2) and by deleting the words "the last half of" in the first sentence of Code Section 542(a)(2) in applying Code Section 856(h)); or
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our disqualification as a REIT.
Outstanding
shares of excess stock will be held in trust. The trustee of the trust will be appointed by us and will be independent of us, any purported record or beneficial transferee
and any beneficiary of such trust (the "beneficiary"). The beneficiary will be one or more charitable organizations selected by the trustee.
Our
charter further provides that shares of excess stock are entitled to the same dividends as the shares of stock exchanged for excess stock (the "original shares"). The trustee, as
record holder of the excess stock, is entitled to receive all dividends and distributions in respect of the excess stock as may be authorized by our board of directors and declared by us and will hold
the dividends or distributions in trust for the benefit of the beneficiary. The trustee is also entitled to cast all votes that holders of the
excess stock are entitled to cast. Shares of excess stock in the hands of the trustee will have the same voting rights as original shares. Upon our liquidation, dissolution or winding up, each share
of excess stock will be entitled to receive ratably with each other share of stock of the same class or series as the original shares, the assets distributed to the holders of the class or series of
stock. The trustee will distribute to the purported transferee the amounts received upon our liquidation, dissolution or winding up, but only up to the amount paid by the purported transferee, or the
market price for the original shares on the date of the purported transfer, if no consideration was paid by the transferee, and subject to additional limitations and offsets set forth in our charter.
If,
after the purported transfer or other event resulting in an exchange of stock for shares of excess stock, dividends or distributions are paid with respect to the original shares,
then the dividends or distributions will be paid to the trustee for the benefit of the beneficiary. While shares of excess stock are held in trust, excess stock may be transferred by the trustee only
to a person whose ownership of the original shares will not result in a prohibited event. At the time of any permitted transfer, the shares of excess stock will be automatically exchanged for the same
number of shares of the same type and class as the original shares. Our charter contains provisions that prohibit the purported transferee of shares of excess stock from receiving in return for the
transfer an amount that reflects any appreciation in the original shares during the period that the shares of excess stock were outstanding. Our charter requires any amount received by a purported
transferee, in excess of the amount permitted to be received, to be paid to the beneficiary.
Our
charter further provides that we may purchase, for a period of 90 days during the time the shares of excess stock are held in trust, all or any portion of the excess stock at
the lesser of the price paid for the stock by the purported transferee (or if no consideration was paid, the market price at the time of such transaction) or the market price of the relevant shares as
determined in accordance with our charter. The 90-day period begins on the date of the prohibited transfer if the purported transferee gives notice to our board of directors of the
transfer or, if no notice is given, the date our board of directors determines in good faith that a prohibited transfer has been made.
These
provisions contained in our charter will not be automatically removed even if the REIT provisions of the Code are changed so as to no longer contain any ownership concentration
limitation or if the ownership concentration limitation is increased. Amendments to our charter require the affirmative vote of at least two-thirds of the shares entitled to vote. In
addition to preserving our status as a REIT, the ownership limit may have the effect of precluding an acquisition of control of us without the approval of our board of directors.
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All
certificates representing shares of our common stock and our preferred stock bear or will bear a legend referring to the restrictions described above.
All
persons who own, directly or by virtue of the attribution provisions of the Code, more than 5% of our outstanding stock must file an affidavit with us containing the information
specified in our charter within 30 days after January 1 of each year. In addition, these and other significant stockholders are required, upon demand, to disclose to us in writing the
information with respect to their direct, indirect and constructive ownership of shares of our capital stock that our board of directors deems necessary to comply with the provisions of the Code
applicable to a REIT.
Restrictions on Transfer and Ownership
For us to qualify as a REIT under the Code, both of the following conditions relating to ownership of shares must be
satisfied:
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not more than 50% in value of our outstanding stock (after taking into account options to acquire stock) may be owned,
directly or indirectly (after application of certain attribution rules), by five or fewer "individuals" (as defined under the Code to include some entities that would not ordinarily be considered
"individuals") during the last half of a taxable year; and
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shares of our 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.
See
"Material United States Federal Income Tax ConsiderationsTaxation of Our Company" and "Requirements for Qualification."
Our Charter Restricts the Ownership and Transfer of Shares of Our Capital Stock
Subject to exceptions specified in our charter, no stockholder may own, or be deemed to own by virtue of the attribution provisions of
the Code, in excess of the lesser of 5% in value or in number of shares of our outstanding capital stock. The attribution provisions are complex and may cause stock owned directly or indirectly by a
group of related individuals or entities to be
deemed to be owned by one individual or entity. As a result, the acquisition of less than 5% in value or in number of shares of stock (or the acquisition of an interest in an entity which owns stock)
by an individual or entity could cause that individual or entity (or another individual or entity) to be deemed to own in excess of 5% in value or in number of shares of our outstanding capital stock,
and thus subject that stock to the ownership limit. Our board of directors, in its sole discretion (subject to certain limitations), may waive the ownership limit with respect to our stockholders, but
is under no obligation to do so. As a condition of a waiver of the ownership limit, our board of directors may require opinions of counsel satisfactory to it or other conditions as it may direct,
including an agreement from the applicant that the applicant will not act to threaten our REIT status. Our charter excludes from the ownership limit some persons and their respective families and
affiliates, but provides that no excluded participant may own (directly or indirectly) more than the excluded participant's percentage limitation, as described under "Issuance of Excess
Stock."
Our
charter provides that any purported transfer or issuance of shares, or other event, will be null and void if it results in a prohibited event. The intended transferee or purported
owner in a transaction that results in a prohibited event will not acquire, and will retain no rights to, or economic interest in, those shares of stock. See "Issuance of Excess Stock."
Selected Provisions of Maryland Law and of Our Charter and Bylaws
In addition to the ownership limit, certain provisions of our charter and bylaws may delay, defer or prevent a change of control or
other transaction in which holders of some, or a majority, of shares of our common stock might receive a premium for their shares over the then prevailing market price of
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those
shares or which such holders might believe to be otherwise in their best interests. The following paragraphs summarize a number of these provisions, as well as selected provisions of the
Maryland General Corporation Law.
Advance Notice of Director Nominations and New Business; Procedures for Special Meetings Requested by Stockholders
Our charter and bylaws provide that for any stockholder proposal to be presented in connection with an annual meeting or special
meeting of our stockholders, including a proposal to nominate a director, the stockholder must have given timely written notice of the proposal to our secretary. The bylaws provide that nominations to
our board of directors and the proposal of
business to be considered by stockholders at an annual meeting of stockholders may be made only:
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pursuant to our notice of the meeting;
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by or at the direction of our board of directors; or
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by a stockholder who is a stockholder of record at the time such stockholder gives the notice required by our bylaws, who
is entitled to vote at the meeting on the election of the individual so nominated or on the proposal of business and who has complied with the advance notice procedures, including minimum and maximum
time periods, set forth in our charter and bylaws.
Our
bylaws also provide that only the business specified in our notice of meeting may be brought before a special meeting of stockholders. Nominations of persons for election to our
board of directors at a special meeting of stockholders at which directors are to be elected may be made only:
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by or at the direction of our board of directors;
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by a stockholder who has requested that a special meeting be called for the purpose of electing directors in compliance
with our bylaws and who has supplied the information required by our bylaws about each individual whom the stockholder proposes to nominate for election as a director; or
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provided that the special meeting has been called in compliance with our bylaws for the purpose of electing directors, by
a stockholder who is a stockholder of record at the time such stockholder gives the notice required by our bylaws, who is entitled to vote at the meeting on the election of the individual so nominated
and who has complied with the advance notice provisions, including minimum and maximum time periods, set forth in our charter or bylaws.
Our
bylaws also contain special procedures applicable to a special meeting of stockholders that is called at the request of stockholders entitled to cast not less than a majority of all
the votes entitled to be cast at the meeting.
Exemptions for the Principals from the Maryland Business Combination Law
Under Maryland law, "business combinations" between a Maryland corporation and an interested stockholder or an affiliate of an
interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger,
consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined
as:
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any person who beneficially owns 10% or more of the voting power of the corporation's voting stock; or
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an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in
question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
After
the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of
directors of the corporation and approved by two super-majority stockholder votes, unless, among other conditions, the holders of the corporation's common stock receive a minimum price, as defined by
Maryland law, for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its common stock. None of these provisions of Maryland
law will apply, however, to business combinations that are approved or exempted by the board of directors of the corporation before the time that the interested stockholder becomes an interested
stockholder.
Furthermore, a person is not an interested stockholder if the transaction by which he or she would otherwise have become an interested stockholder is approved in advance by the board of directors.
As
permitted by Maryland law, our charter exempts from these provisions any business combination between us and Mace Siegel, Arthur M. Coppola, Dana K. Anderson and Edward C.
Coppola (the "principals") and their respective affiliates or related persons. As a result, these persons may be able to enter into business combinations with us that may not be in the best interest
of our stockholders without compliance with the super-majority vote requirements and the other provisions of the statute.
Non-Stockholder Constituencies
Under our charter, for the purpose of determining our and our stockholders' best interests with respect to a proposed business
combination or other transaction involving a change of control of us, our board of directors must give due consideration to all relevant factors, including, without limitation, the interests of our
employees, the economy, community and societal interests and our and our stockholders' long-term as well as short-term interests, including the possibility that these interests
may be best served by our continued independence.
Other Provisions of Our Charter
Our charter authorizes our board of directors to classify and reclassify unissued shares and issue one or more series of common stock
or preferred stock and authorizes the creation and issuance of rights entitling holders thereof to purchase from us shares of stock or other securities or property.
Control Share Acquisitions
Maryland law provides that the acquirer of certain levels of voting power in electing directors of a Maryland corporation
(one-tenth or more, but less than one-third, one-third or more but less than a majority, and a majority or more) is not entitled to vote the shares in excess of the
applicable threshold unless voting rights for the shares are approved at a meeting by holders of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock owned
by the acquiror or by an officer or director of the
corporation who is an employee of the corporation, or unless the acquisition of the shares has been specifically or generally approved or exempted from the statute by a provision in the corporation's
charter or bylaws adopted before the acquisition of the shares. Our charter exempts from these provisions voting rights of shares owned by the principals and their respective affiliates and related
persons. Our bylaws also contain a provision exempting from this statute any acquisition by any person of shares of our common stock. There can be no assurance that this bylaw will not be amended or
eliminated in the future.
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Amendment to Our Charter and Bylaws
Amendments to our charter require the affirmative vote of holders of not less than two-thirds of all the votes entitled to
be cast on the matter. Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.
Director Removal
Subject to the rights of holders of any series of preferred stock, our charter provides that a director may be removed only for cause
and only by the affirmative vote of the holders of shares entitled to cast at least two-thirds of the votes entitled to be cast generally in the election of directors.
Our Dissolution
Our dissolution must be approved by our board of directors and by the affirmative vote of not less than a majority of all of the votes
entitled to be cast on the matter.
Supermajority Vote for Extraordinary Corporate Actions
Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its
assets, or engage in a share exchange or in a similar extraordinary corporate action unless approved by the corporation's board of directors and the affirmative vote of holders of at least
two-thirds of the votes entitled to be cast on the matter, unless a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is set forth in
the corporation's charter. Except for Article Ninth of our charter, which provides that dissolution must be approved by the vote of holders of a majority of our outstanding shares of common stock
entitled to vote on the matter, our charter does not provide for a lesser percentage in these situations.
Limitation of Liability of Directors
Our charter includes provisions that eliminate the liability of our directors and officers to us and to our stockholders for money
damages to the fullest extent permitted under Maryland law. Our charter also requires us to indemnify our present directors and officers to the maximum extent permitted under Maryland law. In
addition, we have entered into indemnification agreements with our directors and some of our officers.
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DESCRIPTION OF OUR COMMON STOCK
Subject to the provisions of our charter regarding excess stock (as described above), the holders of our common stock have full voting
rights, one vote for each share held of record. Subject to the provisions of our charter regarding excess stock and the rights of any holders of preferred stock, holders of our common stock are
entitled to receive the dividends authorized by our board of directors and declared by us out of funds legally available for this purpose. Upon our liquidation, dissolution or winding up (but subject
to the provisions of our charter and the rights of holders of any preferred stock), the assets legally available for distribution to holders of our common stock will be distributed ratably among the
holders of our common stock. Holders of our common stock have no preemptive or other subscription or conversion rights and no liability for further calls upon shares. See "Description of Our Capital
StockSelected Provisions of Maryland Law and of Our Charter and Bylaws." Our common stock is not subject to assessment.
The
transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
Under
Maryland law and our bylaws, stockholders are entitled to receive prior notice of our annual and special meetings of stockholders. Notice is given to a stockholder when it is
personally delivered to
him or her, left at his or her residence or usual place of business, mailed to him or her at his or her address as it appears on our records or transmitted to him or her by electronic mail or other
electronic means.
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DESCRIPTION OF OUR PREFERRED STOCK
Under our charter, we may issue shares of preferred stock from time to time, in one or more series as authorized by our board of
directors. Prior to issuance of shares of each series, our board of directors is required by the Maryland General Corporation Law to adopt resolutions and file Articles Supplementary with the State
Department of Assessments and Taxation of Maryland, fixing for each series the designations, powers, preferences, conversion and other rights, voting powers, qualifications, limitations as to
dividends, restrictions and terms and conditions of redemption. Our board of directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect
of delaying, deferring or preventing a change of control or other transaction in which holders of some, or a majority, of shares of our common stock might receive a premium for their shares over the
then prevailing market price of those shares or which such holders might believe to be otherwise in their best interests. The preferred stock will, when issued, be fully paid and nonassessable and
will not have, or be subject to, any preemptive or similar rights. The terms of any preferred stock we offer under a prospectus supplement may differ from the terms we describe below.
The
prospectus supplement relating to the series of preferred stock offered by that supplement will describe the specific terms of those securities, including:
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the title and stated value of that preferred stock;
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the number of shares of that preferred stock offered, the liquidation preference per share and the offering price of that
preferred stock;
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the dividend rates, periods and/or payment dates or methods of calculation thereof applicable to that preferred stock;
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whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends on
that preferred stock will accumulate;
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the voting rights applicable to that preferred stock;
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the procedures for any auction and remarketing, if any, for that preferred stock;
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the provisions for a sinking fund, if any, for that preferred stock;
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the provisions for redemption, if applicable, of that preferred stock;
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any listing of that preferred stock on any securities exchange;
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the terms and conditions, if applicable, upon which that preferred stock will be convertible into shares of common stock,
including the conversion price (or manner of calculation of the conversion price) and conversion period;
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a discussion of any material or special U.S. federal income tax considerations applicable to that preferred stock;
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any limitations on issuance of any series of preferred stock ranking senior to or on a parity with that series of
preferred stock as to dividend rights and rights upon our liquidation, dissolution or winding up;
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in addition to those limitations described elsewhere in this prospectus and any prospectus supplement, any other
limitations on actual and constructive ownership and restrictions on transfer, in each case as may be appropriate to preserve our status as a REIT; and
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any other specific terms, preferences, rights, limitations or restrictions of that preferred stock.
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Rank
Unless otherwise specified in the applicable prospectus supplement, the preferred stock will, with respect to dividend rights and
rights upon our liquidation, dissolution or winding up, rank:
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senior to all classes or series of common stock and to all equity securities issued by us the terms of which expressly
provide that those equity securities rank junior to the preferred stock;
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on a parity with all equity securities issued by us the terms of which so provide or which do not expressly provide that
those equity securities rank junior or senior to the preferred stock; and
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junior to all equity securities issued by us the terms of which expressly provide that those equity securities rank senior
to the preferred stock.
The
term "equity securities" does not include convertible debt securities.
Dividends
Holders of shares of our preferred stock will be entitled to receive, when, as and if authorized by our board of directors and declared
by us, out of our assets legally available for payment, cash dividends at rates and on dates as will be set forth in the applicable prospectus supplement. Each dividend will be payable to holders of
record as they appear on our stock transfer books on the record dates as may be fixed by our board of directors.
