Unassociated Document
As
filed with the Securities and Exchange Commission on January 18,
2006
Registration
No. 333-
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
CBL
& ASSOCIATES PROPERTIES, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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62-1545718
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(State
or other jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
No.)
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CBL
Center
2030
Hamilton Place Blvd., Suite 500
Chattanooga,
Tennessee 37421-6000
(423)
855-0001
(Address,
including Zip Code; and Telephone Number, including Area Code, of Registrant’s
Principal Executive Office)
Stephen
D. Lebovitz
President
and Secretary
Watermill
Center
800
South Street, Suite 395
Waltham,
MA 02453-1436
(781)
647-3330
(Name,
Address, including Zip Code, and Telephone Number, including Area Code, of
Agent
for Service)
with
copies to:
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Yaacov
M. Gross, Esq.
Morrison
& Foerster LLP
1290
Avenue of the Americas
New
York, New York 10104
(212)
468-8012
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Jeffery
V. Curry, Esq.
Shumacker
Witt Gaither & Whitaker, P.C.
2030
Hamilton Place Blvd., Suite 210
Chattanooga,
Tennessee 37421
(423)
425-7000
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Approximate
date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions and other factors.
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, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.¨
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, please check
the following box. x
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, please
check the following box.¨
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of
Securities
to Be Registered
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Amount
to
Be
Registered
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Proposed
Maximum Offering Price Per Security (1)
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Proposed Maximum
Aggregate
Offering Price
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Amount
of
Registration Fee
(6)
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Preferred
Stock (par value $.01 per share)(2)
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Common
Stock (par value $.01 per share)(3)
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Depositary
Shares, representing Preferred Stock (par value $.01 per
share)(4)
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Common
Stock Warrants
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Units
(5)
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(1)
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An
indeterminate aggregate offering price or number of each identified
class
is being registered as may from time to time be at indeterminate
prices.
Separate consideration may or may not be received for securities
that are
issuable on exercise, conversion or exchange of other securities
or that
are issued in units or represented by depositary shares. In accordance
with Rules 456(b) and 457(r), the Registrant is deferring payment
of all
of the registration fee, except as set forth in note (6) below with
respect to fees carried over from the Registrant’s prior Registration
Statement on Form S-3 (File No. 333-104882).
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(2)
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There
is being registered hereunder an indeterminate number of shares of
Preferred Stock as may be sold from time to time by the
Registrant.
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(3)
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There
is being registered hereunder an indeterminate number of shares of
Common
Stock as may be sold from time to time by the Registrant, as well
as an
indeterminate number of shares of Common Stock that may be offered
and
sold from time to time for the account of persons other than the
Registrant. There are also being registered hereunder an indeterminate
number of shares of Common Stock as shall be issuable upon exercise
of
Common Stock Warrants or conversion of Preferred Stock registered
hereunder.
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(4)
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To
be represented by Depositary Receipts representing an interest in
Preferred Stock.
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(5)
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There
is being registered an indeterminate amount and number of Units to
be
issued under a unit agreement, representing an interest in two or
more
securities, which may or may not be separable from one
another.
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(6)
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Pursuant
to Rule 457(p) under the Securities Act, any registration fee due
upon the
filing of a prospectus supplement shall be offset by the unused
registration fees paid in connection with the Registrant’s Registration
Statement on Form S-3 (File No. 333-104882) in the amount of $12,943.
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PROSPECTUS
CBL
& ASSOCIATES PROPERTIES, INC.
PREFERRED
STOCK, COMMON STOCK, DEPOSITARY SHARES,
COMMON
STOCK WARRANTS, UNITS
We
may
from time to time offer in one or more series (i) shares of our preferred stock,
(ii) shares of our common stock, par value $.01 per share, (iii) fractional
interests in shares of our common stock or preferred stock represented by
depositary shares, (iv) warrants to purchase shares of our common stock, and
(v)
units of our common stock, preferred stock or warrants, in amounts, at prices
and on terms to be determined at the time or times of offering. We may offer
the
preferred stock, depositary shares, common stock, common stock warrants and
units, separately or together, in separate classes or series, in amounts, at
prices and on terms to be set forth in a supplement to this Prospectus. In
addition, this Prospectus may be used to offer any of such securities for the
account of persons other than us.
We
will
include the specific terms of the offered securities in a prospectus supplement
that will include, as applicable, (i) in the case of preferred stock, the
specific series designation, number of shares, title and stated value, any
dividend, liquidation, optional or mandatory redemption, conversion, voting
and
other rights, and the public offering price; (ii) in the case of common stock,
the public offering price; (iii) in the case of depositary shares, the number
of
shares, the whole or fractional preferred stock represented by each such
depositary share and the public offering price; and (iv) in the case of common
stock warrants, the number, duration, offering price, exercise price,
detachability and any public offering price. In addition, such specific terms
may include limitations on direct or beneficial ownership and restrictions
on
transfer of the offered securities, in each case as may be appropriate to
preserve our status as a real estate investment trust, or REIT, for U.S. federal
income tax purposes.
The
applicable prospectus supplement will also contain information, where
applicable, about certain U.S. federal income tax considerations relating to,
and any listing on a securities exchange of, the offered securities covered
by
such prospectus supplement. Our common stock is listed on the New York Stock
Exchange under the symbol “CBL.” Our 8.75% Series B cumulative redeemable
preferred stock is listed on the New York Stock Exchange under the symbol
“CBLprB.” Our Depositary Shares, each representing 1/10th
of a
share of our 7.75% Series C cumulative redeemable preferred stock, are listed
on
the New York Stock Exchange under the symbol “CBLprC.” Our Depositary Shares,
each representing 1/10th of a share of our 7.375% Series D cumulative redeemable
preferred stock, are listed on the New York Stock Exchange under the symbol
“CBLprD.” Any common stock offered pursuant to a prospectus supplement will be
listed on such exchange, subject to official notice of issuance.
We
may
offer the offered securities directly, through agents that we will designate
from time to time, or to or through underwriters or dealers. If any agents
or
underwriters are involved in the sale of any of the offered securities, their
names, and any applicable purchase price, fee, commission or discount
arrangement with, between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable prospectus
supplement.
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Our
securities may not be sold without delivery of the applicable prospectus
supplement describing the method and terms of the offering of such offered
securities.
The
date of this Prospectus is January 18, 2006
TABLE
OF CONTENTS
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ABOUT
THIS PROSPECTUS
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4
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WHERE
TO FIND MORE INFORMATION
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4
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INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
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4
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CBL
& ASSOCIATES PROPERTIES, INC
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5
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USE
OF PROCEEDS
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5
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DESCRIPTION
OF CAPITAL STOCK
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6
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DESCRIPTION
OF DEPOSITARY SHARES
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10
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DESCRIPTION
OF COMMON STOCK WARRANTS
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10
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DESCRIPTION
OF UNITS
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10
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CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
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10
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EXPERTS
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22
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LEGAL
MATTERS
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22
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ABOUT
THIS PROSPECTUS
All
references to “the Company,” “we,” “our” and us in this prospectus mean CBL
& Associates Properties, Inc. and all entities owned or controlled by us
except where it is made clear that the term means only the parent company.
The
term
“you” refers to a prospective investor.
WHERE
TO FIND MORE INFORMATION
We
are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and in accordance with those requirements we file reports
and
other information with the SEC. The reports and other information can be
inspected and copied at the public reference facilities maintained by the SEC
at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Copies
of
this material can be obtained by mail from the Public Reference Section of
the
SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. The
SEC
maintains a Web site (http://www.sec.gov) that contains reports, proxy and
information statements and other materials that are filed through the SEC
Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. In addition,
our common stock, Series B preferred stock and the Depositary Shares
representing fractional interests in our Series C and Series D preferred stock
are listed on the New York Stock Exchange and we are required to file reports,
proxy and information statements and other information with the New York Stock
Exchange. These documents can be inspected at the principal office of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
We
have
filed with the SEC a registration statement on Form S-3 covering the securities
offered by this Prospectus. You should be aware that this Prospectus does not
contain all of the information contained or incorporated by reference in that
registration statement and its exhibits and schedules, particular portions
of
which have been omitted as permitted by SEC rules. For further information
about
our company and our securities, we refer you to the registration statement
and
its exhibits and schedules. You can inspect and obtain the registration
statement, including exhibits, schedules, reports and other information that
we
have filed with the SEC, as described in the preceding paragraph. Statements
contained in this Prospectus concerning the contents of any document we refer
you to are not necessarily complete and in each instance we refer you to the
applicable document filed with the SEC for more complete
information.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC’s
rules allow us to incorporate by reference information into this Prospectus.
This means that we can disclose important information to you by referring you
to
another document. Any information referred to in this way is considered part
of
this Prospectus from the date we file that document.
