As filed with the Securities and
Exchange Commission on May 4, 2020
Registration No. 333-236793
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CATCHMARK
TIMBER TRUST, INC.
(Exact Name of Registrant as Specified
in Its Charter)
Maryland
(State or other jurisdiction of
incorporation or organization)
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20-3536671
(I.R.S. Employer
Identification No.)
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5 Concourse Parkway, Suite 2650
Atlanta, Georgia 30328
(855) 858-9794
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive
offices)
Ursula A. Godoy-Arbelaez
Chief
Financial Officer, Senior Vice President and Treasurer
CATCHMARK TIMBER TRUST, INC.
5 Concourse Parkway, Suite
2650
Atlanta, Georgia 30328
(855) 858-9794
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to:
Rosemarie A. Thurston
Rebecca Valentino
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
(404) 881-7000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the following box ¨
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, check the following box. x
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ¨
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Emerging growth company
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¨
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
CALCULATION OF
REGISTRATION FEE
Title of
Securities Being Registered (1)(2)
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Amount
to be
Registered
(3)
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Proposed
Maximum
Offering Price
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Proposed
Maximum
Aggregate
Offering
Price
(4)
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Amount of
Registration
Fee (5)
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Common Stock, $0.01 par value per share
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Preferred Stock, $0.01 par value per share
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Debt Securities
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Depositary Shares
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Warrants
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Units
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Total
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(6)
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(6)
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$
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600,000,000
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$
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77,880
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(7)
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(1)
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This registration statement also covers delayed delivery contracts that may be issued by the registrant under which the counterparty may be required to purchase common stock, preferred stock, debt securities, depositary shares or warrants to purchase common stock, preferred stock, debt securities or depositary shares. Such contracts may be issued together with the specific securities to which they relate. In addition, securities registered hereunder may be sold separately, together or as units with other securities registered hereunder.
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(2)
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Subject to footnote (4), there is being registered hereunder an indeterminate amount of common stock, preferred stock, debt securities, depositary shares, warrants to purchase debt securities, common stock, preferred stock or depositary shares, or units of two or more of the foregoing securities as may be sold, from time to time, by the registrant. Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement shall be deemed to cover any additional number of securities as may be offered or issued from time to time upon stock splits, stock dividends, recapitalizations or similar transactions.
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(3)
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In U.S. dollars or the equivalent thereof denominated in one or more foreign currencies or units of two or more foreign currencies or composite currencies.
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(4)
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Estimated solely for purposes of calculating the registration fee. No separate consideration will be received for shares of common stock that are issued upon conversion of depositary shares or preferred stock or upon exercise of warrants registered hereunder. The aggregate maximum offering price of all securities issued pursuant to this registration statement will not exceed $600,000,000.
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(5)
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The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act, based on the Proposed Maximum Aggregate Offering Price. Pursuant to Rule 415(a)(6) under the Securities Act, the securities registered hereunder include $470,740,000 in aggregate offering price of unsold securities (“Unsold Securities”) previously registered pursuant to a registration statement on Form S-3 (File No. 333-218466), initially filed by CatchMark Timber Trust, Inc. on June 2, 2017 (the “Prior Registration Statement”). Pursuant to Rule 415(a)(6) under the Securities Act, the portion of the filing fee paid or deemed to have been paid in connection with the registration of the Unsold Securities under the Prior Registration Statement, which was paid upon filing of the Prior Registration Statement, will continue to be applied to the Unsold Securities registered pursuant to this registration statement. A filing fee of $16,777.95 is being paid in connection with the filing of this registration statement, which covers the fee for the remaining $129,260,000 in aggregate offering price of securities registered pursuant to this registration statement that are not Unsold Securities. Pursuant to Rule 415(a)(6), the offering of the Unsold Securities under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement.
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(6)
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Not applicable, as provided in General Instruction II.D to Form S-3.
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(7)
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Previously paid.
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The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED May 4, 2020
PRELIMINARY PROSPECTUS
$600,000,000
Common
Stock
Preferred
Stock
Debt Securities
Depositary
Shares
Warrants
Units
We
may offer and sell up to $600,000,000 in the aggregate of the securities identified above from time to time in one or more offerings.
This prospectus provides you with a general description of the securities.
Each
time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained
in this prospectus with respect to that offering, and may include limitations on actual or constructive ownership and restrictions
on transfer of the securities, in each case as may be appropriate to preserve the status of our company as a real estate investment
trust, or REIT, for United States federal income tax purposes. The applicable prospectus supplement will also contain information,
where applicable, about certain United States federal income tax consequences relating to, and any listing on a securities exchange
of, the securities covered by such prospectus supplement. You should carefully read this prospectus and the applicable prospectus
supplement before you invest in any of our securities.
The
securities may be offered directly by us from time to time, through agents designated by us or to or through underwriters or dealers.
If any agents, dealers or underwriters are involved in the sale of any of the securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information
set forth, in the applicable prospectus supplement.
See
the sections entitled “Plan of Distribution” and “About This Prospectus” for more information. No securities
may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the
offering of such securities.
Our
Class A common stock currently trades on the New York Stock Exchange, or NYSE, under the symbol “CTT.”
Investing
in our securities involves various risks. You should carefully read and consider the “Risk Factors” referred
to on page 3 of this prospectus and set forth in the applicable prospectus supplement and other documents incorporated by reference
herein and therein before you invest in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date
of this prospectus is , 2020
TABLE OF
CONTENTS
Page
ABOUT THIS
PROSPECTUS
This prospectus is
part of a registration statement that we filed with the Securities and Exchange Commission using a “shelf” registration
process. Under this process, we may sell common stock, preferred stock, debt securities, depositary shares, warrants and units
in one or more offerings up to a total dollar amount of $600,000,000. This prospectus provides you with a general description of
the securities we may offer. Each time we sell securities, we will provide a prospectus supplement containing specific information
about the terms of the applicable offering. Such prospectus supplement may add, update or change information contained in this
prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement,
you should rely on the prospectus supplement. You should read this prospectus and the applicable prospectus supplement together
with additional information described below under the heading “Where You Can Find More Information” and “Incorporation
of Certain Documents by Reference” before you decide whether to invest.
We may offer the securities
directly, through agents, or to or through underwriters or dealers. The applicable prospectus supplement will describe the terms
of the plan of distribution and set forth the names of any agents, underwriters or dealers involved in the sale of the securities.
See “Plan of Distribution” beginning on page 62 for more information on this topic. No securities may be sold without
delivery of a prospectus supplement describing the method and terms of the offering of those securities.
In this prospectus,
unless otherwise noted, the words “Catchmark Timber Trust,” “we,” “us,” and “our”
refer to Catchmark Timber Trust, Inc., and all of its subsidiaries, including CatchMark Timber Operating Partnership, L.P., of
which we are the General Partner and hold directly or indirectly approximately 99.9% of its common partnership interests, and
all of its subsidiaries. In addition, references in this prospectus to the “Triple T Joint Venture” refer to TexMark
Timber Treasury, L.P., a Delaware limited partnership that is a joint venture managed by CatchMark, and references to the “Dawsonville
Bluffs Joint Venture” refer to Dawsonville Bluffs, LLC, a Delaware limited liability company that is a joint venture managed
by CatchMark with the Missouri Department of Transportation & Patrol Retirement System, or “MPERS.”
You should rely only
on the information contained in this prospectus, in an accompanying prospectus supplement or incorporated by reference herein or
therein. We have not authorized anyone to provide you with information or make any representation that is different. If anyone
provides you with different or inconsistent information, you should not rely on it. This prospectus and any accompanying prospectus
supplement do not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities
to which they relate, and this prospectus and any accompanying prospectus supplement do not constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction where, or to any person to whom, it is unlawful to make such an
offer or solicitation. You should not assume that the information contained in this prospectus and any accompanying prospectus
supplement is correct on any date after the respective dates of the prospectus and such prospectus supplement or supplements, as
applicable, even though this prospectus and such prospectus supplement or supplements are delivered or shares are sold pursuant
to the prospectus and such prospectus supplement or supplements at a later date. Since the respective dates of the prospectus contained
in this registration statement and any accompanying prospectus supplement, our business, financial condition, results of operations
and prospects may have changed. We may only use this prospectus to sell the securities if it is accompanied by a prospectus supplement.
FORWARD-LOOKING
STATEMENTS
This prospectus, any
accompanying prospectus supplement and the documents that we incorporate by reference in each contain “forward-looking statements”
within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform
Act of 1995 (set forth in Section 27A of the Securities Act, and Section 21E of the Exchange Act). All statements other than statements
of historical fact in this prospectus and any accompanying prospectus supplement, as well as the documents incorporated by reference
herein and therein, are forward-looking statements. In particular, statements pertaining to our capital resources, property performance,
distribution policy and results of operations contain forward-looking statements. Likewise, all our statements regarding anticipated
growth in our portfolio from operations, acquisitions and anticipated market conditions, demographics and results of operations
are forward-looking statements. Forward-looking statements involve numerous risks and uncertainties and you should not rely on
them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect
or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen
as described or that they will happen at all. The use of forward-looking terminology such as “believes,” “expects,”
“may,” “will,” “should,” “seeks,” “approximately,” “intends,”
“plans,” “pro forma,” “estimates,” “contemplates,” “aims,” “continues,”
“would” or “anticipates” or the negative of these words and phrases or similar words or phrases is intended
to identify forward-looking statements, although not all forward-looking statements contain such language. You can also identify
forward-looking statements by discussions of strategies, plans or intentions. The following factors, among others, could cause
actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
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the cyclical nature of the forest products industry;
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increasing
competition from substitute products which may lead to declines in demand for wood products;
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our
history of paying cash distributions may be more limited than other public companies
and our future cash distributions are not guaranteed and may fluctuate;
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our dependence on WestRock Company;
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our ability to successfully execute our investment strategy;
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our
dependence on and our ability to access external sources of capital for future growth;
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our
operating expenses may be a larger percentage of total revenues compared to larger
public companies;
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our dependence on Forest Resource Consultants, Inc. and American Forestry Management, Inc. to manage
our timberlands;
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our concentration on timberlands and lack of diversification;
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adverse economic conditions and other developments in the U.S. South and, to a lesser extent, in
the Pacific Northwest, where our timberlands are located;
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our dependence on third parties for logging and transportation services;
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our ability to retain our key executive officers;
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government approvals, actions and initiatives;
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failure to maintain an effective system of disclosure controls and procedures and integrated internal
controls;
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the
fact that we have experienced net losses and may continue to do so;
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the credit risk of our customers;
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our ability to sell portions of our timberlands;
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changes in timber prices and the impact on our revenues;
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our exposure to uninsured losses;
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the competitive timberland industry, which could force us to pay higher prices for our properties;
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limitations on our ability to harvest timber;
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potential liability for environmental clean-up costs and wildlife protection laws;
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our inability to obtain accurate data on the volume and quality of the timber we intend to acquire;
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our estimates of timber growth rates may be inaccurate;
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changes in assessments, property tax rates and state property tax law;
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our estimates of non-timber revenues from properties that we acquire may be inaccurate;
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climate-related legislation and regulations;
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our reliance on information technology in our operations and the potential for a material failure,
inadequacy, interruption or security failure of such information technology;
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increases in energy and fuel costs;
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actions of joint venture partners or the failure of our joint ventures to meet expectations;
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the
impact of the COVID-19 pandemic, including the impact on our business, on our customers’
business and on the market and overall economy in general
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changes to corporate policies;
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changes to our capitalization;
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our current and future indebtedness;
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the
financial and other covenants contained in the documents governing our indebtedness;
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our ability to generate cash;
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increases in interest rates;
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effectiveness of any interest rate hedges;
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certain provisions of Maryland law that could inhibit changes in control of us;
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our failure to qualify as a REIT;
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changes in tax laws; and
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the other factors identified in the section entitled “Risk Factors.”
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The above list
of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. For a
further discussion of these and other factors that could impact our future results, performance or transactions, see the section
below entitled “Risk Factors,” and under similar headings in the applicable prospectus supplement and any related
free writing prospectus, as well as the risks set forth under similar headings in our most recent Annual Report on Form 10-K and
the other documents that are incorporated by reference into this prospectus, as updated by our future filings.
Although we presently believe that the plans,
expectations and anticipated results expressed in or suggested by the forward-looking statements contained in or incorporated by
reference into this prospectus are reasonable, all forward-looking statements are inherently subjective, uncertain and subject
to change, as they involve substantial risks and uncertainties, including those beyond our control. New factors emerge from time
to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business.
Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation
to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except
as otherwise may be required by law.
SUMMARY
This summary highlights selected information
from this prospectus and does not contain all of the information that you need to consider in making your investment decision.
You should carefully read the entire prospectus, any applicable prospectus supplement and any related free writing prospectus,
including the risks of investing in our securities discussed under the heading “Risk Factors” below and the risk factors
contained in our most recent Annual Report on Form 10-K, the applicable prospectus supplement and any related free writing prospectus,
and under similar headings in the other documents that are incorporated by reference into this prospectus. You should also carefully
read the information incorporated by reference into this prospectus, including our financial statements, and the exhibits to the
registration statement of which this prospectus is a part.
CATCHMARK
TIMBER TRUST, INC.
Our Company
We are a self-administered
and self-managed REIT primarily engaged in the ownership, management, acquisition, and disposition of timberland properties located
in the United States. We seek to generate recurring income and cash flow from the harvest and sale of timber, as well as from non-harvest
related revenue sources, such as asset management fees and rent from hunting and recreational leases. When and where we believe
appropriate, we also seek to generate income and cash flow from timberland sales. In addition to current income, we expect to realize
long-term returns from the biological growth of our standing timber inventory.
We strive to deliver
superior, consistent, predictable per-share cash flow growth from disciplined acquisitions, active management, sustainable harvests,
and well-timed real estate sales. We intend to grow over time through selective acquisitions and investments in high-demand fiber
markets and to efficiently integrate new acquisitions and investments into our operations. Operationally, we focus on generating
cash flows from sustainable harvests and improved harvest mix on high-quality timberlands, as well as opportunistic land sales
and asset management fees to provide recurring dividends to our stockholders. We continue to practice intensive forest management
and silvicultural techniques that improve the biological growth of our forests.
We also seek to create
additional value by entering into joint ventures with long-term, institutional equity partners to opportunistically acquire, own,
and manage timberland properties that fit our core investment strategy. In April 2017, we entered into our first joint venture,
the Dawsonville Bluffs Joint Venture, with MPERS. In July 2018, we entered into the Triple T Joint Venture with a consortium of
institutional investors. Our joint venture platform drives growth through a fee-based management business that leverages our scale
and timberland management efficiencies.
For each of the three
years ended December 31, 2019, 2018 and 2017, our revenues from timber sales, timberland sales, asset management fees, and nontimber
related sources, as a percentage of our total revenue, are set forth in the table below:
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2019
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2018
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2017
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Timber sales
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68
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%
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71
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%
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78
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%
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Timberland sales
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17
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%
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18
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%
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16
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%
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Asset management fees
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11
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%
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6
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%
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—
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%
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Other revenues
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4
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%
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5
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%
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6
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%
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Total
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100
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%
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100
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%
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100
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%
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As of March 31,
2020, we owned interests in approximately 415,400 acres of high-quality industrial timberlands consisting of 17.1 million tons
of merchantable timber inventory located in the U.S. South and Pacific Northwest, consisting of approximately 392,800 acres held
in fee-simple interests, or our fee timberlands, and approximately 22,600 acres held in leasehold interests, or our leased timberlands.
Our wholly-owned timberlands are located within attractive fiber baskets encompassing a diverse group of pulp, paper and wood
products manufacturing facilities. Our Southern timberlands were comprised of approximately 72% pine plantations by acreage and
52% sawtimber by volume. Our Pacific Northwest timberlands consisted of 90% productive acres and 82% sawtimber by volume. Our
leased timberlands of 22,600 acres were all under one long-term lease expiring in 2022.
In addition to
our wholly-owned timber assets, as of March 31, 2020, we owned a common limited partnership interest in the Triple T Joint
Venture which owns 1.1 million acres of high-quality industrial East Texas timberlands with an estimated 43.2 million tons of
merchantable timber inventory, and we owned a 50% membership interest in the Dawsonville Bluffs Joint Venture which owns a
mitigation bank with a book basis of $2.6 million as of March 31, 2020.
Corporate Information
Our principal executive
offices are located at 5 Concourse Parkway, Suite 2650, Atlanta, Georgia 30328, and our telephone number at such address is (855)
858-9794. Our website address is www.catchmark.com. We make available free of charge on our website our annual, quarterly and current
reports, including amendments to such reports, as soon as reasonably practicable after we electronically file such material with,
or furnish such material to, the SEC. Information contained on, or accessible through, our website is not incorporated by reference
into this prospectus or the accompanying prospectus supplement or free writing prospectus, and you should not consider information
contained on, or accessible through, our website as part of this prospectus or the accompanying prospectus supplement or free writing
prospectus.
RISK FACTORS
An investment in
any securities offered pursuant to this prospectus involves risks. You should carefully consider the risks of investing in our
securities, including the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and the other documents
that are incorporated by reference into this prospectus, the other information contained in this prospectus, as updated by our
subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the risk factors and other
information contained in the applicable prospectus supplement and any related free writing prospectus, before acquiring any of
such securities. Please also refer to the section above entitled “Forward-Looking Statements.”
USE OF PROCEEDS
Except as may be set
forth in a particular prospectus supplement, we intend to use the net proceeds from the sale of our securities for general corporate
purposes, which may include repayment or redemption of indebtedness, new investments in our target assets in accordance with our
investment strategy in place at such time or for other general corporate purposes.
We may temporarily
invest the net proceeds in a variety of capital preservation instruments, including investment grade instruments, certificates
of deposit or direct or guaranteed obligations of the U.S. government, or may hold such proceeds as cash, until they are used for
their stated purpose. We have not determined the amount of net proceeds to be used specifically for such purposes. As a result,
management will retain broad discretion over the allocation of net proceeds.
Any specific allocation
of the net proceeds of an offering of securities to a specific purpose will be determined at the time of such offering and will
be described in the related prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
General
This prospectus describes
the general terms of our shares of common stock and our shares of preferred stock. The following description is not complete and
may not contain all of the information you should consider before investing in our common stock or preferred stock. For a more
detailed description of these securities, you should read the applicable provisions of the Maryland General Corporation Law, or
MGCL, and our charter and bylaws. This description is subject to, and qualified in its entirety by reference to, our charter and
bylaws and the MGCL. When we offer to sell a particular class or series of common stock or preferred stock, we will describe the
specific terms of the class or series in a prospectus supplement. Accordingly, for a description of the terms of any class or series
of stock, you must refer to both the prospectus supplement relating to that class or series and the description of stock in this
prospectus. To the extent the information contained in the prospectus supplement differs from this summary description, you should
rely on the information in the prospectus supplement.