Dividends
on any series or class of our preferred stock may be cumulative or noncumulative, as provided in the applicable prospectus supplement. Dividends, if cumulative, will be
cumulative from and after the date set forth in the applicable prospectus supplement. If our board of directors fails to authorize a dividend payable on a dividend payment date on any series or class
of preferred stock for which dividends are noncumulative, then the holders of that series or class of preferred stock will have no right to receive a dividend in respect of the dividend period ending
on that dividend payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends on such series or class are declared or paid for any future period.
Except
as provided in the following paragraph, unless full cumulative dividends on the preferred stock of that series or class have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for that payment is set apart for payment for all past dividend periods, no dividends (other than in the common stock or other stock of ours ranking junior to the
preferred stock of that series or class as to dividends and upon liquidation) may be authorized or paid or set aside for payment nor may any other distribution be authorized or made on the common
stock or any other stock of ours ranking junior to or on a parity with the preferred stock of that series or class as to dividends or upon liquidation. In addition, common stock or any other stock of
ours ranking junior to or on a parity with the preferred stock of that series or class as to dividends or upon liquidation may not be redeemed, purchased or otherwise acquired for any consideration
(or any amounts be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by us (except by conversion into or exchange for other stock of ours ranking junior
to the preferred stock of that series or class as to dividends and upon liquidation).
When
dividends for all past dividend periods are not paid in full (or a sum sufficient for the full payment is not set apart) upon the shares of preferred stock of any series or class
and the shares of any other series or class of preferred stock ranking on a parity as to dividends with the preferred stock of that series or class, then all dividends authorized on shares of
preferred stock of that series or class and any other series or class of preferred stock ranking on a parity as to dividends with that series or class of preferred stock will be authorized pro rata,
so that the amount of dividends authorized per share on the preferred stock of that series or class and such other series or class of preferred stock will in all cases bear to each other the same
ratio that accrued dividends per share on the shares of
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preferred
stock of that series or class (which will not include any accumulation in respect of unpaid dividends for prior dividend periods if the preferred stock does not have a cumulative dividend)
and that other series or class of preferred stock bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on preferred
stock of that series or class that may be in arrears.
Any
dividend payment made on shares of a series or class of preferred stock will first be credited against the earliest accrued but unpaid dividend due with respect to shares of that
series or class that remains payable.
In
determining whether a distribution by dividend, redemption or other acquisition of stock or otherwise is permitted under Maryland law, amounts that would be needed, if we were to be
dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution
will not be added to our total liabilities.
Redemption
If the applicable prospectus supplement so states, the shares of preferred stock will be subject to mandatory redemption or redemption
at our option, in whole or in part, in each case on the terms, at the times and at the redemption prices set forth in that prospectus supplement.
The
prospectus supplement relating to a series or class of preferred stock that is subject to mandatory redemption will specify the number of shares of that preferred stock that are to
or may be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accumulated and unpaid dividends on
that preferred stock (which will not, if that preferred stock does not have a cumulative dividend, include any accumulation in respect of unpaid dividends for prior dividend periods) to the date of
redemption. The
redemption price may be payable in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series or class is payable only from
the net proceeds of the issuance of our stock, the terms of that preferred stock may provide that, if no such stock shall have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, that preferred stock will automatically and mandatorily be converted into shares of our applicable stock pursuant to conversion
provisions specified in the applicable prospectus supplement.
Notwithstanding
the foregoing, unless full cumulative dividends on all outstanding shares of that series or class of preferred stock have been or contemporaneously are authorized and
paid or authorized and a sum sufficient for that payment is set apart for payment for all past dividend periods, we may not redeem any shares of that series or class of preferred stock unless all
outstanding shares of preferred stock of that series or class are simultaneously redeemed and may not purchase or otherwise acquire directly or indirectly any shares of preferred stock of that series
or class (except by conversion into or exchange for our stock ranking junior to the preferred stock of that series or class as to dividends and upon liquidation). However, this will not prevent the
purchase or acquisition of shares of preferred stock of that series or class to preserve our REIT status or pursuant to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of preferred stock of that series or class.
If
fewer than all of the outstanding shares of preferred stock of any series or class are to be redeemed, the number of shares to be redeemed will be determined by us, and those shares
may be redeemed pro rata from the holders of record of those shares in proportion to the number of those shares held by those holders (with adjustments to avoid redemption of fractional shares) or any
other equitable method determined by us.
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Notice
of redemption will be mailed at least 30 days but not more than 90 days before the redemption date to each holder of record of a share of preferred stock of any
series to be redeemed at the address shown on our stock transfer books. Each notice will state:
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the redemption date;
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the number of shares and series of the preferred stock to be redeemed;
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the redemption price;
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the place or places where certificates for the preferred stock are to be surrendered for payment of the redemption price;
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that dividends on the shares to be redeemed will cease to accrue on the redemption date; and
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the date upon which the holder's conversion rights, if any, as to the shares will terminate.
If
fewer than all the shares of preferred stock of any series are to be redeemed, the notice mailed to each holder will also specify the number of shares of preferred stock to be
redeemed from each holder. If notice of redemption of any shares of preferred stock has been given, and if the funds necessary for that redemption have been irrevocably set apart by us in trust for
the benefit of the holders of any shares of preferred stock so called for redemption, then from and after the redemption date, dividends will cease to accrue on those shares of preferred stock, those
shares of preferred stock will no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price.
Liquidation Preference
Upon our voluntary or involuntary liquidation, dissolution or winding up, then, before we will make any distribution or payment to the
holders of common stock or any other series or class of stock ranking junior to any series or class of the preferred stock in the distribution of assets upon any liquidation, dissolution or winding
up, the holders of that series or class of preferred stock will be entitled to receive, after payment or provision for payment of our debts and other liabilities and amounts due to stockholders whose
preferential rights are senior to those of that series or class of preferred stock, out of our assets legally available for distribution to stockholders, liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable prospectus supplement), plus an amount equal to all dividends accrued and unpaid on the preferred stock (which will not include any
accumulation in respect of unpaid dividends for prior dividend periods if the preferred stock does not have a cumulative dividend). After payment of the full amount
of the liquidating distributions to which they are entitled, the holders of preferred stock will have no right or claim to any of our remaining assets.
If,
upon any voluntary or involuntary liquidation, dissolution or winding up, our legally available assets are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of any series or class of preferred stock and the corresponding amounts payable on all shares of other classes or series of our stock ranking on a parity with that series or class
of preferred stock in the distribution of assets upon liquidation, dissolution or winding up, then the holders of that series or class of preferred stock and all other such classes or series of stock
will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
If
liquidating distributions have been made in full to all holders of any series or class of preferred stock, we will distribute our remaining assets among the holders of any other
classes or series of stock ranking junior to that series or class of preferred stock upon liquidation, dissolution or winding up, according to their respective rights and preferences and in each case
according to their respective number of shares. For these purposes, none of the following will be deemed to constitute a liquidation,
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dissolution
or winding up of our affairs: (i) a consolidation, merger or other business combination of our Company with one or more corporations, REITs or other entities, (ii) our
dissolution, liquidation, winding up, or reorganization immediately followed by incorporation of another entity to which such assets are distributed, (iii) a sale, lease, conveyance or other
disposition of all or substantially all of our assets, properties or business to another entity or (iv) a statutory share exchange by us.
Voting Rights
Holders of preferred stock will not have any voting rights, except as set forth below or as indicated in the applicable prospectus
supplement.
Unless
provided otherwise for any series or class of preferred stock, so long as any shares of preferred stock of a series or class remain outstanding, we will
not:
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without the affirmative vote or consent of the holders of at least a majority of the shares outstanding at that time of
that series or class of preferred stock (voting as a single class with all other series or classes of preferred stock upon which like voting rights have been conferred and are exercisable), given in
person or by proxy, either in writing or at a meeting, authorize or create, or increase the authorized or issued amount of, any class or series of stock ranking senior to that series or class of
preferred stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized stock into any of those shares, or create,
authorize or issue any obligation or security convertible into or evidencing the right to purchase any of those shares; or
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without the affirmative vote or consent of the holders of at least a majority of the shares outstanding at that time of
that series or class of preferred stock (voting as a single class with any other series or classes of preferred stock upon which like voting rights have been conferred and are exercisable), given in
person or by proxy, either in writing or at a meeting, amend, alter or repeal the provisions of our charter or articles supplementary for such series or class of preferred stock so as to materially
and adversely alter or change the rights, preferences or privileges of that series or class of preferred stock.
However,
no such vote or consent is required in connection with (i) any increase in the total number of our authorized shares; (ii) the authorization or increase of any
class or series of shares of stock ranking, as to distribution rights and liquidation preference, on a parity with or junior to that series or class of preferred stock; (iii) any merger or
consolidation in which we are the surviving entity if, immediately after the merger or consolidation, there are outstanding no shares of stock and no securities convertible into shares of stock
ranking as to distribution rights or liquidation preference senior to that series or class of preferred stock other than our securities outstanding prior to such merger or consolidation;
(iv) any merger or consolidation in which we are not the surviving entity if, as result of the merger or consolidation, the holders of that series or class of preferred stock receive shares of
stock or other equity securities with preferences, rights and privileges substantially identical with the preferences, rights and privileges of that series or class of preferred stock and there are
outstanding no shares of stock or stock or other equity securities of the surviving entity ranking as to distribution rights or liquidation preference senior to that series or class of preferred stock
other than our securities outstanding prior to such merger or consolidation; or (v) our dissolution, liquidation or winding up.
These
voting provisions will not apply if, at or prior to the time when the act with respect to which that vote would otherwise be required will be effected, all outstanding shares of
that series or class of preferred stock have been redeemed or called for redemption upon proper notice and (i) sufficient funds have been deposited in trust to effect that redemption or
(ii) in a case involving an issuance of stock ranking senior to such series or class of preferred stock, the redemption price (other than any
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portion
thereof consisting of accrued and unpaid dividends) is to be paid solely from the proceeds of such issuance.
Conversion Rights
The terms and conditions, if any, upon which shares of any series or class of preferred stock are convertible into shares of common
stock will be set forth in the applicable prospectus supplement. The terms will include:
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the number of shares of common stock into which the preferred stock is convertible;
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the conversion price (or manner of calculation of the conversion price);
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the conversion period;
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provisions as to whether conversion will be at our option or the option of the holders of the preferred stock;
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the events requiring an adjustment of the conversion price; and
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provisions affecting conversion in the event of the redemption of the preferred stock.
Transfer Agent
The transfer agent and registrar for any series or class of preferred stock will be set forth in the applicable prospectus supplement.
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DESCRIPTION OF DEPOSITARY SHARES
General
The following description, together with the additional information we include in any applicable prospectus supplement, summarizes the
material terms and provisions of depositary shares that we may offer under this prospectus. While the terms we have summarized below will generally apply to any depositary shares we may offer under
this prospectus, we will describe the particular terms of any depositary shares that we may offer in more detail in the applicable prospectus supplement. The terms of any depositary shares we offer
under a prospectus supplement may differ from the terms we describe below.
We
may issue receipts for depositary shares, each of which will represent a fractional interest of a share of a particular series of preferred stock, as specified in the applicable
prospectus supplement. The shares of preferred stock of each series represented by depositary shares will be deposited under a separate deposit agreement among us, the depositary named in the deposit
agreement, and the holders of the depositary receipts. Immediately following our issuance and delivery of the preferred stock to the depositary, we will cause the depositary to issue, on our behalf,
the depositary receipts. Subject to the terms of the applicable depositary agreement, each owner of a depositary receipt will be entitled, in proportion to the fractional interest of a share of a
particular series of preferred stock represented by the depositary shares evidenced by the depositary receipts, to all the rights and preferences of preferred stock represented by the depositary
shares, including dividend, voting, conversion, redemption and liquidation rights, in each case as designated by our board of directors and described in the applicable prospectus supplement.
The
following summary of material provisions of depositary shares we may issue does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all
the provisions of the deposit agreement and the depositary receipts applicable to the particular depositary shares. We urge you to read the applicable prospectus supplements related to the depositary
shares that we sell under this prospectus, as well as the complete deposit agreement and depositary receipts that contain the terms of the depositary shares.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash distributions received with respect to the shares of the applicable
series of the preferred stock proportionately to the record holders of the depositary receipts entitled to receive the distribution. Such distributions are subject to certain obligations of holders to
file proofs, certificates and other information and to pay certain charges and expenses to the depositary.
In
the event of a non-cash distribution, the depositary will distribute property it receives to the record holders of depositary receipts entitled to the property unless the
depositary determines that it cannot be made proportionately or it is not feasible to make such distribution, in which case the depositary may, with our approval, sell such property and distribute the
net proceeds of such sale to holders of the depository receipts entitled to receive the distribution. Such distributions by the depositary are subject to certain obligations of holders to file proofs,
certificates, and other information and to pay certain changes and expenses to the depositary.
Withdrawal of Shares
Unless the related depositary shares have been called previously for redemption, upon surrender of the depositary receipts at the
corporate trust office of the depositary, the holders thereof will be entitled to delivery at such office, to or upon such holder's order, of the number of whole or fractional shares of preferred
stock and any money or other property represented by the depositary shares
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evidenced
by such depositary receipts. Holders of depositary receipts will be entitled to receive whole or fractional shares of the related preferred stock on the basis of the proportion of preferred
stock represented by each depositary share as specified in the applicable prospectus supplement, but holders of such preferred stock will not thereafter be entitled to receive depositary shares
therefor. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the preferred stock to be withdrawn, the
depositary will deliver to such holder at the same time a new depositary receipt evidencing such excess number of depositary shares.
Redemption
Whenever we redeem preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of
depositary shares representing the preferred stock so redeemed, provided we have paid in full to the depositary the redemption price of the preferred stock to be redeemed plus an amount equal to any
accrued and unpaid dividends thereon to the date fixed for redemption. With respect to noncumulative preferred stock, dividends will be paid for the current dividend period only. The redemption price
per depositary share will be equal to the redemption price and any other amounts per share payable with respect to the preferred stock. If less than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected pro rata or by any other equitable method determined by us.
After
the date fixed for redemption, the depositary shares called for redemption will no longer be deemed to be outstanding and all rights of the holders of the depositary receipts
evidencing the depositary shares called for redemption will cease. However, the holders will have the right to receive any moneys payable upon redemption and any money or other property that the
holders of such depositary receipts were entitled to at the time of redemption when they surrender their depositary receipts to the depositary.
Voting Rights
Upon receipt of notice of any meeting at which the holders of the preferred stock are entitled to vote, the depositary will mail the
information contained in such notice to the record holders of the depositary receipts related to such preferred stock. Each record holder of depositary receipts on the record date will be entitled to
instruct the depositary as to the exercise of the voting rights of the preferred stock related to such holder's depositary receipts. The record date for depositary receipts will be the same date as
the record date for preferred stock. The depositary will vote the preferred stock related to such depositary receipts in accordance with such instructions, and we will agree to take all reasonable
action that the depositary deems necessary to enable it to vote the preferred stock. The depositary will abstain from voting the preferred stock represented by such depositary shares to the extent it
does not receive specific instructions from the holders of depositary receipts.
Liquidation Preference
In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, each holder of a depositary
receipt will be entitled to the fraction of the liquidation preference accorded the preferred stock represented by the depositary share evidenced by such depositary receipt, as set forth in the
applicable prospectus supplement.
Conversion or Exchange of Preferred Stock
The depositary shares, as such, are not convertible into or exchangeable for common stock or any other securities or property.
Nevertheless, if so specified in the applicable prospectus supplement relating to an offering of depositary shares, the depositary receipts may be surrendered by holders
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thereof
to the depositary with written instructions to the depositary to instruct us to cause conversion or exchange of the preferred stock represented by the depositary shares into whole common
stock, other preferred stock or other securities or property. Upon receipt of such instructions and any amounts payable in respect thereof, we will cause the conversion or exchange thereof utilizing
the same procedures as those provided for delivery of preferred stock to effect such conversion or exchange. If the depositary shares evidenced by a depositary receipt are to be converted or exchanged
in part only,
one or more new depositary receipts will be issued for any depositary shares not to be converted or exchanged. No fractional shares will be issued upon conversion or exchange. If conversion or
exchange will result in a fractional share being issued, we will pay in cash an amount equal to the value of the fractional interest based upon the closing price of the shares on the last business day
prior to the conversion or exchange.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares which represent the preferred stock and any provision of the deposit
agreement may at any time be amended by agreement between the depositary and us.
