OFFER TO PURCHASE
Published on April 10, 2001
OFFER TO PURCHASE FOR CASH UP TO
1,000,000 COMMON SHARES OF BENEFICIAL INTEREST
OF
ENTERTAINMENT PROPERTIES TRUST
AT
$18.00 NET PER SHARE
BY
BRT REALTY TRUST
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON TUESDAY, MAY 15, 2001 (THE "EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED ON, AMONG OTHER THINGS, (1) FREDRIC H. GOULD'S
ELECTION AND QUALIFICATION TO THE BOARD OF TRUSTEES (THE "BOARD") OF
ENTERTAINMENT PROPERTIES TRUST (THE "COMPANY") AT THE 2001 ANNUAL MEETING OF
SHAREHOLDERS AND (2) THE BOARD GRANTING AN UNQUALIFIED EXEMPTION TO BRT REALTY
TRUST ("BRT") FROM THE 9.8% BENEFICIAL INTEREST OWNERSHIP LIMITATION OF ARTICLE
NINTH OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY AND FROM
THE VOTING RIGHTS RESTRICTION UNDER THE MARYLAND CONTROL SHARE ACQUISITION ACT
ARISING FROM BRT OWNING MORE THAN 10% OF THE SHARES. THIS OFFER IS ALSO SUBJECT
TO OTHER CONDITIONS. SEE "INTRODUCTION" AND SECTION 14 UNDER THE CAPTION "THE
TENDER OFFER." THIS OFFER IS NOT CONDITIONED UPON THE RECEIPT OF FINANCING.
BRT IS MAKING THIS OFFER IN CONNECTION WITH ITS SOLICITATION OF PROXIES TO
ELECT FREDERIC H. GOULD TO THE BOARD.
IMPORTANT
Any Shareholder (defined herein) desiring to tender all or any portion of
his or her Shares (defined herein) should either:
1. Complete and sign the Letter of Transmittal (or a facsimile thereof)
tendered in accordance with the instructions in the Letter of Transmittal, have
your signature thereon guaranteed if required by Instruction 1 to the Letter of
Transmittal, mail or deliver the Letter of Transmittal (or such facsimile), or,
in the case of a book-entry transfer effected pursuant to the procedure set
forth in Section 2 under the caption "Tender Offer", an Agent's Message (as
defined herein) and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the Letter
of Transmittal (or facsimile) or deliver such Shares pursuant to the procedure
for book-entry transfer set forth in Section 2 under the caption "Tender Offer"
or
2. Request your broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for you.
If you have Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, you must contact such broker, dealer,
commercial bank, trust company or other nominee if you desire to tender your
Shares.
If you desire to tender your Shares and your certificates for Shares are
not immediately available or you cannot comply with the procedures for
book-entry transfers described in this Offer to Purchase on a timely basis, or
time will not permit all required documents to reach the Depositary prior to the
Expiration Date, your tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2 under the caption "The Tender Offer"
and in the Notice of Guaranteed Delivery provided herewith.
A summary of the principal terms of the Offer appears on Pages 1-3 of this
Offer to Purchase.
Questions and requests for assistance may be directed to Georgeson
Shareholder Communications Inc., the Information Agent, at its address and
telephone numbers set forth on the last page of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or from brokers, dealers, commercial banks and trust
companies.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
SHAREHOLDERS OF THE COMPANY. ANY SUCH SOLICITATION WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
The Information Agent for the Offer is:
[GEORGESON SHAREHOLDER COMMUNICATIONS INC. LOGO]
April 10, 2001
TABLE OF CONTENTS
SUMMARY TERM SHEET
BRT Realty Trust is offering to purchase up to 1,000,000 common shares of
beneficial interest of Entertainment Properties Trust for $18.00 per share, net
to the seller in cash, without interest. The following are some of the questions
you, as a shareholder of Entertainment Properties, may have and answers to those
questions. This summary term sheet is not meant to be a substitute for the
information contained in the remainder of this Offer to Purchase and the related
Letter of Transmittal, and the information contained in this summary term sheet
is qualified in its entirety by the more detailed descriptions and explanations
contained in this Offer to Purchase and the related Letter of Transmittal. We
urge you to carefully read the entire Offer to Purchase and related Letter of
Transmittal prior to making any decision regarding whether to tender your
shares.
WHO IS OFFERING TO PURCHASE MY SHARES OF ENTERTAINMENT PROPERTIES?
BRT Realty Trust, a Massachusetts business trust, is offering to purchase
your shares of beneficial interest of Entertainment Properties. See the
"Introduction" and Section 9 under the caption "The Tender Offer."
HOW MANY SHARES IS BRT SEEKING TO PURCHASE, AT WHAT PRICE, AND DO I HAVE TO PAY
ANY BROKERAGE OR SIMILAR FEES TO TENDER?
- BRT is offering to purchase 1,000,000 shares of Entertainment Properties
at a price of $18.00 per share, net to the seller in cash, without
interest. To the extent more than 1,000,000 shares are tendered in the
offer, BRT will purchase only 1,000,000 shares on a pro rata basis based
on the number of shares properly tendered by each shareholder prior to or
on the expiration of this offer and not withdrawn. No fractional shares
will be purchased. Preliminary results of proration will be announced by
press release as promptly as practicable after the expiration date of the
offer. Shareholders may obtain such preliminary information from
Georgeson Shareholder Communications Inc., the information agent for this
offer, and may be able to obtain such information from their broker.
- If you are the record owner of your shares and you tender shares in this
offer, you will not have to pay any brokerage or similar fees. However,
if you own your shares through a broker or other nominee, and your broker
tenders your shares on your behalf, your broker or nominee may charge you
a fee for doing so. You should consult your broker or nominee to
determine whether any charges will apply. See the "Introduction".
WHY IS BRT MAKING THIS OFFER?
BRT is making this offer to increase its investment in Entertainment
Properties because we believe in the long-term value of Entertainment Properties
and in the business of owning movie theaters. The acquisition of shares pursuant
to this offer, at a premium to the current market price, demonstrates our
commitment to Entertainment Properties. The additional investment will increase
our incentive to see the shares perform well. This offer will give you the
opportunity to sell some of your shares at a premium and still retain an
interest in Entertainment Properties' future growth. We are making this offer in
connection with our solicitation of proxies to elect Fredric H. Gould to the
board of trustees of Entertainment Properties. See Section 12 under the caption
"The Tender Offer".
WHAT ARE BRT'S PLANS FOR ENTERTAINMENT PROPERTIES?
BRT has no current plans for Entertainment Properties, except to elect
Fredric H. Gould to the board of trustees and to complete this offer, subject to
important conditions. However, we intend to continuously evaluate the company
and its prospects and may propose changes in the future.
WHAT ARE THE CONDITIONS TO THIS OFFER?
The most important conditions to this offer are: (1) Fredric H. Gould's
election and qualification to the board of trustees of Entertainment Properties
by the shareholders at the 2001 annual meeting of shareholders and (2) the board
of trustees granting BRT an unqualified exemption from the 9.8% share ownership
limitation contained in the Declaration of Trust of Entertainment Properties and
from the voting rights restriction under the Maryland Control Share Acquisition
Act arising from BRT owning more than 10% of the shares. This offer is not
conditioned on the receipt of financing. A more detailed discussion of the
conditions to consummation of this offer may be found in the "Introduction" and
Section 14 under the caption "The Tender Offer."
DOES BRT HAVE THE FINANCIAL RESOURCES TO PAY FOR THE SHARES?
BRT has sufficient cash or cash equivalents available to pay for the
shares. See Section 10 under the caption "Tender Offer".
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER INTO THIS OFFER?
You have until the expiration date of this offer to tender your shares.
This offer currently is scheduled to expire at 5:00 p.m., New York City time, on
Tuesday, May 15, 2001. BRT may extend this offer from time to time. If this
offer is extended, BRT will issue a press release announcing the extension on or
before 9:00 a.m., New York City time, on the first business day following the
date this Offer was scheduled to expire. See Section 1 under the caption "The
Tender Offer".
HOW DO I ACCEPT THIS OFFER AND TENDER MY SHARES?
To tender your shares, you must completely fill out the enclosed Letter of
Transmittal and deliver it, along with your share certificates and any other
documents required by the Letter of Transmittal, to American Stock Transfer &
Trust Company, the depositary for this offer, prior to the expiration of this
offer. If your shares are held through a broker, dealer or other nominee, your
shares can be tendered by your nominee through The Depository Trust Company. If
you cannot deliver all necessary documents to the depositary in time, you may be
able to complete and deliver to the depositary, in lieu of the missing
documents, the enclosed Notice of Guaranteed Delivery, provided you are able to
comply fully with its terms. See Section 2 under the caption "The Tender Offer".
