As filed with the Securities and
Exchange Commission on July 27, 1998
Registration No. 333-37911
SECURITIES AND EXCHANGE COMMISSION
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-3191743
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(904) 356-7000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Martin E. Stein, Jr.,
President and Chief Executive Officer
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(904) 356-7000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to:
Charles E. Commander III
Linda Y. Kelso
Foley & Lardner
200 Laura Street
Jacksonville, Florida 32202
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act of 1933, please check the following box. [_]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. A registration statement relating
to these securities has been filed with the Securities and Exchange
Commission. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there by any sale of these securities in any
State in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION - DATED JULY 27, 1998
PROSPECTUS
Regency Realty Corporation
Preferred Stock, Depositary Shares and Common Stock
Regency Realty Corporation (the "Company"), may offer from time to time,
together or separately, in one or more series (a) shares of the Company's
preferred stock, par value $0.01 per share ("Preferred Stock"),
(b) depositary shares representing entitlement to all rights and
preferences of a fraction of a share of Preferred Stock of a specified
series ("Depositary Shares") and (c) shares of the Company's common stock,
par value $0.01 per share ("Common Stock") (the Preferred Stock,
Depositary Shares and Common Stock are collectively referred to as the
"Securities"), separately or together, at an aggregate initial offering
price not to exceed U.S. $400,000,000 (or the equivalent in foreign
currencies or currency units), in amounts, at prices and on terms to be
determined at the time of sale.
The specific terms of any Securities offered pursuant to this Prospectus
will be set forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement"), together with the terms of the offering of such
Securities and the initial price and the net proceeds to the Company from
the sale thereof. The Prospectus Supplement will include, with regard to
the particular Securities, the following information: (a) in the case of
Preferred Stock, the designation, number of shares, liquidation preference
per share, initial offering price, dividend rate (or method of calculation
thereof), dates on which dividends shall be payable and dates from which
dividends shall accrue, any redemption or sinking fund provisions, and any
conversion or exchange rights; (b) in the case of Depositary Shares, the
fractional share of Preferred Stock represented by each Depositary Share,
(c) in the case of Common Stock, the number of shares and the terms of the
offering and sale thereof; and (d) in the case of all Securities, whether
such Securities will be offered separately or as a unit with other
Securities. The Prospectus Supplement will also contain information,
where applicable, about material United States federal income tax
considerations relating to, and any listing on a securities exchange of,
the Securities covered by such Prospectus Supplement.
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "REG." Any Common Stock offered pursuant to a
Prospectus Supplement will be listed on such exchange, subject to official
notice of issuance.
The Company may sell Securities directly through agents, underwriters or
dealers designated from time to time. If any agents, underwriters or
dealers are involved in the sale of the Securities, the names of such
agents, underwriters or dealers and any applicable commissions or
discounts and the net proceeds to the Company from such sale will be set
forth in the applicable Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
See "Risk Factors" on pages 4 to 8 for a discussion of certain material
factors which should be considered in connection with an investment in the
Securities offered hereby.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________, 1998.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports and other
information concerning the Company may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following regional offices of the Commission: New York Office, Seven
World Trade Center, 13th Floor, New York, New York 10048 and Chicago
Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may also be obtained
from the public reference section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. The Commission also
maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants, including the
Company, that file electronically with the Commission. The address of
such Web site is http://www.sec.gov. In addition, the Company's Common
Stock is listed on the NYSE and similar information concerning the Company
can be inspected and copied at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are hereby incorporated in this Prospectus by
reference, except as superseded or modified herein:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. The Company's Current Report on Form 8-K dated January 12, 1998, as
amended by Form 8-K/A dated March 11, 1998.
3. The Company's Current Report on Form 8-K dated January 14, 1998.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
5. The description of Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on
August 30, 1993, and declared effective on October 29, 1993, including
portions of the Company's Registration Statement on Form S-11 (No. 33-
67258) incorporated by reference therein.
Each document filed by the Company subsequent to the date of this
Prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act and prior to the termination of the offering of the Securities shall
be deemed to be incorporated in this Prospectus by reference and to be a
part hereof from the date of the filing of such document. Any statement
contained in a document incorporated by reference shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed incorporated
document or in an accompanying Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of any such
person, a copy of any document described above that has been incorporated
in this Prospectus by reference and not delivered with this Prospectus or
any preliminary Prospectus distributed in connection with the offering of
the Securities, other than exhibits to such document referred to above
unless such exhibits are specifically incorporated by reference herein.
Requests should be directed to Ms. Brenda Paradise, the Company's Director
of Shareholder Relations, 121 West Forsyth Street, Suite 200,
Jacksonville, Florida 32202 (telephone: (904) 356-7000).
RISK FACTORS
Prospective investors should carefully consider the following
information in conjunction with the other information contained in this
Prospectus before purchasing Common Stock. This Prospectus contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to the
Company that is based on the beliefs of the management of the Company, as
well as assumptions made by and information currently available to the
management of the Company. When used in this Prospectus, the words
"estimate," "project," "believe," "anticipate," "intend," "expect" and
similar expressions are intended to identify forward-looking statements.
Such statements involve known and unknown risks, uncertainties and other
factors, including those identified herein and elsewhere in this
Prospectus that may cause the actual results, performance or achievements
of the Company, or industry results, to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following: general economic and business conditions; changes in customer
preferences; competition; changes in technology; the integration of any
acquisitions; changes in business strategy; the indebtedness of the
Company; quality of management, business abilities and judgment of the
Company's personnel; the availability, terms and deployment of capital;
and various other factors referenced in this Prospectus. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company does not undertake
any obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Significant Reliance on Major Tenants
The Company derives significant revenues from certain anchor tenants
that occupy more than one center. The Company could be adversely affected
in the event of the bankruptcy or insolvency of, or a downturn in the
business of, any of it major tenants, or in the event that any such tenant
does not renew its leases as they expire or renews at lower rental rates.
Vacated anchor space not only would reduce rental revenues if not
retenanted at the same rental rates but also could adversely affect the
entire shopping center because of the loss of the departed anchor tenant's
customer drawing power. Loss of customer drawing power also can occur
through the exercise of the right that most anchors have to vacate and
prevent retenanting by paying rent for the balance of the lease term, or
the departure of an anchor tenant that owns its own property. In
addition, in the event that certain major tenants cease to occupy a
property, such an action may result in certain other tenants having the
right to terminate their leases at the affected property, which could
adversely affect the future income from such property.
Tenants may seek the protection of the bankruptcy laws, which could
result in the rejection and termination of their leases and thereby cause
a reduction in the cash flow available for distribution by the Company.
Such reduction could be material if a major tenant files bankruptcy.
Geographic Concentration of Properties
The Company's performance is dependent on the economic conditions in
markets in which its properties are concentrated, including Florida and
Georgia. The Company could be adversely affected by such geographic
concentration if market conditions, such as an oversupply of space or a
reduction in demand for real estate, in such areas become more competitive
relative to other geographic areas.
Risk of the Company's Rapid Growth Through Acquisitions
The Company has pursued extensive growth opportunities. This expansion
has placed significant demands on its operational, administrative and
financial resources. The continued growth of the Company's real estate
portfolio can be expected to continue to place a significant strain on its
resources. The Company's future performance will depend in part on its
ability to successfully attract and retain qualified management personnel
to manage the growth and operations of the Company's business and to
finance such acquisitions. In addition, acquired properties may fail to
operate at expected levels due to the numerous factors which may affect
the value of real estate. There can be no assurance that the Company will
have sufficient resources to identify and manage acquired properties or
otherwise be able to maintain its historic rate of growth.
Risks Related to Partnership Structure
The Company's primary property-owning vehicle is Regency Centers, L.P.,
of which the Company is the general partner. The Company's acquisition of
properties through the Partnership in exchange for interests in the
Partnership may permit certain tax deferral advantages to limited partners
who contribute properties to the Partnership. Since properties
contributed to the Partnership may have unrealized gain attributable to
the difference between the fair market value and adjusted tax basis in
such properties prior to contribution, the sale of such properties could
cause adverse tax consequences to the limited partners who contributed
such properties. Although the Company, as the general partner of the
Partnership, generally has no obligation to consider the tax consequences
of its actions to any limited partner, there can be no assurance that the
Partnership will not acquire properties in the future subject to material
restrictions designed to minimize the adverse tax consequences to the
limited partners who contribute such properties. Such restrictions could
result in significantly reduced flexibility to manage the Company's
assets.
General Risks Relating to Real Estate Investments
Value of Real Estate Dependent on Numerous Factors. Real property
investments are subject to varying degrees of risk. Real estate values
are affected by a number of factors, including changes in the general
economic climate, local conditions (such as an oversupply of space or a
reduction in demand for real estate in an area), the quality and
philosophy of management, competition from other available space, the
ability of the owner to provide adequate maintenance and insurance and to
control variable operating costs. Shopping centers, in particular, may be
affected by changing perceptions of retailers or shoppers regarding the
safety, convenience and attractiveness of the shopping center and by the
overall climate for the retail industry generally. Real estate values are
also affected by such factors as government regulations, interest rate
levels, the availability of financing and potential liability under, and
changes in, environmental, zoning, tax and other laws. As substantially
all of the Company's income is derived from rental income from real
property, the Company's income and cash flow would be adversely affected
if a significant number of the Company's tenants were unable to meet their
obligations to the Company, or if the Company were unable to lease on
economically favorable terms a significant amount of space in its
properties. In the event of default by a tenant, the Company may
experience delays in enforcing, and incur substantial costs to enforce,
its rights as landlord.
Equity real estate investments are relatively illiquid and therefore
may tend to limit the ability of the Company to react promptly in response
to changes in economic or other conditions. In addition, certain
significant expenditures associated with each equity investment (such as
mortgage payments, real estate taxes and maintenance costs) are generally
not reduced when circumstances cause a reduction in income from the
investment.
Difficulties and Costs Associated with Renting Unleased and Vacated
Space. The ability of the Company to rent unleased or vacated space will
be affected by many factors, including certain covenants restricting the
use of other space at a property found in certain leases with shopping
center tenants. If the Company is able to relet vacated space, there is
no assurance that rental rates will be equal to or in excess of current
rental rates. In addition, the Company may incur substantial costs in
obtaining new tenants, including leasing commissions and tenant
improvements. The Company also may have difficulty maintaining existing
or obtaining new tenants if other space at a property is vacated.
Restrictions on, and Risks of, Unsuccessful Development Activities.
The Company intends to selectively pursue development activities as
opportunities arise. Such development activities generally require
various government and other approvals, the receipt of which cannot be
assured. The Company will incur risks associated with any such
development activities. These risks include the risk that development
opportunities explored by the Company may be abandoned; the risk that
construction costs of a project may exceed original estimates, possibly
making the project unprofitable; lack of cash flow during the construction
period; and the risk that occupancy rates and rents at a completed project
will not be sufficient to make the project profitable. In case of an
unsuccessful development project, the Company's loss could exceed its
investment in the project. Also, there are competitors seeking properties
for development, some of which may have greater resources than the
Company.
Adverse Effect of Market Interest Rates on Stock Prices
One of the factors that may influence the trading price of the
Company's Common Stock is the annual dividend rate on such stock as a
percentage of its market price. An increase in market interest rates may
lead purchasers of shares of such stock to demand a higher annual dividend
rate, which could adversely affect the market price of such stock and the
Company's ability to raise additional equity in the public markets.
Risks of Losing Property Management Contracts
The Company is subject to the risks associated with the management of
properties owned by third parties. These risks include the risk that
management contracts with third party owners (which typically are
cancelable upon 30 days' notice) will be lost due to the sale of such
property or to competitors, and that contracts may not be renewed upon
expiration or may not be renewed on terms consistent with current terms.
Any of these developments would adversely affect the ability of the
Company to make expected distributions to its shareholders.