Our charter authorizes
the issuance of one billion shares of stock, of which 900 million shares are designated as common stock with a par value of $0.01
per share, and 100 million shares are designated as preferred stock with a par value of $0.01 per share.
As of April 30,
2020, 48,742,034 shares of our Class A common stock were issued and outstanding and held of record by a total of 1,500
stockholders and no shares of preferred stock were issued and outstanding. Currently, there are no other classes or series of
capital stock outstanding, and we refer to the Class A common stock, par value $0.01 per share, herein as the “common stock.”
Our board of directors
may amend our charter from time to time without stockholder approval to increase or decrease the aggregate number of our authorized
shares or the number of shares of any class or series that we have authority to issue. Under Maryland law, our stockholders generally
are not personally liable for our debts and obligations solely as a result of their status as stockholders.
Common Stock
Except as may
otherwise be specified in our charter, the holders of common stock are entitled to one vote per share on all matters voted on
by stockholders, including election of our directors. Our charter does not provide for cumulative voting in the election of
our directors. Therefore, the holders of a majority of the outstanding shares of common stock can elect our entire board of
directors. Subject to any preferential rights of any outstanding class or series of preferred stock, the holders of common
stock are entitled to such distributions as may be authorized from time to time by our board of directors and declared by us
out of legally available funds and, upon liquidation, are entitled to receive all assets available for distribution to our
stockholders. Holders of shares of common stock will not have preemptive rights, which means that you will not have an
automatic option to purchase any new shares that we issue. Holders of common stock will not have appraisal rights unless our
board of directors determines that appraisal rights apply, with respect to all or any classes or series of stock, to one or
more transactions occurring after the date of such determination in connection with which stockholders would otherwise be
entitled to exercise appraisal rights.
Preferred Stock
We currently have no
shares of preferred stock outstanding. Our charter authorizes the issuance of 100 million shares of preferred stock with a par
value of $0.01 per share. Our charter authorizes our board of directors to classify and reclassify any unissued shares of our common
and preferred stock into one or more classes or series of stock, and to issue such classified or reclassified stock, without stockholder
approval. Our board of directors must determine the relative rights, preferences and privileges of each class or series of stock
so issued, which may be more beneficial than the rights, preferences and privileges attributable to the common stock. The issuance
of such stock could have the effect of delaying, deferring or preventing a change in control.
Any shares of preferred
stock issued under this registration statement may be issued as one or more new classes or series of shares of preferred stock,
the rights, preferences, privileges and restrictions of which will be fixed by articles supplementary relating to each class or
series. A prospectus supplement relating to each class or series will specify the terms of the shares of preferred stock, including:
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the maximum number of shares in the class or series and the designation of the class or series;
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the terms on which dividends, if any, will be paid;
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the terms on which the shares may be redeemed, if at all;
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the liquidation preference, if any;
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the terms of any retirement or sinking fund for the purchase or redemption of the shares of the
class or series;
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the terms and conditions, if any, on which the shares of the class or series will be convertible
into, or exchangeable for, shares of any other class or classes of stock;
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the voting rights, if any, of the shares of the class or series; and
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any or all other preferences and relative, participating, operational or other special rights or
qualifications, limitations or restrictions of the shares of the class or series.
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The description of
the terms of a particular class or series of shares of preferred stock included in any prospectus supplement will not be complete.
You should refer to the articles supplementary with respect to a class or series of preferred stock for complete information concerning
the terms of that class or series. A copy of the articles supplementary for each new class or series of preferred stock will be
filed with the Securities and Exchange Commission as an exhibit to the registration statement of which this prospectus is a part
or as an exhibit to a filing incorporated by reference in such registration statement.
Our board of directors
may authorize the issuance of classes or series of preferred stock with voting or conversion rights that could adversely affect
the voting power or other rights of common stockholders. The issuance of shares of preferred stock, which may provide flexibility
in connection with possible acquisitions and other corporate purposes, could have the effect of delaying or preventing a change
in control, and may cause the market price of shares of common stock to decline or impair the voting and other rights of the holders
of shares of common stock.
Uncertificated Shares
Unless otherwise provided
by our board of directors, we will not issue shares in certificated form. We maintain a stock ledger that contains the name and
address of each stockholder of record and the number of shares that the stockholder holds. With respect to uncertificated stock,
we will continue to treat the stockholder registered on our stock ledger as the owner of the shares until the new owner delivers
a properly executed form to us, which form we will provide to any registered holder upon request.
Meetings, Special Voting Requirements and Access to Records
An annual meeting of
the stockholders will be held each year, on the date and at the time and place set by our board of directors. Special meetings
of stockholders may be called by our board of directors, the chairman of the board, the president or the chief executive officer,
and, subject to certain procedural requirements set forth in our bylaws, must be called by our secretary to act on any matter that
may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast at least a majority
of all the votes entitled to be cast on such matter at the special meeting. The presence in person or by proxy of stockholders
entitled to cast at least a majority of all the votes entitled to be cast at such meeting on any matter constitutes a quorum. Generally,
the affirmative vote of a majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present
shall be sufficient to approve any matter which may properly come before the meeting, unless more than a majority of the votes
cast is required by statute or by our charter. With respect to uncontested director elections, a nominee for director shall be
elected as a director only if such nominee receives the affirmative vote of a majority of the total votes cast for and against
such nominee at a meeting of stockholders duly called and at which a quorum is present. However, in contested elections directors
shall be elected by a plurality of votes cast at a meeting of stockholders duly called and at which a quorum is present.
Under Maryland law,
a Maryland corporation generally cannot dissolve, amend its charter, merge, convert, sell all or substantially all of its assets,
engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless declared advisable
by its board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes
entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by
a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter provides for
a majority vote in these situations.
Stockholders may, by
the affirmative vote of a majority of all the votes entitled to be cast generally in the election of directors, remove a director
from our board.
Restrictions on Ownership and Transfer
Ownership Limit
In order for us to
qualify as a REIT, during the last half of each taxable year, not more than 50% of the value of our outstanding shares may be owned,
directly or indirectly, by five or fewer individuals, as defined in the Code to include certain entities. In addition, the outstanding
shares must be owned by 100 or more persons independent of us and each other during at least 335 days of a 12-month taxable year
or during a proportionate part of a shorter taxable year.
We may prohibit certain
acquisitions and transfers of shares so as to ensure our continued qualification as a REIT under the Code. However, we cannot assure
you that this prohibition will be effective.
Our charter contains
limitations on ownership that prohibit any person or group of persons from acquiring, directly or indirectly, beneficial ownership
of more than 9.8% in value of our outstanding stock, or more than 9.8% (in value or in number of shares, whichever is more restrictive)
of our outstanding common stock. Our charter also provides that our board of directors may, subject to certain conditions, prospectively
or retroactively exempt a person or group of persons from these ownership limitations and establish or increase an excepted holder
limit for such person or group of persons. However, the board may not exempt any person whose ownership of our outstanding stock
would result in our being “closely held” within the meaning of Section 856(h) of the Code or otherwise would result
in our failing to qualify as a REIT. In order to be considered by the board for exemption, a person also must agree that any violation
or attempted violation of these restrictions or any representation or undertakings on which the board of directors conditioned
such exemption or excepted holder limit will result in the automatic transfer of the shares of stock causing the violation to a
trust. The board of directors may require a ruling from the IRS or an opinion of counsel in order to determine or ensure our status
as a REIT.
Our charter further
prohibits (1) any person from owning shares of our stock that would result in our being “closely held” under Section
856(h) of the Code or otherwise cause us to fail to qualify as a REIT and (2) any person from transferring shares of our stock
if the transfer would result in our stock being beneficially owned by fewer than 100 persons. Any person who acquires or attempts
or intends to acquire shares of our stock that may violate any of these restrictions, or who is the intended transferee of shares
of our stock that are transferred to the trust, as described below, is required to give us immediate written notice or, in the
case of a proposed or attempted transaction, at least 15 days prior written notice and provide us with such information as we may
request in order to determine the effect of the transfer on our status as a REIT. The above restrictions will not apply if our
board of directors determines that it is no longer in our best interests to continue to qualify as a REIT and files with the State
Department of Assessments and Taxation of Maryland a certificate of notice setting forth such determination by the board of directors
or if our board of directors determines that compliance is no longer required for REIT qualification.
Any attempted transfer
of our stock which, if effective, would result in our stock being beneficially owned by fewer than 100 persons will be null and
void and the proposed transferee will acquire no rights in the shares. Any attempted transfer of our stock which, if effective,
would result in violation of the ownership limits discussed above or in our being “closely held” under Section 856(h)
of the Code or otherwise failing to qualify as a REIT will cause the number of shares causing the violation (rounded to the nearest
whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, and
the proposed transferee will not acquire any rights in the shares. The automatic transfer will be deemed to be effective as of
the close of business on the business day prior to the date of the transfer. If the transfer to the trust would not be effective
for any reason to prevent the violation of such limitations, then the transfer of that number of shares that otherwise would cause
such violation will be null and void and the proposed transferee will acquire no rights in such shares. Shares of our stock held
in the trust will be issued and outstanding shares. The proposed transferee will not benefit economically from ownership of any
shares of stock held in the trust, will have no rights to distributions and no rights to vote or other rights attributable to the
shares of stock held in the trust. The trustee of the trust will have all voting rights and rights to dividends or other distributions
with respect to shares held in the trust. These rights will be exercised for the exclusive benefit of the charitable beneficiary.
Any dividend or other distribution paid prior to our discovery that shares of stock have been transferred to the trust will be
paid by the recipient to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when due
to the trustee. Any dividend or distribution paid to the trustee will be held in trust for the charitable beneficiary. Subject
to Maryland law, the trustee will have the authority (1) to rescind as void any vote cast by the proposed transferee prior to our
discovery that the shares have been transferred to the trust and (2) to recast the vote in accordance with the desires of the trustee
acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the
trustee will not have the authority to rescind and recast the vote.
Within 20 days of receiving
notice from us that shares of our stock have been transferred to the trust, the trustee will sell the shares to a person designated
by the trustee, whose ownership of the shares will not violate the above ownership limitations. Upon the sale, the interest of
the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the
proposed transferee and to the charitable beneficiary as follows. The proposed transferee will receive the lesser of (1) the price
paid by the proposed transferee for the shares or, if the proposed transferee did not give value for the shares in connection with
the event causing the shares to be held in the trust (e.g., a gift, devise or other similar transaction), the “market price”
(as defined in our charter) of the shares on the day of the event causing the shares to be held in the trust and (2) the price
received by the trustee from the sale or other disposition of the shares. The trustee may reduce the amount payable to the proposed
transferee by the amount of dividends and other distributions which have been paid to the proposed transferee and are owed by the
proposed transferee to the trustee. Any net sales proceeds in excess of the amount payable to the proposed transferee will be paid
immediately to the charitable beneficiary. If, prior to our discovery that shares of our stock have been transferred to the trust,
the shares are sold by the proposed transferee, then (1) the shares shall be deemed to have been sold on behalf of the trust and
(2) to the extent that the proposed transferee received an amount for the shares that exceeds the amount he was entitled to receive,
the excess shall be paid to the trustee upon demand.
In addition, shares
of our stock held in the trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal
to the lesser of (1) the price per share in the transaction that resulted in the transfer to the trust (or, in the case of a devise
or gift, the market price at the time of the devise or gift) and (2) the market price on the date we, or our designee, accept the
offer. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest of the
charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed
transferee. We may reduce the amount payable to the proposed transferee by the amount of dividends and other distributions which
have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. We may pay the amount of such
reduction to the trustee for the benefit of the charitable beneficiary.
Any certificates representing
shares of our stock will bear a legend referring to the restrictions described above.
Every owner of more
than 5% (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of our stock, within
30 days after the end of each taxable year, is required to give us written notice, stating his name and address, the number of
shares of each class and series of our stock which he beneficially owns, and a description of the manner in which the shares are
held. Each such owner shall provide us with such additional information as we may request in order to determine the effect, if
any, of his beneficial ownership on our status as a REIT and to ensure compliance with the ownership limits and the other restrictions
set forth in our charter. In addition, each stockholder shall upon demand be required to provide us with such information as we
may request in good faith in order to determine our status as a REIT and to comply with the requirements of any taxing authority
or governmental authority or to determine such compliance.
These ownership limits
could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise
be in the best interest of our stockholders.
Listing
Our Class A common
stock is listed on the NYSE under the symbol “CTT.”
Transfer Agent and Registrar
The transfer agent
and registrar for our shares of common stock is ComputerShare Inc.
DESCRIPTION
OF DEBT SECURITIES
The following description,
together with the additional information we include in any applicable prospectus supplement, summarizes certain general terms and
provisions of the debt securities that we may offer under this prospectus. When we offer to sell a particular series of debt securities,
we will describe the specific terms of the series in a supplement to this prospectus. We will also indicate in the prospectus supplement
to what extent the general terms and provisions described in this prospectus apply to a particular series of debt securities. To
the extent the information contained in the prospectus supplement differs from this summary description, you should rely on the
information in the prospectus supplement.
We may issue debt securities
either separately, or together with, or upon the conversion or exercise of or in exchange for, other securities described in this
prospectus. Debt securities may be our senior, senior subordinated or subordinated obligations and, unless otherwise specified
in a supplement to this prospectus, the debt securities will be our direct, unsecured obligations and may be issued in one or more
series.
The debt securities
will be issued under an indenture between us and a trustee that we will name in the applicable prospectus supplement. We have summarized
select portions of the indenture below. The summary is not complete. The form of the indenture has been filed as an exhibit to
the registration statement and you should read the indenture carefully for provisions that may be important to you. We will include
any applicable amended and/or final indenture and any other instrument establishing the terms of any debt securities we offer as
exhibits to a filing we will make with the SEC in connection with such offering. Please read “Incorporation of Certain Documents
by Reference.” Capitalized terms used in the summary and not defined in this prospectus have the meanings specified in the
indenture.
General
The terms of each series
of debt securities will be established by or pursuant to a resolution of our board of directors and set forth or determined in
the manner provided in such resolutions, in an officer’s certificate or by a supplemental indenture. The particular terms
of each series of debt securities will be described in a prospectus supplement relating to such series, including any pricing supplement
or term sheet.
We can issue an unlimited
amount of debt securities under the indenture that may be in one or more series with the same or various maturities, at par, at
a premium, or at a discount. We will set forth in a prospectus supplement, including any pricing supplement or term sheet, relating
to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities,
to the extent applicable:
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the title and ranking of the debt securities (including the terms of any subordination provisions);
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the price or prices (expressed as a percentage of the principal amount) at which we will sell the
debt securities;
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any limit on the aggregate principal amount of the debt securities;
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the date or dates on which the principal on the debt securities is payable;
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the rate or rates (which may be fixed or variable) per annum or the method used to determine the
rate or rates (including any commodity, commodity index, stock exchange index or financial index) at which the debt securities
will bear interest, the date or dates from which interest will accrue, the date or dates on which interest will commence and be
payable and any regular record date for the interest payable on any interest payment date;
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any restrictions on the declaration of dividends or requiring maintenance of any asset ratio or
the creation or maintenance of reserves;
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any restrictions on the incurrence of additional debt or the issuance of additional securities;
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the place or places where principal of, and any premium and interest on, the debt securities will
be payable, the method of such payment, where debt securities may be surrendered for registration of transfer or exchange and where
notices and demands to us relating to the debt securities may be delivered;
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the period or periods within which, the price or prices at which and the terms and conditions upon
which we may redeem the debt securities;
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any obligation we have to redeem or purchase the debt securities pursuant to any sinking fund or
analogous provisions or at the option of a holder of debt securities and the period or periods within which, the price or prices
at which and the terms and conditions upon which the debt securities shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
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the dates on which and the price or prices at which we will repurchase debt securities at the option
of the holders of debt securities and other detailed terms and provisions of these repurchase obligations;
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the denominations in which the debt securities will be issued, if other than denominations of $1,000
and any integral multiple thereof;
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whether the debt securities will be issued in the form of certificated debt securities or global
debt securities;
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the portion of principal amount of the debt securities payable upon declaration of acceleration
of the maturity date, if other than the principal amount;
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the currency of denomination of the debt securities, which may be U.S. dollars or any foreign currency,
and if such currency of denomination is a composite currency, the agency or organization, if any, responsible for overseeing such
composite currency;
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the designation of the currency, currencies or currency units in which payment of principal of,
and any premium and interest on, the debt securities will be made;
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if payments of principal of, or any premium or interest on, the debt securities will be made in
one or more currencies or currency units other than that or those in which the debt securities are denominated, the manner in which
the exchange rate with respect to these payments will be determined;
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the manner in which the amounts of payment of principal of, and any premium and interest on, the
debt securities will be determined, if these amounts may be determined by reference to an index based on a currency or currencies
other than that in which the debt securities are denominated or designated to be payable or by reference to a commodity, commodity
index, stock exchange index or financial index;
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any provisions relating to any security provided for the debt securities;
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any addition to, deletion of or change in the Events of Default described in this prospectus or
in the indenture with respect to the debt securities and any change in the acceleration provisions described in this prospectus
or in the indenture with respect to the debt securities;
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any addition to, deletion of or change in the covenants described in this prospectus or in the
indenture with respect to the debt securities;
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any information regarding the rights evidenced by the debt securities which may materially limit
or qualify the rights of any other authorized class of securities;
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the nature of any material relationship between us or any of our affiliates and the trustee;
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the percentage of securities of the class necessary to require the trustee to take action, and
what indemnification the trustee may require before proceeding to enforce the lien;
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any other terms of the debt securities, which may supplement, modify or delete any provision of
the indenture as it applies to that series, including any terms that may be required under applicable law or regulations or advisable
in connection with the marketing of the securities;
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a discussion of any material United States federal income tax considerations applicable to an investment
in the debt securities, including the tax effects of the debt securities if such securities are to be offered at a price such that
they will be deemed to be offered at an "original issue discount" as defined in paragraph (a) of Section 1273 of the
Code, or if a debt security is sold in a package with another security and the allocation of the offering price between the two
securities may have the effect of offering the debt security at such an original issue discount, the tax effects thereof pursuant
to Sections 1271-1278 of the Code;
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any depositaries, interest rate calculation agents, exchange rate calculation agents or other agents
with respect to the debt securities;
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any provisions relating to conversion or exchange of any debt securities, including if applicable,
the conversion or exchange price and period, provisions as to whether conversion or exchange will be mandatory, at the option of
the holders thereof or at our option, the events requiring an adjustment of the conversion or exchange price and provisions affecting
conversion or exchange if such debt securities are redeemed; and
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whether the debt securities will be senior debt securities or subordinated debt securities and,
if applicable, a description of the subordination terms thereof, and whether the debt securities are entitled to the benefits of
the guarantee of any guarantor, and whether any such guarantee is made on a senior or subordinated basis and, if applicable, a
description of the subordination terms of any such guarantee.