IF I ACCEPT THIS OFFER, WHEN WILL I GET PAID?
Subject to the terms and conditions of this offer, we will pay for all
validly tendered and not withdrawn shares, subject to the proration provisions
noted in the offer to purchase, promptly after the expiration date of this
offer, subject to the satisfaction or waiver of the conditions to this offer, as
set forth in Section 4 under the caption "The Tender Offer". We will pay for
your validly tendered and not withdrawn shares by depositing the purchase price
with the depositary, which will act as your agent for the purpose of receiving
payments from us and transmitting such payments to you. In all cases, payment
for your tendered shares will be made only after timely receipt by the
depositary of certificates for such shares (or of a confirmation of a book-entry
transfer of the shares as described in Section 2 under the caption "The Tender
Offer"), a properly completed and duly executed letter of transmittal and any
other required documents for the shares.
CAN I WITHDRAW MY PREVIOUSLY TENDERED SHARES?
You may withdraw a portion of or all your tendered shares by delivering
written, manually executed or facsimile notice to the depositary at any time
prior to the expiration of this offer. Further, if BRT has not agreed to accept
your shares for payment within 60 days of the commencement of this offer, you
can withdraw them at any time after that 60-day period until BRT does accept
your shares for payment. Once shares are accepted for payment, they cannot be
withdrawn. The right to withdraw tendered shares will not apply to any
subsequent offering period, if one is included. Withdrawn shares may be
re-tendered by following the tender procedures before the offer expires. See
Section 3 under the caption "The Tender Offer".
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HAS THE BOARD OF TRUSTEES OF ENTERTAINMENT PROPERTIES APPROVED THIS OFFER?
The board of trustees has not approved this offer. Within 10 business days
after the date of this offer, Entertainment Properties is required by law to
publish, send or give to you (and file with the Securities and Exchange
Commission, or Commission) a statement as to whether it recommends acceptance or
rejection of this offer, that it has no opinion with respect to this offer or
that it is unable to take a position with respect to this offer.
IF I DO NOT TENDER BUT THIS OFFER IS SUCCESSFUL, WHAT WILL HAPPEN TO MY SHARES?
BRT believes that, if the offer is successful, the shares will continue to
be actively traded and Entertainment Properties will continue to be subject to
the Commission's rules relating to publicly held companies.
ARE APPRAISAL RIGHTS AVAILABLE IN THIS OFFER?
Appraisal rights are not available in this offer.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED TRANSACTIONS?
The receipt of cash in this offer in exchange for Entertainment Properties
shares will be a taxable transaction for U.S. federal income tax purposes and
may also be a taxable transaction under applicable state, local or foreign
income or other tax laws.
You should consult your tax advisor about the particular effect the
proposed transactions will have on your shares. See Section 5 under the caption
"The Tender Offer".
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On March 30, 2001, the last full trading day before we announced our
intentions to commence this offer, the shares of Entertainment Properties closed
on the NYSE at $14.24 per share. On April 9, 2001, the last full trading day
before the commencement of this offer, the shares of Entertainment Properties
closed on the NYSE at $13.92 per share. You should obtain a recent quotation for
your shares before you decide whether or not to tender. See Section 6 under the
caption "The Tender Offer".
WHO SHOULD I CALL WITH QUESTIONS?
You should call Georgeson Shareholder Communications Inc. at (800) 233-2064
(toll-free) with any questions you may have. Georgeson is acting as the
information agent for this offer. See the back cover of this offer for further
details.
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INTRODUCTION
BRT Realty Trust, a Massachusetts business trust (the "Purchaser"), hereby
offers to purchase up to 1,000,000 common shares of beneficial interest, par
value $0.01 per share ("Shares"), of Entertainment Properties Trust, a Maryland
real estate investment trust (the "Company"), at a price of $18.00 per Share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in this Offer to Purchase and
in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer").
Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Purchaser for customary clerical and
mailing expenses incurred by them in forwarding offering materials to their
clients. Shareholders of the Company ("Shareholders") who tender will not be
obligated to pay brokerage fees or commissions. Except as set forth in
Instruction 7 of the Letter of Transmittal, tendering Shareholders will not be
obligated to pay stock transfer taxes on the purchase of Shares pursuant to this
Offer. The Purchaser will pay all charges and expenses of American Stock
Transfer & Trust Company, as Depositary (the "Depositary"), and Georgeson
Shareholder Communications Inc., as Information Agent (the "Information Agent"),
incurred in connection with this Offer. See Section 16 under the caption "The
Tender Offer".
The purpose of this Offer is to increase, through the purchase of Shares,
our investment in the Company because we believe in the long-term value of the
Company and in the business of owning movie theaters. The Purchaser currently is
the beneficial owner of 1,355,600 Shares, representing approximately 9.2% of the
outstanding Shares, with a current value of approximately $18.9 million. The
Offer, at a premium to the current market price, demonstrates the Purchaser's
commitment to the Company. The additional investment will increase the
Purchaser's incentive to see the Shares perform well. This Offer will give
Shareholders an opportunity to sell some of their Shares at a price
substantially in excess of the current market price and still retain a
significant interest in the future growth of the Company. This Offer is being
made in connection with the Purchaser's solicitation of proxies to elect Fredric
H. Gould to the Board of Trustees of the Company (the "Board"). See Section 12
under the caption "The Tender Offer".
Certain federal income tax consequences of the sale of Shares pursuant to
this Offer are described in Section 5 under the caption "The Tender Offer".
The offer is conditioned on, among other things, (1) Fredric H. Gould's
election and qualification to the Board at the 2001 annual meeting of
Shareholders ("Annual Meeting") (the "Election Condition") and (2) the Board
granting to the Purchaser an unqualified exemption from the 9.8% beneficial
interest ownership limitation of Article Ninth of the Amended and Restated
Declaration of Trust of the Company ("Declaration of Trust") (the "Ownership
Limitation Condition") and from the voting rights restriction under the Maryland
Control Share Acquisition Act arising from the Purchaser owning more than 10% of
the Shares (the "Voting Rights Condition"). The Purchaser expressly reserves the
right, in its reasonable discretion, to waive any one or more of the conditions
to this Offer. See Section 1, Section 14 and Section 15 under the caption "The
Tender Offer".
The Election Condition shall be satisfied upon the election of Fredric H.
Gould to the Board at the Annual Meeting and his qualification as a member of
the Board. As of the date of this Offer, the Annual Meeting is scheduled to be
held at the Leawood Town Center Theatre, Leawood, Kansas, on Wednesday, May 9,
2001, at 10:00 a.m. local time. The Purchaser is currently soliciting proxies in
favor of the election of Mr. Gould.
Pursuant to the Company's Declaration of Trust, no person shall
beneficially own more than 9.8% of the Shares. The Declaration of Trust provides
that the Board may exempt a person from this ownership limit. The Purchaser
believes that the ownership limit is designed to prevent the Company from losing
desirable tax benefits derived from its status as a real estate investment trust
("REIT"). In particular, an entity cannot qualify as a REIT for federal income
tax purposes if it is "closely held," generally meaning that not more than 50%
of the value of a REIT's stock may be owned, directly or indirectly by five or
fewer individuals. The Purchaser has on numerous occasions informed the Company
that its REIT status would not be jeopardized
4
because the Purchaser is itself a REIT. The Purchaser's shareholder
configuration would not result in the Company losing its REIT status. The
Purchaser has stated that it would agree not to take any action that would
negatively affect the Company's REIT status including an agreement not to
purchase additional Shares if the purchase would jeopardize the status of the
Company as a REIT. To date, the Company has refused to grant the requested
exemption.
Generally, pursuant to the Maryland Control Share Acquisition Act, the
Purchaser will not have any voting rights with respect to any Shares that the
Purchaser acquires to the extent those Shares exceed 10% of the voting power of
all of the outstanding Shares. However, voting rights may be approved by the
affirmative vote of two-thirds of all of the Shares, excluding all Shares over
which the Purchaser, any officer of the Company or any trustee employed by the
Company exercises voting power. In addition, the Maryland Control Share
Acquisition Act will not restrict the voting rights of Shares if the acquisition
of those Shares has been approved or exempted by a provision in the Bylaws of
the Company and adopted at any time before the acquisition of those Shares.