Adverse Effect of Uninsured Loss on Performance
The Company carries comprehensive liability, fire, flood, extended
coverage and rental loss insurance with respect to its properties with
policy specifications and insured limits customarily carried for similar
properties. The Company believes that the insurance carried on its
properties is adequate in accordance with industry standards. There are,
however, certain types of losses (such as from hurricanes, wars or
earthquakes) which may be uninsurable, or the cost of insuring against
such losses may not be economically justifiable. Should an uninsured loss
occur, the Company could lose both the invested capital in and anticipated
revenues from the property, and would continue to be obligated to repay
any recourse mortgage indebtedness on the property.
Uncertainty of Availability of Refinancing; Risks of Increased Interest
Rates
The Company does not expect to generate sufficient funds from
operations to make balloon principal payments when due on its
indebtedness. There can be no assurance that the Company will be able to
refinance such indebtedness or to otherwise obtain funds to make such
payments by selling assets or raising equity. An inability to make such
balloon payments when due could cause the mortgage lenders to foreclose on
the properties securing such indebtedness, which would have a material
adverse effect on the Company. In addition, interest rates and other
terms on any loans obtained to refinance such indebtedness may be less
favorable than the rates on the current indebtedness.
To the extent that the Company is obligated on floating rate debt, and
to the extent that exposure to increases in interest rates is not
eliminated through interest rate protection or cap agreements, such
increases may adversely affect the Company's performance.
Federal Income Tax Considerations
There are a number of issues associated with an investment in a REIT
that are related to the federal income tax laws, including, but not
limited to, the consequences of failing to continue to qualify as a REIT.
See "Federal Income Tax Considerations."
Concentration of Ownership of Company Common Stock
Security Capital Holdings S.A. (together with its parent company,
Security Capital U.S. Realty, "SC-USREALTY") is entitled to own up to 45%
of the Common Stock, on a fully diluted basis. SC-USREALTY is the
Company's single largest shareholder and has participation rights
entitling it to maintain its percentage ownership of the Common Stock.
SC-USREALTY has the right to nominate a proportionate number of the
directors of the Company's Board, rounded down to the nearest whole
number, based upon its ownership of outstanding shares of Common Stock,
but not to exceed 49% of the Board. Although certain standstill
provisions preclude SC-USREALTY from increasing its percentage interest in
the Company for a period of at least five years (subject to certain
exceptions) and SC-USREALTY is subject to certain limitations on its
voting rights with respect to its shares of Common Stock during that time,
SC-USREALTY nonetheless has substantial influence over the Company's
affairs. This concentration of ownership in one shareholder could be
disadvantageous to other shareholders' interests. The director
nomination, voting and other rights granted to SC-USREALTY, although
subject to certain limitations during the standstill period, may make it
more difficult for other shareholders to challenge the Company's director
nominees, elect their own nominees as directors, or remove incumbent
directors and may render the Company a less attractive target for an
unsolicited acquisition by an outsider. If the standstill period or any
standstill extension term terminates, SC-USREALTY could be in a position
to control the election of the Board or the outcome of any corporate
transaction or other matter submitted to the shareholders for approval.
The Company has agreed with SC-USREALTY to certain limitations on
Regency's operations, including restrictions relating to (i) incurrence of
total indebtedness exceeding 60% of the gross book value of Regency's
consolidated assets, (ii) investments in properties other than shopping
centers in specified states in the eastern United States, and
(iii) certain other matters. In addition, the Company has agreed to
certain limitations on the amount of assets that it owns indirectly
through other entities and the manner in which it conducts its business
(including the type of assets that it can acquire and own and the manner
in which such assets are operated). These restrictions, which are
intended to permit SC-USREALTY to comply with certain requirements of the
Internal Revenue Code of 1986, as amended (the "Code"), and other
countries' tax laws applicable to foreign investors, limit somewhat the
Company's flexibility to structure transactions that might otherwise be
advantageous to the Company. Although the Company does not believe that
the limitations imposed on its activities will materially impair its
ability to conduct its business, there can be no assurance that these
limitations will not adversely affect the Company's operations in the
future.
Unsuitable Investment for Non-U.S. Investors
Section 5.14 of the Company's Articles of Incorporation (the
"Articles") contains provisions designed to preserve the Company's status
as a domestically controlled REIT. Section 5.14 of the Articles prohibits
the issuance or transfer of the Company's capital stock if it would result
in the fair market value of all capital stock owned directly or indirectly
by Non-U.S. Persons (as defined in the Articles) to comprise 5% or more
(excluding shares owned by SC-USREALTY) or 50% or more (including shares
owned by SC-USREALTY) of the fair market value of the Company's
outstanding capital stock. Any shares issued or transferred in violation
of this restriction will be void, or if such remedy is invalid, will be
subject to the provisions for "excess shares" described in "Capital Stock
-- Restrictions on Ownership."
Anti-Takeover Effect of Ownership Limit, Staggered Board, Preferred Stock,
Florida Business Corporation Act and Certain Other Matters
Ownership of more than 7% by value of the Company's outstanding capital
stock by certain persons has been restricted for the purpose of
maintaining the Company's qualification as a REIT, with certain
exceptions. See "Capital Stock--Restrictions on Ownership." This 7%
limitation may discourage a change in control of the Company and may also
(i) deter tender offers for the capital stock, which offers may be
attractive to the shareholders, or (ii) limit the opportunity for
shareholders to receive a premium for their capital stock that might
otherwise exist if an investor attempted to assemble a block in excess of
7% of the outstanding capital stock or to effect a change in control of
the Company. Additionally, the division of the Company's Board of
Directors into three classes with staggered three-year terms may have the
effect of deterring certain potential acquisitions of the Company because
control of the Company's Board of Directors could not be obtained at a
single annual meeting of shareholders.
The Company's Articles authorize the Board of Directors to issue up to
10,000,000 shares of Preferred Stock and 10,000,000 shares of Special
Common Stock and to establish the preferences and rights of any shares
issued. The issuance of Preferred Stock or Special Common Stock could
have the effect of delaying or preventing a change in control of the
Company even if a change in control were in the shareholders' interest.
The provisions of the Florida Business Corporation Act regarding control
share acquisitions and affiliated transactions could also deter potential
acquisitions of the Company by preventing the acquiring party from voting
the Common Stock it acquires or consummating a merger or other
extraordinary corporate transaction without the approval of the
disinterested shareholders.
Potential Environmental Liability
Under various federal, state and local laws, ordinances and
regulations, an owner or manager of real estate may be liable for the
costs of removal or remediation of certain hazardous or toxic substances
on or in such property. Such laws often impose such liability without
regard to whether the owner knew of, or was responsible for, the presence
of such hazardous or toxic substances. The cost of any required
remediation and the owner's liability therefor could exceed the value of
the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may
adversely affect the owner's ability to sell or rent such property or
borrow using such property as collateral.
THE COMPANY
The Company is a self-administered and self-managed REIT which
acquires, owns, develops, and manages neighborhood and community shopping
centers in targeted in fill markets in the eastern half of the United
States. The Company's executive offices are located at 121 West Forsyth
Street, Suite 200, Jacksonville, Florida 32202, and its telephone number
is (904) 356-7000.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general
corporate purposes, which may include the repayment of outstanding
indebtedness, the acquisition of shopping centers as suitable
opportunities arise, the expansion and improvement of certain properties
in the Company's portfolio and payment of development costs for new
centers.
CONSOLIDATED RATIOS OF
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The Company's ratios of earnings to combined fixed charges and
Preferred Stock dividends for the years ended December 31, 1997, 1996,
1995, 1994 and 1993 were 2.2, 1.8, 1.5, 1.7 and 2.5, respectively. The
Company did not have any Preferred Stock outstanding prior to June 29,
1994 or after June 29, 1996.
The ratios of earnings to combined fixed charges and Preferred Stock
dividends were computed by dividing earnings by the sum of fixed charges
and Preferred Stock dividends. For purposes of computing these ratios,
earnings have been calculated by adding fixed charges (excluding
capitalized interest) to net income from operations. Fixed charges
consist of interest costs (whether expensed or capitalized) and
amortization of deferred debt costs.
CAPITAL STOCK
The authorized capital stock of the Company consists of 150,000,000
shares of Common Stock, par value $0.01 per share, 10,000,000 shares of
Special Common Stock, par value $0.01 per share, and 10,000,000 shares of
Preferred Stock, par value $0.01 per share. The summary description of
the Company's capital stock set forth herein does not purport to be
complete and is qualified in its entirety by reference to the Company's
Articles and the applicable articles of amendment designating a class or
series of Preferred Stock (the "Preferred Stock Designation").
Common Stock
For a description of the Company's Common Stock, see "Description of
Common Stock" below.
Special Common Stock
Under the Company's Articles, the Board of Directors is authorized,
without further shareholder action, to provide for the issuance of up to
10 million shares of Special Common Stock from time to time in one or more
classes or series. The Special Common Stock will bear dividends in such
amounts as the Board of Directors may determine with respect to each class
or series. All such dividends must be pari passu with dividends on the
Common Stock. Upon the dissolution of the Company, the Special Common
Stock will participate pari passu with the Common Stock in liquidating
distributions. Shares of Special Common Stock will have one vote per
share and vote together with the holders of Common Stock (and not
separately as a class except where otherwise required by law), unless the
Board of Directors creates classes or series with more limited voting
rights or without voting rights. The Board will have the right to
determine whether shares of Special Common Stock may be converted into
shares of any other class or series or be redeemed, and, if so, the
conversion or redemption price and the terms and conditions of conversion
or redemption, and to determine such other rights as may be allowed by
law. Holders of Special Common Stock will not be entitled, as a matter of
right, to preemptive rights. As all Special Common Stock is expected to
be closely held, it is anticipated that most classes or series would be
convertible into Common Stock for liquidity purposes.
The Company has outstanding as of the date of this Prospectus 2,500,000
shares of a non-voting class of Special Common Stock in the form of Class
B Common Stock, which were issued in a private placement to an
institutional investor. The Class B Common Stock receives dividends pari
passu with the Common Stock at a rate equivalent to 1.03 times the Common
Stock dividend rate and participates pari passu with the Common Stock in
any liquidation of the Company. Beginning December 20, 1998, 1/6th of the
Class B Common Stock originally issued may be converted into Common Stock
at the election of the holder during any three-month period, but the
holder may not at any time be the beneficial owner of more than 4.9% of
the outstanding Common Stock. Accelerated conversion may take place in
the event of certain extraordinary occurrences, including certain changes
in senior management. A total of 2,975,468 shares of Common Stock are
issuable upon conversion of the Class B Common Stock.
Preferred Stock
For a description of the Company's Preferred Stock, see "Description of
Preferred Stock" below.
Restrictions on Ownership
Restrictions Relating to REIT Qualification. For the Company to
qualify as a REIT under the Code, not more than 50% in value of its
outstanding capital stock may be owned, directly or indirectly, by five or
fewer individuals (as defined in the Code to include certain entities)
during the last half of a taxable year, its stock must be beneficially
owned (without reference to attribution rules) by 100 or more persons
during at least 335 days in a taxable year of 12 months or during a
proportionate part of a shorter taxable year, and certain other
requirements must be satisfied (see "Federal Income Tax Considerations-
Requirements for Qualification").
To assure that five or fewer individuals do not Beneficially Own (as
defined in the Company's Articles to include ownership through the
application of certain stock attribution provisions of the Code) more than
50% in value of the Company's outstanding capital stock, the Company's
Articles provide that, subject to certain exceptions, no holder may own,
or be deemed to own (by virtue of certain of the attribution provisions of
the Code), more than 7% by value (the "Ownership Limit") of the Company's
outstanding capital stock. Certain existing holders specified in the
Articles and those to whom Beneficial Ownership of their capital stock is
attributed, whose Beneficial Ownership of capital stock exceeds the
Ownership Limit ("Existing Holders"), may continue to own such percentage
by value of outstanding capital stock (the "Existing Holder Limit") and
may increase their respective Existing Holder Limits through benefit plans
of the Company, dividend reinvestment plans, additional asset sales or
capital contributions to the Company or acquisitions from other Existing
Holders, but may not acquire additional shares from such sources such that
the five largest Beneficial Owners of capital stock hold more than 49.5%
by value of the outstanding capital stock, and in any event may not
increase their respective Existing Holder Limits through acquisition of
capital stock from any other sources. In addition, because rent from a
related tenant (any tenant 10% of which is owned, directly or
constructively, by the REIT) is not qualifying rent for purposes of the
gross income tests under the Code (see "Federal Income Tax Considerations-
Requirements for Qualification-Income Tests"), the Articles provide that
no constructive owner of stock in the Company who owns, directly or
indirectly, a 10% interest in any tenant of the Company (a "Related Tenant
Owner") may own, or constructively own by virtue of certain of the
attribution provisions of the Code (which differ from the attribution
provisions applied to determine Beneficial Ownership), more than 9.8% by
value of the outstanding capital stock of the Company (the "Related Tenant
Limit"). The Board of Directors may waive the Ownership Limit, the
Existing Holder Limit and the Related Tenant Limit if evidence
satisfactory to the Board of Directors is presented that such ownership
will not then or in the future jeopardize the Company's status as a REIT.