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We may issue debt securities
that provide for an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their
maturity pursuant to the terms of the indenture. We will provide you with information on the other special considerations applicable
to any of these debt securities in the applicable prospectus supplement.
If we denominate the
purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the
principal of, and any premium and interest on, any series of debt securities is payable in a foreign currency or currencies or
a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations,
specific terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign
currency unit or units in the applicable prospectus supplement.
Transfer and Exchange
Each debt security
will be represented by either one or more global securities issued to and registered in the name of the Depositary or a nominee
of the Depositary (any such debt security represented by a global debt security, a “book-entry debt security”), or
a certificate issued in definitive registered form (any such debt security represented by a certificated security, a “certificated
debt security”) as set forth in the applicable prospectus supplement. Except as otherwise set forth in this prospectus or
the applicable prospectus supplement, book-entry debt securities will not be issuable in certificated form except in certain limited
circumstances.
Certificated
Debt Securities
You may transfer or
exchange certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture
or the applicable supplemental indenture. No service charge will be made for any transfer or exchange of certificated debt securities,
but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer
or exchange.
You may effect the
transfer of certificated debt securities and the right to receive the principal of, and any premium and interest on, certificated
debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us
or the trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global Debt Securities and Book-Entry
System
Each global debt security
representing book-entry debt securities will be deposited with, or on behalf of, the Depositary, and registered in the name of
the Depositary or a nominee of the Depositary. See “Global Securities.”
Covenants
We will set forth in
the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate
with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to, any person,
which we refer to as a successor person, unless:
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we are the surviving corporation or the successor person (if other than us) is a corporation, partnership,
trust or other entity organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes our
obligations on the debt securities and under the indenture;
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immediately after giving effect to the transaction, no Default or Event of Default shall have occurred
and be continuing;
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if we are not the successor person, each guarantor, if any, unless it has become the successor
person, confirms that its guarantee shall continue to apply to the obligations under the debt securities and the indenture to the
same extent as prior to such merger, conveyance, transfer or lease, as applicable; and
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certain other conditions are met.
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Notwithstanding the
above, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties to us.
Events of Default
“Event of Default”
means, with respect to any series of debt securities, any of the following:
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default in the payment of any interest upon any debt security of that series when it becomes due
and payable, and continuance of that default for a period of 30 days (unless the entire amount of the payment is deposited by us
with the trustee or with a paying agent prior to the expiration of the 30-day period);
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default in the payment of principal of any debt security of that series at its maturity;
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default in the performance or breach of any other covenant or warranty by us in the indenture (other
than a covenant or warranty that has been included in the indenture solely for the benefit of a series of debt securities other
than that series), which default continues uncured for a period of 60 days after we receive written notice from the trustee, or
we and the trustee receive written notice from the holders of not less than a majority in principal amount of the outstanding debt
securities of that series, as provided in the indenture;
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certain voluntary or involuntary events of bankruptcy, insolvency or reorganization of our company;
and
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any other Event of Default provided with respect to debt securities of that series that is described
in the applicable prospectus supplement.
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No Event of Default
with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization)
necessarily constitutes an Event of Default with respect to any other series of debt securities. The occurrence of certain Events
of Default or an acceleration under the indenture may constitute an event of default under certain of our or our subsidiaries’
indebtedness outstanding from time to time.
If an Event of Default
with respect to outstanding debt securities of any series occurs and is continuing, then the trustee or the holders of not less
than a majority in principal amount of the outstanding debt securities of that series may, by a notice in writing to us (and to
the trustee if given by the holders), declare to be due and payable immediately the principal amount (or, if the debt securities
of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) of,
and any accrued and unpaid interest on, all outstanding debt securities of that series. In the case of an Event of Default resulting
from certain events of bankruptcy, insolvency or reorganization, the principal amount (or such specified amount) of, and any accrued
and unpaid interest on, all outstanding debt securities will become and be immediately due and payable without any declaration
or other act on the part of the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration
with respect to debt securities of any series has been made, but before a judgment or decree for payment of the money due has been
obtained by the trustee, the holders of a majority in principal amount of the outstanding debt securities of that series, by written
notice to us and the trustee, may rescind and annul the acceleration if all Events of Default, other than the non-payment of accelerated
principal and interest, if any, with respect to debt securities of that series, have been cured or waived as provided in the indenture.
We refer you to the prospectus supplement relating to any series of debt securities that are discount securities for the particular
provisions relating to acceleration of a portion of the principal amount of such discount securities upon the occurrence of an
Event of Default.
The indenture provides
that the trustee will be under no obligation to exercise any of its rights or powers under the indenture unless the trustee receives
indemnity reasonably satisfactory to it against any cost, liability or expense that might be incurred by it in exercising such
right or power. Subject to certain rights of the trustee, 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 any trust or power conferred on the trustee with respect to the debt securities of that series and
the trustee shall not be liable with respect to any such action taken, suffered or omitted to be taken in good faith in accordance
with such direction by the holders of a majority in principal amount of the outstanding debt securities of any such series.
No holder of any debt
security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or
for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:
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that holder has previously given to the trustee written notice of a continuing Event of Default
with respect to debt securities of that series;
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the holders of at least a majority in principal amount of the outstanding debt securities of that
series have made written request, and offered indemnity or security reasonably satisfactory to the trustee, to the trustee to institute
the proceeding as trustee;
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the trustee has failed to institute any such proceeding within 60 days of receipt of such notice
and the request and offer of indemnity; and
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the trustee has not received from the holders of at least a majority in principal amount of the
outstanding debt securities of that series a direction inconsistent with that request within the 60-day period mentioned directly
above.
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Notwithstanding any
other provision in the indenture, the holder of any debt security will have an absolute and unconditional right to receive payment
of the principal of, and any premium and interest on, that debt security on or after the maturity dates expressed in that debt
security and to institute suit for the enforcement of payment.
The indenture requires
us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture.
If a Default or Event of Default occurs and is continuing with respect to the debt securities of any series and if it is known
to a responsible officer of the trustee, the trustee shall mail to each holder of the debt securities of that series notice of
a Default or Event of Default within 90 days after it occurs or, if later, after a responsible officer of the trustee has knowledge
of such Default or Event of Default. The indenture provides that the trustee may withhold notice to the holders of debt securities
of any series of any Default or Event of Default (except in payment on any debt securities of that series) with respect to debt
securities of that series if the trustee determines in good faith that withholding notice is in the interest of the holders of
those debt securities.
Modification and Waiver
We, any guarantors
and the trustee may modify and amend the indenture or the debt securities of any series without the consent of any holder of any
debt security in order to:
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cure any ambiguity, defect or inconsistency;
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comply with covenants in the indenture described above under the heading “Consolidation,
Merger and Sale of Assets”;
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provide for uncertificated securities in addition to or in place of certificated securities;
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surrender any of our rights or powers under the indenture;
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add covenants or events of default for the benefit of the holders of debt securities of any series;
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comply with the applicable procedures of the applicable depositary;
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make any change that does not adversely affect the rights of any holder of debt securities;
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provide for the issuance of and establish the form and terms and conditions of debt securities
of any series as permitted by the indenture;
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effect the appointment of a successor trustee with respect to the debt securities of any series
and to add to or change any of the provisions of the indenture to provide for or facilitate administration by more than one trustee;
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comply with requirements of the Securities and Exchange Commission in order to effect or maintain
the qualification of the indenture under the Trust Indenture Act; or
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add guarantors with respect to any or all of the debt securities or to secure any or all of the
debt securities or the guarantees, if any.
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We may also modify
and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding debt securities
of each series affected by the modifications or amendments. We may not make any modification or amendment without the consent of
the holders of each affected debt security then outstanding if that amendment will:
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reduce the principal amount of debt securities whose holders must consent to an amendment, supplement
or waiver;
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reduce the rate of or extend the time for payment of interest (including default interest) on any
debt security;
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reduce the principal of or premium on, or change the fixed maturity of, any debt security, or reduce
the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation with respect to any series
of debt securities;
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reduce the principal amount of discount securities payable upon acceleration of maturity;
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waive a Default or Event of Default in the payment of the principal of, or any premium or interest
on, any debt security (except a rescission of acceleration of the debt securities of any series by the holders of at least a majority
in aggregate principal amount of the then outstanding debt securities of that series and a waiver of the payment default that resulted
from such acceleration);
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make the principal of, or any premium or interest (if any) on, any debt security payable in any
currency other than that stated in the debt security;
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make any change to certain provisions of the indenture relating to, among other things, the right
of holders of debt securities to receive payment of the principal of, or any premium and interest on, those debt securities and
to institute suit for the enforcement of any such payment and to waivers or amendments;
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waive a redemption payment with respect to any debt security; or
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if the debt securities of that series are entitled to the benefit of a guarantee, release any guarantor
of such series other than as provided in the indenture or modify the guarantee in any manner adverse to the holders.
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Except for certain
specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series may,
on behalf of the holders of all debt securities of that series, waive our compliance with provisions of the indenture by sending
written notice to us and the trustee. The holders of a majority in principal amount of the outstanding debt securities of any series
may, on behalf of the holders of all of the debt securities of such series, waive any past default under the indenture with respect
to that series and its consequences, except a default in the payment of the principal of, or any premium or interest on, any debt
security of that series; provided, however, that the holders of a majority in principal amount of the outstanding
debt securities of any series may rescind an acceleration and its consequences, including any related payment default that resulted
from the acceleration.
Defeasance of Debt Securities and Certain Covenants in
Certain Circumstances
Legal Defeasance
The indenture provides
that, unless otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all
obligations in respect of the debt securities of any series (subject to certain exceptions and other conditions) on the 91st day
after the date of the deposit with the trustee, as trust funds, of money and/or U.S. government obligations or, in the case of
debt securities denominated in a single currency other than U.S. dollars, government obligations of the government that issued
or caused to be issued such currency, that, through the payment of interest and principal in accordance with their terms, will
provide money or U.S. government obligations in an amount sufficient in the opinion of a nationally recognized firm of independent
public accountants or investment bank to pay and discharge each installment of principal of, any premium and interest on, and any
mandatory sinking fund payments in respect of, the debt securities of that series on the stated maturity of those payments in accordance
with the terms of the indenture and those debt securities.
This discharge may
occur only if, among other things, we have delivered to the trustee an opinion of counsel stating that we have received from, or
there has been published by, the IRS a ruling or, since the date of execution of the indenture, there has been a change in the
applicable United States federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm
that, the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income
tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the
same amounts and in the same manner and at the same times as would have been the case if the deposit, defeasance and discharge
had not occurred.
Defeasance of Certain Covenants
The indenture provides
that, unless otherwise provided by the terms of the applicable series of debt securities, upon compliance with certain conditions:
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we may omit to comply with the covenant described under the heading “Consolidation, Merger
and Sale of Assets” and certain other covenants set forth in the indenture, as well as any additional covenants that may
be set forth in the applicable prospectus supplement; and
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any omission to comply with those covenants will not constitute a Default or an Event of Default
with respect to the debt securities of that series, or covenant defeasance.
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The conditions include:
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depositing with the trustee money and/or U.S. government obligations or, in the case of debt securities
denominated in a single currency other than U.S. dollars, government obligations of the government that issued or caused to be
issued such currency, that, through the payment of interest and principal in accordance with their terms, will provide money in
an amount sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay
and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest in respect
of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and
those debt securities; and
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delivering to the trustee an opinion of counsel to the effect that the holders of the debt securities
of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit
and related covenant defeasance and will be subject to United States federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if the deposit and related covenant defeasance had not occurred.
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Regarding the Trustee
The indenture provides
that, except during the continuance of an Event of Default, the trustee will perform only such duties as are specifically set forth
in the indenture. During the existence of an Event of Default, the trustee will exercise such rights and powers vested in it under
the indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person’s own affairs.
The indenture and provisions
of the Trust Indenture Act that are incorporated by reference therein contain limitations on the rights of the trustee, should
it become one of our creditors, to obtain payment of claims in certain cases or to realize on certain property received by it in
respect of any such claim as security or otherwise. The trustee is permitted to engage in other transactions with us or any of
our affiliates; provided, however, that if it acquires any conflicting interest (as defined in the indenture or in the Trust Indenture
Act), it must eliminate such conflict or resign.
No Personal Liability of Directors, Officers, Employees
or Stockholders
None of our past, present
or future directors, officers, employees or stockholders, as such, will have any liability for any of our obligations under the
debt securities or the indenture or for any claim based on, or in respect or by reason of, such obligations or their creation.
By accepting a debt security, each holder waives and releases all such liability. This waiver and release is part of the consideration
for the issue of the debt securities.
Governing Law
The indenture and the
debt securities, including any claim or controversy arising out of or relating to the indenture or the debt securities, will be
governed by the laws of the State of New York.
DESCRIPTION
OF DEPOSITARY SHARES
We may, at our option,
elect to offer depositary shares rather than full shares of preferred stock. Each depositary share will represent ownership of,
and entitlement to, all rights and preferences of a fraction of a share of preferred stock of a specified series (including dividend,
voting, redemption and liquidation rights). The applicable fraction will be specified in a prospectus supplement. The shares of
preferred stock represented by the depositary shares will be deposited with a depositary named in the applicable prospectus supplement,
under a deposit agreement, among us, the depositary and the holders of the certificates representing depositary shares, or depositary
receipts. Depositary receipts will be delivered to those persons purchasing depositary shares in the offering. The depositary will
be the transfer agent, registrar and dividend disbursing agent for the depositary shares. Holders of depositary receipts agree
to be bound by the deposit agreement, which requires holders to take certain actions such as filing proof of residence and paying
certain charges.
The summary of the
terms of the depositary shares contained in this prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the deposit agreement, our charter and the form of articles supplementary for the applicable
class or series of preferred stock.
Dividends
The depositary will
distribute all cash dividends or other cash distributions in respect of the series of preferred stock represented by the depositary
shares to the record holders of depositary receipts in proportion to the number of depositary shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by us for the applicable series of preferred stock.
The depositary, however, will distribute only such amount as can be distributed without attributing to any depositary share a fraction
of one cent, and any balance not so distributed will be added to and treated as part of the next sum received by the depositary
for distribution to record holders of depositary receipts then outstanding.
In the event of a distribution
other than in cash, the depositary will distribute property received by it to the record holders of depositary receipts entitled
thereto, in proportion, as nearly as may be practicable, to the number of depositary shares owned by such holders on the relevant
record date, unless the depositary determines (after consultation with us) that it is not feasible to make such distribution, in
which case the depositary may (with our approval) adopt any other method for such distribution as it deems equitable and appropriate,
including the sale of such property (at such place or places and upon such terms as it may deem equitable and appropriate) and
distribution of the net proceeds from such sale to such holders.
No distribution will
be made in respect of any depositary share to the extent that it represents any preferred stock transferred to a trust for the
benefit of one or more charitable beneficiaries. See “Restrictions on Ownership and Transfer.”
Withdrawal of Preferred Stock
Unless we have previously called the underlying
preferred stock for redemption or the holder of the depositary shares has converted such shares, a holder of depositary shares
may surrender them at the corporate trust office of the depositary in exchange for whole or fractional shares of the underlying
preferred stock together with any money or other property represented by the depositary shares. Once a holder has exchanged the
depositary shares, the holder may not redeposit the preferred stock and receive depositary shares again. If a depositary receipt
presented for exchange into preferred stock represents more shares of preferred stock than the number to be withdrawn, the depositary
will deliver a new depositary receipt for the excess number of depositary shares.
Redemption
If the series of preferred
stock represented by the applicable series of depositary shares is redeemable, such depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole or in part, of preferred stock held by the depositary.
Whenever we redeem any preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number
of depositary shares representing the shares of preferred stock so redeemed. The depositary will mail the notice of redemption
promptly upon receipt of such notice from us and not less than 10 nor more than 30 days prior to the date fixed for redemption
of the preferred stock and the depositary shares to the record holders of the depositary receipts.
On the redemption date:
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all dividends relating to the shares of preferred stock called for redemption will cease to accrue;
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we and the depositary will no longer deem the depositary shares called for redemption to be outstanding; and
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all rights of the holders of the depositary shares called for redemption will cease, except the right to receive any money
payable upon the redemption and any money or other property to which the holders of the depositary shares are entitled upon redemption.
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Voting
Promptly upon receipt
of notice of any meeting at which the holders of the series of preferred stock represented by the applicable series of depositary
shares are entitled to vote, the depositary will mail the information contained in such notice of meeting to the record holders
of the depositary receipts as of the record date for such meeting. Each such record holder of depositary receipts will be entitled
to instruct the depositary as to the exercise of the voting rights pertaining to the number of shares of preferred stock represented
by such record holder’s depositary shares. The depositary will endeavor, insofar as practicable, to vote such preferred stock
represented by such depositary shares in accordance with such instructions, and we will agree to take all action which may reasonably
be deemed necessary by the depositary in order to enable the depositary to do so.
Liquidation Preference
In the event of the
liquidation, dissolution or winding up of the affairs of our company, whether voluntary or involuntary, the holders of each depositary
share will be entitled to the fraction of the liquidation preference accorded each share of the applicable series of preferred
stock as set forth in the applicable prospectus supplement.
Amendment and Termination of Deposit Agreement
The form of depositary
receipt representing the depositary shares and any provision of the deposit agreement may at any time and from time to time be
amended by agreement between us and the depositary. However, any amendment which materially and adversely alters the rights of
the holders (other than any change in fees) of depositary shares will not be effective unless such amendment has been approved
by at least a majority of the depositary shares then outstanding. No such amendment may impair the right, subject to the terms
of the deposit agreement, of any owner of any depositary shares to surrender the depositary receipt representing such depositary
shares with instructions to the depositary to deliver to the holder the preferred stock and all money and other property, if any,
represented thereby, except in order to comply with mandatory provisions of applicable law.
The deposit agreement
will be permitted to be terminated by us upon not less than 30 days prior written notice to the applicable depositary if (1) such
termination is necessary to preserve our status as a REIT or (2) a majority of each series of preferred stock affected by such
termination consents to such termination, whereupon such depositary will be required to 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 represented by such depositary receipts together with any other
property held by such depositary with respect to such depositary receipts. We will agree that if the deposit agreement is terminated
to preserve our status as a REIT, then we will use our best efforts to list the preferred stock issued upon surrender of the related
depositary shares on a national securities exchange. In addition, the deposit agreement will automatically terminate if (1) we
have redeemed all underlying preferred stock subject to the agreement, (2) there shall have been a final distribution in respect
of the related preferred stock in connection with any liquidation, dissolution or winding-up of our company and such distribution
shall have been distributed to the holders of depositary receipts representing the depositary shares representing such preferred
stock or (3) each share of the related preferred stock shall have been converted into stock of our company not so represented by
depositary shares.