Although entitled to under the Maryland Control Share Acquisition Act, the
Purchaser does not intend to call for a vote of Shareholders to approve its
voting rights. Instead, the Purchaser requests that the Board adopt a Bylaw
approving all acquisitions of Shares by the Purchaser in excess of Shares
representing 10% of the voting power of all of the outstanding Shares.
IN THE EVENT THE OFFER IS TERMINATED OR NOT CONSUMMATED, OR AFTER THE
EXPIRATION DATE OF THE OFFER, IN ACCORDANCE WITH APPLICABLE LAW THE PURCHASER
MAY EXPLORE ANY AND ALL OPTIONS WHICH MAY BE AVAILABLE. IN THIS REGARD, AND
AFTER EXPIRATION OR TERMINATION OF THE OFFER, THE PURCHASER MAY SEEK TO ACQUIRE
ADDITIONAL SHARES, THROUGH OPEN MARKET PURCHASES, PRIVATELY NEGOTIATED
TRANSACTIONS, A TENDER OFFER OR EXCHANGE OFFER OR OTHERWISE, UPON SUCH TERMS AND
AT SUCH PRICES AS THE PURCHASER MAY DETERMINE, WHICH, IN THE CASE OF SHARES, MAY
BE MORE OR LESS THAN THE PRICE TO BE PAID PER SHARE PURSUANT TO THE OFFER AND
COULD BE FOR CASH OR OTHER CONSIDERATION.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
SHAREHOLDERS OF THE COMPANY. ANY SUCH SOLICITATION WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
5
THE TENDER OFFER
1. TERMS OF THIS OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of this Offer (including, if
this Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for up to 1,000,000
Shares validly tendered and not withdrawn prior to the Expiration Date.
"Expiration Date" means 5:00 p.m., New York City time, on Tuesday, May 15, 2001,
unless and until the Purchaser, in its sole discretion, shall have extended the
period of time during which this Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which this Offer, as so
extended by the Purchaser, will expire. To the extent more than 1,000,000 Shares
are tendered in this Offer, the Purchaser will purchase 1,000,000 Shares in this
Offer on a pro rata basis (with appropriate adjustments to avoid purchase of
fractional Shares) based on the number of Shares properly tendered by each
Shareholder prior to or on the Expiration Date and not withdrawn. See Section 4.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission ("Commission"), the Purchaser expressly reserves the right,
in its sole discretion, at any time or from time to time, regardless of whether
or not any of the events set forth in Section 14 shall have occurred or shall
have been determined by the Purchaser to have occurred, (i) to extend the period
of time during which this Offer is open and thereby delay acceptance for payment
of, and the payment for, any Shares, by giving oral or written notice of such
extension to the Depositary and (ii) to waive any condition to this Offering or
to amend this Offer in any respect by giving oral or written notice of such
amendment to the Depositary. During any such extension of this Offering, all
Shares previously tendered and not properly withdrawn shall remain subject to
this Offer, subject to the right of a tendering Shareholder to withdraw his or
her Shares. Under no circumstances will interest be paid on the purchase price
for tendered shares, whether or not the Purchaser exercises its right to extend
this Offer.
If by the Expiration Date any or all of the conditions to this Offer have
not been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the applicable rules and regulations of the Commission,
to (a) terminate this Offer and not accept for payment or pay for any Shares and
return all tendered Shares to tendering Shareholders, (b) waive all the
unsatisfied conditions and accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (c) extend
this Offer and, subject to the right of Shareholders to withdraw Shares until
the Expiration Date, retain the Shares that have been tendered during the period
or periods for which this Offer is extended or (d) amend this Offer.
The rights reserved by the Purchaser in the foregoing two paragraphs are in
addition to the Purchaser's rights to terminate this Offer pursuant to Section
14. There can be no assurance that the Purchaser will exercise its right to
extend this Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-l(d) under the Securities and Exchange Act of 1934, as amended
("Exchange Act"), requires that the announcement be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(d) and 14e-l(d) under the Exchange Act), any material
change in the information published, sent or given to Shareholders in connection
with this Offer must be promptly disseminated to them in a manner reasonably
designed to inform Shareholders of such change, and without limiting the manner
in which the Purchaser may choose to make any public announcement, the Purchaser
will not have any obligation to publish, advertise or otherwise communicate any
such public announcement other than by making a release to the Dow Jones News
Service. "Business day" means any day other than Saturday, Sunday or a federal
holiday and shall consist of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
If the Purchaser extends this Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or is unable to pay for Shares pursuant to this
Offer for any reason, then, without prejudice to the Purchaser's rights under
this Offer,
6
the Depositary may retain tendered shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering Shareholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of this Offer.
If the Purchaser makes a material change in the terms of this Offer or the
information concerning this Offer or waives a material condition of this Offer,
the Purchaser will disseminate additional tender offer materials and extend this
Offer to the extent required by Rules 14d-4(c), 14d-6(c) and 14e-l(d) under the
Exchange Act. The minimum period during which this Offer must remain open
following material changes in the terms of this Offer or information concerning
this Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the terms or information. With respect to a change
in price or a change in percentage of securities sought, a minimum 10 business
day period is generally required to allow for adequate dissemination to
Shareholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in this
Offer, such increase will be applicable to all Shareholders whose Shares are
accepted for payment pursuant to this Offer regardless of when such Shares were
tendered.
On March 16, 2001, the Purchaser requested, pursuant to Section 2-513 of
the Maryland General Corporation Law and Section 8-402 of the Maryland Real
Estate Investment Trust Law, a Shareholder list for communicating with
Shareholders. On April 2, 2001, the Company made the Shareholder list available
to the Purchaser. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares, and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Shareholder
lists, or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
2. PROCEDURES FOR TENDERING SHARES
VALID TENDER. For a Shareholder to validly tender Shares pursuant to this
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) relating to the Shares tendered, together with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message (as defined below), and any other required documents, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date and either certificates
for tendered Shares ("Share Certificates") must be received by the Depositary at
one of such addresses or such Shares must be delivered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined below) received by the Depositary), in each case prior
to the Expiration Date, or (b) the tendering Shareholder must comply with the
guaranteed delivery procedures set forth below.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of this Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined below), and any other required documents, must,
in any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering Shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." Delivery
of documents to the book-entry transfer facility in accordance with such
book-entry transfer facility's
7
procedures does not constitute delivery to the depositary. "Agent's Message"
means a message transmitted by the Book-Entry Transfer Facility to, and received
by, the Depositary and forming a part of a Book-Entry Confirmation, which states
that such Book-Entry Transfer Facility has received an express acknowledgment
from the participant in such Book-Entry Transfer Facility tendering the Shares
that such participant has received and agrees to be bound by the terms of the
Letter of Transmittal and that the Purchaser may enforce such agreement against
such participant.
The method of delivery of Share Certificates, the Letter of Transmittal and
all other required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering Shareholder. Share
Certificates, the Letter of Transmittal and all other required documents will be
deemed delivered only when actually received by the Depositary (including, in
the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
SIGNATURE GUARANTEES. No signature guarantee is required on a Letter of
Transmittal if either (a) the Letter of Transmittal is signed by the registered
holder (which term, for purposes of this Section, includes any participant in
the Book-Entry Transfer Facility's system whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (b) such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange ("NYSE")
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on a Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instructions 1
and 5 to the Letter of Transmittal. If Share Certificates are registered in the
name of a person other than the signer of a Letter of Transmittal, or if payment
is to be made or Share Certificates for Shares not tendered or not accepted for
payment are to be returned to a person other than the registered holder of the
Share Certificates surrendered, the tendered Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders appear on the Share Certificates, with
the signatures on the Share Certificates or stock powers guaranteed as described
above. See Instructions 1 and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a Shareholder desires to tender Shares pursuant to
this Offer and such Shareholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shareholder's tender may be
effected if all the following conditions are met:
- the tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Purchaser, is received by the
Depositary, as provided below, prior to the Expiration Date; and
- the Share Certificates representing all tendered Shares, in proper form
for transfer (or a Book-Entry Confirmation with respect to all such
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the NYSE is open
for business.
A Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery. The method of delivery of Shares and all other
required documents, including through the Book-Entry Transfer Facility, is at
your option and risk, and the delivery will be deemed to be made only when
actually received by the Depositary. If Share Certificates are sent by mail, we
recommend registered mail with return receipt requested, properly insured.
8
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to this Offer will in all cases be made only after timely
receipt by the Depositary of (a) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or
facsimile thereof) relating to the Shares tendered, properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (c) any other documents required by
the Letter of Transmittal. Accordingly, tendering Shareholders may be paid at
different times depending upon when Share Certificates or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
Under no circumstances will interest be paid on the purchase price of the shares
to be paid by the Purchaser, regardless of any extension of this Offer or any
delay in making such payment.