We
have
filed the documents listed below with the SEC under the Securities Exchange
Act
of 1934 and they are incorporated herein by reference:
(i)
Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as
amended by Amendment No. 1 thereto on Form 10-K/A filed on December 2, 2005
(excluding the
cover
page and Items 1, 5, 6, 7, 8 and 15, which have
been
updated in the Current Report on Form 8-K dated January 10, 2006);
(ii)
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2005;
(iii)
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2005;
(iv)
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2005;
(v)
Current Reports on Form 8-K filed on each of May 3, 2005, May 11, 2005, May
13,
2005, June 7, 2005, June 21, 2005, July 14, 2005, July 20, 2005, August 10,
2005, September 19, 2005, October 21, 2005, October 28, 2005 (the two separate
Current Reports dated October 24, 2005), November 1, 2005, November 22, 2005,
January 10, 2006 and January 18, 2006;
(vi)
the
description of our common stock contained in our Registration Statement on
Form
8-A dated October 25, 1993;
(vii)
the
description of our series B preferred stock contained in our Registration
Statement on Form 8-A dated June 11, 2002;
(viii)
the description of the Depositary Shares, each representing 1/10th
of a
share of our series C preferred stock contained in our Registration Statement
on
Form 8-A, filed on August 21, 2003; and
(ix)
the
description of the Depositary Shares, each representing 1/10th
of a
share of our series D preferred stock contained in our Registration Statement
on
Form 8-A, filed on December 10, 2004.
Any
document which we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to termination of
this
offering of securities (other
than, in each case, documents or information deemed to have been furnished
and
not filed in accordance with SEC rules) will
be
deemed to be incorporated by reference into, and to be part of, this Prospectus
from the date of filing of each such document.
Any
statement contained in this Prospectus or in a document incorporated or deemed
to be incorporated by reference into this Prospectus will, to the extent
applicable, be deemed to be modified, superseded or replaced by later statements
included in supplements or amendments to this Prospectus or in subsequently
filed documents which are in, or deemed to be incorporated by reference in,
this
Prospectus.
We
will
provide without charge to each person, including any beneficial owner, to whom
a
copy of this Prospectus is delivered, upon the written or oral request of any
such person, a copy of any or all documents incorporated by reference herein
(other than exhibits to those documents, unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be
addressed to our Investor Relations Department, CBL Center, 2030 Hamilton Place
Blvd., Suite 500, Chattanooga, Tennessee 37421-6000 (telephone number (423)
855-0001).
CBL
& ASSOCIATES PROPERTIES, INC.
We
are a
self-managed, self-administered, fully integrated real estate company. We own,
operate market, manage, lease, expand, develop, redevelop, acquire and finance
regional malls and community shopping centers. We have elected to be taxed
as a
REIT for U.S. federal income tax purposes. We currently own interests in a
portfolio of properties, consisting of enclosed regional malls, associated
centers, each of which is part of a regional shopping mall complex, community
centers, joint venture investments in similar types of properties and income
from mortgages and certain other assets. Our
shopping center properties are located in 26 states, but primarily in the
Southeast and Midwest regions of the United States. We
may
also own from time to time shopping center properties that are under development
or construction, as well as options to acquire certain shopping center
development sites.
We
conduct substantially all of our business through CBL & Associates Limited
Partnership, our “Operating Partnership.” We currently own an indirect majority
interest in the Operating
Partnership, and one of our wholly owned subsidiaries, CBL Holdings I, Inc.,
a
Delaware corporation, is its sole general partner. To comply with certain
technical requirements of the Internal Revenue Code of 1986, as amended,
applicable to REITs, our property management and development activities, sales
of peripheral land and maintenance operations are carried out through a separate
management company, CBL & Associates Management, Inc. Our Operating
Partnership owns 100% of the stock of the management company.
In
order
to maintain our qualification as a REIT for U.S. federal income tax purposes,
we
must distribute each year at least 90% of our taxable income, computed without
regard to net capital gains or the dividends-paid deduction.
We
were
organized on July 13, 1993 as a Delaware corporation to acquire substantially
all of the real estate properties owned by our predecessor company, CBL &
Associates, Inc., and its affiliates. Our principal executive offices are
located at CBL Center, 2030 Hamilton Place Blvd., Suite 500, Chattanooga,
Tennessee 37421-6000, and our telephone number is (423) 855-0001. Our website
can be found at www.cblproperties.com. The information contained in our website
is not part of this Prospectus.
USE
OF PROCEEDS
We
intend
to use the net proceeds from the sale of the offered securities as set forth
in
the applicable prospectus supplement. We will not receive proceeds from any
sales of securities by persons other than the Company, except as may otherwise
be stated in any applicable prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
Under
our
amended and restated certificate of incorporation, we have authority to issue
195,000,000 shares of all classes of capital stock, consisting of 180,000,000
shares of common stock and 15,000,000 shares of preferred stock. As of January
13, 2006, we had 62,542,929
shares
of
common stock outstanding, 2,000,000 shares of our 8.75% Series B cumulative
redeemable preferred stock outstanding, 460,000 shares of our 7.75% Series
C
cumulative redeemable preferred stock outstanding and 700,000 shares of our
7.375% Series D cumulative redeemable preferred stock outstanding.
Our
common stock is listed on the New York Stock Exchange under the symbol “CBL.”
Our 8.75% Series B cumulative redeemable preferred stock is listed on the New
York Stock Exchange under the symbol “CBLprB.” Our Depositary Shares, each
representing 1/10th
of a
share of our 7.75% Series C cumulative redeemable preferred stock, are listed
on
the New York Stock Exchange under the symbol “CBLprC.” Our Depositary Shares,
each representing 1/10th of a share of our 7.375% Series D cumulative redeemable
preferred stock, is listed on the New York Stock Exchange under the symbol
“CBLprD.”
Pursuant
to rights granted to us and the other limited partners in the partnership
agreement of the Operating Partnership, each of the limited partners may,
subject to certain conditions, exchange its limited partnership interests in
the
Operating Partnership for shares of common stock.
Subject
to the limitations prescribed by our certificate of incorporation, our Board
of
Directors is authorized to fix the number of shares constituting each series
of
preferred stock and to fix the designations, powers, preferences and rights
of
each series and the qualifications, limitations and restrictions, all without
any further vote or action by our stockholders. In particular, the Board of
Directors may determine the number of shares of each series, the dividend rate,
if any, the date, if any, on which dividends will accumulate, the dates, if
any,
on which dividends will be payable, the redemption rights, if any, of such
series, any sinking fund provisions, liquidation rights and preferences, and
any
conversion rights and voting rights. The preferred stock will, when issued,
be
fully paid and non-assessable and, unless otherwise provided in the preferred
stock designations, will have no preemptive rights. Under Delaware law, holders
of our preferred stock generally are not responsible for our debts or
obligations.
The
rights, preferences, privileges and restrictions of each series of our preferred
stock will be fixed by the articles supplementary relating to the series. A
prospectus supplement relating to each series will specify the terms of the
preferred stock.
Description
of Common Stock
The
following summary description of the common stock sets forth certain general
terms and provisions of the common stock to which any prospectus supplement
may
relate. The statements below describing the common stock do not purport to
be
complete and are in all respects subject to and qualified in their entirety
by
reference to our certificate of incorporation and bylaws.
The
holders of common stock are entitled to one vote per share on all matters voted
on by stockholders, including elections of directors, and, except as otherwise
required by law or as provided in our certificate of incorporation, the holders
of those shares exclusively possess all voting power. Our certificate of
incorporation does 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 distributions which may be declared
from
time to time by our Board of Directors from funds which are legally available,
and upon liquidation are entitled to receive
pro
rata
all of
our assets available for distribution to those holders. Holders of common stock
will not be entitled to any preemptive rights. Under Delaware law, holders
of
common stock generally are not responsible for our debts or
obligations.
Restrictions
on Transfer
For
us to
qualify as a REIT under the Internal Revenue Code, not more than 50% in value
of
our outstanding capital stock may be owned, directly or indirectly, by five
or
fewer individuals (as defined in the Internal Revenue Code to include certain
entities) during the last half of any taxable year. In addition, the capital
stock must be beneficially owned by 100 or more persons during at least 335
days
of a taxable year of 12 months or during a proportionate part of a shorter
taxable year and certain percentages of our gross income must be from particular
activities.
To
ensure
that we remain a qualified REIT, our certificate of incorporation contains
provisions, collectively referred to as the ownership limit provision,
restricting the acquisition of shares of our capital stock. The affirmative
vote
of 66 2/3%
of
the outstanding voting stock is required to amend this provision.