Charges of Depositary
We will pay all transfer
and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges
of the depositary in connection with the initial deposit of the preferred stock and initial issuance of the depositary shares,
and redemption of the preferred stock and all withdrawals of preferred stock by owners of depositary shares. Holders of depositary
receipts will pay transfer, income and other taxes and governmental charges and certain other charges as are provided in the deposit
agreement to be for their accounts. In certain circumstances, the depositary may refuse to transfer depositary shares, may withhold
dividends and distributions and sell the depositary shares represented by such depositary receipt if such charges are not paid.
The applicable prospectus supplement will include information with respect to fees and charges, if any, in connection with the
deposit or substitution of the underlying securities, the receipt and distribution of dividends, the sale or exercise of rights,
the withdrawal of the underlying security, and the transferring, splitting or grouping of receipts. The applicable prospectus supplement
will also include information with respect to the right to collect the fees and charges, if any, against dividends received and
deposited securities.
Miscellaneous
There will be provisions:
(1) requiring the depositary to forward to holders of record of depositary shares any reports or communications from us which the
depositary receives with respect to the preferred stock to which the depositary shares relate; (2) regarding compensation of the
depositary; (3) regarding resignation and removal of the depositary; (4) limiting our liability and the liability of the depositary
under the deposit agreement (usually to failure to act in good faith, gross negligence or willful misconduct); (5) indemnifying
the depositary against certain possible liabilities; and (6) governing how the depositary will vote uninstructed shares.
In the event 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.
The description in
an accompanying prospectus supplement of any depositary shares we offer will not necessarily be complete and will be qualified
in its entirety by reference to the applicable investor rights agreement and articles supplementary which will be filed with the
SEC if we offer depositary shares. For more information on how you can obtain copies of any articles supplementary or investor
rights agreement if we offer depositary shares, see “Where You Can Find More Information.” We urge you to read the
applicable articles supplementary, the applicable investor rights agreement and any accompanying prospectus supplement in their
entirety.
DESCRIPTION
OF WARRANTS
We may issue warrants
for the purchase of shares of our common stock or preferred stock, depositary shares or debt securities. We may issue warrants
independently or together with other securities, and the warrants may be attached to or separate from any offered securities. Each
series of warrants will be issued under a separate warrant agreement to be entered into between us and the investors or a warrant
agent. The following summary of material provisions of the warrants and warrant agreements is subject to, and qualified in its
entirety by reference to, all of the provisions of the warrant agreement and warrant certificate applicable to a particular series
of warrants. The terms of any warrants offered under a prospectus supplement may differ from the terms described below. You should
read any applicable prospectus supplement relating to the terms of warrants being offered, as well as the complete warrant agreements
and warrant certificates that contain the terms of the warrants. For more information on how you can obtain copies of any warrant
agreement or warrant certificates if we offer any warrants, see “Where You Can Find More Information.”
The particular terms
of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may include:
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the number of shares of common stock or preferred stock or depositary shares purchasable upon the
exercise of warrants to purchase such shares and the price at which such number of shares may be purchased upon such exercise;
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the designation, stated value and terms (including, without limitation, liquidation, dividend,
conversion and voting rights) of the series of preferred stock purchasable upon exercise of warrants to purchase preferred stock
or depositary shares;
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the principal amount of debt securities that may be purchased upon exercise of a debt warrant and
the exercise price for the warrants, which may be payable in cash, securities or other property;
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the date, if any, on and after which the warrants and the related debt securities, common stock,
preferred stock or depositary shares will be separately transferable;
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the terms of any rights to redeem or call the warrants;
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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;
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any applicable anti-dilution provisions to adjust the number of shares to be delivered upon exercise
of warrants to purchase common stock or preferred stock;
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a discussion of any material United States federal income tax considerations applicable to an investment
in the warrants;
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the identity of the warrant agent;
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the procedures and conditions relating to the exercise of the warrants; and
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any additional terms of the warrants, including terms, procedures and limitations relating to the
exchange, exercise and settlement of the warrants.
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Holders of equity warrants
will not be entitled to:
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vote, consent or receive dividends;
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receive notice as stockholders with respect to any meeting of stockholders for the election of
our directors or any other matter; or
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exercise any rights as our stockholders.
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Each warrant will entitle
its holder to purchase the principal amount of debt securities or the number of shares of common stock or preferred stock or depositary
shares at the exercise price set forth in, or calculable as set forth in, the applicable prospectus supplement. Unless we otherwise
specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified
time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration
date, unexercised warrants will be void.
A holder of warrant
certificates may exchange them for new warrant certificates of different denominations, present them for registration of transfer
and exercise them at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus
supplement. Until any warrants to purchase debt securities are exercised, the holders of the warrants will not have any rights
of holders of the debt securities that can be purchased upon exercise, including any rights to receive payments of principal of,
or any premium or interest on, the underlying debt securities or to enforce covenants in the applicable indenture. Until any warrants
to purchase shares of common stock or preferred stock or depositary shares are exercised, the holders of the warrants will not
have any rights of holders of the underlying common stock or preferred stock, including any rights to receive dividends or payments
upon any liquidation, dissolution or winding up on the common stock or preferred stock, if any.
DESCRIPTION
OF UNITS
We may issue units
consisting of any combination of the other types of securities offered under this prospectus in one or more series. We may evidence
each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements with
a unit agent. Each unit agent will be a bank or trust company that we select and, if applicable, we will indicate the name and
address of the unit agent in the applicable prospectus supplement relating to a particular series of units.
The following description,
together with the additional information included in any applicable prospectus supplement, summarizes the general features of the
units that we may offer under this prospectus. You should read any prospectus supplement relating to the series of units being
offered, as well as the complete unit agreements that contain the terms of the units. Specific unit agreements will contain additional
important terms and provisions, and we will file as an exhibit to the registration statement of which this prospectus is a part,
or will incorporate by reference from another report that we file with the Securities and Exchange Commission, the form of each
unit agreement relating to units offered under this prospectus. For more information on how you can obtain copies of any unit agreement
if we offer units, see “Where You Can Find More Information.”
If we offer any units,
certain terms of that series of units will be described in the applicable prospectus supplement, including, without limitation,
the following, as applicable:
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the title of the series of units;
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identification and description of the separate constituent securities comprising the units;
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the price or prices at which the units will be issued;
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the date, if any, on and after which the constituent securities comprising the units will be separately
transferable;
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a discussion of any material United States federal income tax considerations applicable to an investment
in the units; and
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any other terms of the units and their constituent securities.
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CERTAIN
PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND
BYLAWS
The following summary
of certain provisions of Maryland law and of our charter and bylaws is subject to, and qualified in its entirety by reference to,
Maryland law, and to our charter and bylaws, copies of which are exhibits to the registration statement of which this prospectus
is a part. See “Where You Can Find More Information.”
Business Combinations
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, directly or indirectly, 10% or more of the voting power of our
outstanding voting stock; or
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an affiliate or associate of ours who, at any time within the two-year period prior to the date
in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then-outstanding stock.
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A person is not an
interested stockholder if our board of directors approved in advance the transaction by which the person otherwise would have become
an interested stockholder. However, in approving a transaction, our board of directors may provide that its approval is subject
to compliance, at or after the time of approval, with any terms and conditions determined by our board of directors.
After the five-year
prohibition, any business combination between us and an interested stockholder or an affiliate of an interested stockholder generally
must be recommended by our board of directors and approved by the affirmative vote of at least:
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80% of the votes entitled to be cast by holders of our then-outstanding shares of voting stock;
and
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two-thirds of the votes entitled to be cast by holders of our voting stock other than stock held
by the interested stockholder with whom or with whose affiliate the business combination is to be effected or stock held by an
affiliate or associate of the interested stockholder.
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These super-majority
vote requirements do not apply if our common stockholders receive a minimum price, as defined under Maryland law, for their stock
in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its stock.
The statute permits
various exemptions from its provisions, including business combinations that are exempted by the board of directors before the
time that the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution providing
that any business combination between us and any other person is exempted from this statute, provided that such business combination
is first approved by our board. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution
is repealed, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating
any offer to acquire us.
Control Share Acquisitions
Maryland law provides
that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent
approved by a vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter. Shares owned by
the acquiror, by officers or by employees who are directors of the corporation are excluded from shares entitled to vote on the
matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or
in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable
proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting
power:
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one-tenth or more but less than one-third;
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one-third or more but less than a majority; or
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a majority or more of all voting power.
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Control shares do not
include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A
control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.
A person who has made
or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling
of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the
meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders’ meeting.
If voting rights are
not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute,
then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously
been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations. Fair value
is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share
acquisition by the acquiror or of any meeting of stockholders at which the voting rights of the shares are considered and not approved.
If voting rights for control shares are approved at a stockholders’ meeting and the acquiror becomes entitled to vote a majority
of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined
for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition
statute does not apply (1) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the
transaction, or (2) to acquisitions approved or exempted by the charter or bylaws of the corporation.
Our bylaws contain
a provision exempting from the control share acquisition statute any and all acquisitions of shares of our stock by any person.
There can be no assurance that this provision will not be amended or eliminated (without stockholder approval) at any time in the
future.
Subtitle 8
Subtitle 8 of Title
3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three
independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and
notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions:
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a two-thirds vote requirement to remove a director;
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a requirement that the number of directors be fixed only by the vote of the directors;
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a requirement that a vacancy on our board of directors be filled only by the remaining directors
and for the remainder of the full term of the class of directors in which the vacancy occurred; and
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a majority requirement for the calling of a stockholder requested special meeting of stockholders.
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Through provisions
in our charter and bylaws unrelated to Subtitle 8, we require, unless called by our board of directors, the chairman of the board,
our president or our chief executive officer, the request of stockholders entitled to cast at least a majority of the votes entitled
to be cast on any matter that may properly be considered at a meeting of stockholders to call a special meeting to act on such
matter. Pursuant to Subtitle 8, we have elected that, except as may be provided by our board of directors in setting the terms
of any class or series of preferred stock, any and all vacancies on our board of directors may be filled only by the affirmative
vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director
elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred.
Advance Notice of Director Nominations
and New Business
Our bylaws provide
that with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors and the
proposal of business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at
the direction of the board of directors or (3) by a stockholder who is a stockholder of record both at the time of giving the advance
notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual
so nominated or on such other business and who has complied with the advance notice procedures of the bylaws. With respect to special
meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations
of individuals for election to the board of directors at a special meeting may be made only (1) by or at the direction of the board
of directors or (2) provided that the special meeting has been called in accordance with our bylaws for the purpose of electing
directors, by a stockholder who is a stockholder of record both at the time of giving the advance notice required by our bylaws
and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who
has complied with the advance notice provisions of the bylaws.
Anti-takeover Effect of Certain Provisions
of Maryland Law and of the Charter and Bylaws
The business combination
provisions (if the board of directors rescinds its resolution exempting any business combination between us and any other person
or otherwise fails to first approve such business combination) and the control share acquisition provisions (if the applicable
provision in our bylaws is rescinded) of Maryland law, any provisions of our charter electing to be subject to Subtitle 8, and
the advance notice provisions of our bylaws could delay, defer or prevent a transaction or a change in control of our company that
might involve a premium price for stockholders or otherwise be in their best interest.
Indemnification and Limitation of
Directors’ and Officers’ Liability
Maryland law permits
a Maryland corporation 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 actual receipt of an improper benefit or profit in
money, property or services or active and deliberate dishonesty that is established by a final judgment and is material to the
cause of action. Our charter contains a provision that eliminates such liability for our directors and officers to the maximum
extent permitted by Maryland law.
Our charter requires
us, to the maximum extent that Maryland law in effect from time to time permits, to indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition
of a proceeding to:
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any present or former director or officer who is made or threatened to be made a party to the proceeding
by reason of his or her service in that capacity; or
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any individual who, while a director or officer of our company and at our request, serves or has
served another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee
benefit plan or any other enterprise as a director, officer, partner, member, manager or trustee of such corporation, real estate
investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who
is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.
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Our charter also permits
us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and
to any employee or agent of our company or a predecessor of our company.
The MGCL 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 or threatened to be made a
party by reason of his or her service in that capacity. The MGCL 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 or are threatened to be made a party by reason of their service in
those or other capacities unless it is established that:
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the act or omission of the director or officer was material to the matter giving rise to the proceeding
and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;
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the director or officer actually received an improper personal benefit in money, property or services;
or
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in the case of any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission as unlawful.
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However, under the
MGCL, 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 personal benefit was improperly received. A court may order indemnification if it determines
that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not
meet the prescribed standard of conduct, was adjudged liable to the corporation or was adjudged liable on the basis that personal
benefit was improperly received. However, indemnification 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 personal benefit was improperly received, is limited to expenses.
In addition, the MGCL
permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:
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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 the corporation; and
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a written undertaking by the director or officer or on the director’s or officer’s
behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did
not meet the standard of conduct.
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Insofar as the foregoing
provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act,
we have been informed that in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
We have entered into
indemnification agreements with each of our executive officers and directors whereby we indemnify such executive officers and
directors against all expenses and liabilities and pay or reimburse reasonable expenses in advance of final disposition of a proceeding
if such director or executive officer is made or threatened to be made a party to the proceeding by reason of his or her service
in that capacity to the fullest extent permitted by Maryland law, subject to limited exceptions. These indemnification agreements
also provide that upon an application for indemnity by an executive officer or director to a court of appropriate jurisdiction,
such court may order us to indemnify such executive officer or director.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a
general summary of certain United States federal income tax considerations regarding our company and the acquisition, ownership
and disposition of certain securities offered by this prospectus. Supplemental United States federal income tax considerations
relevant to the ownership of certain securities offered by this prospectus may be provided in the prospectus supplement that relates
to those securities. Your tax treatment will vary depending upon the terms of the specific securities you acquire, as well as your
particular situation.
The following is a
summary of material federal income tax consequences relating to our qualification and taxation as a REIT and the acquisition, ownership
and disposition of our common stock. Because this section is a general summary, it does not address all of the potential tax issues
that may be relevant to you in light of your particular circumstances.
This summary of certain
federal income tax consequences applies to you only if you acquire and hold our common stock as a “capital asset” (generally,
property held for investment within the meaning of Section 1221 of the Code). This summary does not consider all of the rules which
may affect the U.S. tax treatment of your investment in our common stock in light of your particular circumstances. For example,
special rules not discussed here may apply to you if you are:
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a broker-dealer or a dealer in securities or currencies;
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a partnership or other pass-through entity;
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a bank, thrift or other financial institution;
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a regulated investment company or a REIT;
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a tax-exempt organization, except to the extent discussed under the headings “-Taxation of
Holders of Our Common Stock-Taxation of Tax-Exempt Stockholders;”
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subject to the alternative minimum tax provisions of the Code;
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holding our common stock as part of a hedge, straddle, conversion, integrated or other risk reduction
or constructive sale transaction;
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holding our common stock through a partnership or other pass-through entity;
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a non-U.S. corporation or an individual who is not a resident or citizen of the United States,
except to the extent discussed under the headings “-Taxation of Holders of Our Common Stock-Taxation of Non-U.S. Stockholders;”
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a U.S. person whose “functional currency” is not the U.S. dollar; or
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If a partnership, including
any entity that is treated as a partnership for federal income tax purposes, holds our common stock, the federal income tax treatment
of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you
are a partner in a partnership that will hold our common stock, you should consult your tax advisor regarding the federal income
tax consequences of acquiring, holding and disposing of our common stock by the partnership.
This summary does not
discuss any alternative minimum tax considerations or any state, local or non-U.S. tax considerations.
We base the information
in this section on the current Code, current final, temporary and proposed Treasury regulations, the legislative history of the
Code, current administrative interpretations of the IRS, including its practices and policies as endorsed in private letter rulings,
which are not binding on the IRS, and existing court decisions. Future legislation, regulations, administrative interpretations
and court decisions could change current law or adversely affect existing interpretations of current law. Any change could apply
retroactively. It is possible that the IRS could challenge the statements in this discussion, which do not bind the IRS or the
courts, and that a court could agree with the IRS.
Each investor is
advised to consult his or her own tax advisor regarding the tax consequences to him or her of the purchase, ownership and sale
of the offered stock, including the federal, state, local, non-U.S. and other tax consequences of such purchase, ownership or sale
and of potential changes in applicable tax laws.
Federal Income Taxation of Our Company
as a REIT
We have elected to
be taxed as a REIT under Sections 856 through 860 of the Code. We believe that we have been organized and operated in conformity
with the requirements for qualification and taxation as a REIT under the Code beginning with our taxable year ended December 31,
2009 and that our intended manner of operation will enable us to continue to meet the requirements for qualification and taxation
as a REIT for U.S. federal income tax purposes.
In connection with
the filing of this prospectus, our tax counsel, Alston & Bird LLP, is rendering an opinion to us to the effect that, commencing
with our taxable year ended December 31, 2009, we have been organized in conformity with the requirements for qualification and
taxation as a REIT under the Code and our organization and method of operations will allow us to continue to satisfy the requirements
for qualification and taxation as a REIT under the Code. The opinion of Alston & Bird LLP is based upon various assumptions
and our representations as to our past and contemplated future ownership, investments, distributions, share valuations and operations,
among other things. The opinion of Alston & Bird LLP is expressly conditioned upon the accuracy of these and other assumptions
and upon our representations, which Alston & Bird LLP has not verified and will not verify. Moreover, our qualification and
taxation as a REIT will depend upon our ability to meet, through actual annual operating results, distribution levels, and diversity
of stock ownership, the various and complex REIT qualification tests imposed under the Code, the results of which have not been
and will not be reviewed or verified by Alston & Bird LLP. Accordingly, no assurance can be given that we have satisfied or
will satisfy the requirements for qualification and taxation as a REIT. The opinion of Alston & Bird LLP is based upon the
law in effect as of the date of the opinion (or, with respect to past years, the law in effect for such years), which is subject
to change either prospectively or retroactively. Opinions of counsel impose no obligation on counsel to advise us or the holders
of our stock of any subsequent change in the matters stated, represented or assumed, or of any subsequent change in the applicable
law. Changes in applicable law could modify the conclusions expressed in the opinion. Unlike a ruling from the IRS, an opinion
of Alston & Bird LLP is not binding on the IRS and no assurance can be given that the IRS could not successfully challenge
our qualification as a REIT.