The Purchaser's acceptance for payment of Shares validly tendered pursuant
to this Offer will constitute a binding agreement between the tendering
Shareholder and the Purchaser upon the terms and subject to the conditions of
this Offer.
GRANT OF PROXY. By executing a Letter of Transmittal as set forth above, a
tendering Shareholder irrevocably appoints designees of the Purchaser as such
Shareholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such Shareholder's rights with respect to the Shares tendered by such
Shareholder and accepted for payment by the Purchaser (and any and all other
Shares or other securities issued or issuable in respect of such Shares). All
such proxies will be irrevocable and considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts such Shares for payment pursuant to this Offer. Upon
such acceptance for payment, all prior powers of attorney, proxies and consents
given by such Shareholder with respect to such Shares or other securities will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be deemed
effective). The designees of the Purchaser will thereby be empowered to exercise
all voting and other rights with respect to such Shares and other securities in
respect of any annual, special, adjourned or postponed meeting of the Company's
Shareholders, actions by written consent in lieu of any such meeting or
otherwise, as they in their sole discretion deem proper. The Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting, consent and other rights with
respect to such Shares and other securities or rights, including voting at any
meeting of Shareholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tendered Shares determined by them not
to be in proper form or the acceptance for payment of or payment for which may,
in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also
reserves the absolute right to waive any defect or irregularity in the tender of
any Shares of any particular Shareholder whether or not similar defects or
irregularities are waived in the case of other Shareholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in such tendered Shares or
incur any liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of this Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding on all
parties.
BACKUP WITHHOLDING. Under the federal income tax laws, the Depositary will
be required to withhold 31% of the amount of any payments made to certain
Shareholders pursuant to the Offer. In order to avoid such backup withholding,
you must provide the Depositary with your correct taxpayer identification number
and certify that you are not subject to such backup withholding by completing
the Substitute Form W-9 included in the Letter of Transmittal. If you are a
non-resident alien or foreign entity not subject to back-up withholding, you
must give the Depositary a completed Form W-8 Certificate of Foreign Status
prior to receipt of any payment.
LOST CERTIFICATES. If the Share Certificates that a registered holder
wants to surrender have been lost or destroyed, that fact should be indicated in
the appropriate space on the Letter of Transmittal. Certain
9
representations and agreements contained in the Letter of Transmittal are
required to be made by tendering Shareholders who have lost their Share
Certificates. In addition, the Information Agent or Depositary may forward to
such registered holders additional documentation necessary to be completed in
order to effectively surrender such lost or destroyed certificates. See
Instruction 3 to the Letter of Transmittal. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchaser, in its sole discretion,
whose determination will be final and binding on all parties.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to this Offer are irrevocable. Shares tendered pursuant to this Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless such Shares are accepted for payment and paid for by
the Purchaser pursuant to this Offer, they may also be withdrawn at any time
after June 8, 2001 (or such later date as may apply in case this Offer is
extended).
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of the Share
Certificates, the serial numbers shown on the Share Certificates must be
submitted to the Depositary and, unless the Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedure for book-entry transfer as set forth in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of this Offer. However, withdrawn Shares may be retendered by again following
one of the procedures described in Section 2 at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT; PRORATION
Upon the terms and subject to the conditions of this Offer (including, if
this Offer is extended or amended, the terms and conditions of any such
extension or amendment), the Purchaser will accept for payment and will pay for
up to 1,000,000 Shares validly tendered and not properly withdrawn in accordance
with Section 3 promptly after the Expiration Date. To the extent more than
1,000,000 Shares are tendered in this Offer, the Purchaser will purchase only
1,000,000 Shares in this Offer on a pro rata basis (with appropriate adjustments
to avoid purchase of fractional Shares) based on the number of Shares properly
tendered by each Shareholder prior to or on the Expiration Date and not
withdrawn. See Section 3. All questions as to the satisfaction of such terms and
conditions will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. See Section 1 and
Section 14. The Purchaser expressly reserves the right, in its sole discretion,
to delay acceptance for payment of or payment for Shares in order to comply in
whole or in part with any applicable law. See Section 14. Any such delays will
be effected in compliance with Rule 14e-l(c) under the Exchange Act (relating to
a bidder's obligation to pay for or return tendered securities promptly after
the termination or withdrawal of such bidder's offer).
10
In all cases, payment for Shares accepted for payment pursuant to this
Offer will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) the Letter of Transmittal (or facsimile thereof) relating to the
Shares tendered, properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (c) any other documents required by the Letter of Transmittal. The
per Share consideration paid to any Shareholder pursuant to this Offer will be
the highest per Share consideration paid to any other Shareholder pursuant to
this Offer.
For purposes of this Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to this Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
validly tendering Shareholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering Shareholders. Under no
circumstances will interest be paid on the purchase price of the shares to be
paid by the Purchaser, regardless of any extension of this Offer or any delay in
making such payment. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering Shareholders, the Purchaser's obligation
to make such payment shall be satisfied and tendering Shareholders must
thereafter look solely to the Depositary for payment of amounts owed to them by
reason of the acceptance for payment of Shares pursuant to this Offer. The
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale to them or their order pursuant to this Offer, except as otherwise provided
in Instruction 7 of the Letter of Transmittal, as well as any charges and
expenses of the Depositary and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to this
Offer for any reason, then, without prejudice to the Purchaser's rights under
this Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering Shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to this Offer for any
reason, including proration, Share Certificates for any such unpurchased Shares
will be returned, without expense to the tendering Shareholder (or, in the case
of Shares delivered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedure set forth
in Section 2, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of this Offer.
If more than the 1,000,000 Shares are validly tendered and not withdrawn
prior to the Expiration Date, we will accept payment and pay for only 1,000,000
Shares on a pro rata basis based on the number of Shares properly tendered by
each Shareholder prior to or on the Expiration Date and not withdrawn.
Preliminary results of proration will be announced by press release as promptly
as practicable after the Expiration Date. Shareholders may obtain such
preliminary information from the Information Agent and may also be able to
obtain such preliminary information from their brokers.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to this Offer will be a taxable transaction
for federal income tax purposes under the Internal Revenue Code of 1986, as
amended (the "Code"), and may also be a taxable transaction under applicable
state, local or foreign income or other tax laws. Generally, for federal income
tax purposes, a tendering Shareholder will recognize gain or loss equal to the
difference between the amount of cash received by the Shareholder pursuant to
this Offer and the aggregate tax basis in the Shares tendered by the Shareholder
and purchased pursuant to this Offer. If Shares are held by a Shareholder as
capital assets (i.e., generally assets held for investment), gain or loss
recognized by the Shareholder with respect to such Shares will be capital gain
or loss.
11
Capital gains recognized by an individual Shareholder will generally be
taxed at a maximum federal marginal tax rate of 20% if the Shareholder's holding
period for the shares exceeds 12 months. Capital gains recognized by a corporate
Shareholder will be taxed at a maximum federal marginal tax rate of 35%.
The foregoing discussion is included for general information only and may
not be applicable with respect to shares received pursuant to the exercise of
employee stock options or otherwise as compensation or with respect to holders
of Shares who are subject to special tax treatment under the Code, such as
non-U.S. persons, insurance companies, tax-exempt organizations, financial
institutions, broker-dealers and Shareholders who hold their Shares as part of a
hedge, straddle or conversion transaction, and otherwise may not apply to a
holder of Shares in light of particular circumstances. You are urged to consult
your tax advisors to determine the particular tax consequences to you (including
the application and effect of any state, local or foreign income and other tax
laws) of this Offer.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are quoted on the NYSE. The following table sets forth for each
of the periods indicated, the high and low trading prices per Share on the NYSE
based on published financial sources:
- ---------------
* On March 16, 2001, the Company announced that it raised its quarterly dividend
to $0.45 from $0.44.
On March 30, 2001, the last full trading day before we announced our
intention to commence this Offer, the Shares closed on the NYSE at $14.24 per
Share. On April 9, 2001, the last full trading day before the commencement of
this Offer, the Shares closed on the NYSE at $13.92. We urge you to obtain
current market quotations for the Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN SECURITIES.
MARKET FOR THE SHARES. Based upon the Company's proxy statement dated
April 2, 2001, there were 14,723,726 Shares outstanding as of March 26, 2001.