The
ownership limit provision provides that, subject to certain exceptions specified
in our certificate of incorporation, no person (other than Charles Lebovitz,
members of the Richard Jacobs Group (as defined), members of the David Jacobs
Group (as defined) and their respective affiliates under the applicable
attribution rules of the Internal Revenue Code) may own, or be deemed to own
by
virtue of the attribution provisions of the Internal Revenue Code, more than
6%
of the value of our outstanding capital stock. The ownership limit provision
further provides that, subject to certain restrictions, Charles Lebovitz and
his
respective affiliates (as defined under the applicable attribution rules of
the
Internal Revenue Code) may own beneficially or constructively in the aggregate
up to 25.4% of the value of the outstanding shares of our capital stock. The
ownership limit provision further provides that, subject to certain
restrictions, of the group comprised of Richard Jacobs and his respective
affiliates and David Jacobs and his respective affiliates (in each case, as
defined under the applicable attribution rules of the Internal Revenue Code),
any individual person (that is, any person who is treated as an individual
for
purposes of Section 542(a)(2) of the Internal Revenue Code) may own beneficially
or constructively in the aggregate up to 13.9% of the value of the outstanding
shares of our capital stock. Also, any two individuals of the group comprised
of
Richard Jacobs and his respective affiliates or of the group comprised of David
Jacobs and his respective affiliates may own beneficially or constructively
in
the aggregate up to 19.9% of the value of the outstanding shares of our capital
stock. The ownership limit is the percentage limitation on ownership applicable
to any given person pursuant to the ownership limit provision.
Our
Board
of Directors may, subject to certain conditions, waive the applicable ownership
limit upon receipt of a ruling from the IRS or an opinion of counsel to the
effect that such ownership will not jeopardize our status as a REIT. The
ownership limit provision will not apply if our Board of Directors and our
stockholders determine that we will not attempt to continue to qualify as a
REIT.
Any
issuance or transfer of capital stock to any person in excess of the applicable
ownership limit or any issuance or transfer of shares of capital stock which
would cause us to be beneficially owned by fewer than 100 persons, will be
null
and void and the intended transferee will acquire no rights to the stock. Any
acquisition of our capital stock and continued holding or ownership of our
capital stock constitutes, under our certificate of incorporation, a continuous
representation of compliance with the applicable ownership limit.
The
shares held in trust will be issued and outstanding shares of our capital stock,
entitled to the same rights and privileges as all other issued and outstanding
shares of capital stock of the same class and series. All dividends and other
distributions paid by us with respect to the shares held in trust will be held
by the trustee for the benefit of the designated charitable beneficiary. The
trustee will have the power to vote all shares held in trust from and after
the
date the shares are deemed to be transferred into trust. The prohibited owner
will be required to repay any dividends or other distributions received by
it
which are attributable to the shares held in trust if the record date for such
dividends or distributions was on or after the date those shares were
transferred to the trust. We can take all measures we deem necessary in order
to
recover such amounts.
The
trustee will have the exclusive right to designate a permitted transferee to
acquire the shares held in trust without violating the applicable ownership
restrictions for an amount equal to the fair market value (determined at the
time of transfer to this permitted transferee) of those shares. The trustee
will
pay to the aforementioned prohibited owner the lesser of: (a) the value of
the
shares at the time they were transferred to the trust and (b) the price received
by the trustee from the sale of such shares to the permitted transferee. The
excess of (x) the sale proceeds from the transfer to the permitted transferee
over (y) the amount paid to the prohibited owner, if any, will be distributed
to
the charitable beneficiary.
We
or our
designee will have the right to purchase any shares-in-trust, within a limited
period of time, at a price per share equal to the lesser of (i) the price per
share in the transaction that created such shares-in-trust and (ii) the market
price per share on the date we, or our designee, exercise such right to purchase
such shares-in-trust.
The
ownership limit provision will not be automatically removed even if the REIT
provisions of the Internal Revenue Code are changed so as to no longer contain
any ownership concentration limitation or if the ownership concentration
limitation is increased. Except as otherwise described above, any change in
the
ownership limit would require an amendment to our certificate of incorporation,
and such an amendment would require a 66 2/3%
vote
of the outstanding voting stock. In addition to preserving our status as a
REIT,
the ownership limit may have the effect of precluding an acquisition of control
of us without the approval of our Board of Directors.
All
certificates representing shares of any class of stock will bear a legend
referring to the restrictions described above.
All
persons who own, directly or by virtue of the attribution provisions of the
Internal Revenue Code, more than 5% (or such other percentage as may be required
by the Treasury Regulations) of the value of the outstanding shares of capital
stock must file an affidavit with us containing the information specified in
our
certificate of incorporation before January 30 of each year. In addition, each
stockholder will upon demand be required to disclose to us in writing such
information with respect to the direct, indirect and constructive ownership
of
shares of capital stock as our Board of Directors deems necessary to comply
with
the provisions of the Internal Revenue Code applicable to a REIT or to comply
with the requirements of any taxing authority or governmental
agency.
Limitation
of Liability of Directors
Our
certificate of incorporation provides that a director will not be personally
liable for monetary damages to us or our stockholders for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director’s
duty of loyalty to us or our stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the Delaware General Corporation Law
or
(iv) for any transaction from which the director derived an improper personal
benefit.
While
our
certificate of incorporation provides directors with protection from awards
for
monetary damages for breaches of their duty of care, it does not eliminate
such
duty. Accordingly, our certificate of incorporation will have no effect on
the
availability of equitable remedies such as an injunction or rescission based
on
a director’s breach of his or her duty of care. The provisions of our
certificate of incorporation described above apply to our officers only if
the
respective officer is one of our directors and is acting in his or her capacity
as director, and do not apply to our officers who are not
directors.
Indemnification
Agreements
We
have
entered into indemnification agreements with each of our officers and directors.
The indemnification agreements require, among other things, that we indemnify
our officers and directors to the fullest extent permitted by law, and advance
to our officers and directors all related expenses, subject to reimbursement
if
it is subsequently determined that indemnification is not permitted. We must
also indemnify and advance all expenses incurred by officers and directors
who
are successful in seeking to enforce their rights under the indemnification
agreements, and cover officers and directors under our directors’ and officers’
liability insurance, provided that such insurance is commercially available
at
reasonable expense. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by provisions in our
certificate of incorporation and bylaws, it provides greater assurance to
directors and officers that indemnification will be available, because, as
a
contract, it cannot be modified unilaterally in the future by our Board of
Directors or by the stockholders to eliminate the rights it
provides.
Other
Provisions of Our Certificate of Incorporation and Bylaws
Our
certificate of incorporation and bylaws include a number of provisions that
may
have the effect of encouraging persons considering unsolicited tender offers
or
other unilateral takeover proposals to negotiate with our Board of Directors
rather than pursue non-negotiated takeover attempts. These provisions
include:
Classified
Board of Directors. Our
certificate of incorporation provides for a Board of Directors divided into
three classes, with one class to be elected each year to serve for a three-year
term. As a result, at least two annual meetings of stockholders may be required
for the stockholders to change a majority of our Board of Directors. In
addition, our stockholders can only remove directors for cause and only by
a
vote of 75% of the outstanding voting stock. The classification of directors
and
the inability of stockholders to remove directors without cause make it more
difficult to change the composition of our Board of Directors. The provisions
of
our certificate of incorporation relating to the classification of our Board
of
Directors may only be amended by a 66 2/3%
vote
of the outstanding voting stock and the provision relating to the removal for
cause may only be amended by a 75% vote of the outstanding voting
stock.
Advance
Notice Requirements. Our
bylaws establish advance notice procedures with regard to stockholder proposals
relating to the nomination of candidates for election as directors or new
business to be brought before meetings of our stockholders. These procedures
provide that notice of such stockholder proposals must be timely given in
writing to our Secretary prior to the meeting at which the action is to be
taken. Generally, to be timely, notice must be received at our principal
executive offices not less than 60 days nor more than 90 days prior to the
meeting. The notice must contain certain information specified in the
bylaws.
Written
Consent of Stockholders. Our
certificate of incorporation requires all stockholder actions to be taken by
a
vote of the stockholders at an annual or special meeting and does not permit
action by stockholder consent. These provisions of our certificate of
incorporation may be amended only by a vote of 80% of the outstanding voting
stock.
Bylaw
Amendments. A
vote of 66 2/3%
of
the outstanding voting stock is necessary to amend the bylaws.
Stockholder
Rights Plan
Following
a two-for-one split of our common stock that was effected in the form of a
stock
dividend as of June 15, 2005, each share of our common stock automatically
trades with one half of a right (a “Right”), which will expire at the close of
business on April 29, 2009 (the “Final Expiration Date”), unless earlier
redeemed or exchanged by us as described below. Each whole Right entitles the
holder to purchase from us one ten-thousandth of a share of our Series 1999
Junior Participating Preferred Stock at a price of $100.00 per share, (the
“Purchase Price”), subject to certain adjustments.