Taxation of REITs in General
Provided we continue
to qualify to be taxed as a REIT, we generally will not be subject to federal income tax on our REIT taxable income that is distributed
to our stockholders. This treatment substantially eliminates the “double taxation” at the corporate and stockholder
levels that have historically resulted from investment in a corporation. Rather, income generated by a REIT generally is taxed
only at the stockholder level upon a distribution of dividends by the REIT.
Net operating losses,
foreign tax credits and other tax attributes of a REIT generally do not pass through to the stockholders of the REIT, subject to
special rules for certain items such as capital gains.
If we continue to qualify
to be taxed as a REIT, we will nonetheless be subject to federal tax in the following circumstances:
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We will be taxed at regular corporate income tax rates on any taxable income, including net capital
gains, that we do not distribute to stockholders during, or within a specified time period after, the calendar year in which the
income is earned.
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If we have net income from prohibited transactions, which are, in general, sales or other dispositions
of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business, such income
will be subject to a 100% tax. See “-Prohibited Transactions” and “-Foreclosure Property” below.
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If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan
or certain leasehold terminations as “foreclosure property,” we may thereby avoid the 100% prohibited transaction tax
on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but income from the sale
or operation of the property may be subject to corporate income tax at the highest corporate tax rate. See “-Foreclosure
Property” below.
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If we fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below,
but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax
on an amount based upon the magnitude of the failure, adjusted to reflect the profitability of such gross income.
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In the event of a failure to satisfy one or more of the asset tests (other than certain de minimis
failures), as described below under “-Asset Tests but nevertheless maintain our qualification as a REIT because certain other
requirements are met, we will pay a tax equal to the greater of $50,000 or tax at the highest corporate income tax rate on the
net income from the nonqualifying assets during the period in which we failed to satisfy such asset tests.
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In the event of a failure to satisfy one or more requirements for REIT qualification, other than
the gross income tests and the asset tests, but nevertheless maintain our qualification as a REIT because the failure is due to
reasonable cause and not willful neglect, we will be required to pay a penalty of $50,000 for each such failure.
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If we fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary
income for such year, (b) 95% of our REIT capital gain net income for such year and (c) any undistributed taxable income from prior
periods, we will be subject to a 4% excise tax on the excess of the required distribution over the sum of (1) the amounts actually
distributed, plus (2) retained amounts on which income tax is paid at the corporate level.
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We may be required to pay monetary penalties to the IRS in certain circumstances, including if
we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of our stockholders,
as described below in “-Requirements for Qualification-General.”
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A 100% tax may be imposed on certain items of income and expense that are directly or constructively
paid between a REIT and a taxable REIT subsidiary (as described below) if and to the extent that the IRS successfully adjusts the
reported amounts of these items to conform to an arm’s length pricing standard.
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If we acquire appreciated assets from a C corporation that is not a REIT in a transaction in which
the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands
of the corporation, we will be subject to tax at the highest corporate income tax rate then applicable if we subsequently recognize
the built-in gain on a disposition of any such assets during the five-year period following the acquisition from the corporation,
unless the corporation elects to treat the transfer of the assets to the REIT as a deemed sale. Income derived from the harvesting
and sale of timber pursuant to certain timber cutting contracts (as opposed to gain derived from the sale of timberlands) is not
subject to this built-in gains tax.
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The earnings of our lower-tier entities that are taxable corporations, if any, including domestic
taxable REIT subsidiaries, are subject to federal corporate income tax.
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In addition, we and
our subsidiaries may be subject to a variety of taxes, including payroll taxes and state, local, and non-U.S. income, property
and other taxes on assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.
Requirements for Qualification-General
The Code defines a
REIT as a corporation, trust or association:
(1) that is
managed by one or more trustees or directors;
(2) the
beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;
(3) which
would be taxable as a domestic corporation but for the special Code provisions applicable to REITs;
(4) that
is neither a financial institution nor an insurance company subject to specific provisions of the Code;
(5) the
beneficial ownership of which is held by 100 or more persons;
(6) in
which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly,
by five or fewer “individuals” (as defined in the Code to include specified entities);
(7) that
uses a calendar year as its taxable year;
(8) that
does not have at the end of any year any undistributed earnings and profits that were accumulated in any non-REIT taxable year;
(9) which
meets other tests described below regarding the nature of its gross income and assets, its distributions, and certain other matters;
and
(10) that
elects to be taxed as a REIT (which election has not been revoked or terminated).
Conditions (1) through
(4) must be met during the entire taxable year, and that condition (5) must be met during at least 335 days of a taxable year of
12 months, or during a proportionate part of a shorter taxable year. Our charter provides restrictions regarding the ownership
and transfer of our shares, which are intended to assist us in satisfying the share ownership requirements described in conditions
(5) and (6) above. For purposes of condition (6), an “individual” generally includes a supplemental unemployment compensation
benefit plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes,
but does not include a qualified pension plan or profit sharing trust.
To monitor compliance
with the share ownership requirements, we generally are required to maintain records regarding the actual ownership of our shares.
To do so, we must demand written statements each year from the record holders of significant percentages of our stock in which
the record holders are to disclose the actual owners of the shares (i.e., the persons required to include in gross income the dividends
paid by us). A list of those persons failing or refusing to comply with this demand must be maintained as part of our records.
Failure to comply with these record-keeping requirements could subject us to monetary penalties.
If we satisfy these
requirements and have no reason to know that condition (6) is not satisfied, we will be deemed to have satisfied such condition.
A stockholder that fails or refuses to comply with the demand is required by Treasury regulations to submit a statement with its
tax return disclosing the actual ownership of the shares and other information.
We believe that we
have satisfied all such requirements. With respect to the requirement that a REIT not have earnings and profits from a non-REIT
taxable year, we operated as a taxable corporation in years before we made our REIT election, but we determined that we did not
have positive accumulated earnings and profits as of January 1, 2009.
Effect of Subsidiary Entities
Ownership of Partnership Interests.
In the case of a REIT
that is a partner in a partnership for U.S. federal income tax purposes (for purposes of this discussion, references to "partnership"
include a limited liability company or other entity treated as a partnership for U.S. federal income tax purposes, and references
to a partner include a member in such a limited liability company or other entity), the REIT is deemed to own its proportionate
share of the partnership’s assets, and to earn its proportionate share of the partnership’s income, for purposes of
the asset and gross income tests applicable to REITs. In addition, the assets and gross income of the partnership are deemed to
retain the same character in the hands of the REIT. Thus, our proportionate share of the assets and items of income of our operating
partnership and its share of assets and income of underlying partnership in which it owns an equity interest are treated as our
assets and items of income for purposes of applying the REIT requirements. Our proportionate share is generally determined, for
these purposes, based upon our percentage interest in the partnership’s equity capital; however, for purposes of the 10%
value-based asset test described below, the percentage interest also takes into account certain debt securities issued by the partnership
and held by us. Consequently, to the extent that we directly or indirectly hold a preferred or other equity interest in a partnership,
the partnership’s assets and operations may affect our ability to qualify to be taxed as a REIT, even if we have no control,
or only limited influence, over the partnership. A summary of certain rules governing the federal income taxation of partnerships
and their partners is provided below in “-Tax Aspects of Investments in Partnerships.”
Disregarded Subsidiaries.
If a REIT owns a corporate
subsidiary that is a “qualified REIT subsidiary,” that subsidiary is disregarded for federal income tax purposes, and
all assets, liabilities and items of income, deduction and credit of the subsidiary are treated as assets, liabilities and items
of income, deduction and credit of the REIT itself, including for purposes of the gross income and asset tests. A qualified REIT
subsidiary is any corporation, other than a “taxable REIT subsidiary” as described below, that is wholly owned by a
REIT, or by other disregarded subsidiaries, or by a combination of the two. Other entities that are wholly owned by us, including
single member limited liability companies, are also generally disregarded as separate entities for federal income tax purposes,
including for purposes of the REIT gross income and asset tests. Disregarded subsidiaries, along with partnerships in which we
hold an equity interest, are sometimes referred to as “pass-through subsidiaries.”
In the event that one
of our disregarded subsidiaries ceases to be wholly owned—for example, if any equity interest in the subsidiary is acquired
by a person other than us, or another of our disregarded subsidiaries—the subsidiary’s separate existence would no
longer be disregarded for federal income tax purposes. Instead, it would have multiple owners and would be treated as either a
partnership or a taxable corporation. Such an event could, depending on the circumstances, adversely affect our ability to satisfy
the various asset and gross income requirements applicable to REITs. See “-Asset Tests” and “-Gross Income Tests.”
Taxable Subsidiaries.
A REIT may jointly
elect with a subsidiary corporation, whether or not wholly owned, to treat the subsidiary corporation as a taxable REIT subsidiary,
or TRS. The separate existence of a TRS or other taxable corporation, unlike a disregarded subsidiary as discussed above, is not
ignored for federal income tax purposes. A TRS may be subject to corporate income tax on its earnings.
A REIT is not treated
as holding the assets of a taxable subsidiary corporation or as receiving any income that the subsidiary earns for purposes of
the REIT gross income and asset tests described below. Rather, the stock issued by the subsidiary is an asset in the hands of the
parent REIT, and the REIT recognizes as income the dividends, if any, that it receives from the subsidiary. This treatment can
affect the gross income and asset test calculations that apply to the REIT. Because a parent REIT does not include the assets and
income of such subsidiary corporations in determining the parent’s compliance with the REIT requirements, such entities may
be used by the parent REIT to undertake indirectly activities that the REIT rules might otherwise preclude it from doing directly
or through pass-through subsidiaries (for example, activities that give rise to certain categories of income such as management
fees).
Certain restrictions
imposed on TRSs are intended to ensure that such entities will be subject to appropriate levels of federal income taxation. For
example, various rules impose a 100% excise tax with respect to certain non-arm’s length transactions that would understate
the income, or overstate the expenses, of a TRS
We own and may acquire
direct or indirect interests in one or more entities that have jointly elected together with us, or will elect together with us,
to be treated as our taxable REIT subsidiary (for example, CatchMark Timber TRS, Inc.). Generally, a taxable REIT subsidiary may
earn income that would not be qualifying income under the REIT gross income tests if earned directly by the parent REIT. We will
determine whether we should conduct through CatchMark Timber TRS, Inc. or other taxable REIT subsidiaries certain activities that
will produce nonqualifying income for the gross income tests or may be subject to the prohibited transaction tax, such as the sales
of delivered logs and, in certain circumstances, HBU properties. For example, pursuant to the timber agreements with MeadWestvaco,
CatchMark Timber TRS, Inc. harvests timber on portions of our timberlands and sells logs to MeadWestvaco. CatchMark Timber TRS
pays a portion of the proceeds received from MeadWestvaco plus an additional amount to us, and we report any capital gain resulting
from the sale of our standing timber to CatchMark Timber TRS pursuant to the master stumpage agreement as qualifying income for
purposes of the REIT gross income tests, as further described below under “-Income Tests-Timber-Cutting Contracts.”
We and CatchMark Timber TRS have entered into similar arrangements with other purchasers of delivered logs.
Ownership of Interests in Subsidiary
REITs.
We own and may acquire
direct or indirect interests in one or more entities that have elected or will elect to be taxed as REITs under the Code (each,
a “Subsidiary REIT”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations
described herein that are applicable to us. If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT
would become subject to U.S. federal income tax and (ii) the Subsidiary REIT’s failure to qualify could have an adverse effect
on our ability to comply with the REIT income and asset tests, and thus could impair our ability to qualify as a REIT unless we
could avail ourselves of certain relief provisions.
Gross Income Tests
We must satisfy two
gross income requirements annually. First, at least 75% of our gross income for each taxable year, excluding gross income from
sales of inventory or dealer property in “prohibited transactions” and certain hedging income, must be derived from
investments relating to real property or mortgages on real property, including “rents from real property”; dividends
received from other REITs; interest income derived from mortgage loans secured by real property; certain income from qualified
temporary investments; and gains from the sale of real estate assets. For purposes of the 75% gross income test, income attributable
to a stock or debt instrument purchased with the proceeds received by a REIT in exchange for stock in the REIT (other than amounts
received pursuant to a distribution reinvestment plan) constitutes qualified temporary investment income that is qualifying income
for purposes of the 75% gross income test if such income is received or accrued during the one-year period beginning on the date
the REIT receives such new capital. Second, at least 95% of our gross income in each taxable year must be derived from some combination
of income that qualifies under the 75% gross income test described above, as well as other dividends, interest, and gain from the
sale or disposition of stock or securities, which need not have any relation to real property.
Gross income from “prohibited
transactions,” which are sales of property that we hold primarily for sale to customers in the ordinary course of business,
is excluded from both the numerator and the denominator in both gross income tests. In addition, income and gain from “hedging
transactions,” as defined in “-Hedging Transactions,” that we enter into to hedge indebtedness incurred or to
be incurred to acquire or carry select real estate equity investments or to hedge certain foreign currency risks, or to hedge existing
hedging transactions after all or part of the hedged indebtedness or property has been disposed of, and that are clearly and timely
identified as such for federal income tax purposes will be excluded from both the numerator and the denominator for purposes of
the 75% and 95% gross income tests.
Timber Cutting Contracts.
We expect to derive
most of our REIT taxable income from investments in our timberlands, including the sale of standing timber through pay-as-cut contracts.
We generally will retain an “economic interest” under our timber-cutting contracts. The income from any such timber-cutting
contracts with unrelated persons will be treated as rents from real property for purposes of the gross income tests if we retain
an economic interest in the timber and have held the timber for one year or less, but any such timber-cutting contracts with related
persons (including CatchMark Timber TRS) would not be qualifying income. Any gain from our timber-cutting contracts with respect
to timber we held for more than one year will qualify as gain from the sale of real property for purposes of the gross income tests
and for capital gain treatment under Section 631(b) of the Code.
Rents from Real Property.
We do not expect to
receive a substantial amount of rental income, other than the income from our timber-cutting contracts with respect to timber we
have not held for more than one year that will be treated as rents from real property. However, we do anticipate receiving small
amounts of rental income, which we generally treat as qualifying rents from real property for purposes of the REIT gross income
tests, from hunting leases, beekeeping leases, leases for the use of real property to extract minerals and to erect and maintain
billboards on property adjacent to certain public thoroughfares and the rental of rights-of-way through certain properties.
Rents received by us
will qualify as “rents from real property” in satisfying the gross income requirements described above only if several
conditions are met. The amount of rent must not be based in whole or in part on the income or profits of any person; however, an
amount received or accrued generally will not be excluded from the term “rents from real property” solely by reason
of being based on a fixed percentage or percentages of gross receipts or sales. If rent is partly attributable to personal property
leased in connection with a lease of real property, the portion of the total rent that is attributable to the personal property
will not qualify as “rents from real property” unless it constitutes 15% or less of the total rent received under the
lease. Moreover, for rents received to qualify as “rents from real property,” the REIT generally must not operate or
manage the property or furnish or render services to the residents of such property, other than through an “independent contractor”
from which the REIT derives no revenue. We and our affiliates are permitted, however, to perform services that are “usually
or customarily rendered” in connection with the rental of space for occupancy only and are not otherwise considered rendered
to the occupant of the property. In addition, we and our affiliates may directly or indirectly provide other services to tenants
of properties without disqualifying all of the rent from the property if the payment for such services does not exceed 1% of the
total gross income from the property. For this purpose, the amount received by the REIT for such service is deemed to be at least
150% of the REIT’s direct cost of providing the service. Also, rental income will qualify as rents from real property only
to the extent that we do not directly or constructively hold a 10% or greater interest, as measured by vote or value, in the lessee’s
equity.
Interest.
Interest income constitutes
qualifying income for purposes of the 75% gross income test to the extent that the obligation is secured by a mortgage on real
property. If we receive interest income with respect to a mortgage loan that is secured by both real property and personal property,
the value of the personal property securing the loan exceeds 15% of the value of all property securing the loan, and the highest
principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property on the date that
we had a binding commitment to acquire or originate the mortgage loan, the interest income will be apportioned between the real
property and the other collateral, and interest will qualify for purposes of the 75% gross income test only to the extent that
it is allocable to the real property. Even if a loan is not secured by real property or is undersecured, the income that it generates
may nonetheless qualify for purposes of the 95% gross income test.
To the extent that
the terms of a loan provide for contingent interest that is based on the cash proceeds realized upon the sale of the property securing
the loan (a “shared appreciation provision”), income attributable to the participation feature will be treated as gain
from sale of the underlying property, which generally will be qualifying income for purposes of both the 75% and 95% gross income
tests provided that the property is not inventory or dealer property in the hands of the borrower or the REIT.
To the extent that
a REIT derives interest income from a mortgage loan or income from the rental of real property where all or a portion of the amount
of interest or rental income payable is contingent, such income generally will qualify for purposes of the 75% and 95% gross income
tests only if it is based upon the gross receipts or sales, and not the net income or profits, of the borrower or lessee. This
limitation does not apply, however, where the borrower or lessee leases substantially all of its interest in the property to lessees
or sub-lessees, to the extent that the rental income derived by the borrower or lessee, as the case may be, would qualify as rents
from real property had it been earned directly by a REIT.
Dividends.
We may receive distributions
from TRSs or other corporations that are not REITs. These distributions will be classified as dividend income to the extent of
the earnings and profits of the distributing corporation. Such distributions will generally constitute qualifying income for purposes
of the 95% gross income test but not the 75% gross income test. Any dividends we received from a REIT will be qualifying income
for purposes of both the 75% and 95% gross income tests.
Other Income.
We may receive various
fees in connection with our operations. The fees will be qualifying income for purposes of both the 75% and 95% gross income tests
if they are received in consideration for entering into an agreement to make a loan secured by real property or to purchase or
lease real property and the fees are not determined by the borrower’s income and profits. Other fees are not qualifying income
for purposes of either gross income test.
Any income or gain
we derive from instruments that hedge certain risks, such as the risk of changes in interest rates with respect to debt incurred
to acquire or carry real estate assets or certain foreign currency risks, or to hedge existing hedging positions after a portion
of the hedged indebtedness or property is disposed of will not be treated as income for purposes of calculating the 75% or 95%
gross income test, provided that specified requirements are met. Such requirements include the instrument is properly identified
as a hedge, along with the risk that it hedges, within prescribed time periods. Any other hedging income will not be qualifying
income for purposes of either gross income test.
Failure to Satisfy 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 still qualify to be taxed as a REIT for the year
if we are entitled to relief under applicable provisions of the Code. These relief provisions will be generally available if our
failure to meet these tests was due to reasonable cause and not due to willful neglect, we attach to our tax return a schedule
of the sources of our income, and any incorrect information on the schedule was not due to fraud with intent to evade tax, which
we refer to as the reasonable cause exception. It is not possible to state whether we would be entitled to the benefit of these
relief provisions in all circumstances. If these relief provisions are inapplicable, we will not qualify to be taxed as a REIT.