As a condition of such waiver, the Board of Directors may require opinions
of counsel satisfactory to it and/or an undertaking from the applicant
with respect to preserving the REIT status of the Company.
Preservation of Status as a Domestically Controlled REIT. Section 5.14
of the Articles contains provisions designed to preserve the Company's
status as a domestically controlled REIT. Section 5.14 of the Articles
prohibits the issuance or transfer of the Company's capital stock if it
(i) would result in the fair market value of all capital stock owned
directly or indirectly by Non-U.S. Persons (as defined in the Articles)
other than SC-USREALTY and its affiliates to comprise 5% or more of the
fair market value of the Company's outstanding common stock or (ii) would
result in the fair market value of all capital stock owned directly or
indirectly by Non-U.S. Persons, including SC-USREALTY, to comprise 50% or
more of the fair market value of the Company's outstanding capital stock.
A Non-U.S. Person is defined in the Articles as any person who is not (i)
a citizen or resident of the United States, (ii) a partnership or
corporation created or organized in the United States or under the laws of
the United States or any state therein (including the District of
Columbia), or (iii) any estate or trust (other than a foreign estate or
trust) within the meaning of Section 7701(a)(31) of the Code.
Any shares issued or transferred in violation of the foregoing
restriction will be void, or if such remedy is invalid, will be subject to
the provisions for "excess shares" described below. Accordingly, the
purchase of Common Stock, Preferred Stock or Depositary Shares which may
be offered hereby may not be a suitable investment for a Non-U.S. Person
(whether or not such person presently owns any shares of Common Stock).
Remedies. If (i) shares of capital stock in excess of the applicable
Ownership Limit, Existing Holder Limit, or Related Tenant Limit, or (ii)
shares which (a) would cause the REIT to be beneficially owned by fewer
than 100 persons (without application of the attribution rules), (b) would
result in the Company being "closely held" within the meaning of Section
856(h) of the Code, or (c) would result in the fair market value of
capital stock owned directly or indirectly by Non-U.S. Persons to comprise
5% or more (excluding capital stock owned by SC-USREALTY) or 50% or more
(including capital stock owned by SC-USREALTY) of the fair market value of
the Company's outstanding capital stock, are issued or transferred to any
person or retained by any person after becoming a Related Tenant Owner,
such issuance, transfer, or retention shall be null and void to the
intended holder, and the intended holder will have no rights to the stock.
Capital stock transferred, proposed to be transferred, or retained in
excess of the Ownership Limit, the Existing Holder Limit, or the Related
Tenant Limit or which would otherwise jeopardize the Company's REIT status
or status as a domestically controlled REIT ("excess shares") will be
deemed held in trust on behalf of and for the benefit of the Company. The
Board of Directors will, within six months after receiving notice of such
actual or proposed transfer, either (i) direct the holder of such shares
to sell all shares held in trust for the Company for cash in such manner
as the Board of Directors directs, or (ii) redeem such shares for a price
equal to the lesser of (a) the price paid by the holder from whom shares
are being redeemed and (b) the average of the last reported sales prices
on the NYSE of the relevant class of capital stock on the 10 trading days
immediately preceding the date fixed for redemption by the Board of
Directors, or if such class of capital stock is not then traded on the
NYSE, the average of the last reported sales prices of such class of
capital stock (or, if sales prices are not reported, the average of the
closing bid and asked prices) on the 10 trading days immediately preceding
the relevant date as reported on any exchange or quotation system over
which such class of capital stock may be traded, or if such class of
capital stock is not then traded over any exchange or quotation system,
then the price determined in good faith by the Board of Directors of the
Company as the fair market value of such class of capital stock on the
relevant date. If the Board of Directors directs the intended holder to
sell the shares, the holder shall receive such proceeds as the trustee for
the Company and pay the Company out of the proceeds of such sale all
expenses incurred by the Company in connection with such sale, plus any
remaining amount of such proceeds that exceeds the amount originally paid
by the intended holder for such shares. The intended holder shall not be
entitled to distributions, voting rights or any other benefits with
respect to such excess shares except the amounts described above. Any
dividend or distribution paid to an intended holder on excess shares
pursuant to the Company's Articles must be repaid to the Company upon
demand.
Miscellaneous. All certificates representing capital stock will bear a
legend referring to the restrictions described above. The transfer
restrictions described above shall not preclude the settlement of any
transaction entered through the facilities of the NYSE.
The Articles provide that every shareholder of record of more than 5%
of the outstanding capital stock and every Actual Owner (as defined in the
Articles) of more than 5% of the outstanding capital stock held by a
nominee must give written notice to the Company of information specified
in the Articles within 30 days after December 31 of each year. In
addition, each Beneficial Owner of capital stock and each person who holds
capital stock for a Beneficial Owner must provide to the Company such
information as the Company may request, in good faith, in order to
determine the Company's status as a REIT.
The ownership limitations described above may have the effect of
precluding acquisition of control of the Company by a third party even if
the Board of Directors determines that maintenance of REIT status is no
longer in the best interests of the Company. The Board of Directors has
the right under the Articles (subject to contractual restrictions,
including covenants made with SC-USREALTY) to revoke the REIT status of
the Company if the Board of Directors determines that it is no longer in
the best interest of the Company to attempt to qualify, or to continue to
qualify, as a REIT. In the event of such revocation, the ownership
limitations in the Articles will remain in effect. Any change in the
ownership limitations would require an amendment to the Articles.
Staggered Board of Directors
The Company's Articles and Bylaws divide the Board of Directors into
three classes of directors, with each class constituting approximately
one-third of the total number of directors and with classes serving
staggered three-year terms. The classification of directors will have the
effect of making it more difficult for shareholders to change the
composition of the Board of Directors. The Company believes, however,
that the longer time required to elect a majority of a classified Board of
Directors helps to insure continuity and stability of the Company's
management and policies.
The classification provisions could also have the effect of
discouraging a third party from accumulating large blocks of the Company's
stock or attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its shareholders.
Accordingly, shareholders could be deprived of certain opportunities to
sell their shares of capital stock at a higher market price than might
otherwise be the case.
Advance Notice Provisions for Shareholder Nominations and Shareholder
Proposals
The Bylaws establish an advance notice procedure for shareholders to
make nominations of candidates for election as directors or to bring other
business before any meeting of shareholders of the Company. Any
shareholder nomination or proposal for action at an upcoming shareholder
meeting must be delivered to the Company no later than the deadline for
submitting shareholder proposals pursuant to Rule 14a-8 under the Exchange
Act. The presiding officer at any shareholder meeting is not required to
recognize any proposal or nomination which did not comply with such
deadline.
The purpose of requiring shareholders to give the Company advance
notice of nominations and other business is to afford the Board of
Directors a meaningful opportunity to consider the qualifications of the
proposed nominees or the advisability of the other proposed business and,
to the extent deemed necessary or desirable by the Board of Directors, to
inform shareholders and make recommendations about such qualifications or
business, as well as to provide a more orderly procedure for conducting
meetings of shareholders. Although the Bylaws do not give the Board of
Directors any power to disapprove timely shareholder nominations for the
election of directors or proposals for action, they may have the effect of
precluding a contest for the election of directors or the consideration of
shareholder proposals if the proper procedures are not followed, and of
discouraging or deterring the third party from conducting a solicitation
of proxies to elect its own slate of directors or to approve its own
proposal.
Certain Provisions of Florida Law
The Company is subject to several anti-takeover provisions under
Florida law that apply to a public corporation organized under Florida law
unless the corporation has elected to opt out of such provisions in its
articles of incorporation or (depending on the provision in question) its
bylaws. The Company has not elected to opt out of these provisions. The
Florida Business Corporation Act (the "Florida Act") contains a provision
that prohibits the voting of shares in a publicly held Florida corporation
which are acquired in a "control share acquisition" unless the board of
directors approves the control share acquisition or the holders of a
majority of the corporation's voting shares (exclusive of shares held by
officers of the corporation, inside directors or the acquiring party)
approve the granting of voting rights as to the shares acquired in the
control share acquisition. A control share acquisition is defined as an
acquisition that immediately thereafter entitles the acquiring party to
vote in the election of directors within each of the following ranges of
voting power: (i) one-fifth or more but less than one-third of such voting
power, (ii) one-third or more but less than a majority of such voting
power and (iii) a majority or more of such voting power.
The Florida Act also contains an "affiliated transaction" provision
that prohibits a publicly held Florida corporation from engaging in a
broad range of business combinations or other extraordinary corporate
transactions with an "interested shareholder" unless (i) the transaction
is approved by a majority of disinterested directors before the person
becomes an interested shareholder, (ii) the interested shareholder has
owned at least 80% of the Company's outstanding voting shares for at least
five years, (iii) the transaction is approved by the holders of two-thirds
of the Company's voting shares other than those owned by the interested
shareholder, or (iv) certain other conditions are met. An interested
shareholder is defined as a person who, together with affiliates and
associates, beneficially owns (as defined in Section 607.0901(1)(e),
Florida Statutes) more than 10% of the Company's outstanding voting
shares.
Limitation of Liability of Directors
The Florida Act provides that a director will not be personally liable
for monetary damages to the Company or any other person except for
liability for breach of such person's duties as a director involving (1) a
violation of criminal law (unless the director reasonably believed his or
her conduct was lawful or had no reasonable cause to believe that it was
unlawful), (2) a transaction from which the director derived an improper
personal benefit, or (3) an unlawful dividend or stock redemption.
However, equitable remedies such as an injunction or rescission continue
to be available against directors who breach their duty of care as
directors.
Indemnification Agreements
The Company has entered into indemnification agreements with each of
the Company's officers and directors. The indemnification agreements
require, among other things, that the Company indemnify its officers and
directors to the fullest extent permitted by law, and advance to the
officers and directors all related expenses, subject to reimbursement if
it is subsequently determined that indemnification is not permitted. The
Company must also indemnify and advance all expenses incurred by officers
and directors seeking to enforce their rights under the indemnification
agreements.
DESCRIPTION OF COMMON STOCK
Common Stock
The holders of the Company's Common Stock are entitled to one vote per
share on all matters voted on by shareholders, including elections of
directors, and, except as otherwise required by law or provided in any
resolution adopted by the Board of Directors with respect to any series of
Preferred Stock establishing the powers, designations, preferences and
relative, participating, option or other special rights of such series,
the holders of Common Stock (together with the holders of any class or
series of Special Common Stock that does not have limited voting rights)
exclusively possess all voting power. The Articles do not provide for
cumulative voting in the election of directors. Subject to any
preferential rights of any outstanding series of Preferred Stock, the
holders of Common Stock are entitled to such dividends as may be declared
from time to time by the Board of Directors from funds legally available
therefor, and upon liquidation are entitled to receive pro rata all assets
of the Company available for distribution to such holders. All shares of
Common Stock offered hereby, upon issuance against full payment of the
purchase price therefor, will be fully paid and nonassessable and the
holders thereof will not have preemptive rights. The Company's Common
Stock is listed on the NYSE under the symbol "REG."