Based on the Company's Annual Report on Form 10-K for the year ended December
31, 2000 ("2000 Annual Report"), there were 7,174 holders of record of Shares at
March 26, 2001. The purchase of Shares pursuant to this Offer may reduce the
number of holders of Shares and the number of Shares that might otherwise trade
publicly and could adversely affect the liquidity and market value of the
remaining Shares held by the public. However, the Purchaser does not expect an
adverse effect on liquidity and market value because the 1,000,000 Shares
subject to this Offer represent approximately 6.8% of the outstanding Shares.
NYSE LISTING. The Purchaser expects that, even if the Offer is successful,
the Shares will continue to meet the requirements for listing in the NYSE.
However, there is a remote possibility that, depending upon
12
the number of Shares purchased pursuant to the Offer and the number of holders
participating in the Offer, the Shares may no longer meet the requirements for
continued listing in the NYSE. According to the published guidelines of the
NYSE, the NYSE would normally give consideration to delisting the Shares when,
among other things:
- the total number of holders of Shares is less than 400,
- the total number of holders of Shares is less than 1,200 and the average
monthly trading volume over the most recent 12 month period is less than
100,000 Shares,
- the number of publicly held Shares (excluding the holdings of officers,
directors and their families and other concentrated holdings of 10% or
more) is less than 600,000,
- the Company's total global market capitalization is less than $50.0
million and the total Shareholders' equity is less than $50.0 million,
- the Company's average global market capitalization over a consecutive
30-trading-day period is less than $15.0 million, or
- the average closing price per Share is less than $1.00 over a consecutive
30-trading-day period.
If, as a result of the purchase of Shares pursuant to the Offer, the Shares
no longer meet the requirements for continued listing in NYSE and the listing of
Shares is discontinued, the market for the Shares could be adversely affected.
In the event that the Shares are delisted from NYSE, it is possible that the
Shares would continue to trade in the over-the-counter market and that the price
or other quotations may still be available from other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon such factors as the number of holders and/or the aggregate
market value of such Shares remaining at such time, the interest in maintaining
a market in such Shares on the part of securities firms, the possible
termination of registration of such Shares under the Exchange Act, as described
below, and other factors. The Purchaser cannot predict whether a reduction in
the number of Shares that might otherwise trade publicly would have an adverse
or beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the price
paid in this Offer.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act and the Purchaser expects continued registration after the Offer.
However, there is a remote possibility that, the Shares may be eligible for
deregistration either prior to or after this Offer depending upon certain
circumstances, including the number of recordholders of the Shares at such time.
Registration of the Shares under the Exchange Act may be terminated upon
application of the Company to the Commission if the Shares are neither listed on
a national securities exchange nor held by 500 or more holders of record, where
total assets of the Company have not exceeded $10 million on the last day of the
Company's three most recent fiscal years. In order to be eligible to effect such
termination, however, the Company must be current on its periodic reporting
requirements under the Exchange Act. The Purchaser currently has no intention of
recommending the deregistration of the Shares.
Termination of registration of the Shares under the Exchange Act would,
assuming the Company were in compliance with its reporting obligations,
substantially reduce the information required to be furnished by the Company to
its Shareholders and to the Commission. Termination would also make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with Shareholders' meetings and the related
requirement of furnishing an annual report to Shareholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities in compliance with Rule 144 or 144A promulgated under the Securities
Act of 1933, as amended, would be eliminated.
MARGIN SECURITIES. The Shares are currently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other
13
things, of allowing brokers to extend credit on the collateral of such Shares
for the purpose of buying, carrying or trading in securities. The Purchaser
expects that the Shares will continue to be "margin securities" after the Offer.
However, there is a remote possibility that, following the purchase of Shares
pursuant to this Offer or any subsequent open market or privately negotiated
purchases, depending upon factors such as the number of record holders of the
Shares and the number and market value of publicly held Shares, the Shares might
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and therefore no longer be used as collateral for
purposes of loans made by brokers. In addition, if registration of the Shares
under the Exchange Act is terminated, the Shares would no longer be "margin
securities" or eligible for listing or Nasdaq National Market reporting.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Maryland real estate investment trust. The principal
executive office of the Company is located at 30 Pershing Road, Union Station,
Suite 201, Kansas City, Missouri 64108 and its telephone number is (816)
472-1700. According to the 2000 Annual Report, the Company is a
self-administered real estate investment trust. As of December 31, 2000, the
Company's real estate portfolio was comprised of 26 megaplex theatre properties
located in 11 states, and one entertainment-themed retail center development
property located in Westminster, Colorado. The Company also owns land parcels
and related properties adjacent to several of its theatre properties. The
Company's theatre properties are leased to leading theatre operators.
AVAILABLE INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's trustees and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Shareholders and filed with the Commission. Such reports,
proxy statements and other information, may be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N. W.,
Washington, DC 20549, and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, IL 60661. Such reports, proxy
statements and other information may also be obtained at the Web site that the
Commission maintains at http://www.sec.gov. Copies of such information should be
obtainable, by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 450 Fifth Street, N. W.,
Washington, DC 20549.
COMPANY INFORMATION. The information concerning the Company contained in
this Offer to Purchase has been taken from or based upon publicly available
documents on file with the Commission and other publicly available information.
Although the Purchaser has no knowledge that any such information is untrue, the
Purchaser takes no responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER
The Purchaser was formed in 1972 under the laws of the Commonwealth of
Massachusetts. It is principally engaged in the business of originating and
holding for its own account senior and junior real estate mortgage loans secured
by income producing real property. See Section 11. The principal executive
office of the Purchaser is located at 60 Cutter Mill Road, Great Neck, New York
11021 and its telephone number is (516) 466-3100. As of the date of this Offer
to Purchase, the Purchaser is the beneficial owner of 1,355,600 Shares, which
constitute approximately 9.2% of the Shares outstanding as of the date of this
Offer to Purchase.
Except as set forth in this Offer to Purchase (including the Schedules
hereto), none of the Purchaser nor, to the best knowledge of the Purchaser, any
of the persons listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the
14
Company, including, without limitation, any contract, arrangement, understanding
or relationship concerning the transfer of the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase (including the Schedules hereto),
none of the Purchaser nor, to the best knowledge of the Purchaser, any of the
persons listed in Schedule I hereto has had any transactions with the Company,
or any of its executive officers, trustees or affiliates that would require
reporting under the rules of the Commission. See Section 11.
Except as set forth in this Offer to Purchase (including the Schedules
hereto), there have been no contacts, negotiations or transactions between the
Purchaser or, to the best knowledge of the Purchaser, any of the persons listed
in Schedule I hereto, on the one hand, and the Company or its executive
officers, trustees or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
election of trustees, or a sale or other transfer of a material amount of assets
that would require reporting under the rules of the Commission. See Section 11.
There have been no transactions in the Shares that were effected during the
sixty days prior to the date of this Offer to Purchase by the Purchaser or any
of its affiliates.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase 1,000,000
Shares pursuant to this Offer and to pay related fees and expenses incurred in
connection with this Offer, is estimated at $18,500,000. The Purchaser has
sufficient cash and cash equivalents available to pay for the Shares. Because
the Purchaser has sufficient resources to fund this Offer, the Purchaser has no
alternative financing arrangements.
11. BACKGROUND OF THIS OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY
The Purchaser began buying Shares in October 1999 and on March 15, 2000
filed a Schedule 13D with the Commission indicating that the Purchaser
beneficially owned 939,600 Shares, representing approximately 6.27% of the
outstanding Shares. Thereafter, David Brain, President and Chief Executive
Officer of the Company, initiated contact with the Purchaser. This led to a
series of conversations and meetings in April 2000 between Frederic H. Gould,
the Chairman and Chief Executive Officer of the Purchaser and Mr. Brain. Jeffrey
Gould, the President and Chief Operating Officer of the Purchaser, and Peter
Brown, the Chairman of the Company, also participated in some of these meetings.
At these meetings, the parties discussed in general terms the business and
activities of the Company. The parties discussed the possibility of an
additional investment by the Purchaser in the Company and the possibility of a
joint venture between the Purchaser and the Company with respect to theater
properties owned by AMC Entertainment, Inc. ("AMC"). AMC is the largest tenant
of the Company. The Purchaser indicated that it would be willing to make a more
significant investment in the Company if this significant investment was made in
conjunction with representation on the Company's Board. Additionally, the
Purchaser indicated that prior to making the investment, the Purchaser would
require the Company to waive the provisions of the Company's Declaration of
Trust prohibiting any person from owning more than 9.8% of the Shares. There was
no agreement between the parties.