As discussed above under “-Taxation of REITs in General,” even where these relief provisions apply, a tax would be
imposed upon the amount by which we fail to satisfy the particular gross income test, adjusted to reflect the profitability of
such gross income.
From time to time we
have opportunities to generate types of income that would not satisfy one or both of the gross income requirements or to which
the application of the gross income requirements may not be clear. We consider our ability to qualify to be taxed as a REIT in
determining whether and how to pursue such opportunities.
In some cases, we may
choose not to pursue the opportunity. In some cases, we may choose to generate the income in CatchMark Timber TRS, in which case
it will not be taken into account for purposes of the gross income requirements, although dividends from CatchMark Timber TRS would
be qualifying income for purpose of the 95% gross income requirement but not the 75% gross income requirement. In some cases, we
choose to generate the income in our operating partnership, e.g., income from mineral leases, because we believe that the amount
of nonqualifying or potentially nonqualifying income will be small enough that it will not prevent us from satisfying the gross
income requirements.
It is possible that
we may overestimate the amount of nonqualifying income we may generate without failing the gross income requirements in a given
year or that the IRS may take different views on the qualification of certain types of income than the views taken by us and our
tax advisors. Accordingly, there is a risk that we may not satisfy the gross income requirements in any given year, in which case
we would not qualify to be taxed as a REIT, unless our failure is due to reasonable cause and not due to willful neglect. It is
not possible to state whether we would be entitled to the benefit of reasonable cause relief in all circumstances, and even if
we did qualify for reasonable cause relief, we would owe additional taxes.
Asset Tests
At the close of each
calendar quarter, we must satisfy multiple tests relating to the nature of our assets. First, at least 75% of the value of our
total assets must be represented by some combination of “real estate assets,” cash, cash items, U.S. government securities,
and debt instruments issued by publicly offered REITs. For this purpose, real estate assets include interests in real property,
such as land, standing timber, buildings and leasehold interests in real property, personal property that generates rents from
real property, stock of other corporations that qualify as REITs, certain kinds of mortgage-backed securities and mortgage loans
and, under some circumstances, stock or debt instruments purchased with new capital. Securities that do not qualify for purposes
of the 75% asset test are subject to the additional asset tests described below. Second, the value of any one issuer’s securities
owned by us may not exceed 5% of the value of our total assets. Third, we may not own more than 10% of any one issuer’s outstanding
securities, as measured by either voting power or value. The 5% and 10% asset tests do not apply to securities of TRSs, and the
10% value test does not apply to “straight debt” and certain other securities, as described below. Fourth, the aggregate
value of all securities of TRSs held by a REIT may not exceed 20% of the value of the REIT’s total assets. Fifth, not more
than 25% of the value of a REIT’s assets may consist of debt instruments issued by publicly offered REITs that would not
otherwise be treated as qualifying real estate assets.
As a result of the
Triple T Joint Venture that we entered into in July 2018, we own interests in Creek Pine REIT, LLC, an entity that is taxable as
a REIT. If Creek Pine REIT, LLC were to fail to qualify as a REIT, its failure to qualify could have an adverse effect on our ability
to comply with the REIT income and asset tests, and thus could impair our ability to qualify as a REIT unless we could avail ourselves
of certain relief provisions.
Notwithstanding the
general rule that a REIT is treated as owning its share of the underlying assets of a subsidiary partnership for purposes of the
REIT income and asset tests, if a REIT holds indebtedness issued by a partnership, the indebtedness will be subject to, and may
cause a violation of, the asset tests, unless it is a qualifying mortgage asset or otherwise satisfies the rules for “straight
debt” or one of the other exceptions to the 10% value test.
Certain securities
will not cause a violation of the 10% value test described above. Such securities include instruments that constitute “straight
debt.” A security does not qualify as “straight debt” where the REIT (or a controlled TRS of the REIT) owns other
securities of the issuer of that security which do not qualify as straight debt, unless the value of those other securities constitute,
in the aggregate, 1% or less of the total value of that issuer’s outstanding securities. In addition to straight debt, the
following securities will not violate the 10% value test: (a) any loan made to an individual or an estate, (b) certain rental agreements
in which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain persons related
to the REIT), (c) any obligation to pay rents from real property, (d) securities issued by governmental entities that are not dependent
in whole or in part on the profits of (or payments made by) a non-governmental entity, (e) any security issued by another REIT,
and (f) any debt instrument issued by a partnership if the partnership’s income is such that the partnership would satisfy
the 75% gross income test described above under “-Gross Income Tests.” In applying the 10% value test, a debt security
issued by a partnership is not taken into account to the extent, if any, of the REIT’s proportionate interest in that partnership.
Our board of directors
will determine the value of our assets for the purpose of determining compliance with the REIT asset tests. The board’s determination
is binding upon the IRS so long as our board of directors acts in good faith. We monitor compliance with all of the asset tests
on an ongoing basis. Independent appraisals will not be obtained, however, to support our conclusions as to the value of our assets
or the value of any particular security or securities. Moreover, values of some assets may not be susceptible to a precise determination,
and values are subject to change in the future. Furthermore, the proper classification of an instrument as debt or equity for federal
income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT asset requirements.
Accordingly, there can be no assurance that the IRS will not contend that we do not comply with one or more of the asset tests.
A REIT which fails
one or more of the asset requirements may nevertheless maintain its REIT qualification (other than a de minimis failure described
below), if (a) it provides the IRS with a description of each asset causing the failure, (b) the failure is due to reasonable cause
and not willful neglect, (c) the REIT pays a tax equal to the greater of (1) $50,000 per failure, and (2) the product of the net
income generated by the assets that caused the failure multiplied by the highest applicable corporate tax rate, and (d) the REIT
either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the
failure, or otherwise satisfies the relevant asset tests within that time frame. A second relief provision applies to de minimis
violations of the 10% and 5% asset tests. A REIT may maintain its qualification despite a violation of such requirements if (a)
the value of the assets causing the violation does not exceed the lesser of 1% of the REIT’s total assets or $10,000,000,
and (b) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which
it identifies the failure or the relevant tests are otherwise satisfied within that time frame.
Annual Distribution Requirements
In order to maintain
our REIT status, 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 deduction for dividends paid and net capital gains), and
(2) 90% of
our net income, if any, (after tax) from foreclosure property (as described below), minus
(b) the sum of specified
items of non-cash income.
These distributions
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 the year and if paid on or before the first regular dividend payment after such declaration. Distributions that we declare
in October, November or December of any year payable to a stockholder of record on a specified date in any of these months will
be treated as both paid by us and received by the stockholder on December 31 of the year, provided that we actually pay the distribution
during January of the following calendar year.
To the extent that
we distribute dividends equal to at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will
be subject to tax at regular corporate tax rates on the undistributed REIT taxable income, including net capital gain. We may elect
to retain, rather than distribute, our net long-term capital gains and pay tax on such gains. In this case, we could elect to have
our stockholders include their proportionate share of such undistributed long-term capital gains in income and receive a corresponding
credit for their share of the tax paid by us. Our stockholders would then increase the adjusted basis of their stock by the difference
between the designated amounts included in their long-term capital gains and the tax deemed paid with respect to their shares.
We have net operating
losses carried forward from prior tax years that may reduce the amount of distributions that we must make in order to comply with
the REIT distribution requirements. Such losses, however, will generally not affect the character, in the hands of our stockholders,
of any distributions that we actually make, which are generally taxable to stockholders to the extent that we have current or accumulated
earnings and profits.
If we fail to distribute
during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain
net income for such year and (c) any undistributed taxable income from prior periods, we would be subject to a 4% excise tax on
the excess of such required distribution over the sum of (x) the amounts actually distributed and (y) the amounts of income retained
on which we have paid corporate income tax. We intend to make timely distributions so that we are not subject to the 4% excise
tax.
In certain circumstances,
we may be able to cure a failure to meet the distribution requirements 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. In such case,
we may be able to avoid losing our REIT status or being taxed on amounts distributed as deficiency dividends. However, we would
be required to pay interest and possibly a penalty based on the amount of any deduction taken for deficiency dividends.
Certain
provisions added by the Tax Cuts and Jobs Act may change the way that we calculate our REIT taxable income and that our
subsidiaries calculate their taxable income, which could in turn affect our distribution requirements. For example, we may
have to accrue certain items of income before they would otherwise be taken into income under the Internal Revenue Code if
they are taken into account in our applicable financial statements. We have not yet identified any material import of this
provision. Additionally, business interest deductions, whether in corporate or pass-through form, generally are limited to
the sum of the taxpayer’s business interest income for the tax year and 30% of the taxpayer’s adjusted taxable
income for the tax year. Proposed Treasury regulations would define interest expansively to cover various amounts not
otherwise treated as interest. This limitation could apply to our operating partnership, underlying partnerships and our TRS
and any other subsidiaries that are not treated as disregarded entities for U.S. federal income tax purposes. This limitation
does not apply to an “electing real property trade or business.” It is not clear whether our operations
constitute a real property trade or business, but Proposed Treasury regulations would allow any REIT (other than certain
REITs holding real estate financing assets) to make this election, and we and certain of our subsidiaries have made the
election in our 2018 federal income tax returns. One consequence of electing to be an “electing real property trade or
business” is that the new expensing rules will not apply to certain property used in an electing real property trade or
business. In addition, in the case of an electing real property trade or business, real property and “qualified
improvement property” are depreciated under the alternative depreciation system over longer useful lives. Finally,
there are new limitations on use of net operating losses arising in taxable years beginning after December 31, 2017.
Failure to Qualify
If we fail to satisfy
one or more requirements for REIT qualification, other than the gross income tests and the asset tests, we could avoid disqualification
if our failure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. In
addition, there are relief provisions for a failure of the gross income tests and asset tests, as described in “-Gross Income
Tests” and “-Asset Tests.”
If we fail to qualify
for taxation as a REIT in any taxable year, and the relief provisions do not apply, we will be subject to tax on our taxable income
at regular corporate income tax rates. Distributions to stockholders in any year in which we are not a REIT would not be deductible
by us, and we would not be required to make them. In this situation, to the extent of current and accumulated earnings and profits,
all distributions to stockholders taxed as individuals will generally be treated as qualified dividend income that is taxed at
corporate capital gains rates and, subject to limitations of the Code, corporate stockholders may be eligible for the dividends
received deduction. Unless we are entitled to relief under specific statutory provisions, we will be disqualified from re-electing
to be taxed as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to
state whether, in all circumstances, we will be entitled to statutory relief.
Prohibited Transactions
Net income derived
from a prohibited transaction is subject to a 100% penalty tax. A “prohibited transaction” is 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 by a REIT or by a lower-tier partnership in which the REIT holds an equity interest and does not qualify for a statutory
safe harbor. Income from timber sold pursuant to timber-cutting contracts that will be treated as rents from real property or capital
gain under Section 631(b) of the Code will not be treated as gain from the sale of property held for sale in the ordinary course
of business.
Sales of timberlands
that satisfy certain safe harbor requirements specified in the Code do not constitute prohibited transactions. We generally intend
to conduct our activities so that our sales of timberlands, other than those undertaken by our TRSs, qualify for this safe harbor
or otherwise do not qualify as property held primarily for sale to customers applying all relevant facts and circumstances.
Whether property is
held “primarily for sale to customers in the ordinary course of a trade or business” depends on the particular facts
and circumstances. No assurance can be given that any particular property in which we hold a direct or indirect interest will not
be treated as property held for sale to customers, or that we can comply with the safe harbor provisions of the Code that would
prevent imposition of the prohibited transaction tax.
We attempt to conduct
any activities that could give rise to a prohibited transaction through CatchMark Timber TRS (or other TRSs). For example, sales
of delivered logs by us generally would be treated as property held primarily for sale to customers in the ordinary course of a
trade or business and would be subject to the 100% penalty tax. Accordingly, such sales are made by CatchMark Timber TRS, which
purchases standing timber from us under pay as cut contracts that generate qualifying income for purposes of the gross income tests
that is not subject to the 100% penalty tax, and then harvests and delivers the logs. Any net taxable income generated by the operations
of CatchMark Timber TRS is subject to federal and applicable state and local income tax.
Foreclosure Property
Foreclosure property
is real property (including interests in real property) and any personal property incident to such real property (1) that is acquired
by a REIT as the result of the REIT having bid on the property at foreclosure, or having otherwise reduced the property to ownership
or possession by agreement or process of law, after there was a default (or default was imminent) on a lease of the property or
on a mortgage loan held by the REIT and secured by the property, (2) for which the related loan or lease was acquired by the REIT
at a time when default was not imminent or anticipated and (3) for which such REIT makes a proper election to treat the property
as foreclosure property. REITs generally are subject to tax at the maximum corporate income tax rate on any net income from foreclosure
property that would otherwise be qualifying income for purposes of the 75% gross income test and any gain from the disposition
of foreclosure property that is held for sale in the ordinary course of business. Any gain from the sale of property for which
a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions described
above, even if the property would otherwise constitute inventory or dealer property in the hands of the selling REIT. We do not
anticipate that we will receive any income from foreclosure property that is not qualifying income for purposes of the 75% gross
income test, but, if we do receive any such income, we intend to make an election to treat the related property as foreclosure
property.
Hedging Transactions
We may enter into hedging
transactions from time to time with respect to our liabilities. Our hedging activities may include entering into interest rate
swaps, caps, floors, collars, options to purchase these items, and futures and forward contracts. To the extent that we enter into
an interest rate swap or cap contract, option, futures contract, forward rate agreement, or any similar financial instrument to
hedge our indebtedness incurred or to be incurred to acquire or carry “real estate assets,” including mortgage loans,
or to hedge certain foreign currency risks, or to hedge existing hedging transactions after all or part of the hedged indebtedness
or property has been disposed of, any periodic income or gain from the disposition of that contract is disregarded for purposes
of the 75% and 95% gross income tests if we identify clearly any such hedging transaction before the close of the day on which
it was acquired, originated, or entered into and satisfy other identification requirements. To the extent that we hedge for other
purposes or fail to timely identify hedging transactions, the income from those transactions will likely be treated as nonqualifying
income for purposes of both gross income tests. We intend to structure any hedging transactions in a manner that does not jeopardize
our status as a REIT.
Tax Aspects of Investments in Partnerships
General.
The operating partnership holds substantially all of our investments. In general, partnerships are “pass-through” entities
that are not subject to federal income tax. Rather, partners are allocated their proportionate shares of the items of income, gain,
loss, deduction and credit of a partnership, and are potentially subject to tax thereon, without regard to whether the partners
receive a distribution from the partnership. We include in our income our proportionate share of these operating partnership items
for purposes of the various REIT income tests and in the computation of our REIT taxable income. Moreover, for purposes of the
REIT asset tests, we include our proportionate share of assets held by the operating partnership.
Tax Allocations
with Respect to the Properties. Pursuant to Section 704(c) of the Internal Revenue 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 the unrealized gain, or benefits from the 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, which we refer to as a “book-tax difference.” These allocations
are solely for federal income tax purposes and do not affect the book capital accounts or other economic or legal arrangements
among the partners.
Basis in Operating
Partnership Interest. Our adjusted tax basis in our interest in the operating partnership generally:
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will equal the amount of cash and the basis of any other property that we contributed to the operating
partnership;
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will increase by our allocable share of the operating partnership’s income and our allocable
share of debt of the operating partnership; and
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will decrease, but not below zero, by our allocable share of losses suffered by the operating partnership,
the amount of cash distributed to us, and constructive distributions resulting from a reduction in our share of debt of the operating
partnership.
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If the allocation of
our distributive share of the operating partnership’s loss exceeds the adjusted tax basis of our partnership interest in
the operating partnership, the recognition of the excess loss will be deferred until such time and to the extent that we have an
adjusted tax basis in our interest in the operating partnership. To the extent that the operating partnership’s distributions,
or any decrease in our share of the debt of the operating partnership (such decreases being considered a cash distribution to the
partners) exceed our adjusted tax basis, the excess distributions (including such constructive distributions) constitute taxable
income to us. This taxable income normally will be characterized as long-term capital gain if we have held our interest in the
operating partnership for longer than one year, subject to reduced tax rates described above for non-corporate U.S. Shareholders,
to the extent designated by us as a capital gain dividend. Under current law, capital gains and ordinary income of corporations
generally are taxed at the same marginal rates.
Sale of the Properties.
Our share of gain realized by the operating partnership on the sale of any property held by the operating partnership as inventory
or other property held primarily for sale to customers in the ordinary course of the operating partnership’s trade or business
will be treated as income from a prohibited transaction that is subject to a 100% penalty tax unless a safe harbor exception applies.
Prohibited transaction gains also may have an adverse effect upon our ability to satisfy the gross income tests for qualification
as a REIT. Under existing law, whether the operating partnership holds its property as inventory or primarily for sale to customers
in the ordinary course of its trade or business is a question of fact that depends on all the facts and circumstances with respect
to the particular transaction. The operating partnership intends to hold the properties for investment with a view to long-term
appreciation, to engage in the business of acquiring, developing, owning and operating the properties and to make such occasional
sales of the properties, including peripheral land, as are consistent with the operating partnership’s investment objectives.
Partnership Audits.
For federal income tax audits of partnership tax returns for taxable years beginning after December 31, 2017, such audits will
continue to be conducted at the entity level, but unless such entity qualifies for and affirmatively elects an alternative procedure,
any adjustments to the amount of tax due (including interest and penalties) will be payable by the entity itself. Under the alternative
procedure, if elected, a partnership would issue information returns to persons who were partners in the audited year, who would
then be required to take the adjustments into account in calculating their own tax liability, and the partnership would not be
liable for the adjustments. If our operating partnership or any of its subsidiary partnerships are able to and in fact elects the
alternative procedure for a given adjustment, the amount of taxes for which such persons will be liable will be increased by any
applicable penalties and a special interest charge. There can be no assurance that any such entities will be eligible to make such
an election or that it will, in fact, make such an election for any given adjustment. Many issues and the overall effect of these
rules on us are uncertain.
Entity Classification
Investment in partnerships
involves special tax considerations, including the possibility of a challenge by the IRS of the status of any partnerships as a
partnership, as opposed to an association taxable as a corporation, for federal income tax purposes. If any of these entities were
treated as an association for federal income tax purposes, it would be taxable as a corporation and therefore could be subject
to an entity-level tax on its income. In such a situation, the character of our assets and items of gross income would change and
could preclude us from satisfying the REIT asset tests or the gross income tests as discussed in “-Asset Tests” and
“-Gross Income Tests,” and in turn could jeopardize our REIT status. See “-Failure to Qualify,” above,
for a discussion of the effect of our failure to meet these tests for a taxable year. In addition, any change in the status of
any of partnerships for tax purposes might be treated as a taxable event, in which case we could have taxable income that is subject
to the REIT distribution requirements without receiving any cash.