The
Rights have certain anti-takeover effects. If the Rights are triggered as
described below, they will cause substantial dilution to any person or group
of
affiliated or associated persons that attempts to acquire us on terms not
approved by our Board of Directors.
The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors, since we may redeem the Rights at $.01
per
Right at any time until the close of business on the tenth day (or such earlier
or later date as described below) after a person or group has obtained
beneficial ownership or voting control of 15% or more of our voting
shares.
The
Rights, unless earlier redeemed or exchanged by us, become exercisable upon
the
close of business on the day (the “Distribution Date”) which is the earlier of
(i) the tenth day following a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership or
voting control of 15% or more of the outstanding shares of common stock (such
person or group, subject to certain exceptions, is treated as an “Acquiring
Person” once they cross such 15% threshold) and (ii) the tenth business day
(or such later date as may be determined by our Board prior to such time as
any
person or group of affiliated or associated persons becomes an Acquiring Person)
after the date of the commencement or public announcement of a person’s or
group’s intention to commence a tender or exchange offer, the consummation of
which would result in the acquisition of beneficial ownership or voting control
of 15% or more of our outstanding shares of common stock. Prior to any such
event, the Rights are not exercisable, are not represented by separate
certificates and are not transferable apart from the common stock. Upon the
occurrence of a Distribution Date, we will not be required to distribute
fractional Rights, and instead will pay cash to any holders who otherwise would
have been entitled to receive a fractional Right.
Our
Rights Agreement with SunTrust Bank, our transfer agent and Rights agent,
provides that, in the event a person or group of affiliated persons becomes
an
Acquiring Person, each holder of record of a whole Right, other than the
Acquiring Person (whose Rights will thereupon become null and void), will
thereafter have the right to receive, upon payment of the Purchase Price, that
number of shares of common stock having a market value at the time of the
transaction equal to two times the Purchase Price. Rights may not, however,
be
exercised for a number of shares that would violate the ownership limits
described above under “Description of Common Stock - Restrictions on
Transfer.”
In
addition, unless the Rights are earlier redeemed or exchanged, in the event
that, after the time that a person or group of affiliated or associated persons
becomes an Acquiring Person, we were to be acquired in a merger or other
business combination (in which any shares are changed into or exchanged for
other securities or assets) or more than 50% of our assets or earning power
were
to be sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of
record of a whole Right, other than the Acquiring Person (whose rights will
thereupon become null and void), will from and after such date have the right
to
receive, upon payment of the Purchase Price, that number of shares of common
stock of the acquiring company (or such other merger consideration as may have
been issued in the transaction, as applicable) having a market value at the
time
of such transaction equal to two times the Purchase Price.
At
any
time after any person or group of affiliated or associated persons becomes
an
Acquiring Person, our Board of Directors may issue shares of common stock in
exchange for the Rights (other than Rights owned by the Acquiring Person, which
will have become null and void), in whole or part, at an exchange ratio of
one
share of common stock per Right (subject to adjustment).
The
Rights Agreement also provides that the Company may pay cash in lieu of issuing
fractional shares upon exercise or redemption of the Rights.
At
any
time on or prior to the earlier of (i) the close of business on the tenth day
after a public announcement that a person or group of affiliated or associated
persons has become an Acquiring Person (or such earlier or later date as may
be
authorized by our Board of Directors), or (ii) the Final Expiration Date, we
may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(“Redemption Price”), payable at our election in cash, shares of common stock or
other consideration determined to be appropriate by our Board of Directors.
Under certain circumstances, the decision to redeem the Rights will require
the
concurrence of at least two-thirds of our directors. Following the effective
time of any such action by us, the right to exercise the Rights will terminate
and the only right of the holders of the Rights will be to receive the
Redemption Price.
While
the
Rights are redeemable, we may, except with respect to the Redemption Price
or
date of expiration of the Rights, amend the Rights in any manner, including
an
amendment to extend the time period in which the Rights may be redeemed. At
any
time when the Rights are not redeemable, we may amend the Rights in any manner
that does not materially adversely affect the interests of holders of the
Rights.
Delaware
Anti-Takeover Statute
The
Company is a Delaware corporation and is subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prevents an “interested
stockholder” (defined generally as a person owning 15% or more of a company’s
outstanding voting stock) from engaging in a “business combination” (as defined
in Section 203) with us for three years following the date that person becomes
an interested stockholder unless (a) before that person became an interested
holder, our Board of Directors approved the transaction in which the interested
holder became an interested stockholder or approved the business combination,
(b) upon completion of the transaction that resulted in the interested
stockholder becoming an interested stockholder, the interested stockholder
owns
85% of our voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers and by employee stock
plans that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer), or (c) following the transaction in which that person became an
interested stockholder, the business combination is approved by our Board of
Directors and authorized at a meeting of stockholders by the affirmative vote
of
the holders of at least two-thirds of our outstanding voting stock not owned
by
the interested stockholder.
Under
Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement
or
notification of certain extraordinary transactions involving us and a person
who
was not an interested stockholder during the previous three years or who became
an interested stockholder with the approval of a majority of our directors,
if
that extraordinary transaction is approved or not opposed by a majority of
the
directors who were directors before any person became an interested stockholder
in the previous three years or who were recommended for election or elected
to
succeed such directors by a majority of directors then in office.
DESCRIPTION
OF DEPOSITARY SHARES
We
may
issue depositary shares, each representing a fraction of a share of our common
stock or preferred stock, as will be specified in the applicable prospectus
supplement. In the event we elect to do so, we will issue to the public receipts
evidencing the depositary shares. The particular terms of the depositary shares
offered by any prospectus supplement will be described in such prospectus
supplement.
DESCRIPTION
OF COMMON STOCK WARRANTS
We
may
issue common stock warrants for the purchase of our common stock. We may issue
our common stock warrants independently or together with any other securities
offered by us in any prospectus supplement, and such common stock warrants
may
be attached to or separate from such offered securities. We will issue each
series of common stock warrants under a separate warrant agreement to be entered
into between a warrant agent specified in the prospectus supplement and us.
The
warrant agent will act solely as our agent in connection with the common stock
warrants of such series and will not assume any obligation or relationship
of
agency or trust for or with any holders or beneficial owners of common stock
warrants. The terms of the common stock warrants and the applicable warrant
agreements will be set forth in the applicable prospectus
supplement.
Reference
is made to the section captioned “Description of Capital Stock—Description of
Common Stock” for a general description of the shares of common stock to be
acquired upon the exercise of the common stock warrants, including a description
of certain restrictions on the ownership of common stock.
DESCRIPTION
OF UNITS
We
may
issue units comprised of one or more of the other securities that may be offered
under this prospectus, in any combination. Each unit will be issued so that
the
holder of the unit is also the holder of each security included in the unit.
Thus, the holder of a unit will have the rights and obligations of a holder
of
each included security.
An
applicable prospectus supplement will describe (i) the material terms of the
units and of the securities comprising the units, including whether and under
what circumstances those securities may be held or transferred separately,
(ii)
any material provisions relating to the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the units, (iii)
certain U.S. federal income tax considerations applicable to the units and
(iv) any material provisions of the governing unit agreement that differ from
those described above.
The
following summary of certain U.S. federal income tax considerations is based
on
current law, is for general information only, and is not tax advice.
This
summary is based on the Internal Revenue Code, Treasury Regulations,
administrative interpretations and judicial decisions, all as currently in
effect, and all of which are subject to differing interpretations or to change,
possibly with retroactive effect. We have not sought any ruling from the
Internal Revenue Service with respect to the statements made and the conclusions
reached in the following summary, and there can be no assurance that the
Internal Revenue Service will not assert, and that a court will not sustain,
a
position contrary to any of the tax consequences described below.
This
summary deals only with offered securities held as "capital assets" (within
the
meaning of Section 1221 of the Internal Revenue Code) and does not address
tax considerations applicable to an investor's particular circumstances or
to
investors that may be subject to special tax rules, including, without
limitation, financial institutions, insurance companies, dealers in securities
or currencies, persons subject to the mark-to-market rules of the Internal
Revenue Code, persons that will hold notes or our common stock as a position
in
a hedging transaction, "straddle" or "conversion transaction" for tax purposes,
entities treated as partnerships for U.S. federal income tax purposes, U.S.
holders (as defined below) that have a "functional currency" other than the
U.S.
dollar, persons subject to the alternative minimum tax provisions of the
Internal Revenue Code and, except as expressly indicated below, tax-exempt
organizations.