However,
any amendment that materially and adversely alters the rights of the holders of depositary receipts will not be effective unless it has been approved by the existing holders of
at least a majority of the depositary shares evidenced by outstanding depositary receipts.
We
may terminate the deposit agreement upon not less than 30 days' prior written notice to the depositary if (1) such termination is to preserve our status as a REIT or
(2) a majority of each class of preferred stock affected by such termination consents to such termination. Upon termination of the deposit agreement, the depositary shall deliver or make
available to each holder of depositary receipts, upon surrender of the depositary receipts held by such holder, such number of whole or fractional shares of preferred stock as are represented by the
depositary shares evidenced by such depositary receipts. In addition, the deposit agreement will automatically terminate if:
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all outstanding depositary shares have been redeemed;
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there has been a final distribution in respect of the related share of preferred stock in connection with any liquidation,
dissolution, or winding-up and such distribution has been distributed to the holders of depositary receipts evidencing the depositary shares representing such preferred stock; or
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-
the related preferred stock shall have been converted into capital stock that is not represented by depositary shares.
Fees of Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the deposit agreement. In
addition, we will pay the fees and expenses of the depositary in connection with the performance of its duties under the deposit agreement. However, holders of depositary receipts will pay the
depositary's fees and expenses for any duties that holders request to be performed which are outside those expressly provided for in the deposit agreement.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering to us notice of its resignation, and we may remove the depositary at any time. Any
such resignation or removal will take effect upon the appointment of a successor depositary. A successor depositary must be appointed within 60 days after delivery of the notice of resignation
or removal. A successor depositary must be a bank or trust
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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 us against an inadvertent loss of REIT status, the deposit agreement will contain provisions restricting the
ownership and transfer of depositary shares. These restrictions will be described in the applicable prospectus supplement.
Miscellaneous
The depositary will forward to holders of depositary receipts any reports and communications from us which it receives with respect to
the related shares of preferred stock. Neither we nor the depositary will be liable if it is prevented from or delayed in, by law or any circumstances beyond its control, performing its obligations
under the deposit agreement. The obligations of the depositary and us under the deposit agreement will be limited to performing their duties thereunder in good faith and without gross negligence or
willful misconduct. We and the depositary will not be obligated to prosecute or defend any legal proceeding in respect of any depositary receipts, depositary shares, or preferred stock represented
thereby unless satisfactory indemnity is furnished. We and the depositary may rely on written advice of counsel or accountants, or information provided by persons presenting preferred stock
represented thereby for deposit, holders of depositary receipts, or other persons believed to be competent to give such information, and on documents believed to be genuine and signed by a proper
party.
If
the depositary shall receive conflicting claims, requests, or instructions from any holders of depositary receipts, on the one hand, and us, on the other hand, the depositary shall be
entitled to act on such claims, requests, or instructions received from us.
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DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any applicable prospectus supplement, summarizes the
material terms and provisions of the debt securities that we may offer under this prospectus. While the terms we have summarized below will generally apply to any future debt securities we may offer
under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities we offer
under a prospectus supplement may differ from the terms we describe below.
We
will issue any senior notes under the senior indenture which we will enter into with the trustee named in the senior indenture. We will issue any subordinated notes under the
subordinated indenture which we will enter into with the trustee named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement of which this
prospectus is a part. We use the term "indentures" to refer to both the senior indenture and the subordinated indenture.
The
indentures will be qualified under the Trust Indenture Act of 1939. We use the term "trustee" to refer to either the senior trustee or the subordinated trustee, as applicable.
The
following summary of material provisions of the senior notes, the subordinated notes and the indentures is subject to, and is qualified in its entirety by reference to, all the
provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements related to the debt securities that we sell under this
prospectus, as well as the complete indentures that contain the terms of the debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are
identical.
General
The indentures do not limit the aggregate principal amount of debt securities that may be issued thereunder. The debt securities may be
issued from time to time in one or more series. We will describe in the applicable prospectus supplement the terms relating to a series of debt securities, including:
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the title;
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the principal amount being offered, and, if a series, the total amount authorized and the total amount outstanding;
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any limit on the amount that may be issued;
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whether or not we will issue the series of debt securities in global form and, if so, the terms and who the depositary
will be;
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the maturity date(s);
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the principal amount due at maturity, and whether the debt securities will be issued with any original issue discount;
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whether and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who
is not a U.S. person for tax purposes, and whether we can redeem the debt securities if we have to pay such additional amounts;
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the interest rate(s), which may be fixed or variable, or the method for determining the rate, the date interest will begin
to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;
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whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
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the terms of the subordination of any series of subordinated debt;
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the place where payments will be payable;
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restrictions on transfer, sale or other assignment, if any;
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our right, if any, to defer payment of interest and the maximum length of any such deferral period;
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the date, if any, after which, the conditions upon which, and the price at which we may, at our option, redeem the series
of debt securities pursuant to any optional or provisional redemption provisions, and any other applicable terms of those redemption provisions;
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provisions for a sinking fund, purchase or other analogous fund, if any;
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the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous
fund provisions or otherwise, to redeem, or at the holder's option to purchase, the series of debt securities;
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a discussion of any material or special U.S. federal income tax considerations applicable to the debt securities;
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information describing any book-entry features;
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the procedures for any auction and remarketing, if any;
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the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any
integral multiple thereof;
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if other than U.S. dollars, the currency in which the series of debt securities will be denominated; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any
events of default that are in addition to those described in this prospectus or any covenants, including restrictive covenants, provided with respect to the debt securities, and any terms which may be
required by us or advisable under applicable laws or regulations or advisable in connection with the marketing of the debt securities.
One
or more series of the debt securities may be issued as discounted debt securities (bearing no interest or interest at a rate which at the time of issuance is below market rates) to
be sold at a substantial discount below their stated principal amount. Material U.S. federal income tax consequences and other special considerations applicable to any such discounted debt securities
will be described in the prospectus supplement relating thereto.
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of debt securities may be convertible into or exchangeable
for our common stock or other securities, including the conversion or exchange rate, as applicable, or how it will be calculated, and the applicable conversion or exchange period. We will include
provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of our securities that the holders of
the series of debt securities receive upon conversion or exchange would, under the circumstances described in those provisions, be subject to adjustment, or pursuant to which those holders would,
under those circumstances, receive other property upon conversion or exchange, for example in the event of our merger or consolidation with another entity.
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Consolidation, Merger or Sale
The indentures in the forms initially filed as exhibits to the registration statement of which this prospectus is a part do not contain
any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor of ours or acquiror of
such assets must assume all of our obligations under the indentures and the debt securities.
If
the debt securities are convertible into our other securities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the
conversion of the debt securities into securities similar to the debt securities which the holders of the debt securities would have received if they had converted the debt securities before the
consolidation, merger or sale.
Events of Default Under the Indentures
The following are events of default under the indentures with respect to any series of debt securities that we may
issue:
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if we fail to pay interest when due and payable and our failure continues for 30 days and the time for payment has
not been extended or deferred;
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if we fail to pay the principal, or premium, if any, when due and payable and the time for payment has not been extended
or delayed;
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if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a
covenant solely for the benefit of another series of debt securities, and our failure continues for 90 days after we receive notice from the trustee or holders of at least 25% in aggregate
principal amount of the outstanding debt securities of the applicable series; and
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if specified events of bankruptcy, insolvency or reorganization occur.
If
an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare
the unpaid principal or, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the
principal amount of and accrued interest, if any, of each series of debt securities then outstanding shall be due and payable without any notice or other action on the part of the trustee or any
holder.
The
holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its
consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the applicable
indenture.
Subject
to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or
powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity. 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 trustee, or exercising
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any
trust or power conferred on the trustee, with respect to the debt securities of that series, provided that:
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the direction so given by the holder is not in conflict with any law or the applicable indenture; and
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subject to its duties under the Trust Indenture Act of 1939, the trustee need not take any action that might involve it in
personal liability or might be unduly prejudicial to the holders not involved in the proceeding.
A
holder of the debt securities of any series will only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies
if:
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the holder has given written notice to the trustee of a continuing event of default with respect to that series;
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made
written request, and such holders have offered reasonable indemnity to the trustee, to institute the proceeding as trustee; and
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the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series other conflicting directions, within 90 days after the notice, request and offer.
These
limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities.
We
will periodically file statements with the trustee regarding our compliance with the covenants in the indentures.
Modification of Indentures; Waiver
We and the trustee may change an indenture without the consent of any holders with respect to specific matters,
including:
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to fix any ambiguity, omission, defect or inconsistency in the indenture;
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to comply with the provisions described above under "Consolidation, Merger or Sale";
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to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture
Act of 1939;
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to evidence and provide for the acceptance of appointment by a successor trustee;
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to provide for uncertificated debt securities;
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to add to, delete from, or revise the conditions, limitations and restrictions on the authorized amount, terms or purposes
of issuance, authorization and delivery of debt securities of any unissued series;
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to add any additional events of default;
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to provide for the issuance of and establish the form and terms and conditions of any series of debt securities as
provided in an indenture, to establish the form of any certifications required to be furnished pursuant to an indenture or any series of debt securities, or to add to the rights of the holders of any
series of debt securities;
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to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, to
make the occurrence, or the occurrence and the continuance, of a
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default
in any such additional covenants, restrictions, conditions or provisions an event of default, or to surrender any of our rights or powers under the indenture; or
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to make any other provisions with respect to matters or questions arising under an indenture, provided that such action
shall not adversely affect the interests of holders or any related coupons in any material respect; provided further, that any change to an indenture to conform it to this prospectus or the applicable
prospectus supplement shall be deemed not to adversely affect the interests of holders in any material respect.
In
addition, under the indentures, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a
majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, we and the trustee may make the following changes only with the consent of each
holder of any outstanding debt securities affected:
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changing the stated fixed maturity of, or any payment date of any installment of interest on, the debt securities;
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reducing the principal amount, reducing the rate of interest on, or reducing any premium payable upon the redemption of
any debt securities; or
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reducing the percentage of debt securities, the holders of which are required to consent to any supplemental indenture.
Defeasance and Discharge
The indentures provide that we may elect, with respect to the debt securities of any series to terminate (and be deemed to have
satisfied) any and all obligations in respect of such debt securities (except for certain obligations to register the transfer or exchange of debt securities, to replace stolen, lost or mutilated debt
securities, to maintain paying agencies and hold monies for payment in trust and, if so specified with respect to the debt securities of a certain series, to pay the principal of (and premium, if any)
and interest, if any, on such specified debt securities) on the 91st day after the deposit with the trustee, in trust, of money and/or U.S. government obligations which through the payment of
interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal (and premium, if any (and interest, if any)), on and any
mandatory sinking fund payments in respect of such debt securities on the stated maturity of such payments in accordance with the terms of the Indenture and such debt securities.
Such
a trust may be established only if, among other things, we have delivered to the trustee an opinion of counsel (who may be counsel to us) to the effect that, based upon applicable
U.S. federal income tax law or a ruling published by the U.S. Internal Revenue Service (which opinion must be based on a change in applicable U.S. federal income tax law after the date of the
indenture or a ruling published by the U.S. Internal Revenue Service after the date of the indenture), such a defeasance and discharge will not be deemed, or result in, a taxable event with respect to
holders of such debt securities. The designation of such provisions, U.S. federal income tax consequences and other considerations applicable thereto will be described in the prospectus supplement
relating thereto. If so specified with respect to the debt securities of a series, such a trust may be established only if establishment of the trust would not cause the debt securities of any such
series listed on any nationally recognized securities exchange to be de-listed as a result thereof.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the
applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in
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temporary
or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depositary named by us and identified
in a prospectus supplement with respect to that series.
At
the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of
the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject
to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present
the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the
office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or
exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We
will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt
securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except
that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If
we elect to redeem the debt securities of any series, we will not be required to:
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issue, register the transfer of, or exchange any debt securities of any series being redeemed in part during a period
beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business
on the day of the mailing; or
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register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the
unredeemed portion of any debt securities we are redeeming in part.
Information Concerning the Trustee
The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only
those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the trustee is under no obligation to exercise any of the powers given it by the indentures at the request of any holder of
debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on
any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We
will pay principal of, and any premium and interest on, the debt securities of a particular series at the office of the paying agents designated by us, except that, unless we
otherwise indicate in the applicable prospectus supplement, we may make payments of principal or interest by check which we will mail to the holder or by wire transfer to certain holders. Unless we
otherwise indicate in a
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prospectus
supplement, we will designate an office or agency of the trustee in the City of New York as our paying agent for payments with respect to debt securities of each series. We will name in the
applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the
debt securities of a particular series.
All
money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities which remains unclaimed at the end of two years
after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except
to the extent that the Trust Indenture Act of 1939 is applicable.
Subordination of Subordinated Debt Securities
The subordinated debt securities will be subordinate and junior in priority of payment to certain of our other indebtedness to the
extent described in a prospectus supplement.
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DESCRIPTION OF WARRANTS
The following description, together with the additional information we include in any applicable prospectus supplement, summarizes the
material terms and provisions of warrants that we may offer under this prospectus. While the terms we have summarized below will generally apply to any warrants we may offer under this prospectus, we
will describe the particular terms of any warrants that we may offer in more detail in the applicable prospectus supplement. The terms of any warrants we offer under a prospectus supplement may differ
from the terms we describe below.
We
may issue warrants for the purchase of shares of our common stock, shares of our preferred stock or debt securities. We may issue warrants independently of or together with shares of
our common stock, shares of our preferred stock or debt securities offered by any prospectus supplement, and we may attach the warrants to, or issue them separately from, shares of common stock,
shares of preferred stock or debt securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent, all
as set forth in the prospectus supplement relating to the particular issue of offered warrants. The warrant agent will act solely as our agent in connection with the warrant certificates relating to
the warrants and will not assume any obligation or relationship of agency or trust with any holders of warrant certificates or beneficial owners of warrants.
The
following summary of material provisions of the warrant agreements and warrants does not purport to be complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the warrant agreement and the warrant certificates applicable to the particular series of warrants. We urge you to read the applicable prospectus supplements related to the
warrants that we sell under this prospectus, as well as the complete warrant agreement and warrant certificates that contain the terms of the warrants.
General
The applicable prospectus supplement will describe the terms of the warrants, including as applicable:
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the offering price;
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the aggregate number or amount of underlying securities purchasable upon exercise of the warrants and the exercise price;
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the number of warrants being offered;
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-
the date, if any, after which the warrants and the underlying securities will be transferable separately;
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the date on which the right to exercise the warrants will commence, and the date on which the right will expire (the
"Expiration Date");
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the number of warrants outstanding, if any;
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-
a discussion of any material or special U.S. federal income tax considerations applicable to the warrants;
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-
the terms, if any, on which we may accelerate the date by which the warrants must be exercised; and
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any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the
warrants.
Warrants
will be offered and exercisable for U.S. dollars only and will be in registered form only.
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Holders
of warrants will be able to exchange warrant certificates for new warrant certificates of different denominations, present warrants for registration of transfer, and exercise
warrants at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. Prior to the exercise of any warrants, holders of the warrants to
purchase shares of common stock or preferred stock will not have any rights of holders of shares of common stock or preferred stock, including the right to receive payments of dividends, if any, or to
exercise any applicable right to vote.
Certain Risk Considerations
Any warrants we issue will involve a degree of risk, including risks arising from fluctuations in the price of the underlying shares of
common stock, shares of preferred stock or
debt securities and general risks applicable to the securities market (or markets) on which the underlying securities trade, as applicable.