During the week of May 8, 2000, Mr. Brain called Mr. Gould and indicated
that the Company was interested in discussing with the Purchaser a transaction
pursuant to which the Purchaser would: acquire a substantial number of Shares,
subject to a "standstill agreement" which would prohibit distribution of the
Shares for a period of time; entitle the Purchaser to designate a certain number
of nominees to the Board; and waive the 9.8% limitation on Share ownership. The
discussions revolved around the issuance of a to-be-decided upon number of
Shares for an aggregate purchase price between $80 million and $100 million. The
parties also discussed possible uses of this additional capital by the Company,
including the purchase of Shares in the market or the purchase of additional
real property leased to theater operators. The parties also discussed a change
in the chairmanship of the Company, which would allow for more comfortable
future transactions with AMC because Mr. Brown is the Chairman of both the
Company and AMC. There was no agreement between the parties.
15
At the end of May (or early June), Mr. Gould met with Mr. Brain and
representatives of an investment bank asked to attend the meeting by Mr. Brain.
At this meeting, Mr. Gould suggested that the Purchaser buy Shares from the
Company directly for $15.25 per Share in order to provide the Company with the
capital required to purchase properties at the attractive yields then available.
The Purchaser also proposed to permit all other Shareholders to buy additional
Shares on a pro rata basis at the same $15.25 per Share price. Again, the
Purchaser required that any such investment be made in conjunction with a waiver
of the 9.8% limitation on Share ownership and Board representation. No aggregate
investment amount was discussed. There was no agreement between the parties. On
May 31, 2000, the Purchaser, after numerous discussions with the Company, sent a
letter to the Company with regard to exempting the Purchaser from the 9.8% share
ownership limitation in the Declaration of Trust. The Purchaser stated that
because its ownership is "sprinkled" down to the Purchaser's shareholders, there
would be no negative results on the Company's REIT status if the Purchaser
exceeds the ownership limitation.
On July 20, 2000, Mr. Gould met with four members of the Board -- Messrs.
Brown and Brain, Robert J. Druten and Scott H. Ward; Fred L. Kennon, the Chief
Financial Officer of the Company; and Gregory K. Silvers, the General Counsel of
the Company, also attended the meeting. A number of the participants only stayed
for a brief period of time. The parties discussed the following issues:
- The Purchaser was then one of the few investors that had confidence in
the business of the Company and that was willing to invest substantial
amounts in the Company.
- The Purchaser's belief that its additional investment in the Company
could be helpful for the Company to obtain first mortgage financing in
order to grow the business.
- The Purchaser expressed its concern about the conflict of interest
arising because Mr. Brown, the Chairman of the Company, is also the
Chairman of AMC, the Company's largest tenant.
- The parties discussed the Purchaser's prior proposal to purchase Shares
directly from the Company at $15.25 per Share combined with allowing all
other Shareholders to purchase a pro rata number of Shares at the same
price and entering into a "standstill agreement" that would provide for
Jeffrey Gould and Fredric Gould to become members of the Board and
require that the Purchaser vote for the Board's designees for a period of
time; and the waiver by the Board of the 9.8% Share ownership limitation.
The parties also discussed the Company's use of the funds from this
investment, including the repurchase of Shares.
- The Purchaser also requested a waiver of the 9.8% share ownership
limitation so that the Purchaser could buy more Shares in the market,
which the Purchaser believed would have had a positive impact on the
Share price because it would have resulted in a potential buyer
interested in a large number of Shares.
- The parties discussed a joint venture to purchase movie theaters with
funds provided primarily by the Purchaser. These discussions did not
advance because the Purchaser insisted on the right to merge the joint
venture into the Company or convert the equity in the joint venture into
Shares at some time in the future.
There was no agreement between the parties.
The Purchaser sent a second letter to the Company on September 6, 2000,
restating its request for an exemption from the ownership limitation. The letter
reiterated the Purchaser's contention that by neglecting to grant its request
for a waiver of the ownership limitation, the Board had precluded the Purchaser
from making additional purchases of Shares in the open market to the detriment
of Shareholders as the stock's price retreated.
On September 11, 2000, Mr. Gould had a telephone conversation with Mr.
Brain in which Mr. Brain indicated that the Board at its October 6th meeting
would consider the various proposals that the Purchaser had to improve
Shareholder value.
16
On September 27, 2000, the Purchaser sent a third letter to the Company in
which it proposed to make an additional $20 million investment in the Company by
acquiring Shares at $15.00 per Share which at the time represented approximately
a 40% premium above the current market price. The Purchaser stated that the
acquisition of the Shares would not jeopardize the Company's REIT status because
the Purchaser is a REIT. The Purchaser also stated that it would agree not to
take any action that would negatively affect the Company's REIT status including
an agreement not to purchase any additional Shares if the purchase would
jeopardize the status of the Company as a REIT. Additionally, the Purchaser
proposed that the Board be expanded to include two designees of the Purchaser
who have experience in real property matters and stated that if the Company
continued to reject these proposals, the Purchaser would attempt to seek the
support of the Shareholders. The Purchaser requested a direct meeting of Mr.
Gould with the Board in which to discuss and explain all of its proposals.
In a telephone conversation between Mr. Brain and Mr. Gould on October 2,
2000, Mr. Brain stated that he believed that the Purchaser's proposals did not
offer anything new beyond that which had already been discussed with members of
the Board. On October 4, 2000, the Company further responded to the Purchaser's
September 27th letter stating that it would consider the Purchaser's proposals
but denied Mr. Gould's request to attend and make a presentation at the Board
meeting. On October 6, 2000, the Company further stated that it would not grant
an exemption of the 9.8% share ownership limitation and that it would not issue
Shares to the Purchaser at the requested price.
On January 25, 2001, in direct response to a request made by Mr. Brain in a
telephone call that he made to Mr. Gould, the Purchaser sent a written request
to the Board to be elected as a member of the Board in addition to the Board
members then in office. Mr. Brain had also stated that upon receipt of such a
letter the Company would send some written questions to the Purchaser. The
Company did not respond to this letter and no questions were ever received by
the Purchaser. Thereafter, the Purchaser submitted advance notice to the Company
pursuant to its organizational documents on February 7, 2001 and again on
February 20, 2001 of its intention to solicit Shareholders for the election of
its nominee to the Board. On March 30, 2001, the Purchaser commenced soliciting
proxies to elect Mr. Gould to the Board at the Annual Meeting.
12. PURPOSE OF THIS OFFER
The purpose of this Offer is to increase the Purchaser's investment in the
Company because the Purchaser believes in the long-term value of the Company and
in the business of owning movie theaters. The Purchaser currently is the
beneficial owner of 1,355,600 Shares, representing approximately 9.2% of the
outstanding Shares, with a current value of approximately $18.9 million. The
Offer, at a premium to the current market price, demonstrates the Purchaser's
commitment to the Company. The additional investment will increase the
Purchaser's incentive to see the Shares perform well. This Offer will give
Shareholders an opportunity to sell some of their shares at a price
substantially in excess of the current market price and still retain a
significant interest in the future growth of the Company. This Offer is being
made in connection with the Purchaser's solicitation of proxies to elect Mr.
Gould to the Board.
Except as set forth in this Offer to Purchase, the Purchaser has no current
plans or proposals that would result in: an extraordinary corporate transaction,
such as a merger, reorganization or liquidation involving the Company or any of
its subsidiaries; a purchase, sale or transfer of any material amount of assets
of the Company or any of its subsidiaries, any material change in the present
dividend rate or policy of the Company or indebtedness or capitalization of the
Company; or any other material change in the Company's corporate structure or
business. However, to the extent information is available, the Purchaser intends
to continuously evaluate the Company and its prospects, and the Purchaser
reserves the right to propose changes in the future.
13. DIVIDENDS AND DISTRIBUTIONS
If, on or after April 9, 2001, the Company should (a) split, combine or
otherwise change the Shares or its capitalization from that disclosed in the
2000 Annual Report, (b) acquire or otherwise cause a reduction in the number of
outstanding Shares or other securities or (c) issue or sell additional Shares
(other than the issuance of Shares under option as disclosed in the 2000 Annual
Report, in accordance with the terms of such options as such terms have been
publicly disclosed in the 2000 Annual Report, shares of any other class of
capital stock, other voting securities or any securities convertible into, or
rights, warrants or options,
17
conditional or otherwise, to acquire any of the foregoing), then, subject to the
provisions of Section 14, the Purchaser, in its sole discretion, may make such
adjustments as it deems appropriate in the Offer Price and other terms of this
Offer, including without limitation, the number or type of securities offered to
be purchased.