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is First Union
National Bank.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions
of the Preferred Stock. The particular terms of any class or series of
Preferred Stock will be described in the applicable Prospectus Supplement.
If so indicated in a Prospectus Supplement, the terms of any such class or
series may differ from the terms set forth below. The summary of terms of
any class or series of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Articles and the
applicable Preferred Stock Designation, which will be filed as an exhibit
to or incorporated by reference in the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such
class or series of Preferred Stock.
Under the Company's Articles, the Board of Directors is authorized,
without further shareholder action, to provide for the issuance of up to
10,000,000 shares of Preferred Stock, par value $0.01 per share. The
Preferred Stock authorized by the Articles may be issued, from time to
time, in one or more series in such amounts and with such designations,
powers, preferences or other rights, qualifications, limitations and
restrictions as may be fixed by the Board of Directors. Under certain
circumstances, the issuance of Preferred Stock could have the effect of
delaying, deferring or preventing a change of control of the Company and
may adversely affect the voting and other rights of the holders of Common
Stock. The Company has no shares of Preferred Stock outstanding as of the
date of this Prospectus.
The Board of Directors has authorized 1,600,000 shares of 8.125% Series
A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"),
which is issuable beginning June 25, 2008 in exchange for units of
preferred interest with matching terms, on a one-share-per unit basis, of
Regency Centers, L.P. (the "Partnership"), of which the Company is the
general partner. The Series A Preferred Stock will be exchangeable for
such units earlier than June 25, 2008 under certain circumstances,
including if the Partnership fails to make timely distributions on the
units for six quarters, or if the Partnership is or is likely to become in
the immediate future a "publicly traded partnership" within the meaning of
Section 7704 of the Internal Revenue Code of 1986, as amended. Each share
of Series A Preferred Stock will have a liquidation preference of $50 per
share and will bear cumulative annual preferential dividends, payable
quarterly out of funds legally available therefor, equal to 8.125% of such
liquidation preference. The Series A Preferred Stock will be senior as to
dividends and liquidation to the Common Stock and to all other capital
stock of the Company not expressly made pari passu with the Series A
Preferred Stock. The Company will have the right, at its option, to
redeem all or any of the Series A Preferred Stock from time to time,
beginning on the later of the date of issuance or June 25, 2003, at a
redemption price of $50 per share, plus accrued but unpaid dividends. The
Series A Preferred Stock will not have any voting rights except (i) as
required by law, (ii) in the event that dividends are in arrears with
respect to six prior quarters, in which case the Board of Directors will
be increased by two seats and the Series A Preferred Stock will have the
right to fill such vacancies until all distributions have been paid in
full, and (iii) the holders of two-thirds of the Series A Preferred Stock
will have the right to approve (x) the issuance of any shares of capital
stock senior to the Series A Preferred Stock, (ii) the issuance to
affiliates of the Company (with certain exceptions) of capital stock pari
passu with the Series A Preferred Stock, and (iii) business combinations
with or a sale of substantially all the Company's assets to another entity
or any amendment to the Company's Articles or Bylaws if such transaction
or amendment would materially and adversely affect the rights of the
Series A Preferred Stock. The Series A Preferred Stock will not have any
conversion rights.
Preferred Stock Offered Hereby
The Preferred Stock offered hereby shall have the dividend,
liquidation, redemption, voting and other rights set forth below unless
otherwise described in a Prospectus Supplement relating to a particular
class or series of Preferred Stock. The applicable Prospectus Supplement
will describe the following terms of the class or series of Preferred
Stock offered thereby: (1) the designation of such class or series and the
number of shares offered; (2) the liquidation preference of such class or
series; (3) the initial public offering price at which such class or
series will be issued; (4) the dividend rate (or method of calculation),
the dates on which dividends shall be payable and the dates from which
dividends shall commence to accumulate, if any; (5) any redemption or
sinking fund provisions; (6) any conversion or exchange rights; (7) any
additional voting, dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions;
(8) any listing of such Preferred Stock on any securities exchange; (9) a
discussion of federal income tax considerations applicable to such class
or series; (10) the relative ranking and preferences of such class or
series as to dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company; (11) any limitations on issuance
of any class or series of Preferred Stock ranking senior to or on a parity
with such class or series as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company;
(12) any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of the
Company as a REIT and a domestically controlled REIT for federal tax
purposes; and (13) any other specific terms, preferences, rights,
limitations or restrictions of such series.
The Preferred Stock offered hereby will be issued in one or more class
or series. The Preferred Stock, upon issuance against full payment of the
purchase price therefor, will be fully paid and nonassessable. The
liquidation preference is not indicative of the price at which the
Preferred Stock will actually trade on or after the date of issuance.
Rank
The Preferred Stock shall, with respect to dividend rights and rights
upon liquidation, dissolution and winding up of the Company, rank prior to
the Common Stock, the Special Common Stock and all other classes and
series of equity securities of the Company now or hereafter authorized,
issued or outstanding (the Common Stock and such other classes and series
of equity securities collectively may be referred to herein as the "Junior
Stock"), other than any classes or series of equity securities of the
Company which by their terms specifically provide for a ranking on a
parity with (the "Parity Stock") or senior to (the "Senior Stock") the
Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the Company. The Preferred Stock will be
junior to the Series A Preferred Stock unless specifically made pari passu
therewith. The Preferred Stock shall be junior to all outstanding debt of
the Company. The Preferred Stock shall be subject to creation of Senior
Stock, Parity Stock and Junior Stock to the extent not expressly
prohibited by the Company's Articles.
Dividends
Holders of Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors, out of assets of the Company
legally available therefor, dividends or distributions in cash, property
or other assets of the Company or in securities of the Company or from any
other source as the Board of Directors in its discretion shall determine
and at such dates and at such rates per share per annum as described in
the applicable Prospectus Supplement. Such rate may be fixed or variable
or both. Each declared dividend shall be payable to holders of record as
they appear at the close of business on the books of the Company on such
record dates (which by law must be not more than 70 calendar days
preceding the payment dates therefor) as are determined by the Board of
Directors (each of such dates, a "Record Date").
Dividends on a class or series of Preferred Stock may be cumulative or
noncumulative. If dividends on a class or series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend
for a dividend period with respect to such class or series, then holders
of such Preferred Stock will have no right to receive a dividend for such
dividend period, and the Company will have no obligation to pay the
dividend for such period, whether or not dividends are declared payable on
any future dividend payment dates. If dividends of a class or series of
Preferred Stock are cumulative, the dividends on such shares will accrue
from and after the date set forth in the applicable Preferred Stock
Designation.
No full dividends shall be declared or paid or set apart for payment on
any class or series of Preferred Stock ranking, as to dividends, on a
parity with or junior to the class or series of Preferred Stock offered by
the applicable Prospectus Supplement for any period unless full dividends
for the immediately preceding dividend period on such Preferred Stock
(including any accumulation in respect of unpaid dividends for prior
dividend periods, if dividends on such Preferred Stock are cumulative)
have been or are contemporaneously declared and paid or are declared and a
sum sufficient for the payment thereof is set apart for such payment.
When dividends are not so paid in full (or a sum sufficient for such full
payment is not so set apart) on such Preferred Stock and any Parity Stock
of the Company ranking on a parity as to dividends with such Preferred
Stock, dividends on such Preferred Stock and dividends on such Parity
Stock shall be declared pro rata so that the amount of dividends declared
per share on such Preferred Stock and such Parity Stock shall in all cases
bear to each other the same ratio that accrued dividends for the
then-current dividend period per share on such Preferred Stock (including
any accumulation in respect of unpaid dividends for prior dividend
periods, if dividends on such Preferred Stock are cumulative) and accrued
dividends, including required or permitted accumulations, if any, on
shares of such Parity Stock, bear to each other. No interest, or sum of
money in lieu of interest, shall be payable with respect to any dividend
payment(s) on Preferred Stock which may be in arrears. Unless full
dividends on the class or series of Preferred Stock offered by the
applicable Prospectus Supplement have been declared and paid or set apart
for payment for the immediately preceding dividend period (including any
accumulation with respect to unpaid dividends for prior dividend periods,
if dividends on such Preferred Stock are cumulative), (a) no cash dividend
or distribution (other than in shares of Junior Stock) may be declared,
set aside or paid on the Junior Stock, (b) the Company may not, directly
or indirectly, repurchase, redeem or otherwise acquire any shares of its
Junior Stock (or pay any monies into a sinking fund for the redemption of
any shares of its Junior Stock) except by conversion into or exchange for
Junior Stock, and (c) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any such Preferred Stock or any
Parity Stock ranking on parity with such Preferred Stock (or pay any
monies into a sinking fund for the redemption of any shares of any such
stock) otherwise than pursuant to pro rata offers to purchase or a
concurrent redemption of all, or a pro rata portion, of such Preferred
Stock and such Parity Stock (except by conversion into or exchange for
Junior Stock).
Any dividend payment made on a class or series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due
with respect to shares of such class or series.
Redemption
The terms, if any, on which Preferred Stock of any class or series may
be redeemed will be set forth in the applicable Prospectus Supplement.
Conversion Rights
The terms and conditions, if any, upon which shares of any class or
series of Preferred Stock will be convertible into Common Stock will be
set forth in the applicable Prospectus Supplement. Such terms will
include the number of shares of Common Stock into which the Preferred
Stock is convertible, the conversion price (or manner of calculation
thereof), the conversion period, provisions as to whether conversion will
be at the option of the holders of the Preferred Stock or the Company, the
events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such Preferred
Stock.
Liquidation
In the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, the holders of a class or series
of Preferred Stock will be entitled, subject to the rights of creditors,
but before any distribution or payment to the holders of Common Stock,
Special Common Stock or any Junior Stock on liquidation, dissolution or
winding up of the Company, to receive a liquidating distribution in the
amount of the liquidation preference per share as set forth in the
applicable Prospectus Supplement, plus accrued and unpaid dividends for
the then-current dividend period (including any accumulation in respect of
unpaid dividends for prior dividend periods, if dividends on such class or
series of Preferred Stock are cumulative). If the amounts available for
distribution with respect to a class or series of Preferred Stock and all
other outstanding Parity Stock are not sufficient to satisfy the full
liquidation rights of all such Preferred Stock outstanding and such other
Parity Stock outstanding, then the holders of each such class or series
will share ratably in any such distribution of assets in proportion to the
full respective preferential amounts (which in the case of Preferred Stock
may include accumulated dividends) to which they are entitled. Unless
otherwise provided in the applicable Preferred Stock Designation for a
particular class or series of Preferred Stock, after payment of the full
amount of the liquidating distribution, the holders of Preferred Stock
will not be entitled to any further participation in any distribution of
assets by the Company.
Voting
The Preferred Stock of a class or series will not be entitled to vote,
except as described in the applicable Prospectus Supplement or as required
by Florida law, e.g. in connection with a proposed reclassification
thereof.
No Other Rights
The shares of a class or series of Preferred Stock will not have any
preferences, voting powers or relative, participating, optional or other
special rights except as set forth above or described in the applicable
Prospectus Supplement, set forth in the Company's Articles or in the
applicable Preferred Stock Designation or as otherwise required by law.
Transfer Agent and Registrar
The transfer agent for each class or series of Preferred Stock will be
described in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than a full share of Preferred Stock.
In such event, receipts ("Depositary Receipts") will be issued for such
Depositary Shares, each of which will represent a fraction of a share of a
particular class or series of Preferred Stock, as described in the
applicable Prospectus Supplement.
Any class or series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and the depositary (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the
name and address of the Depositary with respect to such Depositary Shares.
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share will be entitled, in proportion to the applicable fraction of a
share of Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the Preferred Stock represented thereby
(including dividend and liquidation rights).