Prospective
purchasers of the warrants will need to recognize that the warrants may expire worthless and, thus, purchasers should be prepared to sustain a total loss of the purchase
price of their warrants. This risk reflects the nature of a warrant as an asset which, other factors held constant, tends to decline in value over time and which may, depending on the price of the
underlying securities, become worthless when it expires. The trading price of a warrant at any time is expected to increase if the price of or, if applicable, dividend rate on, the underlying
securities increases. Conversely, the trading price of a warrant is expected to decrease as the time remaining to expiration of the warrant decreases and as the price of or, if applicable, dividend
rate on, the underlying securities, decreases. Assuming all other factors are held constant, the more a warrant is "out-of-the-money" (i.e., the more the
exercise price exceeds the price of the underlying securities and the shorter its remaining term to expiration), the greater the risk that a purchaser of the warrant will lose all or part of his or
her investment. If the price of the underlying securities does not rise before the warrant expires to an extent sufficient to cover a purchaser's cost of the warrant, the purchaser will lose all or
part of his or her investment in the warrant upon expiration.
In
addition, prospective purchasers of the warrants should be experienced with respect to options and option transactions, should understand the risks associated with options and should
reach an investment decision only after careful consideration, with their financial advisers, of the suitability of the warrants in light of their particular financial circumstances and the
information discussed in this prospectus and, if applicable, the prospectus supplement. Before purchasing, exercising or selling any warrants, prospective purchasers and holders of warrants should
carefully consider, among other things:
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the trading price of the warrants;
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-
the price of the underlying securities at that time;
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-
the time remaining to expiration; and
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-
any related transaction costs.
Some
of the factors referred to above are in turn influenced by various political, economic and other factors that can affect the trading price of the underlying securities and should be
carefully considered prior to making any investment decisions.
Purchasers
of the warrants should further consider that the initial offering price of the warrants may be in excess of the price that a purchaser of options might pay for a comparable
option in a private, less liquid transaction. In addition, it is not possible to predict the price at which the warrants will trade in the secondary market or whether any such market will be liquid.
We may, but will not be obligated to, file an application to list any warrants on a U.S. national securities exchange. To the extent that any warrants are exercised, the number of warrants outstanding
will decrease, which may
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result
in a lessening of the liquidity of the warrants. Finally, the warrants will constitute our direct, unconditional and unsecured obligations, and as such will be subject to any changes in our
perceived creditworthiness.
Exercise of Warrants
Each holder of a warrant will be entitled to purchase that number or amount of underlying securities, at the exercise price, as will in
each case be described in the prospectus supplement relating to the offered warrants. After the close of business on the Expiration Date (which may be extended by us), unexercised warrants will become
void.
Holders
may exercise warrants by delivering to the warrant agent payment as provided in the applicable prospectus supplement of the amount required to purchase the underlying securities
purchasable upon exercise, together with the information set forth on the reverse side of the warrant certificate. Warrants will be deemed to have been exercised upon receipt of payment of the
exercise price, subject to the receipt within five business days of the warrant certificate evidencing the exercised warrants. Upon receipt of payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will, as soon as practicable, issue and deliver the
underlying securities purchasable upon such exercise. If fewer than all of the warrants represented by a warrant certificate are exercised, we will issue a new warrant certificate for the remaining
amount of warrants.
Amendments and Supplements to Warrant Agreements
We may amend or supplement the warrant agreement without the consent of the holders of the warrants issued under the agreement to
effect changes that are not inconsistent with the provisions of the warrants and that do not adversely affect the interests of the holders.
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DESCRIPTION OF RIGHTS
We may issue rights for the purchase of shares of our common stock, shares of our preferred stock or debt securities. Each series of
rights will be issued under a separate rights agreement which we will enter into with a bank or trust company, as rights agent, all as set forth in the applicable prospectus supplement. The rights
agent will act solely as our agent in connection with the certificates relating to the rights and will not assume any obligation or relationship of agency or trust with any holders of rights
certificates or beneficial owners of rights. We will file the rights agreement and the rights certificates relating to each series of rights with the SEC, and incorporate them by reference as an
exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of rights.
The
applicable prospectus supplement will describe the terms of any rights we issue, including as applicable:
-
-
the date for determining the persons entitled to participate in the rights distribution;
-
-
the aggregate number or amount of underlying securities purchasable upon exercise of the rights and the exercise price;
-
-
the aggregate number of rights being issued;
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-
the date, if any, on and after which the rights may be transferable separately;
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-
the date on which the right to exercise the rights commences and the date on which the right expires;
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-
the number of rights outstanding, if any;
-
-
a discussion of any material or special U.S. federal income tax considerations applicable to the rights; and
-
-
any other terms of the rights, including the terms, procedures and limitations relating to the distribution, exchange and
exercise of the rights.
Rights
will be exercisable for U.S. dollars only and will be in registered form only.
DESCRIPTION OF UNITS
We may issue securities in units, each consisting of two or more types of securities. For example, we might issue units consisting of a
combination of debt securities and warrants to purchase common stock. If we issue units, the prospectus supplement relating to the units will contain the information described above with regard to
each of the securities that is a component of
the units. In addition, the prospectus supplement relating to the units will describe the terms of any units we issue, including as applicable:
-
-
the date, if any, on and after which the units may be transferable separately;
-
-
whether we will apply to have the units traded on a securities exchange or securities quotation system;
-
-
a discussion of any material or special U.S. federal income tax considerations applicable to the units; and
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-
how, for U.S. federal income tax purposes, the purchase price paid for the units is to be allocated among the component
securities.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the material U.S. federal income tax considerations regarding our qualification and taxation as a
REIT and the material U.S. federal income tax considerations to U.S. Holders and Non-U.S. Holders (each as defined below) of the purchase, ownership and disposition of our common stock.
This discussion does not address the consequence of an investment in shares of our preferred stock, depositary shares, debt securities, warrants, rights or units. The tax considerations of such an
investment will be discussed in the applicable prospectus supplement. This discussion is based upon the provisions of the Code, the final and temporary Treasury regulations promulgated thereunder and
administrative rulings and judicial decisions now in effect, all of which are subject to change (possibly with retroactive effect) or different interpretations. This summary does not purport to deal
with all aspects of U.S. federal income taxation that may be relevant to an investor's decision to purchase shares of our common stock, nor any tax consequences arising under the laws of any state,
locality or foreign jurisdiction or under any federal tax laws other than U.S. federal income tax laws. This summary does not address all tax considerations that may be relevant to a prospective
investor based on such investor's particular circumstances, and is not intended to be applicable to all categories of investors that may be subject to special treatment under the Code, including but
not limited to dealers in securities, banks, thrifts, or other financial institutions, insurance companies, regulated investment companies, tax-exempt organizations, U.S. expatriates,
persons that hold common stock as part of a straddle, conversion transaction, or hedge, partnerships or other pass-through entities and persons holding
our common stock through a partnership or other pass-through entity, a holder who received our stock through the exchange of employee stock options or otherwise as compensation, persons
deemed to sell our common stock under the constructive sale provisions of the Code, persons whose "functional currency" is other than the U.S. dollar, holders subject to the alternative minimum tax,
foreign governments or international organizations. In addition, this discussion is limited to persons who hold our common stock as "capital assets" (generally, property held for investment) within
the meaning of Section 1221 of the Code.
The
sections of the Code relating to qualification and operation as a REIT, and the U.S. federal income tax treatment of a REIT and its stockholders, are highly technical and complex.
The following discussion sets forth only the material aspects of those sections. This summary is qualified in its entirety by the applicable Code provisions and the related rules and Treasury
regulations. No advance ruling from the Internal Revenue Service ("IRS") has been or will be sought regarding any matter discussed in this prospectus. No assurance can be given that the IRS would not
assert, or that a court would not sustain, a position contrary to any of the tax aspects set forth below
THIS
SECTION IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES
TO YOU REGARDING THE PURCHASE, OWNERSHIP AND SALE OF THE COMMON STOCK DESCRIBED BY THIS PROSPECTUS. YOU SHOULD ALSO CONSULT WITH YOUR TAX ADVISOR REGARDING THE IMPACT OF POTENTIAL CHANGES IN THE
APPLICABLE TAX LAWS.
Taxation of Our Company
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with our taxable year ending
December 31, 1994. We believe that we are organized and have operated in a manner that qualifies us for taxation as a REIT under the Code. We further believe that our proposed future method of
operation will enable us to continue to qualify as a REIT. However, no assurances can be given that our beliefs or expectations will be fulfilled, since qualification as a REIT depends on our
continuing to satisfy numerous asset, income and distribution tests described below, which in turn depends, in part, on our operating results.
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We
generally are not subject to U.S. federal income tax on the portion of our taxable income or capital gain that is distributed to stockholders annually as long as we qualify as a REIT.
This treatment
substantially eliminates the "double taxation" (i.e., at both the corporate and stockholder levels) that typically results from investment in a corporation.
Notwithstanding
our qualification as a REIT, we are subject to U.S. federal income tax as follows:
-
-
we are taxed at normal corporate rates on any undistributed net income (including undistributed net capital gains);
-
-
if we fail to satisfy either the 75% or the 95% gross income tests (discussed below), but nonetheless maintain our
qualification as a REIT because other requirements are met, we will be subject to a 100% tax on the greater of (1) the amount by which we fail the 75% test and (2) the amount by which we
fail the 95% test, in either case, multiplied by a fraction intended to reflect our profitability;
-
-
if we should fail to satisfy the asset tests or other requirements applicable to REITs, as described below, yet
nonetheless maintain our qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to an excise tax;
-
-
we are subject to a tax of 100% on net income from any "prohibited transaction;"
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-
we are subject to tax, at the highest corporate rate, on net income from (1) the sale or other disposition of
"foreclosure property" (generally, property acquired by us through foreclosure or after a default on a loan secured by the property or a lease of the property and for which an election is in effect)
that is held primarily for sale to customers in the ordinary course of business or (2) other non-qualifying income from foreclosure property;
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-
if we fail to distribute during each calendar year at least the sum of (1) 85% of our REIT ordinary income for the
year, (2) 95% of our REIT capital gain income for the year and (3) any undistributed taxable income from prior years, we will be subject to a 4% excise tax on the excess of the required
distribution over the sum of (a) the amounts actually distributed plus (b) the amounts with respect to which certain taxes are imposed on us;
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-
if we acquire any asset from a "C corporation" (that is, a corporation generally subject to the full corporate level tax)
in a transaction in which the basis of the asset in our hands is determined by reference to the basis of the asset in the hands of the C corporation, and we recognize gain on the disposition of the
asset during a ten-year period beginning on the date that we acquired the asset, then the asset's "built-in" gain generally will be subject to tax at the highest regular
corporate rate;
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we are subject to the corporate alternative minimum tax;
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a 100% tax may be imposed on certain transactions between us and our taxable REIT subsidiaries that do not reflect arm's
length terms;
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-
we may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to satisfy the
record keeping requirements intended to monitor our compliance with rules relating to the ownership of our stock, as described below in "Requirements for
QualificationOrganizational Requirements;
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-
certain of our subsidiaries are subchapter C corporations, the earnings of which could be subject to federal
corporate income tax; and
-
-
we and our subsidiaries may be subject to a variety of taxes, including state, local and foreign income taxes, property
taxes and other taxes on our assets and operations, and we could also be subject to tax in situations and on transactions not presently contemplated.
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Our
management companies that are "taxable REIT subsidiaries" (within the meaning of Section 856(l)(1) of the Code), including Macerich Management Company and Westcor
Partners, L.L.C., are taxed on their income at regular corporate rates. We use the calendar year both for U.S. federal income tax purposes and for financial reporting purposes.
Requirements for Qualification
To qualify as a REIT for U.S. federal income tax purposes, we must elect to be treated as a REIT, and we must meet various
(a) organizational requirements, (b) gross income tests, (c) asset tests and (d) annual distribution requirements.
Organizational Requirements.
We must be organized as a corporation, trust or association:
-
(1)
-
that
is managed by one or more trustees or directors;
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(2)
-
the
beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;
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(3)
-
that
would be taxable as a domestic corporation, but for Sections 856 through 860 of the Code;
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(4)
-
that
is neither a financial institution nor an insurance company subject to specified provisions of the Code;
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(5)
-
the
beneficial ownership of which is held by 100 or more persons;
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(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 indirectly, or by application
of certain constructive ownership rules, by five or fewer individuals (as defined in the Code to include some entities that would not ordinarily be considered "individuals"); and
-
(7)
-
that
meets other tests, described below, regarding the nature of its income and assets.
The
Code provides that conditions (1) through (4) must be met during our entire taxable year, and that condition (5) must be met during at least 335 days of a
taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Our charter provides for restrictions regarding transfer of our capital stock, in
order to assist us in continuing to satisfy the share ownership requirements described in (5) and (6) above. These transfer restrictions are described in "Description of Our Capital
StockRestrictions on Transfer and Ownership."
We
are treated as having satisfied condition (6) above if we comply with the regulatory requirements to request information from our stockholders regarding their actual ownership
of our stock, and do not know, or in exercising reasonable diligence would not have known, that we failed to satisfy this condition. If we fail to comply with these regulatory requirements for any
taxable year we will be subject to a penalty of $25,000, or $50,000 if such failure was intentional. However, if our failure to comply was due to reasonable cause and not willful neglect, no penalties
will be imposed.
Gross Income Tests.
We must satisfy the following two separate gross income tests each year:
-
-
75% Gross Income Test. At least 75% of our gross income (excluding gross income from prohibited transactions,
income from certain hedging transactions and certain foreign currency gains) must consist of income derived directly or indirectly from investments relating to real property or mortgages on real
property (generally including rents from real property, dividends from other REITs, and, in some circumstances, interest on mortgages), or some types of temporary investment income.
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-
95% Gross Income Test. At least 95% of our gross income (excluding gross income from prohibited transactions,
income from certain hedging transactions and certain foreign currency
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gains)
must consist of items that satisfy the 75% gross income test and certain other items, including dividends, interest and gain from the sale or disposition of stock or securities (or from any
combination of these types of income).
Rents from Real Property.
Rents received by us qualify as "rents from real property" in satisfying the gross income tests
described above if the
following 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. An amount received or accrued generally is not excluded from the
term "rents from real property" solely because the amount is based on a fixed percentage or percentages of receipts or sales. Second, we, or an owner of 10% or more of our equity securities, must not
directly or constructively own 10% or more of a tenant. Third, if more than 15% of the total rent we receive under a lease is attributable to personal property leased in connection with a lease of
real property, then the portion of rent attributable to that personal property does not qualify as "rents from real property." Finally, we 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 we do not derive revenue. However, we may directly perform services that are "usually or
customarily rendered" in connection with the rental of space for occupancy only or are not otherwise considered "rendered to the occupant" for its convenience. A de minimis amount of up to 1% of the
gross income may be received by us from each property from the provision of non-customary services without disqualifying all other amounts received from that property as "rents from real
property." However, the de minimis amount itself will not qualify as "rents from real property" for purposes of the 75% and 95% gross income tests. In addition, we may furnish certain services
(including "non-customary" services) through a taxable REIT subsidiary, which includes a corporation other than a REIT in which we hold stock and that has made a joint election with us to
be treated as a taxable REIT subsidiary. As mentioned above, a taxable REIT subsidiary is subject to U.S. federal income tax at regular corporate rates.
For
purposes of the above, rents received from a tenant that is a taxable REIT subsidiary will not be treated as "rents from real property" unless at least 90% of the space at the
property to which the rents relate is leased to third parties, and the rents paid by our taxable REIT subsidiary are
substantially comparable to rents paid by our other tenants for comparable space. Whether rents paid by a taxable REIT subsidiary are substantially comparable to rents paid by other tenants is
determined at the time the lease with the taxable REIT subsidiary is entered into, extended, or modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing,
however, if a lease with a "controlled taxable REIT subsidiary" is modified and such modification results in an increase in the rents payable by such taxable REIT subsidiary, any such increase will
not qualify as "rents from real property." For purposes of this rule, a "controlled taxable REIT subsidiary" is a taxable REIT subsidiary in which we own stock representing more than 50% of the total
voting power or value of the outstanding stock of such taxable REIT subsidiary.