If, after April 9, 2001, the Company should declare or pay any cash
dividend, other than regular dividends as announced on March 16, 2001, on the
Shares or other distribution on the Shares, or issue with respect to the Shares
any additional Shares, shares of any other class of capital stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, payable or
distributable to Shareholders of record on a date prior to the transfer of the
Shares purchased pursuant to this Offer to Purchase, or their nominees or
transferees on the Company's stock transfer records, then, subject to the
provisions of Section 14, (a) the Offer Price may, in the sole discretion of the
Purchaser, be reduced by the amount of any such cash dividend or cash
distribution and (b) the whole of any such noncash dividend, distribution or
issuance to be received by the tendering Shareholders will (i) be received and
held by the tendering Shareholders for the account of the Purchaser and will be
required to be promptly remitted and transferred by each tendering Shareholder
to the Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance and
subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such noncash dividend, distribution, issuance or
proceeds and may withhold the entire Offer Price or deduct from the Offer Price
the amount or value thereof, as determined by the Purchaser in its sole
discretion.
14. CERTAIN CONDITIONS TO THIS OFFER
Notwithstanding any other provision of the Offer, we are not required to
accept for payment or pay for any Shares, and we may terminate the Offer, prior
to the Expiration Date, if either of the Election Condition, the Ownership
Limitation Condition or the Voting Rights Condition, in the Purchaser's sole
discretion, has not been satisfied, or any waiting periods under applicable
antitrust laws shall not have expired or been terminated. This Offer is not
conditioned on the receipt of financing.
Notwithstanding any other provisions of this Offer, and in addition to (and
not in limitation of) the Purchaser's right to extend and amend this Offer at
any time in its sole discretion, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-l(c) under the Exchange Act (relating to a
bidder's obligation to pay for or return tendered securities promptly after
termination or withdrawal of such bidder's offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered Shares, may terminate or amend this Offer as to any
Shares not then paid for, if any of the following events shall occur or be
deemed by the Purchaser to have occurred after April 9, 2001 and on or prior to
the Expiration Date:
- There shall be threatened, instituted or pending any action, proceeding,
application or counterclaim by any government or governmental, regulatory
or administrative authority or agency, domestic, foreign or supranational
(each, a "Governmental Entity"), or by any other person, domestic or
foreign, before any court or Governmental Entity, (i) (A) challenging or
seeking to, or which is reasonably likely to, make illegal, delay or
otherwise directly or indirectly restrain or prohibit, or seeking to, or
which is reasonably likely to, impose voting, procedural, price or other
requirements, in addition to those required by Federal securities laws
(each as in effect on the date of this Offer to Purchase), in connection
with the making of this Offer, the acceptance for payment of, or payment
for, some of or all the Shares by the Purchaser or any other affiliate of
the Purchaser, (B) seeking to obtain material damages or (C) otherwise
directly or indirectly relating to this Offer, (ii) seeking to prohibit
the ownership or operation by the Purchaser or any other affiliate of the
Purchaser of all or any portion of the Shares or of the business or
assets of the Company or any other affiliate of the Company or to compel
the Purchaser, or any other affiliate of the Purchaser, to dispose of or
hold separate the Shares or all or any portion of the business or assets
of the Company or any other affiliate of the Company or seeking to impose
any limitation on the ability of the Purchaser or any other affiliate of
the Purchaser
18
to conduct such business or own such assets, (iii) seeking to impose or
confirm limitations on the ability of the Purchaser or any other
affiliate of the Purchaser effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by the Purchaser or any other affiliate of
the Purchaser on all matters properly presented to the Shareholders, (iv)
seeking to require divestiture by the Purchaser or any other affiliate of
the Purchaser of any Shares, (v) seeking any material diminution in the
benefits expected to be derived by the Purchaser or any other affiliate
of the Purchaser as a result of this Offer, or (vi) otherwise directly or
indirectly relating to this Offer or which otherwise, in the sole
judgment of the Purchaser, might materially adversely affect the Company
or the Purchaser or any other affiliate of the Purchaser or the value of
the Shares;
- There shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to
(i) the Purchaser or any other affiliate of the Purchaser or the Company
or (ii) this Offer by any government, legislative body or court, or
Governmental Entity, that, in the sole judgment of the Purchaser, might,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (vi) of the immediately preceding bullet paragraph;
- The Purchaser shall have learned of any change that has, since the filing
of the 2000 Annual Report, occurred or been threatened (or any condition,
event or development shall have occurred or been threatened involving a
prospective change) in the business, properties, assets, liabilities,
capitalization, Shareholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company that, in the sole judgment of the Purchaser, is or may be
materially adverse to the Company, or the Purchaser shall have become
aware of any facts that, in the sole judgment of the Purchaser, have or
may have material adverse significance with respect to either the value
of the Company or the value of the Shares to the Purchaser;
- There shall have occurred or been threatened (i) any general suspension
of trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) any extraordinary or material adverse change in the
financial markets or major stock exchange indices in the United States,
(iii) any material change in United States currency exchange rates or any
other currency exchange rates or a suspension of, or limitation on, the
markets therefor, (iv) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (v) any
limitation (whether or not mandatory) by any government, domestic,
foreign or supranational, or Governmental Entity on, or other event that,
in the sole judgment of the Purchaser, might affect the extension of
credit by banks or other lending institutions, (vi) a commencement of a
war or armed hostilities or other national or international calamity
directly or indirectly involving the United States or (vii) in the case
of any of the foregoing existing at the time of the commencement of this
Offer, a material acceleration or worsening thereof;
- The Company shall have (i) split, combined or otherwise changed, or
authorized or proposed a split, combination or other change of the Shares
or its capitalization, (ii) acquired or otherwise caused a reduction in
the number of, or authorized or proposed the acquisition or other
reduction in the number of, outstanding Shares or other securities, (iii)
issued or sold, or authorized or proposed the issuance, distribution or
sale of, additional Shares (other than the issuance of Shares under
option prior to the filing of the 2000 Annual Report, in accordance with
the terms of such options as such terms have been publicly disclosed in
the 2000 Annual Report, shares of any other class of capital stock, any
other class of preferred stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or
otherwise, to acquire, any of the foregoing), (iv) declared or paid, or
proposed to declare or pay, any dividend or other distribution, whether
payable in cash, securities or other property, on or with respect to any
shares of capital stock of the Company, except for regular dividends as
announced on March 16, 2001, (v) altered or proposed to alter any
material term of any outstanding security, (vi) authorized, recommended,
proposed or entered into an agreement, agreement in principle or
arrangement or understanding with respect to any release or
relinquishment of any material contractual or other right of the Company,
or (vii) amended or authorized or proposed any amendment
19
to, the Declaration of Trust or Bylaws, or the Purchaser shall become aware that
the Company shall have proposed or adopted any such amendment that was not
disclosed in publicly available filings prior to the date hereof;
- A tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including the Company
or any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any
person or "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) shall have acquired or proposed to acquire beneficial ownership of
more than 5% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation
of a group or otherwise, or shall have been granted any right, option or
warrant, conditional or otherwise, to acquire beneficial ownership of
more than 5% of any class or series of capital stock of the Company
(including the Shares), other than acquisitions for bona fide arbitrage
purposes only and other than as disclosed in a Schedule 13D or 13G on
file with the Commission prior to April 9, 2001, (ii) any such person,
entity or group that prior to April 9, 2001, had filed such a schedule
with the Commission has acquired or proposes to acquire, through the
acquisition of stock, the formation of a group or otherwise, beneficial
ownership of 1% or more of any class or series of capital stock of the
Company (including the Shares), or shall have been granted any right,
option or warrant, conditional or otherwise, to acquire beneficial
ownership of 1% or more of any class or series of capital stock of the
Company (including the Shares), (iii) any person or group shall have
entered into a definitive agreement or an agreement in principle or made
a proposal with respect to a tender offer or exchange offer or a merger,
consolidation or other business combination with or involving the Company
or (iv) any person, other than the Purchaser, if not filed prior to the
date hereof, shall have filed a Notification and Report Form under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR
Act") (or amended a prior filing to increase the applicable filing
threshold set forth therein) or made a public announcement reflecting an
intent to acquire the Company or any assets or subsidiaries of the
Company;
- Any approval, permit, authorization or consent of any Governmental Entity
(including those described or referred to in Section 15) shall not have
been obtained on terms satisfactory to the Purchaser in its sole
discretion; or
- The Purchaser shall have reached an agreement or understanding with the
Company providing for termination of this Offer;
which, in the sole judgment of the Purchaser in any such case, and regardless of
the circumstances (including any action or inaction by the Purchaser or any
other affiliate of the Purchaser) giving rise to any such condition, makes it
inadvisable for the Purchaser to proceed with this Offer and/or with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to any
such condition or may be waived by the Purchaser in whole or in part at any time
and from time to time in its sole discretion. The failure by the Purchaser at
any time to exercise any of the foregoing rights will not be deemed a waiver of
any such right, the waiver of any such right with respect to particular facts
and circumstances will not be deemed a waiver with respect to any other facts
and circumstances and each such right will be deemed an ongoing right that may
be asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described in this Section 14 will be final and
binding upon all parties.