In
addition, if a partnership (including for this purpose any entity treated as
a
partnership for U.S. federal income tax purposes) is a holder of offered
securities, the tax treatment of a partner in the partnership will generally
depend upon the status of the partner and upon the activities of the
partnership. Holders that are partnerships, and partners in such partnerships,
should consult their tax advisors about the U.S. federal income tax consequences
of purchasing, holding and disposing of our offered securities.
Each
prospective purchaser of the offered securities is advised to consult his or
her
own tax advisor regarding the specific tax consequences to the purchaser of
the
purchase, ownership and sale of the offered securities and of our election
to be
taxed as a REIT, including the U.S. federal, state, local, foreign and other
tax
consequences of the purchase, ownership, sale and election and of potential
changes in applicable tax laws. In particular, foreign investors should consult
their own tax advisors concerning the tax consequences of an investment in
our
company, including the possibility of United States income tax withholding
on
our distributions.
Taxation
of CBL
We
have
elected to be taxed as a REIT under Sections 856 through 860 of the Internal
Revenue Code and applicable Treasury Regulations, which set forth the
requirements for qualifying as a REIT, commencing with our taxable year ended
December 31, 1993. We believe that, commencing with our taxable year ended
December 31, 1993, we have been organized and have operated, and are
operating, in such a manner so as to qualify for taxation as a REIT under the
Internal Revenue Code. We intend to continue to operate in such a manner, but
we
may not operate in a manner so as to qualify or remain qualified.
The
sections of the Internal Revenue Code relating to qualification and operation
as
a REIT are highly technical and complex. The following sets forth the material
aspects of the Internal Revenue Code sections that govern the U.S. federal
income tax treatment of a REIT. This summary is qualified in its entirety by
the
applicable Internal Revenue Code provisions and Treasury Regulations, and
administrative and judicial interpretations of the applicable Internal Revenue
Code provisions and Treasury Regulations. Morrison & Foerster LLP has acted
as our special tax counsel in connection with our election to be taxed as a
REIT.
In
connection with this filing, Morrison & Foerster LLP has rendered an opinion
to us that we have been organized and have operated in conformity with the
requirements for qualification and taxation as a REIT under the Internal Revenue
Code for each of our taxable years beginning with the taxable year ended
December 31, 2002 through our taxable year ended December 31, 2005, and if
we
continue to be organized and operated after December 31, 2005 in the same manner
as we have prior to that date, we will continue to qualify as a REIT. Morrison
& Foerster LLP's opinion is based on certain factual representations and
assumptions and methods of operations which are beyond its control and which
it
will not monitor on an ongoing basis. In particular, this opinion is based
upon
our factual representations concerning our business and properties and certain
factual representations and legal conclusions of Shumacker Witt
Gaither & Whitaker, P.C. Moreover, our qualification and taxation as a
REIT depend upon our ability to meet, through actual annual operating results,
certain distribution levels, a specified diversity of stock ownership, and
the
various other qualification tests imposed under the Internal Revenue Code as
discussed below. The annual operating results will not be reviewed by Morrison
& Foerster LLP. Accordingly, the actual results of our operations for any
particular taxable year may not satisfy these requirements. Further, the
anticipated income tax treatment described in this prospectus supplement may
be
changed, perhaps retroactively, by legislative, administrative or judicial
action at any time.
For
as
long as we qualify for taxation as a REIT, we generally will not be subject
to
U.S. federal corporate income taxes on our income that is currently distributed
to stockholders. The REIT requirements generally allow a REIT to deduct
dividends paid to its stockholders. This treatment substantially eliminates
the
"double taxation" (once at the corporate level and again at the stockholder
level) that generally results from investment in a corporation.
If
we
fail to qualify as a REIT in any year, however, we will be subject to U.S.
federal income tax as if we were an ordinary corporation. In addition, our
stockholders will be taxed in the same manner as stockholders of ordinary
corporations (including, in the case of stockholders that are not corporations,
potentially being eligible for preferential tax rates on dividends received
from
us). In that event, we could be subject to potentially significant tax
liabilities, the amount of cash available for distribution to our stockholders
could be reduced and we would not be obligated to make any distributions.
Moreover, we could be disqualified from taxation as a REIT for four taxable
years beginning after the first taxable year for which the loss of REIT status
occurred. For
a
discussion of the tax consequences of failure to qualify as a REIT, see "Certain
U.S. Federal Income Tax Considerations—Failure to Qualify" below.
Even
if
we qualify for taxation as a REIT, we may be subject to U.S. federal income
tax
as follows:
First,
we
will be taxed at regular corporate rates on any undistributed "real estate
investment trust taxable income," including undistributed net capital gain.
However, we can elect to "pass through" any of our taxes paid on our
undistributed net capital gain income to our stockholders on a proportional
basis.
Third,
if
we have (1) net income from the sale or other disposition of "foreclosure
property" which is held primarily for sale to customers in the ordinary course
of business or (2) other non-qualifying net income from foreclosure
property, we will be subject to tax at the highest corporate rate on such
income. Foreclosure property means property acquired by reason of a default
on a
lease or any indebtedness held by a REIT.
Fourth,
if we have net income from "prohibited transactions" (which are, in general,
sales or other dispositions of property, held primarily for sale to customers
in
the ordinary course of business, generally other than property held for at
least
four years that qualify for a statutory safe harbor, foreclosure property,
and
property involuntarily converted), such income will be subject to a 100% penalty
tax.
Fifth,
if
we
should fail to satisfy the gross income tests or the asset tests, and
nonetheless maintain
our
qualification as a REIT because certain other requirements have been satisfied,
we will ordinarily
be subject to a penalty tax relating to such failure, computed as described
below. Similarly, if we maintain our REIT status despite our failure to satisfy
one or more requirements for REIT qualification, other than the gross income
tests and asset tests, we must pay a penalty of $50,000 for each such
failure.
Sixth,
if
we should fail to distribute during each calendar year at least the sum of
(1) 85% of our ordinary income for such year, (2) 95% of our net
capital gain income for such year, and (3) any undistributed taxable income
from prior periods, we will be subject to a 4% excise tax on the excess of
such
required distribution over the amounts distributed.
Seventh,
if we acquire in the future 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 our hands is determined by reference to the
basis of the asset (or any other property) in the hands of the C corporation,
and we recognize gain on the disposition of such asset during the 10-year period
beginning on the date on which we acquired such asset, then, to the extent
of
any built-in, unrealized gain at the time of acquisition, such gain generally
will be subject to tax at the highest regular corporate rate.
Eighth,
if
we
receive non-arm's
length
income
as a result of services provided by
a
taxable REIT subsidiary, defined below, to
our
tenants, or if we receive certain other non-arm's-length income from a taxable
REIT subsidiary, we can be
subject to a 100%
corporate
level tax
on the
amount of the non-arm's-length income.
Requirements
for Qualification
Organizational
Requirements
In
order
to remain qualified as a REIT, we must continue to meet certain requirements,
discussed below, relating to our organization and sources of income, the nature
of our assets, and distributions of income to our stockholders.
The
Internal Revenue Code defines a REIT as a corporation, trust or association
(1) that is managed by one or more trustees or directors, (2) the
beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest, (3) that would be taxable
as a domestic corporation but for Sections 856 through 860 of the Internal
Revenue Code, (4) that is neither a financial institution nor an insurance
company subject to certain provisions of the Internal Revenue Code, (5) the
beneficial ownership of which is held by 100 or more persons, (6) during
the last half of each taxable year not more than 50% in value of the outstanding
stock of which has been owned, directly or indirectly, by five or fewer
individuals (as defined in the Internal Revenue Code) at any time, and
(7) that meets certain other tests, described below, regarding the nature
of its income and assets. The Internal Revenue Code provide that conditions
(1) to (4), inclusive, must be met during the entire taxable year, and that
condition (5) must be met during at least 335 days of a taxable year
of 12 months, or during a proportionate part of a taxable year of less than
12 months.
For
purposes of condition (6), certain tax-exempt entities are generally treated
as
individuals. However, a pension trust generally will not be considered an
individual for purposes of condition (6). Instead, beneficiaries of the pension
trust will be treated as holding stock of a REIT in proportion to their
actuarial interests in the trust. If
we
were to fail to satisfy condition (6) during a taxable year, that failure would
not result in our disqualification as a REIT under the Internal Revenue Code
for
such taxable year as long as (i) we satisfied the stockholder demand statement
requirements described in the succeeding paragraph and (ii) we did not know,
or
exercising reasonable diligence would not have known, whether we had failed
condition (6).