The description set forth above and in any Prospectus Supplement of
certain provisions of the Deposit Agreement, the Depositary Shares and the
Depositary Receipts does not purport to be complete and is qualified in
its entirety by reference to the forms of Deposit Agreement and Depositary
Receipts relating to each class or series of Preferred Stock which will be
filed with the Commission at or prior to the time of the offering of such
class or series of Preferred Stock. If so indicated in a Prospectus
Supplement, the terms of any class or series of Depositary Shares may
differ from the terms set forth herein.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received with respect to the Preferred Stock to the record
holders of Depositary Shares relating to such Preferred Stock in
proportion to the number of Depositary Shares owned by such holders on the
relevant record date. The Depositary shall distribute only such amount,
however, as can be distributed without attributing to any holder of
Depositary Shares a fraction of one cent, and the balance not so
distributed shall be added to and treated as part of the next sum received
by the Depositary for distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary
Shares in an equitable manner, unless the Depositary determines that it is
not feasible to make such distribution, in which case the Depositary may
sell such property and distribute the net proceeds from such sale to such
holders.
The Deposit Agreement will also contain provisions relating to the
manner in which any subscription or similar rights offered by the Company
to holders of Preferred Stock shall be made available to the holders of
Depositary Shares.
Redemption of Depositary Shares
If a class or series of Preferred Stock represented by Depositary
Shares is subject to redemption, the Depositary Shares will be redeemed
from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such class or series of Preferred
Stock held by the Depositary. The Depositary shall mail notice of
redemption not less than 30 and not more than 60 days prior to the date
fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing on the Depositary's
books. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect
to such class or series of Preferred Stock. Whenever the Company redeems
Preferred Stock held by the Depositary, the Depositary will redeem as of
the same redemption date the number of Depositary Shares representing
Preferred Stock so redeemed. If fewer than all the Depositary Shares are
to be redeemed, the Depositary Shares to be redeemed will be selected by
lot or pro rata as may be determined to be equitable by the Depositary.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be outstanding and all rights of the holders
of the Depositary Shares will cease, except the right to receive the
money, securities, or other property payable upon such redemption and any
money, securities, or other property to which the holders of such
Depositary Shares were entitled upon such redemption upon surrender to the
Depositary of the Depositary Receipts evidencing such Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notices of meeting to the record holders of
the Depositary Shares relating to such Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the
same date as the record date for the Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining
to the amount of the Preferred Stock represented by such holder's
Depositary Shares. The Depositary will endeavor, insofar as practicable,
to vote the number of shares of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company
will agree to take all reasonable action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary
will abstain from voting the Preferred Stock to the extent it does not
receive specific instructions from the holder of Depositary Shares
representing such shares of Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may be amended at any time by agreement
between the Company and the Depositary. However, any amendment which
materially and adversely alters the rights of the holders of Depositary
Shares will not be effective unless such amendment has been approved by
the holders of at least a majority of the Depositary Shares then
outstanding. The Deposit Agreement will only terminate if (i) all
outstanding Depositary Shares related thereto have been redeemed,
(ii) there has been a final distribution in respect of the Preferred Stock
in connection with any liquidation, dissolution or winding up of the
Company and such distribution has been distributed to the holders of the
related Depositary Shares, (iii) such termination is necessary to preserve
the Company's status as a REIT or a domestically controlled REIT, (iv)
each share of the related Preferred Stock shall have been converted into
securities of the Company not so represented by Depositary Shares, or (v)
a majority of each series of Preferred Stock affected by such termination
consents to such termination, whereupon the Depositary shall deliver or
make available to each holder of Depositary Receipts, upon surrender of
the Depositary Receipts held by such holder, such number of whole or
fractional shares of Preferred Stock as are represented by the Depositary
Shares evidenced by such Depositary Receipts together with any other
property held by the Depositary with respect to such Depositary Receipts.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements.
The Company will pay charges of the Depositary in connection with the
initial deposit of the Preferred Stock and issuance of Depositary
Receipts, all withdrawals of Preferred Stock by owners of Depositary
Shares and any redemption of the Preferred Stock. Holders of Depositary
Receipts will pay all other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be paid by the holders.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company
notice of its election to do so, and the Company may at any time remove
the Depositary, any such resignation or removal to take effect upon the
appointment of a successor Depositary and such successor Depositary's
acceptance of the appointment. A successor Depositary must be appointed
within 60 days after delivery of the notice of resignation or removal and
must be a bank or trust company having its principal office in the United
States and having a combined capital and surplus of at least $50,000,000.
Restrictions on Ownership
In order to safeguard the Company against loss of status as a REIT or a
domestically controlled REIT, the Deposit Agreement will contain
provisions restricting the ownership and transfer of Depositary Shares.
Such restrictions will be described in the applicable Prospectus
Supplement and will be referenced on the applicable Depositary Receipts.
Miscellaneous
The Depositary will forward all reports and communications from the
Company which are delivered to the Depositary and which the Company is
required or otherwise determines to furnish to the holders of the
Preferred Stock.
Neither the Depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations
of the Company and the Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder and they
will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares or Preferred Stock unless satisfactory
indemnity is furnished. They may rely upon written advice of counsel or
accountants, or information provided by persons presenting Preferred Stock
for deposit, holders of Depositary Shares or other persons believed to be
competent and on documents believed to be genuine.
PLAN OF DISTRIBUTION
The Securities may be sold through underwriters or dealers, directly to
one or more purchasers, or through agents. The Prospectus Supplement with
respect to the Securities will set forth the terms of the offering of the
Securities, including the name or names of any underwriters, dealers or
agents, the purchase price of the Securities and the proceeds to the
Company from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters'
compensation, the initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers, and any securities
exchanges on which the Securities may be listed.
If underwriters are used in the sale of the Securities, the Securities
may be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The Securities may be offered to the
public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting as
underwriters. The underwriter(s) with respect to a particular underwritten
offering of Securities will be named in the Prospectus Supplement relating
to such offering, and if an underwriting syndicate is used, the managing
underwriter(s) will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters or agents to
purchase the Securities will be subject to conditions precedent, and the
underwriters will be obligated to purchase all the Securities if any are
purchased. The initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from
time to time.
If dealers are utilized in the sale of Securities with respect to which
this Prospectus is delivered, such Securities will be sold to the dealers
as principals. The dealers may then resell such Securities to the public
at varying prices to be determined by such dealers at the time of resale.
The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement
relating thereto. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
In connection with the sale of the Securities, underwriters or agents
may receive compensation from the Company or from purchasers of Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters, agents and dealers participating in the
distribution of the Securities may be deemed to be underwriters and any
discounts or commissions received by them from the Company and any profit
on the resale of the Securities by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters, or dealers to solicit offers from certain
types of institutions to purchase Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject only to
those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
Agents, dealers, and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act,
or to contribution with respect to payments that such agents, dealers or
underwriters may be required to make with respect thereto. Agents,
dealers and underwriters may be customers of, engage in transactions with,
or perform services for the Company in the ordinary course of business.
The Preferred Stock and the Depositary Shares may or may not be listed
on a national securities exchange. The Common Stock currently trades on
the NYSE, and any Common Stock offered hereby will be listed on the NYSE,
subject to an official notice of issuance. No assurances can be given
that there will be a market for the Securities.
Pursuant to its participation rights to acquire Common Stock at the
same price as shares issued to third parties, so long as SC-USREALTY's
ownership of Common Stock on fully diluted basis does not drop below 15%
for more than 180 days (subject to certain conditions), in the event that
the Company issues shares of capital stock (including securities
convertible into or exchangeable or redeemable for capital stock of the
Company and including capital stock to be issued pursuant to the
conversion, exchange or redemption of other securities), SC-USREALTY will
be entitled to a participation right to purchase or subscribe for that
proportion of the total number of shares to be issued, including shares to
be issued to SC-USREALTY pursuant to the rights described in this
paragraph, equal to SC-USREALTY's proportionate holdings of Common Stock
outstanding prior to such issuance (but not to exceed 37.5% of the capital
stock issued). All purchases pursuant to such participation rights will
be at the same price and on the same terms and conditions as are
applicable to other purchasers.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain of the material federal income
tax considerations regarding the Company and is based on current law, is
for general information only and is not tax advice. This discussion does
not purport to deal with all aspects of taxation that may be relevant to
particular investors in light of their personal investment or tax
circumstances, or to certain types of holders (including insurance
companies, tax-exempt organizations, financial institutions or
broker-dealers, foreign corporations, persons who are not citizens or
residents of the United States and persons who own Securities as part of a
conversion transaction, as part of a hedging transaction or as a position
in a straddle for tax purposes) subject to special treatment under the
federal income tax laws. This summary does not give a detailed discussion
of any state, local, or foreign tax considerations. This summary is
qualified in its entirety by the applicable Code provisions, rules and
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as of the date hereof and all of which are
subject to change (which change may apply retroactively). Certain federal
income tax considerations relevant to the holders of Securities will be
provided in the applicable Prospectus Supplement.
As used in this section, the term "Company" refers to the Company and
all qualified subsidiaries (a wholly-owned subsidiary which is not treated
as a separate entity for federal income tax purposes) but excludes Regency
Realty Group, Inc. and its subsidiaries (collectively, the "Management
Company") (which is treated as a separate entity for federal income tax
purposes, although its results are consolidated with those of the Company
for financial reporting purposes).
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT THE APPLICABLE
PROSPECTUS SUPPLEMENT AS WELL AS HIS OR HER OWN TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE, OWNERSHIP AND
SALE OF SECURITIES IN AN ENTITY ELECTING TO BE TAXED AS A REAL ESTATE
INVESTMENT TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER
TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
General
The Company made an election to be taxed as a REIT under Sections 856
through 860 of the Code commencing with its taxable year ending December
31, 1993. The Company believes that it has been organized and operated in
such a manner as to qualify for taxation as a REIT under the Code for such
taxable year and all subsequent taxable years to date, and the Company
intends to continue to operate in such a manner in the future. However,
no assurance can be given that the Company will operate in a manner so as
to qualify or remain qualified as a REIT.
The following sets forth only a summary of the material aspects of the
Code sections that govern the federal income tax treatment of a REIT and
its shareholders.
It is the opinion of Foley & Lardner that the Company has been
organized in conformity with the requirements for qualification and
taxation as a REIT commencing with the Company's taxable year that ended
December 31, 1993 and for all subsequent taxable years to date, and its
method of operation will enable it to continue to be taxed as a REIT. It
must be emphasized that this opinion is based on various assumptions and
is conditioned upon certain representations made by the Company as to
factual matters including, but not limited to, those set forth below in
this discussion of "Federal Income Tax Considerations," those concerning
its business and properties, and certain matters relating to the Company's
manner of operation. Foley & Lardner is not aware of any facts or
circumstances that are inconsistent with these representations and
assumptions. The qualification and taxation as a REIT depends upon the
Company's ability to meet, through actual annual operating results, the
various income, asset, distribution, stock ownership and other tests
discussed below, the results of which will not be reviewed by nor be under
the control of Foley & Lardner. Accordingly, no assurance can be given
that the actual results of the Company's operation for any particular
taxable year will satisfy such requirements. For a discussion of the tax
consequences of failure to qualify as a real estate investment trust, see
"-- Failure to Qualify."