Certain
of our affiliates, including Macerich Property Management Company, LLC and Macerich Arizona Management LLC, have provided and will continue to provide services with
respect to shopping centers wholly owned by us ("Centers") and any newly-acquired, wholly-owned property of the Operating Partnership or certain of our property partnerships. We believe that all of
the services so provided were and will be of the type usually or customarily rendered in connection with the rental of space for occupancy only and therefore that the provision of those services will
not cause the rents received with respect to the Centers or newly-acquired centers to fail to qualify as rents from real property for purposes of the 75% and 95% gross income tests. In addition, we
have elected taxable REIT subsidiary status with respect to certain of our other affiliates. If the Operating Partnership or a property partnership contemplates providing services in the future that
reasonably might be expected to fail the "usual or customary" standard, it will arrange to have those services provided by an independent contractor from whom neither the Operating Partnership nor any
property partnership receives any income, or by one of our taxable REIT subsidiaries.
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Prohibited Transactions.
Net income from prohibited transactions is subject to a 100% tax. The term "prohibited transaction"
generally includes a
sale or other disposition of property (other than foreclosure property) that is held primarily for sale to customers in the ordinary course of a trade or business. We believe that none of the assets
owned by the Operating Partnership, the property partnerships, or us are held for sale to customers. Further, the sale of any Center and associated property will not be in the ordinary course of
business of the Operating Partnership, the relevant property partnership or us. We will attempt to comply with the terms of the safe harbor provisions in the Code prescribing when asset sales will not
be characterized as prohibited transactions. However, we may not always comply with the safe harbor and in the absence of the safe harbor whether property is held "primarily for sale to customers in
the ordinary course of a trade or business" depends on the facts and circumstances, including those related to a particular property. As such, complete assurance cannot be given that we can comply
with the safe harbor provisions of the Code or avoid owning property that may be characterized as property held "primarily for sale to customers in the ordinary course of business."
Effect of Subsidiary Entities.
In the case of a REIT that is a partner in a partnership, Treasury regulations provide that for
purposes of applying
the gross income and asset tests 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 such share. In addition, the character of the assets and gross income of the partnership will remain the same in the hands of the REIT for U.S. federal income tax purposes. Thus, our proportionate
share of the assets, liabilities and items of income of the Operating Partnership and our property partnerships will be treated as our assets, liabilities and items of income for purposes of applying
the gross income and asset tests described in this prospectus supplement.
Our
investment in the Centers directly or indirectly through the Operating Partnership and property partnerships should give rise to qualifying income in the form of rents and gains on
the sales of Centers. Substantially all income derived by us from our taxable REIT subsidiaries will be in the form of dividends on the stock and equity interests owned by the Operating Partnership.
While these dividends only satisfy the 95% (and not the 75%) gross income test, we anticipate that non-qualifying income on our investments (including dividend income) will not result in
our failing any of the gross income tests.
Redetermined Rents.
Any redetermined rents, redetermined deductions or excess interest we generate will be subject to a 100%
penalty tax. In general,
redetermined rents are rents from real property that are overstated as a result of services furnished to any of our tenants by one of our taxable REIT subsidiaries, and redetermined deductions and
excess interest represent amounts that are deducted by a taxable REIT subsidiary for amounts paid to us that are in excess of the amounts that would have been deducted based on arm's length
negotiations. Rents we receive will not constitute redetermined rents if they qualify for the safe harbor provisions contained in the Code. Safe harbor provisions generally apply
where:
-
-
amounts are excluded from the definition of impermissible tenant service income as a result of satisfying the 1% de
minimis exception;
-
-
the taxable REIT subsidiary renders a significant amount of similar services to unrelated parties, and the charges for
such services are substantially comparable;
-
-
rents paid to the REIT by tenants who are not receiving services from the taxable REIT subsidiary are substantially
comparable to the rents paid by the REIT's tenants leasing comparable space who are receiving such services from the taxable REIT subsidiary, and the charge for services is separately stated; or
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-
-
the taxable REIT subsidiary's gross income from the services is not less than 150% of the subsidiary's direct cost in
furnishing or rendering the service.
Relief Provisions for Failing the 75% or the 95% Gross Income Tests.
If we fail to satisfy one or both of the 75% or 95% gross
income tests for any
taxable year, we may nevertheless qualify as a REIT for that year if we are entitled to relief under provisions of the Code. Relief provisions are generally available if:
-
-
following our identification of the failure to meet the 75% or 95% gross income tests for any taxable year, we
file a schedule with the IRS setting forth each item of our gross income for purposes of the 75% or 95% gross income tests for such taxable year; and
-
-
our failure to meet these tests was due to reasonable cause and not willful neglect.
However,
it is not possible to state whether in all circumstances we would be entitled to the benefit of these relief provisions. As discussed above in "Taxation of Our
Company," even if the relief provisions apply, a tax will be imposed with respect to some or all of our excess nonqualifying gross income, reduced by approximated expenses.
Asset Tests.
We must satisfy the following four tests relating to the nature of our assets at the close of each quarter of our
taxable
year:
-
-
at least 75% of the value of our total assets must be represented by real estate assets (including (1) our
allocable share of real estate assets held by partnerships in which we own an interest, (2) stock or debt instruments held for not more than one year purchased with the proceeds of a stock
offering or long-term (at least five years) debt offering of our company, cash, cash items and government securities and (3) stock in other REITs);
-
-
not more than 25% of our total assets may be represented by securities other than those in the 75% asset class;
-
-
of the investments included in the 25% asset class, the value of any one issuer's securities owned by us may not exceed 5%
of the value of our total assets (unless the issuer is a taxable REIT subsidiary), and we may not own more than 10% of the vote or value of any one issuer's outstanding securities (unless the issuer
is a taxable REIT subsidiary or we can avail ourselves of the rules relating to certain securities and "straight debt" summarized below); and
-
-
not more than 25% of the value of our total assets may be represented by securities of one or more taxable REIT
subsidiaries.
For
purposes of these tests, the term "securities" does not include equity or debt securities of a qualified REIT subsidiary, mortgage loans that constitute real estate assets, other
securities included in the 75% asset class above, or equity interests in a partnership. The term "securities," however, generally includes debt securities issued by a partnership or another REIT.
However, "straight debt" securities and certain other obligations, including loans to individuals or estates, certain specified loans to partnerships, certain specified rental agreements and
securities issued by REITs are not treated as "securities" for purposes of the "10% value" asset test. "Straight debt" means a written unconditional promise to pay on demand or on a specified date a
sum certain in cash if (i) the debt is not convertible, directly or indirectly, into stock, (ii) the interest rate and interest payment dates are not contingent on profits, the
borrower's discretion, or similar factors (subject to certain specified exceptions), and (iii) the issuer is either not a corporation or partnership, or the only securities of the issuer held
by us, and certain of our taxable REIT subsidiaries, subject to a de minimis exception, are straight debt and other specified assets.
We
believe that our investment in the Centers through our interest in the Operating Partnership and property partnerships will constitute qualified assets for purposes of the 75% asset
test.
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The Operating Partnership owns 100% of the outstanding stock of Macerich Management Company, which has elected taxable REIT subsidiary status. In addition, the
Operating Partnership owns indirectly 100% of the interests in Macerich Arizona Partners LLC, which also has elected taxable REIT subsidiary status. Because we have a partnership interest in
the Operating Partnership, we are deemed to own our pro rata share of the assets of the Operating Partnership, including the securities of Macerich Management Company and the interests in Macerich
Arizona Partners LLC. Macerich Property Management Company, LLC and Macerich Arizona Management LLC are both single member limited liability companies that are disregarded for
U.S. federal income tax purposes.
Because
the management companies are either taxable REIT subsidiaries or are disregarded entities for U.S. federal income tax purposes, the Operating Partnership does not violate the
limitation on holding more than 10% of the voting securities of any one issuer. In addition, not more than 25% of our total assets consists of securities issued by the management companies that have
elected taxable REIT subsidiary status.
The
above asset tests must be satisfied not only on the date that we acquire, directly or through the Operating Partnership, securities in the applicable issuer, but also in each quarter
we acquire any security or other property, including as a result of increasing our interest in the Operating Partnership. After initially meeting the asset tests at the beginning of any quarter, we
will not lose our REIT status if we fail to satisfy the asset tests at the end of a later quarter solely by reason of changes in the relative values of our assets. If the failure to satisfy the asset
tests results from the acquisition of securities or other property during a quarter, the failure can be cured by a disposition of sufficient
non-qualifying assets or acquisition of sufficient qualifying assets within 30 days after the close of that quarter. Although we believe we have satisfied the asset tests and plan
to take steps to ensure that we satisfy such steps for any quarter with respect to which retesting is to occur, there can be no assurance that such steps will always be successful, or will not require
a reduction in the Operating Partnership's overall interest in an issuer. If we fail to cure the noncompliance with the asset tests within this 30-day period, we could fail to qualify as a
REIT.
In
certain cases, we may avoid disqualification for any taxable year if we fail to satisfy the asset tests after the 30 day cure period. We will be deemed to have met certain of
the REIT asset tests if the value of our non-qualifying assets for such tests (i) does not exceed the lesser of (a) 1% of the total value of our assets at the end of the
applicable quarter or (b) $10,000,000, and (ii) we dispose of the non-qualifying assets 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 forthcoming Treasury regulations. For violations due to reasonable cause rather than willful neglect that are in
excess of the de minimis exception described above, we may avoid disqualification as a REIT, after the 30 day cure period, by taking steps including (i) the disposition of sufficient
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 forthcoming Treasury regulations, (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
non-qualifying assets, and (iii) disclosing certain information to the IRS. If we fail the asset test and cannot avail ourselves of these relief provisions, we may fail to qualify
as a REIT.
Annual Distribution Requirements.
We are required to distribute dividends (other than capital gain dividends) to our
stockholders in an amount at
least equal to (A) the sum of (1) 90% of our REIT taxable income (computed without regard to the dividends paid deduction and our net capital gain) and (2) 90% of the net income
(after tax), if any, from foreclosure property, minus (B) the sum of specified items of noncash income. Dividends must be paid in the taxable year to which they relate, or in the following
taxable year if declared before we timely file our tax return for that year and if paid on or before the first regular dividend payment after the declaration. To the extent that we do not distribute
all of our net capital gain or distribute at least 90%, but less than 100%, of our REIT taxable income, as adjusted, we will be subject to tax on the undistributed amount at regular ordinary and
capital gains
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corporate
tax rates, as applicable. We may designate all or a portion of our undistributed net capital gains as being includable in the income of our stockholders as gain from the sale or exchange of
a capital asset. If so, the stockholders receive an increase in the basis of their stock in the amount of the income recognized. Stockholders are also to be treated as having paid their proportionate
share of the capital gains tax imposed on us on the undistributed amounts and receive a corresponding decrease in the basis of their stock. Furthermore, if we should fail to distribute during each
calendar year at least the sum of (1) 85% of our REIT ordinary income for that year, (2) 95% of our REIT capital gain net income for that year and (3) any undistributed taxable
income from prior periods, we would be subject to a 4% excise tax on the excess of the required distribution over the sum of (a) the amounts actually
distributed and (b) the undistributed amounts on which certain taxes are imposed on us. We have made and intend to make timely distributions sufficient to satisfy all annual distribution
requirements.
From
time to time, we may experience timing differences between (1) the actual receipt of income and actual payment of deductible expenses and (2) the inclusion of that
income and deduction of those expenses in arriving at our taxable income. Further, from time to time, we may be allocated a share of net capital gain attributable to the sale of depreciated property
which exceeds our allocable share of cash attributable to that sale. Additionally, we may incur cash expenditures that are not currently deductible for tax purposes. As such, we may have less cash
available for distribution than is necessary to meet our annual 90% distribution requirement or to avoid tax with respect to capital gain or the excise tax imposed on specified undistributed income.
To meet the 90% distribution requirement necessary to qualify as a REIT or to avoid tax with respect to capital gain or the excise tax imposed on specified undistributed income, we may find it
appropriate to arrange for short-term (or possibly long-term) borrowings or to pay distributions in the form of taxable stock dividends (discussed immediately below). We are
required to arrange through the Operating Partnership any borrowings for the purpose of making distributions to stockholders.
The
IRS has published guidance that provides temporary relief for a publicly-traded REIT to satisfy the annual distribution requirement with distributions consisting of its stock and at
least a minimum percentage of cash. Pursuant to this IRS guidance, a REIT may treat the entire amount of a distribution consisting of both stock and cash as a qualifying distribution for purposes of
the annual distribution requirement if the following requirements are met: (1) the distribution is made by the REIT to its stockholders with respect to its stock; (2) stock of the REIT
is publicly traded on an established securities market in the United States; (3) the distribution is declared on or before December 31, 2012 with respect to a taxable year ending on or
before December 31, 2011; (4) pursuant to such declaration, each stockholder may elect to receive its proportionate share of the declared distribution in either cash or stock of the REIT
of equivalent value, subject to a limitation on the amount of cash to be distributed in the aggregate to all stockholders (the "Cash Limitation"), provided that (a) such Cash Limitation is not
less than 10% of the aggregate declared distribution, and (b) if too many stockholders elect to receive cash, each stockholder electing to receive cash will receive a pro rata amount of cash
corresponding to the stockholder's respective entitlement under the declaration, but in no event will any stockholder electing to receive cash receive less than 10% of the stockholder's entire
entitlement under the declaration in cash; (5) the calculation of the number of shares to be received by any stockholder will be determined over a period of up to two weeks ending as close as
practicable to the payment date, based upon a formula utilizing market prices that is designed to equate in value the number of shares to be received with the amount of cash that could be received
instead; and (6) with respect to any stockholder participating in a dividend reinvestment plan ("DRIP"), the DRIP applies only to the extent that, in the absence of the DRIP, the stockholder
would have received the distribution in cash under subsection (4) above. We have made distributions (and may make future distributions) that are intended to meet all of the requirements
described in this paragraph and count toward our satisfaction of the annual distribution requirement.
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Under
circumstances relating to any IRS audit adjustments that increase income, we may be able to rectify a failure to meet the distribution requirement for a year by paying "deficiency
dividends" to stockholders in a later year, which may be included in our deduction for dividends paid for the earlier year. Thus, we may be able to avoid being disqualified as a REIT or taxed on
amounts distributed as deficiency dividends. However, we will be required to pay interest based upon the amount of any deduction taken for deficiency dividends.
Record Keeping Requirements.
To elect taxation as a REIT under applicable Treasury regulations, we must maintain records and
request information from
our stockholders designed to disclose the actual ownership of our stock. We have complied and intend to continue to comply with these requirements.
Affiliated REITs.
The Operating Partnership owns 100% of the outstanding common stock of Macerich PPR Corp., which in turn owns,
directly or
indirectly, a 51% interest in Pacific Premier Retail Trust. The Operating Partnership also owns, directly or indirectly, (i) a 50% interest in Queens Mall Limited Partnership, (ii) a 51%
interest in Queens Mall Expansion Limited Partnership and (iii) a 50.1% interest in Freehold Chandler Trust LLC, each of which has elected to be treated as a corporation for U.S. federal
income tax purposes and each of which has elected to be treated as a REIT for the taxable year ended December 31, 2009. These affiliated REITs must also meet the REIT tests discussed above. The
failure of any of these affiliated REITs to qualify as a REIT could cause us to fail to qualify as a REIT, because we would then own (through the Operating Partnership) more than 10% of the securities
of an issuer that was neither a REIT, a qualified REIT subsidiary nor a taxable REIT subsidiary. We believe that the affiliated REITs have been organized and operated in a manner that will permit them
to qualify as REITs. The affiliated REITs, however, may be "personal holding companies" within the meaning of the Code, and may thereby be subject to the personal holding company tax.
Failure to Qualify as a REIT
If we fail to qualify for taxation as a REIT for U.S. federal income tax purposes in any taxable year and the relief provisions do not
apply, we will be subject to tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to
qualify will not be deductible by us, nor will we be required to make those distributions. If we fail to so qualify and the relief provisions do not apply, to the extent of current and accumulated
earnings and profits, all distributions to stockholders generally will be taxable at capital gain rates (through 2012) if certain minimum holding period requirements are met, and, subject to specified
limitations of the Code, corporate distributees may be eligible for the dividends received deduction. Unless entitled to relief under specific statutory provisions, we will also be disqualified from
taxation as a REIT for the four taxable years following the year during which we
ceased to qualify as a REIT. It is not possible to state whether in all circumstances we would be entitled to statutory relief.