We
have
satisfied the requirements of conditions (1) through (4) and (7), and
we believe that the requirements of conditions (5) and (6) have been
and are currently satisfied. In addition, our certificate of incorporation
provides for restrictions regarding transfer of our shares in order to assist
us
in continuing to satisfy the share ownership requirements described in
conditions (5) and (6) above. These transfer restrictions are
described under the captions "Description of Capital Stock—Description of
Preferred Stock—Restrictions on Transfer" and "—Description of Common
Stock—Restrictions on Transfer" in the accompanying prospectus. Moreover,
to evidence compliance with these requirements, we must maintain records which
disclose the actual ownership of our outstanding common stock and preferred
stock. In fulfilling our obligations to maintain records, we must and will
demand written statements each year from the record holders of designated
percentages of our stock disclosing the actual owners of such stock. A list
of
those persons failing or refusing to comply with such demand must be maintained
as part of our records. A stockholder failing or refusing to comply with our
written demand must submit with its U.S. federal income tax returns a similar
statement disclosing the actual ownership of stock and certain other
information.
Although
we believe we have satisfied the stockholder demand statement requirements
described in the preceding paragraph, our failure to satisfy those requirements
will not result in our disqualification as a REIT under the Internal Revenue
Code but may result in the imposition of Internal Revenue Service penalties
against us.
We
currently have three "qualified REIT subsidiaries," CBL Holdings I, Inc.,
CBL Holdings II, Inc. and CBL/North Haven, Inc., and may have
additional qualified REIT subsidiaries in the future. A corporation that is
a
qualified REIT subsidiary will not be treated as a separate corporation, and
all
assets, liabilities, and items of income, deduction, and credit of a qualified
REIT subsidiary will be treated as assets, liabilities, and items of the REIT.
Thus, in applying these requirements, the separate existence of our qualified
REIT subsidiaries will be ignored, and all assets, liabilities, and items of
income, deduction, and credit of these subsidiaries will be treated as our
assets, liabilities and items of
income, deduction and credit. A qualified REIT subsidiary is not subject to
U.S.
federal income tax and our ownership of the stock of such a subsidiary will
not
violate the REIT asset tests.
In
the
case of a REIT that is a direct or indirect partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share,
generally based on its pro rata share of capital interest in the partnership,
of
the assets of the partnership and will be deemed to be entitled to the gross
income of the partnership attributable to that share. In addition, the character
of the assets and gross income of the partnership will retain the same character
in the hands of a partner qualifying as a REIT for purposes of the gross income
tests and the asset tests described below. Thus, our proportionate share of
the
assets, liabilities and items of income of the Operating Partnership and the
property partnerships will be treated as our assets, liabilities and items
of
income for purposes of applying the requirements described in this section,
provided that the Operating Partnership and property partnerships are treated
as
partnerships for U.S. federal income tax purposes.
Finally,
a corporation may not elect to become a REIT unless its taxable year is the
calendar year. Our taxable year is the calendar year.
Income
Tests
In
order
for us to maintain our qualification as a REIT, there are two gross income
requirements that must be satisfied annually. First, at least 75% of our gross
income, excluding gross income from prohibited transactions, for each taxable
year must consist of defined types of income derived directly or indirectly
from
investments relating to real property or mortgages on real property, including
"rents from real property," as described below, and, in certain circumstances,
interest, or from certain types of temporary investments. Second, at least
95%
of our gross income, excluding gross income from prohibited transactions, for
each taxable year must be derived from real property investments of those kinds,
dividends, other types of interest, gain from the sale or disposition of stock
or securities that do not constitute dealer property, or any combination of
the
foregoing. Dividends that we receive on our indirect ownership interest in
the
management company, as well as interest that we receive on our loan to the
management company and other interest income that is not secured by real estate,
generally will be includable under the 95% test but not under the 75%
test.
Rents
received or deemed to be received by us will qualify as "rents from real
property" for purposes of the gross income tests only if several conditions
are
met:
First,
the amount of rent must not be based, in whole or in part, on the income or
profits of any person. However, an amount received or accrued generally will
not
be excluded from the term "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts or sales.
Second,
rents received from a tenant will not qualify as rents from real property if
the
REIT, or a direct or indirect owner of 10% or more of the REIT, owns, directly
or constructively, 10% or more of the tenant, except that rents received from
a
taxable REIT subsidiary under certain circumstances qualify as rents from real
property even if we own more than a 10% interest in the subsidiary.
Third,
if
rent attributable to personal property leased in connection with a lease of
real
property is greater than 15% of the total rent received under the lease, then
the portion of rent attributable to the personal property will not qualify
as
rents from real property.
Fourth,
a
REIT may provide services to its tenants and the income will qualify as rents
from real property if the services are of a type that a tax exempt organization
can provide to its tenants without causing its rental income to be unrelated
business taxable income under the Internal Revenue Code. Services that would
give rise to unrelated business taxable income if provided by a tax exempt
organization must be provided either by the management company or by an
independent contractor who is adequately compensated and from whom the REIT
does
not derive any income; otherwise, all of the rent received from the tenant
for
whom the services are provided will fail to qualify as rents from real property
if the services income exceeds a de
minimis
amount.
However, rents will not be disqualified if a REIT provides de
minimis
impermissible services. For this purpose, services provided to tenants of a
property are considered de
minimis
where
income derived from the services rendered equals 1% or less of all income
derived from the property, with the threshold determined on a
property-by-property basis. For purposes of the 1% threshold, the amount treated
as received for any service may not be less than 150% of the direct cost
incurred in furnishing or rendering the service. Also note, however, that
receipts for services furnished, whether or not rendered by an independent
contractor, which are not customarily provided to tenants in properties of
a
similar class in the geographic market in which our property is located will
in
no event qualify as rents from real property.
Substantially
all of our income is derived from our partnership interest in the Operating
Partnership. The Operating Partnership's real estate investments, including
those held through the property partnerships, give rise to income that enables
us to satisfy all of the income tests described above. The Operating
Partnership's income is largely derived from its interests, both direct and
indirect, in the properties, which income, for the most part, qualifies as
"rents from real property" for purposes of the 75% and the 95% gross income
tests. The Operating Partnership also derives dividend income from its interest
in the management company.
None
of
us, the Operating Partnership or any of the property partnerships has a plan
or
intention to (1) charge rent for 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 or sales, as described above) other than relatively
minor amounts that do not affect compliance with the above tests; (2) rent
any property to a tenant of which we, or an owner of 10% or more of our stock,
directly or indirectly, own 10% or more, other than under leases with
CBL & Associates, Inc., CBL & Associates Management, Inc. and
certain of our affiliates and officers and certain affiliates of those persons
that produce a relatively minor amount of non-qualifying income and that we
believe will not, either singly or when combined with other non-qualifying
income, exceed the limits on non-qualifying income; (3) derive rent
attributable to personal property leased in connection with property that
exceeds 15% of the total rents other than relatively minor amounts that do
not
affect compliance with the above tests; or (4) directly perform any
services that would give rise to income derived from services that give rise
to
"unrelated business
taxable income" as defined in Section 512(a) of the Internal Revenue Code.
For
purposes of the gross income tests, the term "interest" generally does not
include any amount received or accrued, directly or indirectly, if the
determination of the 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 percentage of receipts or sales. Although the Operating
Partnership or the property owners may advance money from time to time to
tenants for the purpose of financing tenant improvements, we and the Operating
Partnership do not intend to charge interest in any transaction that will depend
in whole or in part on the income or profits of any person or to make loans
that
are not secured by mortgages of real estate in amounts that could jeopardize
our
compliance with the 5% and 10% asset tests described below.
Any
net
income derived from a prohibited transaction is subject to a 100% penalty tax.
We believe that no asset owned by us, the Operating Partnership or the property
partnerships is held for sale to customers, and that the sale of any property
will not be in the ordinary course of our business, or that of the Operating
Partnership or the relevant property partnership. Whether property is held
primarily for sale to customers in the ordinary course of a trade or business
and, therefore, is subject to the 100% penalty tax, depends on the facts and
circumstances in effect from time to time, including those related to a
particular property. We and the Operating Partnership will attempt to comply
with the terms of safe-harbor provisions in the Internal Revenue Code
prescribing when asset sales will not be characterized as prohibited
transactions. We may not always be able to comply with the safe-harbor
provisions of the Internal Revenue Code or avoid owning property that may be
characterized as property held primarily for sale to customers in the ordinary
course of business.
If
we
fail to satisfy one or both of the 75% or 95% gross income tests for any taxable
year, we may nevertheless qualify as a REIT for that year if we are entitled
to
relief under certain provisions of the Internal Revenue Code. These relief
provisions generally will be available if our failure to meet those tests is
due
to reasonable cause and not to willful neglect, and we timely comply with
requirements for reporting each item of our income to the Internal Revenue
Service. It is not possible to state whether in all circumstances we would
be
entitled to the benefit of these relief provisions. As discussed above in
"—Taxation of CBL," Even if these relief provisions apply, a tax would be
imposed attributable to our nonqualifying income.