Taxation of the Company
As a REIT, the Company generally is not subject to federal corporate
income tax on its net income that is currently distributed to
shareholders. This treatment substantially eliminates the "double
taxation" (at the corporate and shareholder levels) that generally results
from an investment in a corporation. However, the Company will be subject
to federal income tax in the following circumstances. First, the Company
will be taxed at regular corporate rates on any undistributed REIT taxable
income, including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the "corporate alternative
minimum tax" on its items of tax preference. Third, if the Company has
(i) net income from the sale or other disposition of "foreclosure
property" (which is, in general, property acquired by the Company by
foreclosure or otherwise on default of a loan secured by the property)
which is held primarily for sale to customers in the ordinary course of
business or (ii) other non-qualifying net income from foreclosure
property, it will be subject to tax on such income at the highest
corporate rate. Fourth, if the Company has net income from "prohibited
transactions" (which are, in general, certain sales or other dispositions
of property held primarily for sale to customers in the ordinary course of
business other than foreclosure property), such income will be subject to
a 100% tax. Fifth, if the Company should fail to satisfy the 75% gross
income test or the 95% gross income test (as discussed below), and has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on the net
income attributable to the greater of the amount by which the Company
fails the 75% or 95% test, multiplied by a fraction intended to reflect
the Company's profitability. Sixth, if the Company should fail to
distribute during each calendar year at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain net
income for such year, and (iii) any undistributed taxable income from
prior years, it will be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. Seventh, if
during the 10-year period (the "Recognition Period") beginning on the
first day of the first taxable year for which the Company qualified as a
REIT, the Company recognizes gain on the disposition of any asset held by
the Company as of the beginning of such Recognition Period, then, to the
extent of the excess of (a) the fair market value of such asset as of the
beginning of such Recognition Period over (b) the Company's adjusted basis
in such asset as of the beginning of such Recognition Period (the
"Built-in Gain"), such gain will be subject to tax at the highest regular
corporate rate. Because the Company initially acquired its properties in
connection with its initial public offering in fully taxable transactions,
it is not anticipated that the Company will own any assets with
substantial Built-in Gain. Eighth, if the Company acquires any asset from
a C corporation (i.e., generally a corporation subject to full
corporate-level tax) in a transaction in which the basis of the asset in
the Company's hands is determined by reference to the basis of the asset
(or any other property) in the hands of the C corporation, and the Company
recognizes gain on the disposition of such asset during the Recognition
Period beginning on the date on which such asset was acquired by the
Company, then, to the extent of the Built-in Gain, such gain will be
subject to tax at the highest regular corporate rate. The result
described above with respect to the recognition of Built-in Gain during
the Recognition Period assumes the Company will make an election in
accordance with Notice 88-19 issued by the Internal Revenue Service
("IRS").
In addition, the Management Company is taxed on its income at regular
corporate rates.
Requirements for Qualification
A REIT is defined in the Code as a corporation, trust or association:
(1) which is managed by one or more trustees or directors; (2) the
beneficial ownership of which is evidenced by transferable shares or by
transferable certificates of beneficial interest; (3) which would be
taxable as a domestic corporation, but for Sections 856 through 859 of the
Code; (4) which is neither a financial institution nor an insurance
company subject to certain provisions of the Code; (5) the beneficial
ownership of which is held by 100 or more persons (determined without
reference to any rules of attribution); (6) not more than 50% in value of
the outstanding stock of which is owned during the last half of each
taxable year, directly or indirectly, by or for "five or fewer"
individuals (as defined in the Code to include certain entities); and (7)
which meets certain income and asset tests described below. Conditions
(1) to (4), inclusive, must be met during the entire taxable year and
condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12
months. The Company has previously issued sufficient shares to allow it
to satisfy conditions (5) and (6). The Company's Articles of
Incorporation provide restrictions regarding the transfer of its shares
which are intended to assist the Company in continuing to satisfy the
stock ownership requirements described in (5) and (6) above. Moreover,
for the Company's taxable years commencing on or after January 1, 1998, if
the Company complies with regulatory rules pursuant to which it is
required to send annual letters to certain of its shareholders requesting
information regarding the actual ownership of its stock, but does not
know, or exercising reasonable diligence would not have known, whether it
failed to meet the requirement that it not be closely held, the Company
will be treated as having met the "five or fewer" requirement. If the
Company were to fail to comply with these regulatory rules for any year,
it would be subject to a $25,000 penalty. If the Company's failure to
comply was due to intentional disregard of the requirements, the penalty
would be increased to $50,000. However, if the Company's failure to
comply was due to reasonable cause and not willful neglect, no penalty
would be imposed.
The Company owns its properties primarily through Regency Centers, L.P.
(the "Partnership"), of which the Company is the general partner and the
former owners of certain Partnership properties are limited partners. The
Company intends for the Partnership to be its primary property-owning
vehicle in the future. The Company presently owns certain of its
properties directly or indirectly through other partnerships (collectively
with the Partnership, the "Property Partnerships"), of which the partners
are the Company, qualified REIT subsidiaries (which are described below),
Property Partnerships and, in certain instances, third parties. In the
case of a REIT which is a partner in a partnership either directly or
indirectly through a qualified REIT subsidiary, Treasury Regulations
provide that the REIT will be deemed to own its proportionate share of the
assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character
of the assets and gross income of the partnership will retain the same
character in the hands of the REIT for purposes of Section 856 of the
Code, including satisfying the gross income tests and asset tests. Thus,
the Company's proportionate share of the assets, liabilities and items of
income of the Property Partnerships (other than certain properties held by
the Management Company), is treated as assets, liabilities and items of
income of the Company for purposes of applying the requirements described
below.
Section 856(i) of the Code provides that a corporation, 100% of whose
stock is held by a REIT at all times during the corporation's existence,
is a "qualified REIT subsidiary." For taxable years of the Company
beginning on or after January 1, 1998, the Company must own all of the
stock of a subsidiary but not from the commencement of the subsidiary's
existence, in order for a subsidiary to be a "qualified REIT subsidiary."
A qualified REIT subsidiary is not treated as a separate corporation, and
all assets, liabilities and items of income, deduction and credit of a
qualified REIT subsidiary are treated as assets, liabilities and such
items (as the case may be) of the REIT. Thus, in applying the
requirements described herein, the Company's qualified REIT subsidiaries
will be ignored, and all assets, liabilities and items of income,
deduction and credit of such subsidiaries will be treated as assets,
liabilities and items of the Company. The Company has not, however,
sought or received a ruling from the IRS that any of the Company's
subsidiaries is a "qualified REIT subsidiary." The Company currently owns
some of its properties indirectly through qualified REIT subsidiaries.
While this summary generally does not address state tax consequences, some
states may not recognize a qualified REIT subsidiary, which could cause a
subsidiary to be taxed or could cause the Company to fail to qualify as a
REIT under such state law.
Income Tests. In order for the Company to maintain its qualification
as a REIT, it must satisfy three gross income requirements annually.
First, at least 75% of the Company's gross income (excluding gross income
from prohibited transactions) for each taxable year must be derived
directly or indirectly from investments relating to real property or
mortgages on real property, including "rents from real property" and, in
certain circumstances, "interest," or from certain types of temporary
investments.
Second, at least 95% of the Company's gross income (excluding gross
income from prohibited transactions) for each taxable year must be derived
from real estate investments and from dividends, interest and gain from
the sale or disposition of stock or securities or from any combination of
the foregoing.
Third, for the tax years prior to 1998, short-term gain from the sale
or other disposition of stock or securities, gain from prohibited
transactions and gain on the sale or other disposition of real property
held for fewer than four years (apart from involuntary conversions and
sales of foreclosure property) must represent less than 30% of the
Company's gross income (including gross income from prohibited
transactions) for each taxable year.
Rents received by the Company qualify as "rents from real property" in
satisfying the gross income requirements for a REIT described above only
if the following conditions are met. First, the amount of rent must not
be based in whole or in part on the income or profits derived by any
person from such property, although an amount received or accrued
generally will not be excluded from the term "rents from real property"
solely by reason of being based on a fixed percentage or percentages of
receipts or sales. The Company does not anticipate charging rent for any
portion of any property that is based in whole or in part on the income or
profits of any person (except by reason of being based on a percentage of
receipts for sales, which is permitted by the Code). Second, the Code
provides that rents received from a tenant will not qualify as "rents from
real property" in satisfying the gross income tests if (i) the Company
directly or constructively owns a 10% or greater interest in such tenant
or (ii) any Related Tenant Owner directly or constructively owns 10% or
more by value of the Company. Constructive ownership is determined under
the attribution rules of Section 318 of the Code, as modified by Section
856(d)(5) of the Code. The Company does not anticipate receiving rents
from such a tenant. Additionally, pursuant to the Articles of
Incorporation, Related Tenant Owners are prohibited from acquiring
constructive ownership of more than 9.8% by value of the Company. Third,
rent attributable to personal property leased in connection with a lease
of real property will not qualify if it is greater than 15% of the total
rent received under the lease. Fourth, the Company generally must not
operate or manage the property or furnish or render services to the
tenants of such property, other than through an independent contractor
from whom the Company derives no income. The independent contractor
requirement, however, does not apply to the extent services performed by
the Company are "usually or customarily rendered" in connection with the
rental of space for occupancy and are not otherwise considered "rendered
to the occupant." In addition, for its 1998 taxable year and thereafter,
the Company is permitted to receive up to 1% of its gross income from the
provision of non-customary services and still treat all other amounts
received from such property as "rents from real property." The Company
provides certain services with respect to the properties that the Company
believes complies with the "usually or customarily rendered" requirement.
The Company will hire independent contractors from whom the Company
derives no income to perform such services, to the extent that the
performance of such services by the Company would cause amounts received
from its tenants to be excluded from rents from real property.
The term "interest" generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount
depends in whole or in part on the income or profits of any person.
However, an amount received or accrued generally will not be excluded from
the term "interest" solely by reason of being based on a fixed percentage
or percentages of receipts or sales.
It is possible that, from time to time, the Company or the Partnership
will enter into hedging transactions with respect to one or more of its
assets or liabilities. Any such hedging transactions could take a variety
of forms. If the Company or the Partnership enters into an interest rate
swap or cap contract to hedge any variable rate indebtedness incurred to
acquire or carry real estate assets, any periodic income or gain from the
disposition of such contract should be qualifying income for purposes of
the 95% gross income test but not for the 75% gross income test. For the
Company's taxable year which begins on January 1, 1998, and for all
taxable years thereafter, income from hedging transactions which is
qualifying income for the 95% gross income test also includes payments to
the Company under an option, futures contract, forward rate agreement, or
any similar financial instrument. Furthermore, for the Company's 1997
taxable year any such contract would be considered a "security" for
purposes of applying the 30% gross income test. To the extent that the
Company or the Partnership hedges with other types of financial
instruments or in other situations, it may not be entirely clear how the
income from those transactions will be treated for purposes of the various
income tests that apply to REITs under the Code. The Company intends to
structure any hedging transactions in a manner that does not jeopardize
its status as a REIT.
The Management Company receives fees in consideration of the
performance of management and administrative services with respect to
properties that are not owned by the Company. Distributions received by
the Company from the Management Company of its earnings do not qualify
under the 75% gross income test. The Company believes that the aggregate
amount of the distributions from the Management Company together with all
other non-qualifying income in any taxable year will not cause the Company
to exceed the limits on non-qualifying income under the 75% and 95% gross
income tests.
The Company believes that it has satisfied the 75% and 95% gross income
tests for taxable years ended prior to the date of this Prospectus and
intends to operate in such a manner so as to satisfy such tests in the
future. If the Company fails to satisfy one or both of the 75% or 95%
gross income tests for any taxable year, it may nevertheless qualify as a
REIT for such year if it is entitled to relief under certain provisions of
the Code. These relief provisions generally will be available if the
Company's failure to meet such tests was due to reasonable cause and not
due to willful neglect, the Company attaches a schedule of the sources of
its income to its federal income tax return, and any incorrect information
on the schedule was not due to fraud with intent to evade tax. It is not
possible to state whether in all circumstances the Company would be
entitled to the benefit of those relief provisions. As discussed above,
even if those relief provisions apply, a tax would be imposed with respect
to the excess net income.
Asset Tests. The Company, at the close of each quarter of its taxable
year, must also satisfy three tests relating to the nature of its assets.
First, at least 75% of the value of the Company's total assets must be
represented by real estate assets (including (i) its allocable share of
real estate assets which are held by the Partnership or other Property
Partnerships or which are held by "qualified REIT subsidiaries" of the
Company and (ii) stock or debt instruments held for not more than one year
purchased with the proceeds of a stock offering or long-term (at least
five years) debt offering of the Company), cash, cash items and government
securities. Second, not more than 25% of the value of the Company's total
assets may be represented by securities other than those in the 75% asset
class. Third, of the investments included in the 25% asset class, the
value of any one issuer's debt and equity securities owned by the Company
may not exceed (at the end of the quarter in which any of such securities
are acquired) 5% of the value of the Company's total assets and (subject
to limited exceptions) the Company may not own more than 10% of any one
issuer's outstanding voting securities.