We
can invoke specified cure provisions for any taxable year in the event we violate a provision of the Code that would otherwise result in our failure to qualify as a REIT for U.S.
federal income tax purposes. These cure provisions would limit the instances causing our disqualification as a REIT for violations due to reasonable cause, and would instead require the payment of a
monetary penalty.
Tax Aspects of Our Investments in Partnerships
We hold direct or indirect interests in the Operating Partnership and the property partnerships (each individually a "Partnership" and,
collectively, the "Partnerships"). In general, partnerships are "pass-through" entities which are not subject to U.S. federal income tax. Rather, partners are allocated their proportionate
shares of the items of income, gain, loss, deduction and credit of a partnership.
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Further,
the partners are potentially subject to tax thereon without regard to whether the partners receive a distribution from the partnership. We will include our proportionate share of the items of
income, gain, loss, deduction and credit of the Partnerships for purposes of the various REIT income tests. See above "Requirements for QualificationGross Income Tests." Any
resulting increase in our REIT taxable income will increase our distribution requirements (see above "Requirements for QualificationAnnual Distribution Requirements").
However,
these increases will not be subject to U.S. federal income tax in our hands provided that the income is distributed by us to our stockholders. Moreover, for purposes of the REIT
asset tests (see above "Requirements for QualificationAsset Tests"), we will include our proportionate share of assets held by the Partnerships.
Tax Allocations with Respect to Contributed Properties.
Under Section 704(c) of the Code, income, gain, loss and deduction
attributable to
appreciated or depreciated property that is contributed to a partnership in exchange for an interest in the partnership must be allocated in a manner such that the contributing partner is charged
with, or benefits from, respectively, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of the unrealized gain or unrealized loss is
generally equal to the difference between the fair market value of contributed property at the time of contribution, and the adjusted tax basis of the property at the time of contribution (a
"Book-Tax Difference"). These allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic or legal arrangements among the
partners. The Operating Partnership was formed principally by way of contributions of appreciated property. Consequently, the partnership agreement of the Operating Partnership requires these
allocations to be made in a manner consistent with Section 704(c) of the Code.
In
general, the limited partners of the Operating Partnership who contributed properties to it will be allocated lower amounts of depreciation deductions for tax purposes and increased
taxable income and gain on sale by the Partnerships of the contributed assets. This will tend to eliminate the Book-Tax Difference over the life of the Partnerships. However, the special
allocation rules of Section 704(c) of the Code do not always rectify the Book-Tax Difference on an annual basis or with respect to a specific taxable transaction such as a sale.
Under the applicable Treasury regulations, special allocations of income and gain and depreciation deductions must be made on a property-by-property basis. Depreciation
deductions resulting from the carryover basis of a contributed property are used to eliminate the Book-Tax Difference by allocating these deductions to the non-contributing
partners (i.e., the REIT and the other non-contributing partners) up to the amount of their share of book depreciation. Any remaining tax depreciation for the contributed property
would be allocated to the partners that contributed the property. The Operating Partnership intends to elect the traditional method of rectifying the Book-Tax Difference under the
applicable Treasury regulations, under which, if depreciation deductions are less than the non-contributing partners' share of book depreciation, then the non-contributing
partners lose the benefit of these deductions (the "ceiling rule"). The application of the ceiling rule increases the likelihood we will recognize taxable income in excess of cash proceeds in our
capacity as a partner of the Operating Partnership, which might adversely affect our ability to comply with the REIT distribution requirements. See above "Requirements for
QualificationAnnual Distribution Requirements."
Taxation of Stockholders
U.S. Holder and Non-U.S. Holder.
For purposes of this summary, a "U.S. Holder" is a beneficial owner of our common stock that
is:
-
-
a citizen or resident of the United States;
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-
-
a corporation or entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the
laws of the United States or any political subdivision of the United States;
-
-
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
-
-
a trust if it (1) is subject to the primary supervision of a court within the United States, and one or more U.S.
persons have authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
A
beneficial owner of our common stock that is an individual, a corporation or entity treated as a corporation for U.S. federal income tax purposes, an estate or trust and not a U.S.
Holder is referred to herein as a "Non-U.S. Holder."
If
a partnership, or entity treated as a partnership for U.S. federal income tax purposes, holds our common stock, the tax treatment of a partner will generally depend upon the status of
the partner and upon the activities of the partnership. Persons holding our common stock through a partnership or other entity treated as a partnership for U.S. federal income tax purposes should
consult their own tax advisors.
Distributions.
As long as we qualify as a REIT for U.S. federal income tax purposes, distributions made to our taxable U.S. Holders on
our common
stock will be taxed as follows:
-
-
Distributions out of current or accumulated earnings and profits (and not designated as capital gain dividends) generally
constitute ordinary dividend income to U.S. Holders and will not be eligible for the dividends received deduction for corporations.
-
-
Distributions in excess of current and accumulated earnings and profits are not taxable to a U.S. Holder to the extent
that they do not exceed the adjusted basis of the U.S. Holder's shares, but rather reduce the adjusted basis of those shares. To the extent that distributions in excess of current and accumulated
earnings and profits exceed the adjusted basis of a U.S. Holder's shares, they are to be included in income as long-term capital gain (or short-term capital gain if the shares
have been held for one year or less).
-
-
Distributions designated as capital gain dividends constitute long-term capital gains (to the extent they do
not exceed our actual net capital gain for the taxable year) without regard to the period for which the U.S. Holder has held its stock. Corporate U.S. Holders may be required to treat up to 20% of
some capital gain dividends as ordinary income.
-
-
Distributions declared by us in October, November or December of any year payable to a U.S. Holder of record on a
specified date in October, November or December will be treated as both paid by us and received by the U.S. Holder on December 31 of that year, provided that the distribution is actually paid
by us during January of the following calendar year.
-
-
U.S. Holders may not include in their individual income tax returns any of our net operating losses or capital losses.
-
-
In determining the extent to which a distribution constitutes a dividend for U.S. federal income tax purposes, our
earnings and profits generally will be allocated first to distributions with respect to our preferred stock prior to allocating any remaining earnings and profits to distributions on our common stock.
If we have net capital gains and designate some or all of our distributions as capital gain dividends to that extent, although the proper tax treatment of those amounts is not entirely clear, we
intend to allocate the capital gain dividends among different classes of stock in proportion to the allocation of earnings and profits as described above.
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Distributions Consisting of Stock and Cash.
As discussed above in "Requirements for QualificationAnnual Distribution Requirements,
" we
have made distributions (and may make further distributions) in cash and shares of common stock. With respect to each such distribution, each U.S. Holder must include the sum of the value of the
shares of our common stock and the amount of cash, if any, received pursuant to the dividend in its gross income as a taxable dividend to the extent that the distribution is made out of our current
and accumulated earnings and profits. For this purpose, the amount of the dividend paid in common stock will be equal to the amount of cash that could have been received instead of our common stock. A
U.S. Holder that receives shares of our common stock pursuant to the dividend would have a tax basis in such stock equal to the amount of cash that could have been received instead of such stock as
described above, and the holding period in such stock would begin on the day following the payment date for the dividend. Accordingly, a U.S. Holder's tax liability with respect to such dividend may
be significantly greater than the amount of cash it receives.
Tax Rates.
The current maximum tax rate applicable to non-corporate taxable U.S. Holders for long-term capital gains,
including capital gain dividends, and for certain dividends, has generally been reduced to 15%. Short-term capital gains recognized by non-corporate taxpayers are taxed at
ordinary income rates (currently up to 35%). Gains recognized by corporate taxpayers (other than tax-exempt taxpayers) are currently subject to U.S. federal income tax at a maximum rate of
35%, whether or not classified as
long-term capital gains. The deductibility of capital losses is subject to certain limitations.
In
general, dividends paid by REITs are not eligible for the reduced 15% tax rate on corporate dividends, except to the extent the REIT's dividends are attributable either to dividends
received from taxable corporations (such as our taxable REIT subsidiaries), to income that was subject to tax at the corporate (REIT) level or to dividends properly designated by us as capital gain
dividends. The currently applicable provisions of the U.S. federal income tax laws relating to the 15% tax rate are currently scheduled to "sunset," or revert back to the provisions of prior law
effective for taxable years beginning after December 31, 2012, at which time the capital gains tax rate will be increased to 20% and the rate applicable to dividends will be increased to the
tax rate then applicable to ordinary income. In addition, on March 30, 2010, President Obama signed into law the Health Care and Education Reconciliation Act of 2010, under which individuals
will be subject to a 3.8% surtax for taxable years beginning after December 31, 2012 imposed on the lesser of (i) their net investment income (including, among other things, dividend and
capital gains from the sale or other disposition of stock), or (ii) the excess of their adjusted gross income, increased by any foreign earned income otherwise excluded from adjusted gross
income over their applicable "threshold amount." The applicable threshold amounts include: for married couples filing a joint return (and surviving spouses), $250,000; for a married taxpayer filing an
individual return, $125,000; and for single and head-of-household taxpayers, $200,000. Taxable estates and certain trusts are also subject to a 3.8% surtax on the lesser of
(i) their undistributed net investment income for the tax year, or (ii) any excess of their adjusted gross income over the dollar amount at which the highest tax bracket for estates and
trusts begins for the tax year. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of our common stock.
Sale, Exchange, Repurchase or Other Disposition of Our Common Stock.
Upon a sale, repurchase or other taxable disposition of our common
stock, a U.S.
Holder generally will recognize capital gain or loss equal to the difference between the amount of cash and the fair market value of property received on the sale or other disposition and such
holder's adjusted tax basis in our common stock. Such capital gain or loss will be long-term capital gain or loss if a U.S. Holder's holding period for our common stock is more than one
year. In general, any loss upon a sale or exchange of shares by a U.S. Holder, if such holder has held the shares for six months or less (after applying certain holding period rules), will be treated
as a long-term capital loss to the extent of distributions from us required to be treated by such holder as long-term capital gain. The deductibility of capital losses is
subject to a number of limitations.
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Backup Withholding and Information Reporting.
Information with respect to dividends paid on our
common stock and proceeds from the sale or other disposition of our common stock may be required to be reported to U.S. Holders and to the IRS. This obligation, however, does not apply with respect to
payments to certain U.S. Holders, including corporations and tax-exempt organizations.
A
U.S. Holder may be subject to backup withholding (currently at a rate of 28%) with respect to distributions paid on our common stock, or with respect to proceeds received from a sale
or other disposition of our common stock. Backup withholding will not apply, however, if the U.S. Holder (i) is a corporation or comes within certain other exempt categories and, when required,
demonstrates such fact or (ii) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable backup withholding
rules. To establish status as an exempt person, a U.S. Holder will generally be required to provide certification on IRS Form W-9.
U.S.
Holders should consult their personal tax advisor regarding their qualification for an exemption from backup withholding and the procedures of obtaining such an exemption, if
applicable. The backup withholding tax is not an additional tax and taxpayers may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund as long as they
timely provide certain information to the IRS.
Treatment of Tax-Exempt Holders.
Distributions on our common stock by us to a tax-exempt employee pension trust, or other
domestic tax-exempt holder, generally will not constitute unrelated business taxable income ("UBTI"), unless the holder has borrowed to acquire or carry our common stock. However,
qualified trusts that hold more than 10% (by value) of some REITs may be required to treat a specified percentage of those REITs' distributions as UBTI. This requirement will apply only if
(1) the REIT would not qualify as such for U.S. federal income tax purposes but for the application of a "look-through" exception to the "five or fewer" requirement applicable to
shares held by qualified trusts and (2) the REIT is "predominantly held" by "qualified trusts" (as defined below). A REIT is predominantly held if either (1) a single qualified trust
holds more than 25% by value of the REIT interests; or (2) one or more qualified trusts, each owning more than 10% by value of the REIT interests, hold in the aggregate more than 50% by value
of the REIT interests. The percentage of any REIT dividend treated as UBTI is equal to the ratio of (a) the UBTI earned by the REIT (treating the REIT as if it were a qualified trust and
therefore subject to tax on UBTI) to (b) the total gross income (less specified associated expenses) of the REIT. A
de minimis
exception applies
in any year in which the ratio set forth in the preceding sentence is less than 5%. For these purposes, a qualified trust is any trust described in Section 401(a) of the Code and exempt from
tax under Section 501(a) of the Code. Because the provisions requiring qualified trusts to treat a portion of REIT distributions as UBTI will not apply if the REIT is able to satisfy the "five
or fewer" requirement without relying upon the "look-through" exception, the restrictions on ownership of our stock in our charter generally should prevent application of the provisions
treating a portion of REIT distributions as UBTI to tax-exempt entities purchasing our stock, absent approval by our board of directors.
Taxation of Non-U.S. Holders.
This section provides a brief summary of the complex rules governing U.S. federal income taxation
of
Non-U.S. Holders. Prospective Non-U.S. Holders should consult with their own tax advisors to determine the impact of U.S. federal, state and local income tax laws with regard
to an investment in our common stock, including any reporting requirements.
Distributions.
Distributions that are not attributable to gain from sales or exchanges by us of U.S. real property interests and that
may not be
designated by us as capital gains dividends generally will be treated as ordinary dividend income to the extent that they are made out of our current or accumulated earnings and profits. These
distributions will ordinarily be subject to a withholding tax of 30% of the gross amount of the distribution, unless an applicable tax treaty reduces or eliminates that tax. However, if income from
the investment in our common stock is treated as effectively connected with a Non-U.S. Holder's conduct of a U.S. trade or business (through a U.S. permanent establishment,
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if
the Non-U.S. Holder is entitled to the benefits of an applicable tax treaty and such tax treaty so requires as a condition for taxation), the Non-U.S. Holder generally will
be subject to a tax at graduated rates, in the same manner that U.S. Holders are taxed with respect to distributions of this kind (and may also be subject to the 30% branch profits tax in the case of
a Non-U.S. Holder that is a foreign corporation). We expect to withhold U.S. income tax at the rate of 30% on the gross amount of any distributions of this kind made to a
Non-U.S. Holder, unless the Non-U.S. Holder timely provides to us (1) an accurate and complete IRS Form W-8BEN certifying that a lower treaty rate
applies, or (2) an accurate and complete IRS Form W-8ECI claiming that the distribution is effectively connected income.
Distributions
in excess of our current and accumulated earnings and profits will not be taxable to a Non-U.S. Holder to the extent that these distributions do not exceed the
adjusted basis of the Non-U.S. Holder's shares, but rather will reduce the adjusted basis of those shares, and may be subject to U.S. withholding tax as described below. To the extent that
distributions in excess of current accumulated earnings and profits exceed the adjusted basis of a Non-U.S. Holder's shares, these distributions will give rise to tax liability if the
Non-U.S. Holder would otherwise be subject to tax on any gain from the sale or disposition of shares in us, as described below, and may be subject to U.S. withholding tax as described
below. If it cannot be determined, at the time a distribution is made, whether or not that distribution will be in excess of current and accumulated earnings and profits, the distributions will be
subject to withholding at the same rate as dividends. However, amounts thus withheld are refundable by the IRS if it is subsequently determined that the distribution was, in fact, in excess of our
current and accumulated earnings and profits and the proper forms are filed with the IRS by the Non-U.S. Holder on a timely basis.
Under
the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") (as discussed further below), we may, under certain circumstances, be required to withhold at least 10% of any
distribution in excess of our current and accumulated earnings and profits, even if a lower treaty rate applies and the Non-U.S. Holder is not liable for tax on the receipt of that
distribution. However, a Non-U.S. Holder may seek a refund of these amounts from the IRS if the Non-U.S. Holder's U.S. tax liability with respect to the distribution is less
than the amount withheld.