In
order
for us to maintain our qualification as a REIT, we, at the close of each quarter
of our taxable year, must also satisfy several tests relating to the nature
of
our assets. First, at least 75% of the value of our total assets must be
represented by real estate assets. Real estate assets for the purpose of this
asset test include (1) our allocable share of real estate assets held by
partnerships in which we own an interest or held by qualified REIT subsidiaries
and (2) stock or debt instruments held for not more than one year purchased
with the proceeds of our stock offering or long-term (at least five years)
debt
offering, cash items and government securities. Second, although the remaining
25% of our assets generally may be invested without restriction, securities
in
this class may not exceed either (1) 5% of the value of our total assets as
to any one nongovernment issuer, or (2) 10%
of the outstanding voting securities of any one issuer.
Securities
for purposes of the above 5% and 10% asset tests may include debt securities,
including debt issued by a partnership. However, debt of an issuer will not
count as a security for purposes of the 10% value test if the security qualifies
for an exception set forth in the Internal Revenue Code. Beginning in 2005,
solely for purposes of the 10% value test, a REIT's interest in the assets
of a
partnership will be based upon the REIT's proportionate interest in any
securities issued by the partnership (including, for this purpose, the REIT's
interest as a partner in the partnership and any debt securities issued by
the
partnership, but excluding any securities qualifying for the "straight debt"
or
other exceptions described above), valuing any debt instrument at its adjusted
issue price.
In
addition to the asset tests described above, we are prohibited from owning
more
than 10% of the value of the outstanding debt and equity securities of any
subsidiary other than a qualified REIT subsidiary, subject to an exception.
The
exception is that we and a non-qualified REIT subsidiary may make a joint
election for the subsidiary to be treated as a "taxable REIT subsidiary." The
securities of a taxable REIT subsidiary are not subject to the 10% value test
and the 10% voting securities test, and also are exempt from the 5% asset test.
However, no more than 20% of the total value of a REIT's assets can be
represented by securities of one or more taxable REIT subsidiaries. The
management company is a taxable REIT subsidiary.
It
should
be noted that the 20% value limitation must be satisfied at the end of any
quarter in which we increase our interest in the management company. In this
respect, if any partner of the Operating Partnership exercises its option to
exchange interests in the Operating Partnership for shares of common stock
(or
we otherwise acquire additional interests in the Operating Partnership), we
will
thereby increase our proportionate (indirect) ownership interest in the
management company, thus requiring us to recalculate our ability to meet the
20%
test in any quarter in which the exchange option is exercised. Although we
plan
to take steps to ensure that we satisfy the 20% value test for any quarter
with
respect to which retesting is to occur, these steps may not always be successful
or may require a reduction in the Operating Partnership's overall interest
in
the management company.
The
rules
regarding taxable REIT subsidiaries contain provisions generally intended to
ensure that transactions between a REIT and its taxable REIT subsidiary occur
"at arm's length" and on commercially reasonable terms. These requirements
include a provision that prevents a taxable REIT subsidiary from deducting
interest on direct or indirect indebtedness to its parent REIT if, under a
specified series of tests, the taxable REIT subsidiary is considered to have
an
excessive interest expense level or debt-to-equity ratio. In addition, a 100%
penalty tax can be imposed on the REIT if its loans to or rental, service or
other agreements with its taxable REIT subsidiary are determined not to be
on
arm's length terms. No assurance can be given that our loans to or rental,
service or other agreements with our taxable REIT subsidiaries will be on arm's
length terms. A
taxable
REIT subsidiary is subject to a corporate level tax on its net taxable income,
as a result of which our earnings derived through a taxable REIT subsidiary
are
effectively subject to a corporate level tax notwithstanding our status as
a
REIT. To the extent that a taxable REIT subsidiary pays dividends to us in
a
particular calendar year, we may designate a corresponding portion of dividends
we pay to our noncorporate stockholders during that year as "qualified dividend
income" eligible to be taxed at reduced rates to noncorporate recipients. See
"—Taxation of U.S. Stockholders."
We
believe that we are in compliance with the asset tests. Substantially all of
our
investments are in properties that are qualifying real estate assets.
After
initially meeting the asset tests at the close of any quarter, we will not
lose
our status as a REIT for failure to satisfy the asset tests at the end of a
later quarter solely by reason of changes in asset values. If the failure to
satisfy the asset tests results from an acquisition of securities or other
property during a quarter, the failure can be cured by disposition of sufficient
nonqualifying assets within 30 days after the close of that quarter. We
intend to maintain adequate records of the value of our assets to ensure
compliance with the asset tests and to take such other actions within
30 days after the close of any quarter as may be required to cure any
noncompliance.
Beginning
in 2005, if we fail to satisfy the 5% and/or 10% asset tests for a particular
quarter, we will not lose our REIT status if the failure is due to the ownership
of assets the total value of which does not exceed a specified de
minimis
threshold, provided that we come into compliance with the asset tests generally
within six months after the last day of the quarter in which we identify the
failure. In addition, beginning in 2005, other failures to satisfy the asset
tests generally will not result in a loss of REIT status if (i) following our
identification of the failure, we file a schedule with a description of each
asset that caused the failure; (ii) the failure was due to reasonable cause
and
not to willful neglect; (iii) we come into compliance with the asset tests
generally within six months after the last day of the quarter in which the
failure was identified; and (iv) we pay a tax equal to the greater of $50,000
or
the amount determined by multiplying the highest corporate tax rate by the
net
income generated by the prohibited assets for the period beginning on the first
date of the failure and ending on the earlier of the date we dispose of such
assets and the end of the quarter in which we come into compliance with the
asset tests.
Annual
Distribution Requirements
In
order
to remain qualified as a REIT, we are required to distribute dividends, other
than capital gain dividends, to our stockholders each year in an amount equal
to
at least (A) the sum of (1) 90% of our REIT taxable income, computed
without regard to the dividends paid deduction and our net capital gain, and
(2) 90% of the net income (after-tax), if any, from foreclosure property,
minus (B) the sum of certain items of noncash income. In addition, if we
dispose of any asset with built-in gain during the ten-year period beginning
on
the date we acquired the property from a "C" corporation or became a REIT,
we
will be required, according to guidance issued by the IRS, to distribute at
least 90% of the after tax built-in gain, if any, recognized on the disposition
of the asset These distributions must be paid in the taxable year to which
they
relate, or in the following taxable year if declared before we timely file
our
tax return for the year and if paid on or before the first regular dividend
payment after the declaration, provided such payment is made during the 12-month
period following the close of such taxable year. These distributions are taxable
to stockholders in the year in which paid, even though the distributions relate
to our prior taxable year for purposes of the 90% distribution requirement.
To
the extent that we do not distribute all of our net capital gain or distribute
at least 90% but less than 100% of our REIT taxable income, as adjusted, we
will
be subject to tax on the undistributed amount at regular corporate tax rates.
If
we so choose, we may retain, rather than distribute, our net long-term capital
gains and pay the tax on those gains. In this case, our stockholders would
include their proportionate share of the undistributed long-term capital gains
in income. However, our stockholders would then be deemed to have paid their
share of the tax, which would be credited or refunded to them. In addition,
our
stockholders would be able to increase their basis in our shares they hold
by
the amount of the undistributed long-term capital gains, less the amount of
capital gains tax we paid, included in the stockholders' long-term capital
gains.
Furthermore,
if we should fail to distribute during each calendar year at least the sum
of
(1) 85% of our ordinary income for the year, (2) 95% of our net
capital gain income for the year, and (3) any undistributed taxable income
from prior periods, we would be subject to a 4% excise tax on the excess of
the
required distribution over the sum of the amounts actually distributed
and
the
amount of any net capital gains we elected to retain and pay tax on. For these
and other purposes, dividends declared by us in October, November or December
of
one taxable year and payable to a stockholder of record on a specific date
in
any such month shall be treated as both paid by us and received by the
stockholder during such taxable year, provided that the dividend is actually
paid by us by January 31 of the following taxable year.
We
intend to make timely distributions sufficient to satisfy all annual
distribution requirements.
Our
taxable income consists substantially of our distributive share of the income
of
the Operating Partnership. We expect that our taxable income will be less than
the cash flow we receive from the Operating Partnership, due to the allowance
of
depreciation and other non-cash charges in computing REIT taxable income.
Accordingly, we anticipate that we will generally have sufficient cash or liquid
assets to enable us to satisfy the 90% distribution requirement.