The Company owns 41.25% of the non-voting preferred stock and the
Partnership owns 58.75% of the non-voting preferred stock and 6.96% of the
voting common stock of the Management Company. The Company represents
that the value of the stock held by the Company in the Management Company
did not exceed, at the date that the Company acquired such stock and for
any applicable quarter prior to the date of this Prospectus, 5% of the
total value of the Company's assets. No independent appraisals have been
obtained to support the Company's estimate of value, however, and Foley &
Lardner, in issuing its opinion on the Company's qualification as a REIT,
is relying on the Company's representation as to the limited value of the
stock interests in the Management Company. Although the Company plans to
take steps to ensure that it will continue to satisfy the 5% value test
for any subsequent quarter with respect to which retesting is to occur,
there can be no assurance that such steps will always be successful or
will not require a reduction in the Company's overall interest in the
Management Company. See "-- Failure to Qualify."
Annual Distribution Requirements. The Company, in order to qualify as
a REIT, is required to distribute dividends (other than capital gains
dividends) to its shareholders in an amount at least equal to: (a) the sum
of (i) 95% of the Company's "REIT taxable income" (computed without regard
to the dividends paid deduction and the Company's net capital gain) and
(ii) 95% of the net income (after tax), if any, from foreclosure property;
minus (b) the sum of certain items of non-cash income. In addition, if,
during the applicable Recognition Period, the Company disposes of any
asset with Built-in Gain, the Company will be required, pursuant to
Treasury Regulations which have not yet been promulgated, to distribute at
least 95% of the Built-in Gain (after tax), if any, recognized on the
disposition of such asset. Such distribution must be paid in the taxable
year to which it relates, or in the following taxable year if declared
before the Company timely files its tax return for such prior year and if
paid on or before the first regular dividend payment date after such
declaration. To the extent that the Company does not distribute all of
its net capital gain or distributes at least 95%, but less than 100%, of
its "REIT taxable income," as adjusted, it will be subject to tax thereon
at regular ordinary and capital gains corporate tax rates. For the
Company's taxable year beginning on January 1, 1998 and for all taxable
years thereafter, undistributed capital gains may be so designated by the
Company and in such event will be includable in the income of the holders
of shares of Common Stock. Such holders will be treated as having paid
the capital gains tax imposed on the Company on the designated amounts
included in their income as long-term capital gains. Such stockholders
would get an increase in their basis for income recognized and a decrease
in their basis for taxes paid by the Company. If the Company should fail
to distribute during each calendar year at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain
income for such year and (iii) any undistributed taxable income from prior
periods, the Company will be subject to a 4% excise tax on the excess of
such required distribution over the amounts actually distributed.
The Company intends to make timely distributions sufficient to satisfy
this annual distribution requirement in the future. It is possible that
the Company, from time to time, may not have sufficient cash or other
liquid assets to meet the 95% distribution requirement due to timing
differences between the actual receipt of income and the actual payment of
deductible expenses and the inclusion of such income and deduction of such
expenses in arriving at the taxable income of the Company, or if the
amount of nondeductible expenses such as principal amortization or capital
expenditures exceeds the amount of noncash deductions. In the event that
such timing differences occur, in order to meet the 95% distribution
requirement, the Company may find it necessary to arrange for short-term,
or possibly long-term, borrowings to permit the payment of required
dividends or to pay dividends in the form of taxable stock dividends.
Under certain circumstances, the Company may be able to rectify a
failure to meet the distribution requirement for a certain year by paying
"deficiency dividends" to shareholders in a later year, which may be
included in the Company's deduction for dividends paid for the earlier
year. Thus, the Company may be able to avoid being taxed on amounts
distributed as deficiency dividends; however, the Company will be required
to pay to the IRS interest based upon the amount of any deduction taken
for deficiency dividends.
Failure to Qualify
If the Company fails to qualify for taxation as a REIT in any taxable
year, and the relief provisions do not apply, the Company will be subject
to tax (including any applicable corporate alternative minimum tax) on its
taxable income at regular corporate rates. Such a failure could have an
adverse effect on the market value and marketability of the Securities.
Distributions to shareholders in any year in which the Company fails to
qualify will not be deductible by the Company nor will they be required to
be made. In such event, to the extent of current and accumulated earnings
and profits, all distributions to shareholders will be taxable as ordinary
income, and, subject to certain limitations of the Code, corporate
distributees may be eligible for the dividends received deduction. Unless
entitled to relief under specific statutory provisions, the Company will
also be disqualified from taxation as a REIT for the four taxable years
following the year during which qualification was lost. It is not
possible to state whether the Company would be entitled to such statutory
relief.
Taxation of Taxable Domestic Shareholders
As long as the Company qualifies as a REIT, distributions made to its
taxable domestic shareholders out of current or accumulated earnings and
profits (and not designated as capital gains dividends) will result in
ordinary income. Corporate shareholders will not be entitled to the
dividends received deduction. Distributions that are designated as
capital gains dividends will be taxed as gain from the sale or exchange of
a capital asset held for more than one year to the extent they do not
exceed the Company's actual net capital gain for the taxable year without
regard to the period for which the shareholder has held its stock.
However, corporate shareholders may be required to treat up to 20% of
certain capital gains dividends as ordinary income. Distributions in
excess of current and accumulated earnings and profits will not be taxable
to the extent that they do not exceed the adjusted basis of the
shareholder's shares, but rather will reduce a shareholder's adjusted
basis in such shares. To the extent that such distributions exceed the
adjusted basis of a shareholder's shares, they will be included in income
as long-term capital gain (or short-term capital gain if the shares have
been held for one year or less), assuming the shares are a capital asset
in the hands of the shareholder. In addition, any dividend declared by
the Company in October, November or December of any year payable to a
shareholder of record on a specific date in any such month shall be
treated as both paid by the Company and received by the shareholder on
December 31 of such year, provided that the dividend is actually paid by
the Company during January of the following calendar year.
Shareholders may not include any net operating losses or capital losses
of the Company in their individual income tax returns. In general, any
loss upon the sale or exchange of shares by a shareholder who has held
such shares for six months or less (after applying certain holding period
rules) will be treated as a long-term capital loss to the extent
distributions from the Company on such shares were required to be treated
by such shareholder as long-term capital gain.
Taxation of Tax-Exempt Shareholders
In Revenue Ruling 66-106, 1966-1 C.B. 151, the IRS ruled that amounts
distributed by a REIT to a tax-exempt employees' pension trust did not
constitute "unrelated business taxable income" ("UBTI"). Revenue rulings
are interpretive in nature and subject to revocation or modification by
the IRS. Based upon Revenue Ruling 66-106 and the analysis therein,
except as noted below, distributions to tax-exempt shareholders should not
constitute UBTI where (a) the shareholder has not financed the acquisition
of its shares with "acquisition indebtedness" within the meaning of the
Code, and (b) the shares are not used by the shareholder in an unrelated
trade or business.
Under the Omnibus Budget Reconciliation Act of 1993, certain pension
trusts holding more than 10% by value of a REIT at any time during a
taxable year are treated as having UBTI which bears the same ratio to the
aggregate dividends paid (or treated as paid) by the REIT to such trust as
(i) the gross income of the REIT (less any direct expenses related
thereto) which would be treated as UBTI if the REIT were a pension trust,
bears to (ii) the gross income of the REIT (less any direct expenses
related thereto), but only if such ratio is at least 5%. This rule for
UBTI only applies to pension trusts investing in a REIT which would have
been considered "closely held" under Section 542(a)(2) of the Code, had
such section not been amended by the Omnibus Budget Reconciliation Act of
1993. In addition, the rule only applies where at least one pension trust
holds more than 25% by value of the REIT or where one or more pension
trusts (each owning more than 10% by value of the REIT) hold in aggregate
more than 50% by value of the REIT.
Other Tax Consequences
Most of the Company's investments are through the Property
Partnerships. These partnerships may involve special tax risks. Such
risks include possible challenge by the IRS of (i) allocations of income
and expense items, which could affect the computation of taxable income of
the Company, and (ii) the status of the Property Partnerships as
partnerships (as opposed to associations taxable as corporations or
entities that may be disregarded as entities separate from their owners or
as qualified REIT subsidiaries) for income tax purposes. In the opinion
of Foley & Lardner, which is based on (i) analysis of the partnership
agreements for each Property Partnership, and (ii) the representations of
the Company that such agreements fully reflect all amendments and
modifications to such agreements as of the date of this Prospectus, the
partnership allocations of income and expense items for the Property
Partnerships (classified as partnerships for federal income tax purposes)
have substantial economic effect under Section 704(b) of the Code and the
Treasury Regulations thereunder, and each of the Property Partnerships has
been and will continue to be treated for federal income tax purposes as
(i) a partnership, (ii) a qualified REIT subsidiary under the Code or
(iii) an entity that may be disregarded as an entity separate from its
owner under Treasury Regulation Section 301.7701-3. See "-- Requirements
for Qualification."
The Company and its Security holders may be subject to state or local
taxation in various state or local jurisdictions, including those in which
it or they transact business or reside. The state and local tax treatment
of the Company and its Security holders may not conform to the federal
income tax consequences discussed above. Consequently, prospective
Security holders should consult their own tax advisors regarding the
effect of state and local tax laws on an investment in the Company.
Backup Withholding
The Company will report to its domestic shareholders and to the IRS the
amount of dividends paid during each calendar year, and the amount of tax
withheld, if any. Under the backup withholding rules, a shareholder may
be subject to backup withholding at the rate of 31% with respect to
dividends paid unless such shareholder (a) is a corporation or another
form of entity exempt from backup withholding and, when required,
demonstrates this fact, or (b) provides a taxpayer identification number,
certifies to no loss of exemption from backup withholding, and otherwise
complies with applicable requirements of the backup withholding rules. A
shareholder that does not provide the Company with a correct taxpayer
identification number may also be subject to penalties imposed by the IRS.
Any amount paid as backup withholding will be creditable against the
shareholder's income tax liability. In addition, the Company may be
required to withhold a portion of capital gain distributions to any
shareholders who fail to certify their non-foreign status to the Company.
ERISA CONSIDERATIONS
The following is a summary of material considerations arising under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
the prohibited transactions provisions of Section 4975 of the Code that
may be relevant to a prospective purchaser. This discussion does not
purport to deal with all aspects of ERISA or Section 4975 of the Code that
may be relevant to particular shareholders (including plans subject to
Title I of ERISA, other retirement plans and Individual Retirement
Accounts ("IRA's") subject to the prohibited transaction provisions of
Section 4975 of the Code, and governmental plans or church plans that are
exempt from ERISA and Section 4975 of the Code but that may be subject to
the prohibited transaction provisions of Section 503 of the Code and to
state law requirements) in light of their particular circumstances.
A FIDUCIARY MAKING THE DECISION TO INVEST IN SECURITIES ON BEHALF OF A
PROSPECTIVE PURCHASER WHICH IS AN EMPLOYEE BENEFIT PLAN, A TAX QUALIFIED
RETIREMENT PLAN, OR AN IRA IS ADVISED TO CONSULT ITS OWN LEGAL ADVISOR
REGARDING THE SPECIFIC CONSIDERATIONS ARISING UNDER ERISA, SECTIONS 4975
AND 503 OF THE CODE, AND STATE LAW WITH RESPECT TO THE PURCHASE,
OWNERSHIP, OR SALE OF THE SHARES BY SUCH PLAN OR IRA.
Employee Benefit Plans, Tax Qualified Retirement Plans and IRA's
Each fiduciary of a pension, profit sharing, or other employee benefit
plan subject to Title I of ERISA (an "ERISA Plan") should carefully
consider whether an investment in the Securities is consistent with his
fiduciary responsibilities under ERISA. The fiduciary must make its own
determination as to whether an investment in the Securities (i) is
permissible under the documents governing the ERISA Plan, (ii) is
appropriate for the ERISA Plan under the general fiduciary standards of
investment prudence and diversification, taking into account the overall
investment policy of the ERISA Plan and the composition of the ERISA
Plan's investment portfolio, and (iii) would result in a nonexempt
prohibited transaction under ERISA and the Code.