Distributions
to a Non-U.S. Holder that are designated by us at the time of the distribution as capital gain dividends, other than those arising from the disposition of a
U.S. real property interest, generally should not be subject to U.S. federal income taxation unless: (1) the investment in our common stock is effectively connected with the
Non-U.S. Holder's U.S. trade or business (through a U.S. permanent establishment, if the Non-U.S. Holder is entitled to the benefits of an applicable tax treaty and such tax
treaty so requires as a condition for taxation), in which case the Non-U.S. Holder will be subject to the same treatment as U.S. Holders with respect to any gain, except that a holder that
is a foreign corporation also may be subject to the 30% branch profits tax, as discussed above; or (2) the Non-U.S. Holder is a nonresident alien individual who is present in the
United States for more than 182 days during the taxable year and certain other requirements are met, in which case the nonresident alien individual will be subject to a 30% tax on the
individual's capital gains, reduced by certain capital losses.
For
any year in which we qualify as a REIT for U.S. federal income tax purposes, distributions that are attributable to gain from sales or exchanges by us of U.S. real property interests
will be taxed to a Non-U.S. Holder under the provisions of FIRPTA. Under FIRPTA, distributions attributable to gain from sales of U.S. real property interests are taxed to a
Non-U.S. Holder as if the gain were effectively connected with a U.S. business. Non-U.S. Holders would thus be taxed at the normal capital gain rates applicable to U.S. Holders
(subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). Also, distributions subject to FIRPTA may be subject to a 30% branch
profits tax in the hands of a foreign corporate stockholder not entitled to treaty exemption. We are generally required by applicable Treasury regulations to
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withhold
35% of any distribution that could be designated by us as a capital gains dividend. This amount is creditable against the Non-U.S. Holder's FIRPTA tax liability. A
Non-U.S. Holder who receives distributions attributable to gain from the sale or exchange by us of U.S. real property interests will be required to file a U.S. federal income tax
return for the taxable year.
Notwithstanding
the foregoing, distributions that are attributable to gain from sales or exchanges of U.S. real property interests (including capital gain distributions) with respect to
any class of our stock that is regularly traded on an established securities market located in the United States will not be subject to FIRPTA and the 35% withholding tax described above, and such
Non-U.S. Holder will not be required to file a U.S. federal income tax return with respect to such distributions, if the Non-U.S. Holder does not own more than 5% of
such class of stock at any time
during the 1-year period ending on the date of distribution. Also, the branch profits tax will not apply to such a distribution. Instead, any such distribution will be treated as an
ordinary dividend for U.S. federal income tax purposes, and may be subject to U.S. withholding tax as described above.
Distributions Consisting of Stock and Cash.
As discussed above in "Requirements for QualificationAnnual Distribution Requirements,
" we
have made distributions (and may make further distributions) in cash and shares of common stock. As described above in "Taxation of StockholdersTaxation of Taxable U.S.
HoldersDistributions Consisting of Stock and Cash," such distributions will be treated as taxable dividends for U.S. federal income tax purposes and, as such, will generally be treated in
the same manner as the cash distributions discussed above. More specifically, we generally will withhold and remit to the IRS 30% of the amount of the dividend (including any portion of the dividend
paid in our common stock). If such withholding exceeds a Non-U.S. Holder's actual U.S. federal income tax liability, such Non-U.S. Holder may be entitled to a refund or credit
for such excess. To the extent that the amount we are required to withhold with respect to a Non-U.S. Holder exceeds the cash portion of the dividend payable to such Non-U.S.
Holder, we will also withhold a portion of our common stock payable to the Non-U.S. Holder to the extent necessary for us to satisfy our withholding obligations. Furthermore, to the extent
that any portion of such a dividend is treated as effectively connected with a Non-U.S. Holder's U.S. trade or business, the Non-U.S. Holder's tax liability with respect to
such dividend may be significantly greater than the amount of cash it receives.
Sale, Exchange, Repurchase or Other Disposition of Our Common Stock.
Gain recognized by a Non-U.S. Holder upon a sale, repurchase or
other disposition of our common stock generally will not be taxable to a Non-U.S. Holder in the United States unless (1) investment in our common stock is effectively connected with
the Non-U.S. Holder's U.S. trade or business (through a U.S. permanent establishment, if the Non-U.S. Holder is entitled to the benefits of an applicable tax treaty and such
tax treaty so requires as a condition for taxation), in which case the Non-U.S. Holder generally will be subject to the same treatment as U.S. Holders with respect to the gain and if such
Non-U.S. Holder is a corporation, may also be subject to the branch profits tax described above; (2) the Non-U.S. Holder is a nonresident alien individual who was
present in the United States for more than 182 days during the taxable year and other requirements are met, in which case the nonresident alien individual will be subject to a 30% tax on the
individual's capital gains, reduced by certain capital losses; or (3) we are not a "domestically controlled REIT" (defined generally as a REIT in which at all times during a specified testing
period less than 50% in value of the stock was held directly or indirectly by foreign persons), in which case gain recognized by a Non-U.S. Holder will be taxable under FIRPTA.
We
currently anticipate that we constitute a domestically controlled REIT, although, because our common stock is publicly traded, there can be no assurance that we have or will retain
that status. If we are not a domestically controlled REIT, gain recognized by a Non-U.S. Holder with respect to any class of our stock that is regularly traded on an established securities
market will nevertheless be exempt under FIRPTA if that Non-U.S. Holder at no time during the five-year period ending on the date of disposition owned more than 5% of such
class of stock. If the gain on the sale of shares were to be subject to taxation under FIRPTA, the Non-U.S. Holder would be subject to the same treatment
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as
U.S. Holders with respect to the gain (subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). In that case, withholding
tax at a rate of 10% of the amount payable could apply and any withholding tax withheld pursuant to the rules applicable to dispositions of a U.S. real property interest would be creditable against
such Non-U.S. Holder's U.S. federal income tax liability. Additionally, such Non-U.S. Holder could be required to file a U.S. federal income tax return for the taxable
year in which such a disposition occurs.
Non-U.S.
Holders are urged to consult their own tax advisors as to whether they will be subject to tax under FIRPTA upon a disposition of their common stock.
Backup Withholding and Information Reporting.
Information may be required to be reported to Non-U.S. Holders and to the IRS concerning
the amount of any dividends paid on our common stock. Under current U.S. federal income tax law, backup withholding tax (at the current rate of 28%) will not apply to dividend payments on our common
stock if the required certifications of exempt status are received, provided in each case that the payor, including a bank or its paying agent, as the case may be, does not have actual knowledge or
reason to know that the payee is a nonexempt person.
Under
the Treasury regulations, payments on the sale, exchange or other disposition of our common stock effected through a foreign office of a broker to its customer generally are not
subject to information reporting or backup withholding. However, if the broker is a U.S. person, a controlled foreign corporation for U.S. federal income tax purposes, a foreign person 50% or more of
whose gross income is effectively connected with a U.S. trade or business for a specified three-year period, a foreign partnership that has significant U.S. ownership or at any time during
its taxable year is engaged in a U.S. trade or business, or a U.S. branch of a foreign bank or insurance company, then information reporting will be required, unless the broker has in its records
documentary evidence that the beneficial owner of the payment is not a U.S. person or is otherwise entitled to an exemption, and the broker has no actual knowledge that the beneficial owner is not
entitled to an exemption. Backup withholding may apply if the sale is subject to information reporting and the broker has actual knowledge that the beneficial owner is a U.S. person.
The
information reporting and backup withholding rules will apply to payments effected at a U.S. office of any U.S. or foreign broker, unless the broker has in its records documentary
evidence that the beneficial owner of the payment is not a U.S. person or is otherwise entitled to an exemption, and the broker has no actual knowledge that the beneficial owner is not entitled to an
exemption.
Non-U.S.
Holders should consult their own tax advisors regarding the application of withholding, information reporting and backup withholding in their particular
circumstances and the availability of and procedure for obtaining an exemption from withholding, information reporting and backup withholding under the current Treasury regulations. Backup withholding
does not represent an additional income tax. Any amounts withheld from a payment to a holder under the backup withholding rules will be allowed as a credit against the Non-U.S. Holder's
U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information or returns are timely furnished by such holder to the IRS.
Other Tax Considerations
Recently Enacted Legislation on Wtihholding.
Recently enacted legislation will require, after December 31, 2012,
withholding at a rate of 30%
on dividends in respect of, and gross proceeds from the sale of, our common stock held by or through certain foreign financial institutions (including certain investment funds), unless such
institution enters into an agreement with the Secretary of the Treasury to report, on an annual basis, information with respect to shares in the institution held by, and accounts maintained by the
institution for, certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by such U.S. persons. Accordingly, the status of entity through which our common
stock is held will affect the determination of whether such withholding is required. Similarly,
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dividends
in respect of, and gross proceeds from the sale of, our common stock held by an investor that is a non-financial non-U.S. entity will be subject to withholding at a
rate of 30% unless such entity either (i) certifies to us that such entity does not have any "substantial United States owners" or (ii) provides certain information regarding its
"substantial United States owners," which we will in turn provide to the Secretary of the Treasury. We will not pay any additional amounts to holders in respect of any amounts withheld. Both U.S.
Holders and Non-U.S. Holders are encouraged to consult with their tax advisors regarding the possible implications of this legislation on their investment in our common stock.
Taxable REIT Subsidiaries.
A portion of the cash to be used by the Operating Partnership to fund distributions to partners,
including us, may come
from the taxable REIT subsidiaries through distributions on the stock or limited liability company interests that will be held by the Operating Partnership. The taxable REIT subsidiaries will receive
income from the Operating Partnership, the property partnerships and unrelated third parties. Because we, the Operating Partnership and the taxable REIT subsidiaries are related through stock or other
ownership, income of the taxable REIT subsidiaries from services performed for us and the Operating Partnership may be subject to rules under which additional income may be allocated to the taxable
REIT subsidiaries. The taxable REIT subsidiaries will pay federal and state income tax at the full applicable corporate rates on their income prior to payment of any distributions. The taxable REIT
subsidiaries will attempt to minimize the amount of these taxes, but there can be no assurance whether, or the extent to which, measures taken to minimize taxes will be successful. To the extent that
the taxable REIT subsidiaries are required to pay federal, state or local taxes, the cash available for distribution by us to stockholders or available to service our indebtedness will be reduced
accordingly.
Possible Legislative or Other Actions Affecting REITs.
You should recognize that the present U.S. federal income tax treatment
of an investment in us
may be modified by legislative, judicial or administrative action at any time and that any such action may affect investments and commitments previously made. The rules dealing with U.S. federal
income taxation are constantly under review by persons involved in the legislative process and by the IRS and the Treasury, resulting in revisions of regulations and revised interpretations of
established concepts as well as statutory changes. Revisions in federal tax laws and interpretations thereof could affect the tax consequences of an investment in us.
State and Local Taxes.
We and our stockholders may be subject to state or local taxation in various jurisdictions, including
those in which we or
they transact business or reside. The state and local tax treatment of us and our stockholders may not conform to the federal income tax consequences discussed above. Consequently, you should consult
your own tax advisors regarding the effect of state and local tax laws on an investment in any securities being offered by this prospectus or a prospectus supplement to this prospectus.
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SELLING SECURITYHOLDERS
Information about selling securityholders, where applicable, will be set forth in a prospectus supplement, in a
post-effective amendment, or in filings we make with the SEC that are incorporated into this prospectus by reference.
PLAN OF DISTRIBUTION
We and any selling securityholders may sell the securities under this prospectus in one or more of the following ways (or in any
combination) from time to time:
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to or through one or more underwriters or dealers;
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in short or long transactions;
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directly to investors; or
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through agents.
If
underwriters or dealers are used in the sale, the securities will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more
transactions, including:
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in privately negotiated transactions;
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in one or more transactions at a fixed price or prices, which may be changed from time to time;
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in "at the market offerings," within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market
maker or into an existing trading market, on an exchange or otherwise;
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at prices related to those prevailing market prices; or
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at negotiated prices.
As
applicable, we, any selling securityholders, and our respective underwriters, dealers or agents, reserve the right to accept or reject all or part of any proposed purchase of the
securities. We will set forth in a prospectus supplement the terms and offering of securities by us, including:
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the names of any underwriters, dealers or agents;
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any agency fees or underwriting discounts or commissions and other items constituting agents' or underwriters'
compensation;
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any discounts or concessions allowed or reallowed or paid to dealers;
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details regarding over-allotment options under which underwriters may purchase additional securities from us,
if any;
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the purchase price of the securities being offered and the proceeds we will receive from the sale;
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the public offering price; and
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the securities exchanges on which such securities may be listed, if any.
We
and any selling securityholders may enter into derivative transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated
transactions from time to time. If the applicable prospectus supplement indicates, in connection with those derivative transactions, such third parties (or affiliates of such third parties) may sell
securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, such third parties (or affiliates of such third parties) may use securities
pledged by us or any selling securityholders, as the case may be, or borrowed from us or any selling securityholders, as the case may
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be,
or others to settle those sales or to close out any related open borrowings of securities, and may use securities received from us or any selling securityholders, as the case may be, in settlement
of those derivative transactions to close out any related open borrowings of securities. The third parties (or affiliates of such third parties) in such sale transactions by us will be underwriters
and will be identified in an applicable prospectus supplement (or a post-effective amendment). We may also sell securities under this prospectus upon the exercise of rights that may be
issued to our securityholders.
We
may loan or pledge securities to a financial institution or other third party that in turn may sell the securities using this prospectus and an applicable prospectus supplement. Such
financial institution or third party may transfer its economic short position to investors in our securities or in connection with a simultaneous offering of other securities offered by this
prospectus.
Underwriters, Agents and Dealers.
If underwriters are used in the sale of our securities, the securities will be acquired by the
underwriters for
their own account and may be resold from time to time in one or more transactions described above. The securities may be offered to the public either through underwriting syndicates represented by
managing underwriters or directly by underwriters. Generally, the underwriters' obligations to purchase the securities will be subject to conditions precedent and the underwriters will be obligated to
purchase all of the securities if they purchase any of the securities. We may use underwriters with which we have a material relationship and will describe in the prospectus supplement, naming the
underwriter, the nature of any such relationship.
We
and any selling securityholders may sell the securities through agents from time to time. When we sell securities through agents, the prospectus supplement will name any agent
involved in the offer or sale of securities and any commissions we pay to them. Generally, any agent will be acting on a best efforts basis for the period of its appointment.
We
may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase our securities from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The
contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we pay for solicitation of these contracts.
Underwriters,
dealers and agents may contract for or otherwise be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters, dealers and agents.
We
may grant underwriters who participate in the distribution of our securities an option to purchase additional securities to cover over-allotments, if any, in connection
with the distribution.
Underwriters,
dealers or agents may receive compensation in the form of discounts, concessions or commissions from us or our purchasers, as their agents in connection with the sale of
our securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act. As a result, discounts, commissions or profits on resale received by the
underwriters, dealers or agents may be treated as underwriting discounts and commissions. The prospectus supplement for any securities offered by us will identify any such underwriter, dealer or agent
and describe any compensation received by them from us. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to
time.
Any
underwriter may engage in over-allotment transactions, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under
the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of our securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters
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to
reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a transaction to cover short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time. We make no representation or prediction as to the direction or
magnitude of any effect these transactions may have on the price of our securities. For a description of these activities, see the information under the heading "Underwriting" in the applicable
prospectus supplement.
Underwriters,
broker-dealers or agents who may become involved in the sale of our securities may engage in transactions with and perform other services for us for which they receive
compensation.
Stabilization Activities.
In connection with an offering through underwriters, an underwriter may, to the extent permitted by
applicable rules and
regulations, purchase and sell securities in the open market. These transactions, to the extent permitted by applicable rules and regulations, may include short sales, stabilizing transactions and
purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of securities than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters' option to purchase additional securities from us in the offering, if any. If the underwriters have an
over-allotment option to purchase additional securities from us, the underwriters may consider, among other things, the price of securities available for purchase in the open market as
compared to the price at which they may purchase securities through the over-allotment option. "Naked" short sales, which may be prohibited or restricted by applicable rules and
regulations, are any sales in excess of such option or where the underwriters do not have an over-allotment option. The underwriters must close out any naked short position by purchasing
securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the securities in the open
market after pricing that could adversely affect investors who purchase in the offering.