Each reference in this Section 14 to the "sole judgment" or "sole
discretion" of the Purchaser with respect to the satisfaction of the conditions
set forth in this Section 14 shall be deemed to mean the "sole reasonable
judgment" and "sole reasonable discretion", respectively, of the Purchaser.
15. CERTAIN LEGAL MATTERS
GENERAL. Except as otherwise disclosed in this Section 15, based on a
review of publicly available information filed by the Company with the
Commission, the Purchaser is not aware of (i) any license or regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Shares
by the Purchaser pursuant to this Offer or
20
(ii) any approval or other action, by any governmental, administrative or
regulatory agency or authority, domestic, foreign or supranational, that would
be required for the acquisition or ownership of Shares by the Purchaser as
contemplated herein. Should any such approval or other action be required or
desirable, the Purchaser currently contemplates that such approval or action
would be sought, except as described below under "State Takeover Laws." While
the Purchaser does not currently intend to delay the acceptance for payment of
Shares tendered pursuant to this Offer pending the outcome of any such matter,
there can be no assurance that any such approval or action, if needed, would be
obtained or would be obtained without substantial conditions or that adverse
consequences might not result to the business of the Company or the Purchaser or
that certain parts of the businesses of the Company or the Purchaser might not
have to be disposed of in the event that such approvals were not obtained or any
other actions were not taken. The Purchaser's obligation under this Offer to
accept for payment and pay for Shares is subject to certain conditions. See
Section 14.
A change in control of the Company may require filings with the Commission
and the NYSE. The Purchaser does not currently and does not expect to acquire or
exercise control of the Company as a result of this Offer. However, if it does
control the Company it will determine whether to make any required filings.
STATE TAKEOVER LAWS. A number of states (including Maryland, where the
Company was formed) throughout the United States have enacted takeover statutes
that purport, in varying degrees, to be applicable to attempts to acquire
securities of corporations (including REITs in the case of Maryland) that are
incorporated or have assets, Shareholders, executive offices or places of
business in such states. In Edgar v. MITE Corp., the Supreme Court of the United
States held that the Illinois Business Takeover Act, which involved state
securities laws that made the takeover of certain corporations more difficult,
imposed a substantial burden on interstate commerce and therefore was
unconstitutional. In CTS Corp. v. Dynamics Corp. of America, however, the
Supreme Court of the United States held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of a
target corporation without prior approval of the remaining Shareholders,
provided that such laws were applicable only under certain conditions.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with this Offer. The Purchaser reserves the right to challenge the
validity or applicability of any state law allegedly applicable to this Offer
and nothing in this Offer to Purchase nor any action taken in connection
herewith is intended as a waiver of that right. In the event that any state
takeover statute is found applicable to this Offer, the Purchaser might be
unable to accept for payment or pay for the Shares tendered pursuant to this
Offer or be delayed in continuing or consummating this Offer. In such case, the
Purchaser may not be obligated to accept for payment or pay for any Shares
tendered. See Section 14.
ANTITRUST. The Purchaser believes that the HSR Act is inapplicable to this
Offer in light of the size of the transaction. If the provisions of the HSR Act
were applicable to this Offer, the acquisition of Shares under this Offer could
be consummated only following the expiration of a 15-calendar day waiting period
following the filing by the Purchaser of a Notification and Report Form with
respect to this Offer, unless the Purchaser received a request for additional
information or documentary material from the Antitrust Division or the FTC or
early termination of the waiting period is granted. If, within the initial
15-day waiting period, either the Antitrust Division or the FTC requested
additional information or material from the Purchaser concerning this Offer, the
waiting period would be extended and would expire at 11:59 p.m., New York City
time, on the tenth calendar day after the date of substantial compliance by the
Purchaser with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with the
consent of the Purchaser. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality of
transactions under the antitrust laws. At any time before or after Purchaser's
acquisition of the Shares pursuant to this Offer, the Antitrust
21
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of the Shares pursuant to this Offer or seeking the divestiture of the
Shares acquired by the Purchaser. Private parties may also bring legal action
under the antitrust laws under certain circumstances. There can be no assurance
that a challenge to this Offer on antitrust grounds will not be made or, if such
a challenge is made, of the result thereof.
16. FEES AND EXPENSES
Georgeson Shareholder Communication Inc. has been retained by the Purchaser
as Information Agent in connection with this Offer. The Information Agent may
contact holders of Shares by mail, telephone, facsimile and personal interview
and may request brokers, dealers and other nominee Shareholders to forward
material relating to this Offer to beneficial owners of Shares. The Purchaser
will pay the Information Agent reasonable and customary compensation for all
such services in addition to reimbursing the Information Agent for reasonable
out-of-pocket expenses in connection therewith. The Purchaser has agreed to
indemnify the Information Agent against certain liabilities and expenses in
connection with this Offer, including, without limitation, certain liabilities
under the federal securities laws.
American Stock Transfer & Trust Company has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with this Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Purchaser for customary clerical and
mailing expenses incurred by them in forwarding offering materials to their
clients. No soliciting dealers fees shall be paid to any person or entity with
respect to tendered Shares beneficially owned by such person or entity.
17. MISCELLANEOUS
This Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of this
Offer or the acceptance thereof would not be in compliance with the securities,
blue-sky or other laws of such jurisdiction. The Purchaser is not aware of any
jurisdiction in which the making of this Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. If the Purchaser
becomes aware of any jurisdiction where the making of this Offer or the tender
of Shares is not in compliance with any applicable law, the Purchaser will make
a good faith effort to comply with such law. If, after such good faith effort,
the Purchaser cannot comply with such law, this Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Shares residing in
such jurisdiction. To the extent the Purchaser becomes aware of any state law
that would limit the class of offerees in this Offer, the Purchaser will amend
this Offer and, depending on the timing of such amendment, if any, will extend
this Offer to provide adequate dissemination of such information to such holders
of Shares prior to the expiration of this Offer. In any jurisdiction the
securities, blue sky or other laws of which require this Offer to be made by a
licensed broker or dealer, this Offer shall be deemed to be made on behalf of
the Purchaser by one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.
The Purchaser has filed with the Commission a tender offer statement on
Schedule TO (the "Schedule TO") pursuant to rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional information with respect
to this Offer, and may file amendments thereto. Such Schedule TO and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained in the manner set forth in Section 8 with respect to the Company
(except that such material will not be available at the regional offices of the
Commission).
BRT REALTY TRUST
April 10, 2001
22
SCHEDULE I
TRUSTEES AND EXECUTIVE OFFICERS OF THE PURCHASER
Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each trustee and executive officer of the
Purchaser. Except as otherwise noted, the business address of each officer and
trustee is c/o BRT Realty Trust, 60 Cutter Mill Road, Great Neck, New York 11021
and, except as otherwise noted, each such person is a United States citizen.
Where no date is shown, the individual has occupied the position indicated for
the past five years. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with the Purchaser. Except as
described herein, none of the officers and trustees of the Purchaser listed
below has, during the past five years, (i) been convicted in a criminal
proceeding or (ii) been a party to any judicial or administrative proceeding
that resulted in a judgment, decree or final order enjoining the person from
future violations of, or prohibiting activities subject to, federal or state
securities laws or a finding of any violation of federal or state securities
laws.
23
24
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by you or your broker, dealer,
commercial bank, trust company or other nominee to the Depositary at its address
set forth below.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
Facsimile Copy Number: 718-234-5001
Confirm by Telephone: 718-921-8200
By First Class Mail, by Overnight Courier, By Hand:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
59 Maiden Lane
New York, NY 10038
Questions and requests for assistance should be directed to the Information
Agent at its respective address or telephone numbers set forth below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and all other tender
offer materials may be obtained from the Information Agent as set forth below,
and will be furnished promptly at the Purchaser's expense. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning this Offer.
The Information Agent for this Offer is:
[GEORGESON SHAREHOLDER COMMUNICATIONS INC. LOGO]
17 State Street
New York, New York 10004
Toll Free: 1-800-223-2064
Call Collect: 212-440-9800