The fiduciary of an IRA or of a qualified retirement plan not subject
to Title I of ERISA because it is a governmental or church plan or because
it does not cover common law employees (a "Non-ERISA Plan") should
consider that such an IRA or Non-ERISA Plan may only make investments that
are authorized by the appropriate governing documents and under applicable
state law. The fiduciary should also consider the applicable prohibited
transaction rules of Sections 4975 and 503 of the Code.
Status of the REIT
The following section discusses certain principles that apply in
determining whether the fiduciary requirements of ERISA and the prohibited
transaction provisions of ERISA and the Code apply to an entity because
one or more investors in the entity's equity interests is an ERISA Plan or
is a Non-ERISA Plan or IRA subject to Section 4975 of the Code. An ERISA
Plan fiduciary should also consider the relevance of these principles to
ERISA's prohibition on improper delegation of control over or
responsibility for "plan assets" and ERISA's imposition of co-fiduciary
liability on a fiduciary who participates in, permits (by action or
inaction) the occurrence of, or fails to remedy a known breach by another
fiduciary.
Under the Department of Labor regulations as to what constitutes assets
of an employee benefit plan (the "DOL Regulations"), if an ERISA Plan
acquires an equity interest in an entity, which interest is neither a
"publicly offered security" nor a security issued by an investment company
registered under the Investment Company Act of 1940, as amended, the ERISA
Plan assets would include, for purposes of the fiduciary responsibility
provisions of ERISA, both the equity interest and an undivided interest in
each of the entity's underlying assets unless certain specified exceptions
apply. The DOL Regulations define a publicly offered security as a
security that is "widely held," "freely transferable," and either part of
a class of securities registered under the Securities Exchange Act of
1934, or sold pursuant to an effective registration statement under the
Securities Act (provided the securities are registered under the
Securities Exchange Act of 1934 within 120 days after the end of the
fiscal year of the issuer during which the offering occurred). The equity
Securities offered hereby will be sold in an offering registered under the
Securities Act and are or are expected to be registered under the
Securities Exchange Act of 1934.
The DOL Regulations provide that a security is "widely held" only if it
is part of a class of securities that is owned by 100 or more investors
independent of the issuer and of one another. A security will not fail to
be "widely held" because the number of independent investors falls below
100 as a result of events beyond the issuer's control. The Common Stock
is "widely held."
The DOL Regulations provide that whether a security is "freely
transferable" is a factual question to be determined on the basis of all
relevant facts and circumstances. The DOL Regulations further provide
that when a security is part of an offering in which the minimum
investment is $10,000 or less, as is expected to be the case with this
offering, certain restrictions ordinarily will not, alone or in
combination, affect the finding that such securities are freely
transferable. The Company believes that restrictions imposed under the
Articles of Incorporation on the transfer of its capital stock are limited
to the restrictions on transfers generally permitted under the DOL
Regulations and are not likely to result in the failure of its capital
stock to be "freely transferable." The DOL Regulations only establish a
presumption in favor of the finding of free transferability, and,
therefore, no assurance can be given that the Department of Labor and the
U.S. Treasury Department will not reach a contrary conclusion.
LEGAL MATTERS
The validity of the Securities to which this Prospectus relates and
certain tax matters described under "Federal Income Tax Considerations"
and "ERISA Considerations" will be passed upon for the Company by Foley &
Lardner, Jacksonville, Florida. Attorneys with Foley & Lardner
representing the Company with respect to this offering beneficially owned
approximately 4,100 shares of Common Stock as of the date of this
Prospectus.
EXPERTS
The consolidated financial statements and schedule of the Company as of
December 31, 1997 and 1996, and for each of the years in the three year
period ended December 31, 1997, have been incorporated by reference herein
and in the Registration Statement in reliance upon the reports of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. To the extent that KPMG Peat Marwick LLP audits
and reports on consolidated financial statements of the Company issued at
future dates, and consents to the use of their report thereon, such
consolidated financial statements also will be incorporated by reference
in the Registration Statement in reliance upon their reports and said
authority.
===================================
No dealer, salesperson or any
other person has been authorized
to give any information or to
make any representations other
than those contained in this
Prospectus in connection with
the offer made by this
Prospectus and, if given or
made, such information or
representations must not be Regency Realty
relied upon as having been Corporation
authorized by the Company or by
any of the Underwriters. This _____________
Prospectus does not constitute
an offer to sell or the PROSPECTUS
solicitation of any offer to buy _____________
securities other than the
Securities offered by this
Prospectus, nor shall it Preferred Stock
constitute an offer to sell or a
solicitation of any offer to buy Depositary Shares
the Securities by anyone in any
jurisdiction in which such offer Common Stock
or solicitation is not
authorized or in which the
person making such offer or
solicitation is not qualified to
do so or to any person to whom
it is unlawful to make such
offer or solicitation. Neither
the delivery of this Prospectus
nor any sale made hereunder
shall, under any circumstances,
create an implication that the
information contained herein is __________, 1998
correct as of any time
subsequent to the date hereof.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . 4
The Company . . . . . . . . . . . . . . . . . . . . . . 9
Use of Proceeds . . . . . . . . . . . . . . . . . . . . 9
Consolidated Ratios of Earnings to Combined Fixed
Charges and Preferred Stock Dividends . . . . . . . . 9
Capital Stock . . . . . . . . . . . . . . . . . . . . 10
Description of Common Stock . . . . . . . . . . . . . . . 15
Description of Preferred Stock . . . . . . . . . . . . . 16
Description of Depositary Shares . . . . . . . . . . . . 20
Plan of Distribution . . . . . . . . . . . . . . . . . . 23
Federal Income Tax Considerations . . . . . . . . . . . . 25
ERISA Considerations . . . . . . . . . . . . . . . . . . 34
Legal Matters . . . . . . . . . . . . . . . . . . . . . . 36
Experts . . . . . . . . . . . . . . . . . . . . . . . . . 36
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the approximate amount of fees and
expenses payable by the Registrant in connection with the issuance and
distribution of the securities registered hereby.
Securities and Exchange Commission
Registration Fee $121,212
NASD Fee $ 30,500*
Exchange Listing Fee $ 52,500*
Transfer Agent's Fees $ 5,000*
Printing and Delivery $ 50,000*
Legal Fees and Expenses $120,000*
Accounting Fees and Expenses $ 60,000*
Blue Sky Fees and Expenses $ 10,000*
Depositary's Fees $ 5,000*
Miscellaneous $ 50,788*
-------
Total $505,000*
=======
* Estimated
Item 15. Indemnification of Directors and Officers.
The Florida Business Corporation Act (the "Florida Act") permits a
Florida corporation to indemnify a present or former director or officer
of the corporation (and certain other persons serving at the request of
the corporation in related capacities) for liabilities, including legal
expenses, arising by reason of service in such capacity if such person
shall have acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and in any
criminal proceeding if such person had no reasonable cause to believe his
conduct was unlawful. However, in the case of actions brought by or in the
right of the corporation, no indemnification may be made with respect to
any matter as to which such director or officer shall have been adjudged
liable, except in certain limited circumstances.
Article X of the Registrant's Bylaws provides that the Registrant shall
indemnify directors and executive officers to the fullest extent now or
hereafter permitted by the Florida Act. In addition, the Registrant has
entered into Indemnification Agreements with its directors and executive
officers in which the Registrant has agreed to indemnify such persons to
the fullest extent now or hereafter permitted by the Florida Act.
Item 16. Exhibits.
*1.1 Form of Underwriting Agreement (Common Stock)
*1.2 Form of Underwriting Agreement (Preferred Stock)
*1.3 Form of Underwriting Agreement (Depositary Shares)
*4.1 Form of Preferred Stock Certificate of Designation
*4.2 Form of Deposit Agreement
*4.3 Form of Depositary Receipt
*5. Opinion of Foley & Lardner as to the legality of the securities
to be issued
*8. Opinion of Foley & Lardner as to tax aspects of the offering
(included in Exhibit 5)
12. Statement re Computation of Ratios
*23.1 Consent of Foley & Lardner (included in Opinion filed as Exhibit
5)
23.2 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney (included on Signature Page of previously
filed Registration Statement)
24.2 Certified Board Resolutions Authorizing Powers of Attorney
(previously filed)
_______________
*If applicable, to be filed by post-effective amendment or by a current
report on Form 8-K pursuant to the Securities Exchange Act of 1934, as
appropriate.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement (i) to
include any prospectus required by section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act of 1933, if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement, and (iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Jacksonville, State of Florida,
on July 27, 1998.
REGENCY REALTY CORPORATION
By: /s/ Martin E. Stein, Jr.
Martin E. Stein, Jr., Chairman of the Board,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: July 27, 1998 /s/ Martin E. Stein, Jr.
Martin E. Stein, Jr., Chairman of the
Board, President and Chief Executive
Officer
Date: July 27, 1998 /s/ Bruce M. Johnson
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: July 27, 1998 /s/ J. Christian Leavitt
J. Christian Leavitt, Vice President,
Secretary, Treasurer and Principal
Accounting Officer
Date: July 27, 1998 *
Joan W. Stein, Chairman Emeritus and
Director
Date: July 27, 1998 *
Richard W. Stein, Director
Date: July 27, 1998 *
Edward L. Baker, Director
Date: July 27, 1998 *
Raymond L. Bank, Director
Date: July 27, 1998 *
J. Alexander Branch III, Director
Date: July 27, 1998 *
A.R. Carpenter, Director
Date: July 27, 1998 *
J. Dix Druce, Jr., Director
Date: July 27, 1998 *
Albert Ernest, Jr., Director
Date: July 27, 1998 *
Douglas S. Luke, Director
Date: July 27, 1997 *
Mary Lou Rogers, Director
Date: July 27, 1998
Lee S. Wielansky, Director
Date: July 27, 1998 /s/ Jonathan L. Smith
Jonathan L. Smith, Director
* By: /s/ Bruce M. Johnson
Bruce M. Johnson
Attorney-in-Fact
EXHIBIT INDEX
Sequential
Page No.
*1.1 Form of Underwriting Agreement (Common Stock)
*1.2 Form of Underwriting Agreement (Preferred Stock)
*1.3 Form of Underwriting Agreement (Depositary Shares)
*4.1 Form of Preferred Stock Certificate of Designation
*4.2 Form of Deposit Agreement
*4.3 Form of Depositary Receipt
*5. Opinion of Foley & Lardner as to the legality of the securities
to be issued
*8. Opinion of Foley & Lardner as to tax aspects of the offering
(included in Exhibit 5)
12. Statement re Computation of Ratios
*23.1 Consent of Foley & Lardner (included in Opinion filed as Exhibit
5)
23.2 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney (included on Signature Page of previously
filed Registration Statement)
24.2 Certified Board Resolutions Authorizing Powers of Attorney
(previously filed)
_______________
*If applicable, to be filed by post-effective amendment or by a current
report on Form 8-K pursuant to the Securities Exchange Act of 1934, as
appropriate.
Exhibit 12
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
-------- -------- -------- -------- --------
Earnings:
Net income $27,402,000 $ 9,965,000 $ 5,585,000 $ 5,384,000$ 896,000
Add: Fixed Charges 21,563,000 11,915,000 10,299,000 7,090,000 612,000
Deduct: Capitalized
Interest (1,896,000) (381,000) (285,000) (216,000) --
Deduct: Gain on Sale (451,000) -- -- -- --
Deduct: Preferred Stock
Dividends -- (57,000) (591,000) (284,000) --
46,618,000 21,442,000 15,008,000 11,974,000 1,508,000
Fixed Charges (a) 21,563,000 11,915,000 10,299,000 7,090,000 612,000
Ratio 2.2 1.8 1.5 1.7 2.5
(a) Includes interest expense and amortization of debt expense,
whether expensed or capitalized, and preferred stock dividend
requirements paid.
Exhibit 23.2
Accountants' Consent
The Board of Directors
Regency Realty Corporation:
We consent to the use of our reports incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the
Prospectus.
KPMG Peat Marwick LLP
Jacksonville, Florida
July 24, 1998