Taxation of Holders of Our Common Stock
The following is a
summary of certain federal income tax considerations with respect to the ownership and disposition of our common stock, assuming
that we qualify to be taxed as a REIT.
Taxation of Taxable U.S. Stockholders
As used herein, the
term “U.S. stockholder” means a holder of our common stock that for federal income tax purposes is:
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a citizen or resident of the United States;
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a corporation (including an entity treated as a corporation for federal income tax purposes) created
or organized in or under the laws of the United States, any of its states or the District of Columbia;
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an estate whose income is subject to U.S. federal income taxation regardless of its source; or
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a trust if: (1) a U.S. court is able to exercise primary supervision over the administration of
such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (2) it has a valid
election in place to be treated as a U.S. person.
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If a partnership, entity
or arrangement treated as a partnership for federal income tax purposes holds our common stock, the federal income tax treatment
of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you
are a partner in a partnership that will hold our common stock, you should consult your tax advisor regarding the consequences
of the purchase, ownership and disposition of our common stock by the partnership.
Distributions on Our Common Stock.
As long as we qualify
to be taxed as a REIT, a taxable U.S. stockholder generally must take into account as ordinary income distributions made out of
our current or accumulated earnings and profits that we do not designate as capital gain dividends or qualified dividend income.
To the extent our taxable income includes net long-term capital gains from the sale of timber under Section 631(b), dividends paid
in respect of such gains may be designated as capital gain dividends.
Dividends paid to corporate
U.S. stockholders will not qualify for the dividends-received deduction generally available to corporations. In addition, dividends
paid to a U.S. stockholder generally will not qualify as “qualified dividend income,” which is treated as long-term
capital gain. However, we may designate a portion of our distributions as qualified dividend income to the extent attributable
to: (1) dividends received by us from non-REIT corporations, such as TRSs; and (2) income upon which we have paid corporate income
tax. In general, to qualify for the reduced tax rate on qualified dividend income, a non-corporate U.S. stockholder must hold our
common stock for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which our
common stock become ex-dividend. Dividends that are not designated as capital gain dividends or qualified dividend income will
be treated as ordinary income.
For taxable years beginning
before January 1, 2026, non-corporate taxpayers are entitled to a deduction of up to 20% of their ordinary REIT dividends. The
amount of the deduction may be up to 20% of the amount of the non-corporate U.S. stockholder’s aggregate qualified REIT dividends,
but may be less than 20% of the amount of qualified REIT dividends if the U.S. stockholder has losses from publicly traded partnerships
or the U.S. stockholder’s taxable income, not taking into account net capital gain, is less than the amount of the U.S. stockholder’s
qualified REIT dividends. In addition, Treasury regulations under section 199A of the Code impose a minimum holding period for
the 20% deduction. Under such Treasury regulations, in order for a REIT dividend with respect to a share of REIT stock to be treated
as a qualified REIT dividend, the U.S. stockholder (i) must have held the share for more than 45 days during the 91-day period
beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend and
(ii) cannot have been under an obligation to make related payments with respect to positions in substantially similar or related
property, e.g., pursuant to a short sale.
A U.S. stockholder
generally will take into account as long-term capital gain any distributions that we designate as capital gain dividends without
regard to the period for which the U.S. stockholder has held its common stock. We generally will designate our capital gain dividends
as either capital gains distributions, which will be subject to a maximum federal income tax rate of 20% for individuals, or unrecaptured
Section 1250 gains, which will be subject to a maximum federal income tax rate of 25% for individuals. A corporate U.S. stockholder,
however, may be required to treat up to 20% of certain capital gain dividends as ordinary income.
We may elect to retain
and pay income tax on the net long-term capital gain that we receive in a taxable year. In that case, to the extent that we designate
such amount in a timely notice to such stockholder, a U.S. stockholder would be taxed on its proportionate share of its undistributed
long-term capital gain. The U.S. stockholder would receive a credit for its proportionate share of the tax we paid. The U.S. stockholder
would increase the basis in its stock by the amount of its proportionate share of our undistributed long-term capital gain, minus
its share of the tax we paid.
To the extent that
we make a distribution in excess of our current and accumulated earnings and profits, such distribution will not be taxable to
a U.S. stockholder to the extent that it does not exceed the adjusted tax basis of the U.S. stockholder’s common stock. Instead,
such distribution will reduce the adjusted tax basis of such stock. To the extent that we make a distribution in excess of both
our current and accumulated earnings and profits and the U.S. stockholder’s adjusted tax basis in its common stock, such
stockholder will recognize long-term capital gain or short-term capital gain if the common stock has been held for one year or
less.
If we declare a distribution
in October, November, or December of any year that is payable to a U.S. stockholder of record on a specified date in any such month,
such distribution shall be treated as both paid by us and received by the U.S. stockholder on December 31 of such year, provided
that we actually pay the distribution during January of the following calendar year.
We may make distributions
to holders of our common stock that are paid in a mix of cash and shares of our common stock. These distributions are intended
to be treated as dividends for federal income tax purposes and a U.S. stockholder would, therefore, generally have taxable income
with respect to such distributions of common stock and may have a tax liability on account of such distribution in excess of the
cash (if any) that is received.
Disposition
of Our Common Stock.
In general, a U.S.
stockholder must treat any gain or loss realized upon a taxable disposition of our common stock as long-term capital gain or loss
if the U.S. stockholder has held the common stock for more than one year and otherwise as short-term capital gain or loss. However,
a U.S. stockholder must treat any loss upon a sale or exchange of common stock held by such stockholder for six months or less
as a long-term capital loss to the extent of any actual or deemed distributions from us that such U.S. stockholder previously has
characterized as long-term capital gain. All or a portion of any loss that a U.S. stockholder realizes upon a taxable disposition
of the common stock may be disallowed if the U.S. stockholder purchases other substantially identical common stock within 30 days
before or after the disposition.
A non-corporate U.S.
stockholder may deduct capital losses not offset by capital gains against its ordinary income only up to a maximum annual amount
of $3,000. A non-corporate U.S. stockholder may carry forward unused capital losses indefinitely. A corporate stockholder must
pay tax on its net capital gain at ordinary corporate income tax rates. A corporate U.S. stockholder may deduct capital losses
only to the extent of capital gains, with unused losses being carried back three years and forward five years.
If a U.S. stockholder
recognizes a loss upon a subsequent disposition of our stock or other securities in an amount that exceeds a prescribed threshold,
it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a
resulting requirement to separately disclose the loss-generating transaction to the IRS. These regulations, though directed towards
“tax shelters,” are broadly written and apply to transactions that would not typically be considered tax shelters.
The Code imposes significant penalties for failure to comply with these requirements. You should consult your tax advisor concerning
any possible disclosure obligation with respect to the receipt or disposition of our stock or securities or transactions that we
might undertake directly or indirectly. Moreover, you should be aware that we and other participants in the transactions in which
we are involved (including advisors to the participants) might be subject to disclosure or other requirements pursuant to these
regulations.
Passive Activity Loss, Excess Business
Losses and Investment Interest Limitations.
Dividends that we distribute
and gain from the disposition of our common stock will not be treated as passive activity income, and, therefore, U.S. stockholders
will not be able to apply any “passive losses” against such income. Similarly, non-corporate U.S. stockholders cannot
apply “excess business losses” against dividends that we distribute and gains arising from the disposition of our common
stock. Dividends from us (to the extent they do not constitute a return of capital) generally will be treated as investment income
for purposes of the investment interest limitation. Net capital gain from the disposition of our common stock or capital gain dividends
generally will be excluded from investment income unless the U.S. stockholder elects to have the gain taxed at ordinary income
rates. U.S. stockholders are not allowed to include on their own federal income tax returns any tax losses that we incur.
Unearned Income Medicare Tax.
High-income U.S. individuals,
estates, and trusts are subject to an additional 3.8% tax on net investment income. For these purposes, net investment income includes
dividends and gains from sales of stock. In the case of an individual, the tax is 3.8% of the lesser of the individuals’
net investment income or the excess of the individuals’ modified adjusted gross income over $250,000 in the case of a married
individual filing a joint return or a surviving spouse, $125,000 in the case of a married individual filing a separate return,
or $200,000 in the case of a single individual. The 20% deduction for “qualified REIT dividends” discussed above is
not taken into account in computing net investment income.
Information Reporting Requirements and
Backup Withholding.
We will report to our
stockholders and to the IRS the amount of distributions we pay during each calendar year, and the amount of tax we withhold, if
any. Under the backup withholding rules, a stockholder may be subject to backup withholding with respect to distributions unless
such holder:
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is a corporation or comes within certain other exempt categories and, when required, demonstrates
this fact; or
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provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding,
and otherwise complies with the applicable requirements of the backup withholding rules.
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A stockholder who does
not provide us with its correct taxpayer identification number also may be subject to penalties imposed by the IRS. Any amount
paid as backup withholding will be creditable against the stockholder’s income tax liability.
Brokers are subject
to information reporting requirements relating to certain transactions involving shares of our capital stock acquired by a stockholder
other than an exempt recipient (“covered stock”). Specifically, upon the transfer or redemption of shares of covered
stock, the broker must report certain information to the stockholder and the IRS, including the adjusted tax basis of the shares
and whether any gain or loss recognized on the transfer or redemption is long-term or short-term. Shares of covered stock will
be transferred or redeemed on a “first in/first out” basis unless the stockholder identifies specific lots to be transferred
or redeemed in a timely manner.
If we take an organizational
action such as a stock split, merger, or acquisition that affects the tax basis of shares of covered stock, or even make distributions
that exceed our current or accumulated earnings and profits, we will report to each stockholder and the IRS (or post on our primarily
public Web site) a description of the action and the quantitative effect of that action on the tax basis of the applicable shares.
Although corporations generally qualify as exempt recipients, an S corporation will not qualify as an exempt recipient with respect
to shares of our capital stock that the S corporation acquires.
Brokers may be subject
to transfer statement reporting on certain transactions not otherwise subject to the reporting requirements discussed above. Transfer
statements, however, are issued only between “brokers” and are not issued to stockholders or the IRS.
Stockholders are encouraged
to consult their tax advisors regarding the application of the information reporting rules discussed above to their investment
in our capital stock.
Taxation of U.S. Tax-Exempt Stockholders
Tax-exempt entities,
including qualified employee pension and profit sharing trusts and individual retirement accounts and annuities, generally are
exempt from federal income taxation. However, they are subject to taxation on their unrelated business taxable income. Dividend
distributions from a REIT to an exempt employee pension trust generally do not constitute unrelated business taxable income, provided
that the exempt employee pension trust does not otherwise use the shares of the REIT in an unrelated trade or business of the pension
trust and do not incur indebtedness to purchase or carry such shares. However, if a tax-exempt stockholder were to finance its
investment in our common stock with debt, a portion of the income that it receives from us would constitute unrelated business
taxable income pursuant to the “debt-financed property” rules. Furthermore, social clubs, voluntary employee benefit
associations, supplemental unemployment benefit trusts, and qualified group legal services plans that are exempt from taxation
under special provisions of the federal income tax laws are subject to different unrelated business taxable income rules, which
generally will require them to characterize distributions that they receive from us as unrelated business taxable income. Finally,
in certain circumstances, a qualified employee pension or profit sharing trust that owns more than 10% of our stock is required
to treat a percentage of the dividends that it receives from us as unrelated business taxable income. Such percentage is equal
to the gross income that we derive from an unrelated trade or business, determined as if we were a pension trust, divided by our
total gross income for the year in which we pay the dividends. That rule applies to a pension trust holding more than 10% of our
stock only if:
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the percentage of our dividends that the tax-exempt trust would be required to treat as unrelated
business taxable income is at least 5%;
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we qualify to be taxed as a REIT by reason of the modification of the rule requiring that no more
than 50% of our stock be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as
holding our stock in proportion to their actuarial interests in the pension trust (see “Federal Income Taxation of Our Company
as a REIT-Requirements for Qualification-General”); and
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either: (1) one pension trust owns more than 25% of the value of our stock; or (2) a group of pension
trusts individually holding more than 10% of the value of our stock collectively owns more than 50% of the value of our stock.
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Taxation of Non-U.S. Stockholders
The term “non-U.S.
stockholder” means a holder of our common stock that is not a U.S. stockholder or a partnership or an entity treated as a
partnership for federal income tax purposes. The rules governing federal income taxation of non-U.S. stockholders are complex.
This section is only a summary of such rules. Non-U.S. stockholders are urged to consult their tax advisors to determine the impact
of federal, state, local and foreign income tax laws on the ownership of our common stock, including any reporting requirements.
Ordinary Dividends.
A non-U.S. stockholder
that receives a distribution that is not attributable to gain from our sale or exchange of a “United States real property
interest” (a “USRPI”), and that we do not designate as a capital gain dividend will recognize ordinary income
to the extent that we pay such distribution out of our current or accumulated earnings and profits. A withholding tax equal to
30% of the gross amount of the distribution ordinarily will apply to such distribution unless an applicable tax treaty
reduces or eliminates the tax. However, if a distribution is treated as effectively connected with the non-U.S. stockholder’s
conduct of a U.S. trade or business, the non-U.S. stockholder generally will be subject to federal income tax on the distribution
at graduated rates, similar to the manner as U.S. stockholders are taxed with respect to such distribution, and a non-U.S. stockholder
that is a corporation also may be subject to the 30% branch profits tax with respect to the distribution. We plan to withhold U.S.
income tax at the rate of 30% on the gross amount of any ordinary distribution paid to a non-U.S. stockholder unless either:
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a lower treaty rate applies and the non-U.S. stockholder furnishes to us an IRS Form W-8BEN evidencing
eligibility for that reduced rate; or
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the non-U.S. stockholder furnishes to us an IRS Form W-8ECI claiming that the distribution is effectively
connected income.
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Capital Gain Dividends.
For any year in which
we qualify to be taxed as a REIT, a non-U.S. stockholder will incur tax on distributions that are attributable to gain from our
sale or exchange of a USRPI under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”), unless an exception
applies. A USRPI includes certain interests in U.S. real property, including timberlands and standing timber. Under FIRPTA, a non-U.S.
stockholder is taxed on distributions attributable to gain from sales of USRPIs as if such gain were effectively connected with
a U.S. business of the non- U.S. stockholder. A non-U.S. stockholder thus would be required to file U.S. federal income tax returns
and would be taxed on such a distribution at the tax rates applicable to U.S. stockholders, subject to a special alternative minimum
tax in the case of a nonresident alien individual. A non-U.S. corporate stockholder not entitled to treaty relief or exemption
also may be subject to the 30% branch profits tax on such a distribution. There is a special withholding rate at the maximum corporate
income tax rate for distributions to non-US stockholders attributable to the REIT’s gains from dispositions of USRPIs. While
the application of FIRPTA to Section 631(b) gains is not clear, we intend to treat gain from the sale of standing timber, including
Section 631(b) gain recognized by us on our sales of timber to CatchMark Timber TRS and to third parties under pay as cut contracts,
as gain from the sale or exchange of a USRPI. A non-U.S. stockholder may receive a credit against its U.S. federal income tax liability
for the amount we withhold.
Capital gain dividends
that are attributable to our sale of USRPIs would be treated as ordinary dividends rather than as gain from the sale of a USRPI,
if: (1) our common stock is “regularly traded” on an established securities market in the United States; and (2) the
non-U.S. stockholder did not own more than 10% of our common stock at any time during the one-year period prior to the distribution.
Such distributions would be subject to withholding tax in the same manner as ordinary dividends.
Non-Dividend Distributions.
A non-U.S. stockholder
will not incur tax on a distribution in excess of our current and accumulated earnings and profits if the excess portion of such
distribution does not exceed the adjusted basis of its common stock. Instead, the excess portion of such distribution will reduce
the adjusted basis of such shares. A non-U.S. stockholder will be subject to tax on a distribution that exceeds both our current
and accumulated earnings and profits and the adjusted basis of its common stock, if the non-U.S. stockholder otherwise would be
subject to tax on gain from the sale or disposition of our common stock, as described below. Because we generally cannot determine
at the time we make a distribution whether the distribution will exceed our current and accumulated earnings and profits, we normally
will withhold tax on the entire amount of any distribution at the same rate as we would withhold on an ordinary dividend. However,
a non-U.S. stockholder may claim a refund of amounts that we withhold if we later determine that a distribution in fact exceeded
our current and accumulated earnings and profits.
We may be required
to withhold 15% of any distribution that exceeds our current and accumulated earnings and profits if our stock is a USRPI. Consequently,
although we intend to withhold at a rate of 30% or the maximum corporate income tax rate on the entire amount of any distribution,
to the extent that we do not do so, we may withhold at a rate of 15% on any portion of a distribution not subject to withholding
at a rate of 30% or the maximum corporate income tax rate.
Stock Distributions.
We may make distributions
to holders of our common stock that are paid in a mix of cash and shares of our common stock and that are intended to be treated
as dividends for federal income tax purposes. If such a distribution is made and is treated as a dividend, a non-U.S. stockholder
would generally be taxed on the full amount of such distribution under the rules described above.
Disposition of Our Common Stock.
A non-U.S. stockholder
generally will not incur tax under FIRPTA with respect to gain realized upon a disposition of our common stock as long as: (i)
we are not a "United States real property holding corporation" during a specified testing period and certain procedural
requirements are satisfied; or (ii) we are a domestically controlled REIT. A "United States real property holding corporation"
is a U.S. corporation that at any time during the applicable testing period owned U.S. real property interests that exceed in value
50% of the value of the corporation's U.S. real property interests, interests in real property located outside the United States
and other assets used in the corporation's trade or business.
Even if shares of
our common stock otherwise would be a USRPI under the foregoing test, shares of our common stock will not constitute a USRPI
if we are a “domestically controlled REIT.” A domestically controlled REIT is a REIT in which, at all times
during a specified testing period (generally the lesser of the five year period ending on the date of disposition of the
REIT’s shares of common stock or the period of the REIT’s existence), less than 50% in value of its outstanding
shares of common stock is held directly or indirectly by non-U.S. stockholders. In the case of a publicly traded REIT, a
person holding less than 5% of a class of stock at all times during the testing period is treated as a U.S. person for this
purpose unless the REIT has actual knowledge to the contrary.
We believe that we
have been and will continue to be a domestically controlled REIT, but we cannot assure you that we currently qualify for this status
or will qualify in the future. Even if we do not qualify as a domestically controlled REIT, a non-U.S. stockholder that owned,
actually or constructively, 10% or less of our common stock at all times during a specified testing period would not incur tax
under FIRPTA if our common stock is “regularly traded” on an established securities market.
If the gain on the
sale of our common stock were taxed under FIRPTA, a non-U.S. stockholder would be taxed in the same manner as U.S. stockholders
with respect to such gain, subject to applicable alternative minimum tax or, a special alternative minimum tax in the case of nonresident
alien individuals.