Accordingly,
to cover these short sales positions or to otherwise stabilize or maintain the price of the securities, the underwriters may bid for or purchase securities in the open
market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in the offering are reclaimed if securities
previously distributed in the offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market
price of the securities at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the securities to the extent that it
discourages resale of the securities. The magnitude or effect of any stabilization or other transactions is uncertain.
Direct Sales.
We and any selling securityholders may also sell securities directly to one or more purchasers without using underwriters
or agents. In
this case, no agents, underwriters or dealers would be involved. We may sell securities upon the exercise of rights that we may issue to our securityholders. We and any selling securityholders may
also sell securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities.
Trading Market and Listing of Securities.
Any common stock sold pursuant to a prospectus supplement will be listed on the New York
Stock Exchange.
The securities other than common stock may or may not be listed on a national securities exchange. It is possible that one or more underwriters may make a market in a class or series of securities,
but the underwriters will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for any of
the securities.
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LEGAL MATTERS
Certain legal matters will be passed upon for us by O'Melveny & Myers LLP and by Venable LLP with respect to
matters of Maryland law.
EXPERTS
The consolidated financial statements of The Macerich Company and subsidiaries and the related financial statement
schedule IIIReal Estate and Accumulated Depreciation as of December 31, 2010, and for the year then ended, have been incorporated by reference herein from our Current Report
on Form 8-K filed with the SEC on September 9, 2011, and management's assessment of the effectiveness of internal control over financial reporting as of December 31,
2010 has been incorporated by reference herein from our Annual Report on Form 10-K filed with the SEC on February 25, 2011, in reliance upon the reports of KPMG LLP,
independent registered public accounting firm, both incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The
consolidated financial statements of Pacific Premier Retail Trust, a Maryland real estate investment trust and the related financial statement schedule as of December 31,
2010, and for the year then ended have been incorporated by reference herein from our Annual Report on Form 10-K filed with the SEC on February 25, 2011, in reliance upon the
report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The
consolidated financial statements of The Macerich Company, and the related consolidated financial statement schedule as of December 31, 2009 and for the years ended
December 31, 2009 and 2008, incorporated in this prospectus by reference from The Macerich Company's Current Report on Form 8-K dated September 9, 2011, and the
consolidated financial statements of Pacific Premier Retail Trust, and the related consolidated financial statement schedule as of December 31, 2009 and for the years ended December 31,
2009 and 2008, incorporated in this prospectus by reference from The Macerich Company's Annual Report on Form 10-K for the year ended December 31, 2010, have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated herein by reference. Such consolidated financial statements and consolidated financial statement schedules have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Our estimated expenses in connection with the registration and sale of the securities are as follows, all of which will be borne by us:
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SEC registration fee
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(1)
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Printing and duplicating expenses
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(2)
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Legal fees and expenses
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(2)
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Accounting fees and expenses
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(2)
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Listing fees
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(2)
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Transfer agent of trustee fees
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(2)
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Miscellaneous
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(2)
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Total
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(2)
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(1)
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In
accordance with Rules 456(b) and 457(r) promulgated under the Securities Act of 1933, as amended, we are deferring the payment of all of
the registration fees, except for filing fees aggregating $32,072.33 that have already been paid with respect to an aggregate of 13,731,565 shares of common stock covered by prospectus supplements
dated November 26, 2008, May 22, 2009, June 19, 2009, August 18, 2009, September 18, 2009, November 18, 2009, December 18, 2009, February 18,
2010, February 22, 2010, March 19, 2010 and July 2, 2010 to the prospectus dated November 26, 2008 included in Registration Statement No. 333-155742
filed on November 26, 2008, of which an aggregate of 10,543,912 shares of common stock remain unsold. Pursuant to Rule 415(a)(6), the filing fee previously paid in connection with such
unsold shares will continue to be applied to such unsold shares which are being carried forward to this registration statement.
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(2)
-
These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland General Corporation Law permits a corporation formed in Maryland to include in its charter a provision limiting the
liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (1) active and deliberate dishonesty which is established
by a final judgment and is material to that cause of action, or (2) actual receipt of an improper benefit or profit in money, property or services. Our charter has incorporated a provision that
eliminates the liability of our directors and officers to us and to our stockholders for money damages to the fullest extent permitted by the Maryland General Corporation Law.
Our
charter requires us to indemnify our present officers and directors, whether serving us or at our request another entity, to the maximum extent permitted under Maryland law, and to
pay or reimburse reasonable expenses in advance of the final disposition of the proceeding to the maximum extent permitted from time to time by the laws of Maryland. Our charter provides that the
indemnification rights are non-exclusive of any other rights to which those seeking indemnification may be entitled. The Maryland General Corporation Law permits a corporation to indemnify
its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to
which they may be made a party by reason of their service in those or other capacities unless it is established that (1) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and
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(a) was
committed in bad faith, or (b) was the result of active and deliberate dishonesty; (2) the director or officer actually received an improper personal benefit in money,
property or services; or (3) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or
omission was unlawful. In addition, the Maryland General Corporation Law requires us, as conditions to advancing expenses, to obtain (1) a written affirmation by the director or officer of his
or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us and (2) a written undertaking by him or her or on his or her behalf to repay the
amount paid or reimbursed by us if it is ultimately determined that the standard of conduct was not met. The Maryland General Corporation Law requires a corporation (unless its charter provides
otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by
reason of his or her service in that capacity. However, under the Maryland General Corporation Law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the
corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless in either case, a court orders indemnification and then only for expenses. Our bylaws
specify the procedures for indemnification and advance of expenses.
The
partnership agreement of the Operating Partnership also provides for indemnification of us and our officers and directors similar to that provided to our officers and directors in
the charter, and includes limitations on the liability of our company and our officers and directors to the partnership and its partners similar to those contained in the charter.
We
and the operating partnership have entered into indemnification agreements with certain of our executive officers and directors. The indemnification agreements require, among other
things, that we and the Operating Partnership indemnify those executive officers and directors to the fullest extent permitted by law, and advance to them all related reasonable expenses, subject to
certain defenses. We and the Operating Partnership must also indemnify and advance all expenses incurred by those executive officers and directors seeking to enforce their rights under the
indemnification agreements, and cover them under our director's and officer's liability insurance. Although the indemnification agreements offer substantially the same scope of coverage afforded by
provisions in our charter and our bylaws and the partnership agreement, it provides greater assurance to directors and officers that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by our board of directors, by the stockholders or by the partners of the Operating Partnership to eliminate the rights it provides.
ITEM 16. EXHIBITS
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EXHIBIT NUMBER
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DESCRIPTION
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1.1
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Underwriting Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated by reference herein)
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4.1
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Articles of Amendment and Restatement of the Company (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-11, as amended (No. 33-68964))
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4.2
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Articles Supplementary of the Company (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date May 30, 1995)
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4.3
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Articles Supplementary of the Company (with respect to the first paragraph) (incorporated by reference as an exhibit to the Company's 1998 Form 10-K)
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4.4
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Articles Supplementary of the Company (Series D Preferred Stock) (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date July 26, 2002)
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EXHIBIT NUMBER
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DESCRIPTION
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4.5
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Articles Supplementary of the Company (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-3, as amended (No. 333-88718))
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4.6
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Articles of Amendment (declassification of Board) (incorporated by reference as an exhibit to the Company's 2008 Form 10-K)
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4.7
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Articles Supplementary (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date February 5, 2009)
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4.8
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Articles of Amendment (increased authorized shares) (incorporated by reference as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)
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4.9
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Amended and Restated Bylaws of the Company (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date June 30, 2010)
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4.10
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Form of Common Stock Certificate (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, as amended, event date November 10, 1998)
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4.11
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Form of Preferred Stock Certificate (Series D Preferred Stock) (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-3 (No. 333-107063))
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4.12
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Form of Deposit Agreement, including form of Depositary Receipt (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated by reference herein)
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4.13
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Form of Indenture for Senior Debt Securities
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4.14
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Form of Indenture for Subordinated Debt Securities
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4.15
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Form of Note for Senior Debt Securities (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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4.16
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Form of Note for Subordinated Debt Securities (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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4.17
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Form of Warrant Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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4.18
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Warrant to Purchase Common Stock dated as of September 30, 2009, between the Company and Heitman M-rich Investors LLC (incorporated by reference as an exhibit to the Company's 2009 Form 10-K)
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4.19
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Form of Unit Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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5.1
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Opinion of Venable LLP
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5.2
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Opinion of O'Melveny & Myers LLP
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8.1
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Opinion of O'Melveny & Myers LLP regarding certain tax matters
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12.1
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Statement regarding computation of ratios of earnings to fixed charges and earnings to combined fixed charges and preferred share distributions
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23.1
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Consent of KPMG LLP with respect to The Macerich Company
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EXHIBIT NUMBER
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DESCRIPTION
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23.2
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Consent of KPMG LLP with respect to Pacific Premier Retail Trust
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23.3
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Consent of Deloitte & Touche LLP
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23.4
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Consent of Venable LLP (contained in Exhibit 5.1)
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23.5
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Consent of O'Melveny & Myers LLP (contained in Exhibits 5.2 and 8.1)
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24.1
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Power of Attorney (contained on signature page hereto)
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25.1
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Statement of Eligibility and Qualification of Trustee under the Senior Indenture under the Trust Indenture Act of 1939, as amended (to be filed by amendment to this registration statement or under cover of a Current
Report on Form 8-K incorporated herein by reference)
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25.2
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Statement of Eligibility and Qualification of Trustee under the Subordinated Indenture under the Trust Indenture Act of 1939, as amended (to be filed by amendment to this registration statement or under cover of a
Current Report on Form 8-K incorporated herein by reference)
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ITEM 17. UNDERTAKINGS
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. 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 SEC 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 of Registration 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), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of
this registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof;
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(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering;
(4) That,
for the purpose of determining any liability under the Securities Act to any purchaser, each prospectus filed by the registrant pursuant to Rule 424(b)(3)
shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and each prospectus required to be filed
pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided
in Rule 430B, for
liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in
the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however,
that no
statement made in a registration statement or prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior
to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such effective date; and
(5) That,
for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
(i) any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The
undersigned registrant hereby undertakes that for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The
undersigned registrant hereby undertakes to supplement the prospectus, after the expiration of any subscription period, to set forth the results of any subscription
offer, any transactions
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by
any underwriters during such subscription period, the amount of unsubscribed securities to be purchased by such underwriters, and the terms of any subsequent reoffering thereof. If any public
offering by such underwriters is to be made on terms differing from those set forth on the cover page of the applicable prospectus, a post-effective amendment will be filed to set forth
the terms of such offering.
(d) The
undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Act.
(e) Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than 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 Securities Act and will be governed by the final adjudication of such issue.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Santa Monica, State of California, on September 9, 2011.
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THE MACERICH COMPANY
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By:
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/s/ ARTHUR M. COPPOLA
Arthur M. Coppola
Chairman and Chief Executive Officer
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We,
the undersigned directors and officers of The Macerich Company, and each of us, do hereby constitute and appoint Dana K. Anderson, Arthur M. Coppola, Edward C. Coppola, Thomas E.
O'Hern and Richard A. Bayer, or any one of them, our true and lawful attorneys and agents, each with power of substitution, to do any and all acts and things in our name and on our behalf in our
capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys and agents, or any one of them, may deem
necessary or advisable to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in
connection with this Registration Statement, including specifically but without limitation, the power and authority to sign for us and any of us in our names in the capacities indicated below, any and
all amendments (including post-effective amendments) hereto; and we do hereby ratify and confirm all that the said attorneys and agents, or their substitute or substitutes, or any one of
them, shall do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated, effective as of
September 9, 2011.
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Signature
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Title
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/s/ DANA K. ANDERSON
Dana K. Anderson
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Vice Chairman of the Board
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/s/ ARTHUR M. COPPOLA
Arthur M. Coppola
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Chairman and Chief Executive Officer and Director (Principal Executive Officer)
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/s/ EDWARD C. COPPOLA
Edward C. Coppola
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President and Director
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/s/ DOUGLAS D. ABBEY
Douglas D. Abbey
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Director
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S-1
Table of Contents
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Signature
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Title
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/s/ JAMES S. COWNIE
James S. Cownie
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Director
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/s/ FREDERICK S. HUBBELL
Frederick S. Hubbell
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Director
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/s/ DIANA M. LAING
Diana M. Laing
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Director
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/s/ STANELY A. MOORE
Stanley A. Moore
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Director
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/s/ MASON G. ROSS
Mason G. Ross
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Director
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/s/ MASON G. ROSS
Dr. William P. Sexton
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Director
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/s/ THOMAS E. O'HERN
Thomas E. O'Hern
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Senior Executive Vice President, Treasurer and Chief Financial and Accounting Officer (Principal Financial and Accounting Officer)
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S-2
Table of Contents
EXHIBIT INDEX
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EXHIBIT NUMBER
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DESCRIPTION
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1.1
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Underwriting Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated by reference herein)
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4.1
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Articles of Amendment and Restatement of the Company (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-11, as amended (No. 33-68964))
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4.2
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Articles Supplementary of the Company (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date May 30, 1995)
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4.3
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Articles Supplementary of the Company (with respect to the first paragraph) (incorporated by reference as an exhibit to the Company's 1998 Form 10-K)
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4.4
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Articles Supplementary of the Company (Series D Preferred Stock) (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date July 26, 2002)
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4.5
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Articles Supplementary of the Company (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-3, as amended (No. 333-88718))
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4.6
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Articles of Amendment (declassification of Board) (incorporated by reference as an exhibit to the Company's 2008 Form 10-K)
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4.7
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Articles Supplementary (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date February 5, 2009)
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4.8
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Articles of Amendment (increased authorized shares) (incorporated by reference as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)
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4.9
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Amended and Restated Bylaws of the Company (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, event date June 30, 2010)
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4.10
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Form of Common Stock Certificate (incorporated by reference as an exhibit to the Company's Current Report on Form 8-K, as amended, event date November 10, 1998)
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4.11
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Form of Preferred Stock Certificate (Series D Preferred Stock) (incorporated by reference as an exhibit to the Company's Registration Statement on Form S-3 (No. 333-107063))
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4.12
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Form of Deposit Agreement, including form of Depositary Receipt (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated by reference herein)
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4.13
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Form of Indenture for Senior Debt Securities
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4.14
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Form of Indenture for Subordinated Debt Securities
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4.15
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Form of Note for Senior Debt Securities (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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4.16
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Form of Note for Subordinated Debt Securities (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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4.17
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Form of Warrant Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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Table of Contents
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EXHIBIT NUMBER
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DESCRIPTION
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4.18
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Warrant to Purchase Common Stock dated as of September 30, 2009, between the Company and Heitman M-rich Investors LLC (incorporated by reference as an exhibit to the Company's 2009 Form 10-K)
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4.19
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Form of Unit Agreement (to be filed by amendment to this registration statement or under cover of a Current Report on Form 8-K incorporated herein by reference)
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5.1
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Opinion of Venable LLP
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5.2
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Opinion of O'Melveny & Myers LLP
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8.1
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Opinion of O'Melveny & Myers LLP regarding certain tax matters
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12.1
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Statement regarding computation of ratios of earnings to fixed charges and earnings to combined fixed charges and preferred share distributions
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23.1
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Consent of KPMG LLP with respect to The Macerich Company
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23.2
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Consent of KPMG LLP with respect to Pacific Premier Retail Trust
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23.3
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Consent of Deloitte & Touche LLP
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23.4
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Consent of Venable LLP (contained in Exhibit 5.1)
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23.5
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Consent of O'Melveny & Myers LLP (contained in Exhibits 5.2 and 8.1)
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24.1
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Power of Attorney (contained on signature page hereto)
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25.1
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Statement of Eligibility and Qualification of Trustee under the Senior Indenture under the Trust Indenture Act of 1939, as amended (to be filed by amendment to this registration statement or under cover of a Current
Report on Form 8-K incorporated herein by reference)
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25.2
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Statement of Eligibility and Qualification of Trustee under the Subordinated Indenture under the Trust Indenture Act of 1939, as amended (to be filed by amendment to this registration statement or under cover of a
Current Report on Form 8-K incorporated herein by reference)
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