Gain from the sale
of our common stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. stockholder
in two cases: (1) if the gain is effectively connected with the non-U.S. stockholder’s U.S. trade or business, in which case
the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain, or (2) if the non-U.S.
stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year
and has a “tax home” in the United States, in which case the non-U.S. stockholder will incur a 30% tax on his capital
gains.
Qualified Shareholders
Generally, a “qualified
shareholder” (as defined in the Code) who holds our common stock directly or indirectly (through one or more partnerships)
will not be subject to FIRPTA withholding on distributions by us or dispositions of our common stock. While a qualified shareholder
will not be subject to FIRPTA on distributions by us or dispositions of our common stock, a distribution to a qualified shareholder
that otherwise would have been taxable under FIRPTA will be treated as an ordinary dividend, and certain investors of a qualified
shareholder (i.e., non-U.S. persons who hold interests in the qualified shareholder (other than interests solely as a creditor),
and hold more than 10% of our common stock (whether or not by reason of the investor’s ownership in the qualified shareholder))
may be subject to FIRPTA and FIRPTA withholding.
Qualified Foreign Pension Funds
A qualified foreign
pension fund (as defined in the Code) (or an entity all of the interests of which are held by a qualified foreign pension fund)
that holds our common stock directly or indirectly (through one or more partnerships) will not be subject to FIRPTA on distributions
by us or dispositions of our common stock.
Foreign Account Tax Compliance Act
Under the provisions
in the Code commonly referred to as FATCA, withholding at a rate of 30% is required on dividends in respect of shares of our common
stock held by or through certain foreign financial institutions (including investment funds), unless such institution enters into
an agreement with the Secretary of the Treasury (unless alternative procedures apply pursuant to an applicable intergovernmental
agreement between the United States and the relevant foreign government) to report, on an annual basis, information with respect
to shares in, and accounts maintained by, the institution to the extent such shares or accounts are held by certain U.S. persons
or by certain non-U.S. entities that are wholly or partially owned by U.S. persons. Accordingly, the entity through which our shares
are held will affect the determination of whether such withholding is required. Similarly, withholding at a rate of 30% is required
on dividends in respect of our shares held by an investor that is a passive non-financial non-U.S. entity, unless such entity either
(i) certifies to us that such entity does not have any “substantial U.S. owners” or (ii) provides certain information
regarding the entity’s “substantial U.S. owners,” which we will in turn provide to the Secretary of the Treasury.
While withholding under FATCA also would have applied to payments of gross proceeds from the sale or other disposition of stock
after December 31, 2018, recently proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely.
Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. Non-U.S. stockholders
are encouraged to consult with their tax advisers regarding the possible implications of these rules on their investment in our
common stock.
Other Tax Considerations
Legislative or Other Actions Affecting
REITs
The rules dealing with
U.S. federal income taxation are constantly under review. No assurance can be given as to whether, when or in what form the U.S.
federal income tax laws applicable to us and our stockholders may be changed, possibly with retroactive effect. Changes to the
federal tax laws and interpretations of federal tax laws could adversely affect an investment in shares of our common stock.
Tax legislation commonly
referred to as the Tax Cuts and Jobs Act was signed into law on December 22, 2017. The Tax Cuts and Jobs Act made significant changes
to the U.S. federal income tax rules for taxation of individuals and corporations. Many of the provisions applicable to individuals
and other non-corporate taxpayers are temporary and are scheduled to apply only to taxable years beginning before January 1, 2026.
The IRS has issued significant guidance under the Tax Cuts and Jobs Act, but guidance on additional issues, finalization of proposed
guidance and possible technical corrections legislation may adversely affect us or our stockholders. In addition, further changes
to the tax laws, unrelated to the Tax Cuts and Jobs Act, are possible.
Prospective stockholders
are urged to consult with their tax advisors with respect to the impact of the Tax Cuts and Jobs Act and any other regulatory or
administrative developments and proposals and their potential effect on investment in our common stock
State, Local and Foreign Taxes
We may be subject to
state, local or non-U.S. taxation in various jurisdictions, including those in which we and our subsidiaries transact business,
own property or reside. The state, local or non-U.S. tax treatment of us may not conform to the federal income tax treatment discussed
above. Any non-U.S. taxes incurred by us would not pass through to stockholders against their U.S. federal income tax liability.
Prospective investors should consult their tax advisors regarding the application and effect of state, local and non-U.S. income
and other tax laws on an investment in our common stock.
PLAN
OF DISTRIBUTION
We
may sell the securities offered by this prospectus from time to time pursuant to underwritten public offerings, privately negotiated
transactions, at-the-market offerings, ordinary brokerage transactions, block trades, a combination of these methods, or through
any other method permitted by applicable law and described in a prospectus supplement. Such sales may be made through underwriting
syndicates represented by one or more managing underwriters, to or through underwriters or dealers, to or through agents and/or
directly to one or more purchasers. The securities may be sold from time to time in one or more transactions at:
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a
fixed price or prices, which may be changed;
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market
prices prevailing at the time of sale;
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prices
related to such prevailing market prices, including in “at the market offerings”
within the meaning of Rule 415(a)(4) of the Securities Act; or
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Any
of the prices may represent a discount from the prevailing market prices.
Each
time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe
the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price
of the securities and the proceeds to us, if applicable.
Offers
to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit
offers to purchase the securities from time to time. Unless otherwise specified in connection with any particular offering of
securities, the agents will agree to use their best efforts to solicit purchases for the period of their appointment. Any agent
involved in the offer or sale of our securities will be identified in a prospectus supplement.
If
a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer,
as principal. We may negotiate and pay dealers’ commissions, discounts or concessions for their services. The dealer may
then resell such securities to the public either at varying prices to be determined by the dealer or at a fixed offering price
agreed to with us at the time of resale. Dealers engaged by us may allow other dealers to participate in resales.
If
an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed
with the underwriter at the time of sale and the name of any underwriter, the amount of securities underwritten, and the nature
of its obligations to take our securities will be provided in the applicable prospectus supplement. Any underwriter will acquire
the offered securities for their own account. The underwriters may resell the offered securities in one or more transactions,
including negotiated transactions. These sales may be made at a fixed public offering price or prices, which may be changed, at
market prices prevailing at the time of the sale, at prices related to such prevailing market price or at negotiated prices. Underwriters
could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an
“at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, sales made directly on the New
York Stock Exchange, the existing trading market for our Class A common stock, or sales made to or through a market maker other
than on an exchange.
In
connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent, may
compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or
through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus supplement,
an agent will be acting on a best efforts basis.
Any
compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be provided in the applicable prospectus supplement. Underwriters,
dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of
the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the securities
may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and
agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required
to make in respect thereof and to reimburse those persons for certain expenses.
Unless
otherwise specified in the prospectus supplement, each series of the securities will be a new issue with no established trading
market, other than our Class A common stock, which is currently listed on the NYSE. We currently intend to list any shares of
our Class A common stock sold pursuant to this prospectus on the NYSE, but we are not obligated to do so. We may elect to list
any new series of preferred stock on an exchange, but are not obligated to do so. We have no current plans for listing of the
offered securities on any securities exchange (other than the Class A common stock that is already listed on the NYSE); any such
listing with respect to any particular securities will be described in the applicable prospectus supplement or pricing supplement,
as the case may be.
If
the offered securities are traded after their initial issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities and other factors. While it is possible that an underwriter
could inform us that it intended to make a market in the offered securities, such underwriter would not be obligated to do so,
and any such market making could be discontinued at any time without notice. Therefore, no assurance can be given as to whether
an active trading market will develop for the offered securities.
To
facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which
involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances, these
persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment
option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing
securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the
offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. 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. These transactions may be discontinued at any time.
If
indicated in the applicable prospectus supplement, underwriters or other persons acting as agents may be authorized to solicit
offers by institutions or other suitable purchasers to purchase the securities at the public offering price set forth in the prospectus
supplement, pursuant to delayed delivery contracts providing for payment and delivery on the date or dates stated in the prospectus
supplement. These purchasers may include, among others, commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. Delayed delivery contracts will be subject to the condition that the purchase
of the securities covered by the delayed delivery contracts will not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which the purchaser is subject. The underwriters and agents will not have any responsibility
with respect to the validity or performance of these contracts.
In
addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives,
the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of securities, and may use securities received from us in settlement of those derivatives
to close out any related open borrowings of securities. The third party in such sale transactions will be an underwriter and,
if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In
addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the
securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party
may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
In
compliance with the guidelines of the Financial Industry Regulatory Authority, Inc., or FINRA, the maximum consideration or discount
to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate proceeds of the offering. The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business
for which they receive compensation.
LEGAL
MATTERS
Certain
legal matters will be passed upon for us by Alston & Bird LLP. Venable LLP will issue an opinion to us regarding certain matters
of Maryland law.
EXPERTS
The
financial statements incorporated in this prospectus by reference from the Company’s Annual Report on Form 10-K, and the
effectiveness of the Company’s internal control over financial reporting 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
financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.
The
consolidated financial statements of TexMark Timber Treasury, L.P. and Subsidiaries as of and for the years ended December 31,
2019 and 2018, incorporated in this Prospectus from CatchMark Timber Trust, Inc.’s Annual Report on Form 10-K, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference,
and is incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission.
Our Securities and Exchange Commission filings, including our registration statement, are available to you on the Securities and
Exchange Commission’s website, www.sec.gov, and on our website, www.catchmark.com. The information found on, or otherwise
accessible through, our website is not incorporated into, and does not form a part of, this prospectus or any other report or
document we file with or furnish to the Securities and Exchange Commission.
We
have filed with the Securities and Exchange Commission a registration statement on Form S-3, of which this prospectus is a part,
including exhibits, schedules and amendments filed with, or incorporated by reference in, this registration statement, under the
Securities Act, with respect to the securities registered hereby. This prospectus and any accompanying prospectus supplement do
not contain all of the information set forth in the registration statement and exhibits and schedules to the registration statement.
For further information with respect to our company and the securities registered hereby, reference is made to the registration
statement, including the exhibits to the registration statement. Statements contained in this prospectus and any accompanying
prospectus supplement as to the contents of any contract or other document referred to in, or incorporated by reference in, this
prospectus and any accompanying prospectus supplement are not necessarily complete and, where that contract is an exhibit to the
registration statement, each statement is qualified in all respects by the exhibit to which the reference relates.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
Securities and Exchange Commission allows us to “incorporate by reference” the information we file with the Securities
and Exchange Commission, which means that we can disclose important information to you by referring to those documents. The information
incorporated by reference is an important part of this prospectus. The incorporated documents contain significant information
about us, our business and our finances. Any information contained in this prospectus or in any document incorporated or deemed
to be incorporated by reference in this prospectus will be deemed to have been modified or superseded to the extent that a statement
contained in this prospectus, in any other document we subsequently file with the Securities and Exchange Commission that is also
incorporated or deemed to be incorporated by reference in this prospectus or in the applicable prospectus supplement, modifies
or supersedes the original statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded,
to be a part of this prospectus. We incorporate by reference the following documents we filed with the Securities and Exchange
Commission:
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·
|
all
documents filed by us with the Securities and Exchange Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the initial registration
statement and prior to effectiveness of the registration statement and after the date
of this prospectus and prior to the termination of the offering of the underlying securities.
|
To
the extent that any information contained in any current report on Form 8-K, or any exhibit thereto, is or was furnished to, rather
than filed with, the Securities and Exchange Commission, such information or exhibit is specifically not incorporated by reference
in this prospectus.
We
will provide without charge to each person, including any beneficial owner, to whom a prospectus is delivered, on written or oral
request of that person, a copy of any or all of the documents we are incorporating by reference into this prospectus, other than
exhibits to those documents unless those exhibits are specifically incorporated by reference into those documents. A request should
be addressed in writing to CatchMark Timber Trust, Inc., 5 Concourse Parkway, Suite 2650, Atlanta, Georgia 30328, Attention: Lesley
H. Solomon, Secretary, or by telephone at (855) 858-9794.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses
of Issuance and Distribution.
The
following table itemizes the expenses incurred by us in connection with the issuance and registration of the securities being
registered hereunder. All amounts shown are estimates except the Securities and Exchange Commission registration fee.
Securities and Exchange Commission
Registration Fee
|
|
$
|
77,880
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|
Printing and Engraving Expenses (1)
|
|
$
|
10,000
|
|
Legal Fees and Expenses (1)
|
|
$
|
75,000
|
|
Accounting Fees and Expenses (1)
|
|
$
|
10,000
|
|
Miscellaneous (1)
|
|
$
|
2,120
|
|
Total
|
|
$
|
175,000
|
|
(1)
|
Does not include expenses of preparing
any accompanying prospectus supplements, listing fees, transfer agent fees and other expenses
related to offerings of particular securities.
|
We
will pay all of the costs identified above.
Item 15. Indemnification
of Directors and Officers.
Maryland
law permits a Maryland corporation 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 actual receipt of an improper benefit
or profit in money, property or services or active and deliberate dishonesty that is established by a final judgment and is material
to the cause of action. Our charter contains a provision that eliminates such liability for our directors and officers to the
maximum extent permitted by Maryland law.
Our
charter requires us, to the maximum extent that Maryland law in effect from time to time permits, to indemnify and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of
final disposition of a proceeding to:
|
·
|
any
present or former director or officer who is made or threatened to be made a party to
the proceeding by reason of his or her service in that capacity; or
|
|
·
|
any
individual who, while a director or officer of our company and at our request, serves
or has served another corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner, member, manager or trustee of such corporation, real
estate investment trust, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise and who is made or threatened to be made a
party to the proceeding by reason of his or her service in that capacity.
|
Our
charter also permits us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities
described above and to any employee or agent of our company or a predecessor of our company.
The
MGCL 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 or threatened
to be made a party by reason of his or her service in that capacity. The MGCL 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 or are threatened to be made a party by reason of
their service in those or other capacities unless it is established that:
|
·
|
the
act or omission of the director or officer was material to the matter giving rise to
the proceeding and (1) was committed in bad faith or (2) was the result of active and
deliberate dishonesty;
|
|
·
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the
director or officer actually received an improper personal benefit in money, property
or services; or
|
|
·
|
in
the case of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission as unlawful.
|
However,
under the MGCL, 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 personal benefit was improperly received. A court may order indemnification if
it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer
did not meet the prescribed standard of conduct, was adjudged liable to the corporation or was adjudged liable on the basis that
personal benefit was improperly received. However, indemnification 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 personal benefit was improperly received, is limited to expenses.
In
addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s
receipt of:
|
·
|
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 the corporation;
and
|
|
·
|
a
written undertaking by the director or officer or on the director’s or officer’s
behalf to repay the amount paid or reimbursed by the corporation if it is ultimately
determined that the director or officer did not meet the standard of conduct.
|
Insofar
as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under
the Securities Act, we have been informed that in the opinion of the SEC, this indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.
We
have entered into indemnification agreements with each of our executive officers and directors whereby we indemnify such executive
officers and directors against all expenses and liabilities and pay or reimburse reasonable expenses in advance of final disposition
of a proceeding if such director or executive officer is made or threatened to be made a party to the proceeding by reason of
his or her service in that capacity to the fullest extent permitted by Maryland law, subject to limited exceptions. These indemnification
agreements also provide that upon an application for indemnity by an executive officer or director to a court of appropriate jurisdiction,
such court may order us to indemnify such executive officer or director.
Item 16. Exhibits
The
following exhibits are filed as part of, or incorporated by reference into, this registration statement on Form S-3:
(1) To
be filed by amendment or incorporated by reference in connection with the offering of a particular class or series of securities.
(2) If
applicable, to be filed by amendment or incorporated by reference separately in accordance with Section 305(b)(2) of the Trust
Indenture Act of 1939, as amended.
* Previously
filed.
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;
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|
(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 Securities
and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement.;
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such information in
the registration statement;
|
provided,
however, that paragraphs (a)(1)(i), (ii), and (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 Securities and Exchange
Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement.
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(2)
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That,
for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
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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.
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|
(4)
|
That,
for the purpose of determining liability under the Securities Act to any purchaser:
|
|
(i)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part
of the registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
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|
(ii)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part
of a registration statement in reliance on Rule 430B relating to an offering made pursuant
to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required
by section 10(a) of the Securities Act 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; or.
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|
(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 Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
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(c)
|
Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the 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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(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 (“Act”) in
accordance with the rules and regulations prescribed by the Securities and Exchange Commission
under Section 305(b)2 of the Act.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on this 4th
day of May, 2020.
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|
|
CATCHMARK TIMBER TRUST,
INC.
|
|
|
|
By:
|
/s/
Brian M. Davis
|
|
|
Brian M. Davis
|
|
|
Chief Executive Officer and President
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POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian M. Davis and Lesley H. Solomon,
and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities,
to sign this Registration Statement, and any and all pre-effective and post-effective amendments thereto as well as any related
registration statements (or amendment thereto) filed pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as
amended, and to file the same, with exhibits and schedules thereto, and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys in-fact and agents,
or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Brian M. Davis
|
|
Chief Executive Officer,
President and Director
|
|
May
4, 2020
|
Brian
M. Davis
|
|
|
|
|
|
|
|
/s/
Ursula A. Godoy-Arbelaez
|
|
Chief
Financial Officer, Senior Vice President, and Treasurer (Principal Financial Officer and Principal Accounting
Officer)
|
|
May
4, 2020
|
Ursula
A. Godoy-Arbelaez
|
|
|
|
|
|
|
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*
|
|
Chairman
of the Board
|
|
May
4, 2020
|
Willis
J. Potts, Jr.
|
|
|
|
|
|
|
|
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|
/s/ Tim E. Bentsen
|
|
Independent Director
|
|
May
4, 2020
|
Tim E. Bentsen
|
|
|
|
|
|
|
|
|
|
/s/ James M. DeCosmo
|
|
Independent Director
|
|
May
4, 2020
|
James M. DeCosmo
|
|
|
|
|
|
|
|
*
|
|
Independent
Director
|
|
May
4, 2020
|
Paul
S. Fisher
|
|
|
|
|
|
|
|
*
|
|
Independent
Director
|
|
May
4, 2020
|
Mary
E. McBride
|
|
|
|
|
|
|
|
*
|
|
Independent
Director
|
|
May
4, 2020
|
Donald
S. Moss
|
|
|
|
|
|
|
|
|
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*
|
|
Independent
Director
|
|
May
4, 2020
|
Douglas
D. Rubenstein
|
|
|
|
|
|
|
|
|
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*By: /s/ Brian M. Davis
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|
|
|
|
Name: Brian M. Davis
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|
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Title: Attorney-in-fact
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