It
is
possible that, from time to time, we may experience timing differences between
(1) the actual receipt of income and actual payment of deductible expenses
and (2) the inclusion of the income and deduction of the expenses in
arriving at our taxable income. Further, it is possible that, from time to
time,
we may be allocated a share of net capital gain attributable to the sale of
depreciated property which exceeds our allocable share of cash attributable
to
that sale. In these cases, we may have less cash available for distribution
than
is necessary to meet our annual 90% distribution requirement. To meet the 90%
distribution requirement, we may find it appropriate to arrange for short-term
or possibly long-term borrowings or to pay distributions in the form of taxable
stock dividends. Any borrowings for the purpose of making distributions to
stockholders are required to be arranged through the Operating Partnership.
Under
certain circumstances, we may be able to rectify a failure to meet the
distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which may be included in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being taxed
on amounts distributed as deficiency dividends; however, we will be required
to
pay applicable penalties and interest to the IRS based upon the amount of any
deduction taken for deficiency dividends.
Failure
to Qualify
Beginning
in 2005, if we should fail to satisfy one or more requirements for REIT
qualification, other than the gross income tests and asset tests, we may retain
our REIT qualification if the failures are due to reasonable cause and not
willful neglect, and if we pay a penalty of $50,000 for each such
failure.
If
we
fail to qualify for taxation as a REIT in any taxable year and the relief
provisions do not apply, we will be subject to tax, including any applicable
alternative minimum tax, on our taxable income at regular corporate rates.
Distributions to stockholders in any year in which we fail to qualify will
not
be deductible by us nor will they be required to be made. In this event, to
the
extent of our current and accumulated earnings and profits, all distributions
to
stockholders will be taxable as dividend
income. In the case of stockholders that are not corporations, any such
dividends may be taxable at a maximum rate of 15% during tax years beginning
before January 1, 2009. In addition,
subject
to certain limitations of the Internal Revenue Code, corporate distributees
may
be eligible for the dividends-received deduction and noncorporate distributees
may be eligible to treat the dividends as "qualified dividend income" taxable
at
capital gain rates. See "—Taxation of U.S. Stockholders." Unless we are entitled
to relief under specific statutory provisions, we will also be disqualified
from
taxation as a REIT for the four taxable years following the year in which our
qualification was lost. It is not possible to state whether we would be entitled
to such statutory relief.
Taxation
of U.S. Stockholders
As
used
in this section, the term "U.S. stockholder" means a holder of our common or
preferred stock that for U.S. federal income tax purposes is (1) a citizen
or resident of the United States, (2) a corporation or other entity treated
as a corporation for U.S. federal income tax purposes that is created
or organized in or under the laws of the United States or of any political
subdivision of the United States, (3) an estate the income of which is
subject to U.S. federal income taxation regardless of its source, or (4) a
trust if (a) a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more U.S. persons have the authority
to
control all substantial decisions of the trust or (b) it has a valid election
in
place to be treated as a U.S. person or otherwise is treated as a U.S. person.
For any taxable year for which we qualify for taxation as a REIT, amounts
distributed to taxable U.S. stockholders will be taxed as follows.
Distributions
Generally
Distributions
to U.S. stockholders, other than capital gain dividends discussed below, will
constitute dividends to those holders up to the amount of our current or
accumulated earnings and profits and are taxable to the stockholders as ordinary
income. These distributions are not eligible for the dividends-received
deduction for corporations. To the extent that we make distributions in excess
of our current or accumulated earnings and profits, the distributions will
first
be treated as a tax-free return of capital, reducing the tax basis in the U.S.
stockholder's shares, and distributions in excess of the U.S. stockholder's
tax
basis in its shares are taxable as capital gain realized from the sale of the
shares. Dividends declared by us in October, November or December of any year
payable to a U.S. stockholder of record on a specified date in any of these
months will be treated as both paid by us and received by the U.S. stockholder
on December 31 of the year, provided that we actually paid the dividend
during January of the following calendar year. U.S. stockholders may not include
on their own income tax returns any of our tax losses.
In
general, dividends paid by REITs are not eligible for the 15% tax rate on
"qualified dividend income" and, as a result, our ordinary REIT dividends will
continue to be taxed at the higher ordinary income tax rate. Dividends received
by a noncorporate stockholder could be treated as "qualified dividend income,"
however, to the extent we have dividend income from taxable corporations (such
as a taxable REIT subsidiary) and to the extent our dividends are attributable
to income that is subject to tax at the REIT level (for example, if we
distributed less than 100% of our taxable income). In general, to qualify for
the reduced tax rate on qualified dividend income, a stockholder must hold
our
stock for more than 60 days during the 121-day period beginning on the date
that
is 60 days before the date on which our common stock becomes ex-dividend.
We
will
be treated as having sufficient earnings and profits to treat as a dividend
any
distribution we make up to the amount required to be distributed in order to
avoid imposition of the 4% excise tax discussed in "—Taxation of CBL" above. As
a result, our stockholders may be required to treat certain distributions that
would otherwise result in a tax-free return of capital as taxable dividends.
Moreover, any deficiency dividend will be treated as a dividend—an ordinary
dividend or a capital gain dividend, as the case may be—regardless of our
earnings and profits.
Capital
Gain Dividends
Dividends
to U.S. stockholders that we properly designate as capital gain dividends will
be treated as long-term capital gain, to the extent they do not exceed our
actual net capital gain, for the taxable year without regard to the period
for
which the stockholder has held his stock. Capital gain dividends are not
eligible for the dividends-received deduction for corporations; however,
corporate stockholders may be required to treat up to 20% of certain capital
gain dividends as ordinary income. Noncorporate
taxpayers are generally taxable at a current maximum tax rate of 15% for
long-term capital gain attributable to sales or exchanges through taxable years
beginning before January 1, 2007. A portion of any capital gain dividends
received by noncorporate taxpayers might be subject to tax at a 25% rate to
the
extent attributable to gains realized on the sale of real property that
correspond to our "unrecaptured Section 1250 gain."
If
we
elect to retain capital gains rather than distribute them, a U.S. stockholder
will be deemed to receive a capital gain dividend equal to the amount of its
proportionate share of the retained capital gains. In this case, a U.S.
stockholder will receive certain tax credits and basis adjustments reflecting
the deemed distribution and deemed payment of taxes by the U.S. stockholder.
Passive
Activity Loss and Investment Interest Limitations
Our
distributions and gain from the disposition of our common or preferred stock
will not be treated as passive activity income and, therefore, U.S. stockholders
may not be able to apply any passive losses against this income or gain. Our
dividends, to the extent they do not constitute a return of capital, will
generally be treated as investment income for purposes of the investment income
limitation. Net capital gain from the disposition of our common or preferred
stock and capital gains generally will be eliminated from investment income
unless the taxpayer elects to have the gain taxed at ordinary income rates.
Certain
Dispositions of Our Common or Preferred Stock
A
U.S. stockholder will recognize gain or loss on any taxable sale or other
disposition of our common or preferred stock in an amount equal to the
difference between (1) the amount of cash and the fair market value of any
property received on the sale or other disposition and (2) the holder's adjusted
basis in the common or preferred stock. This gain or loss generally will be
a
capital gain or loss, and will be long-term capital gain or loss if the holder
held the securities for more than one year. Noncorporate
U.S. stockholders are generally taxable at a current maximum rate of 15% on
long-term capital gain. The Internal Revenue Service has the authority to
prescribe, but has not yet prescribed, regulations that would apply a capital
gain tax rate of 25% (which is generally higher than the long-term capital
gain
tax rates for noncorporate U.S. stockholders) to a portion of capital gain
realized by a noncorporate U.S. stockholder on the sale of REIT stock that
would
correspond to the REIT's "unrecaptured Section 1250 gain." U.S. stockholders
are
urged to consult with their own tax advisors with respect to their capital
gain
tax liability. A corporate U.S. stockholder will be subject to tax at a maximum
rate of 35% on capital gain from the sale of our common stock regardless of
its
holding period for the stock.
In
general, any loss upon a sale or exchange of our common stock by a U.S.
stockholder who has held such stock for six months or less (after applying
certain holding period rules) will be treated as a long-term capital loss,
to
the extent of distributions (actually made or deemed made in accordance with
the
discussion above) from us are required to be treated by such U.S. stockholder
as
long-term capital gain.
Treatment
of Tax-Exempt U.S. Stockholders
Our
distributions to and any gain upon a disposition of our common or preferred
stock by a stockholder that is a tax-exempt entity generally should not
constitute unrelated business taxable income, provided that the tax-exempt
entity has not financed the acquisition of our common or preferred stock with
"acquisition indebtedness" within the meaning of the Internal Revenue Code
and
that the common or preferred stock is not otherwise used in an unrelated trade
or business of the tax-exempt entity. If we were to be a "pension-held REIT"
(which we do not expect to be the case) and were to meet certain other
requirements, certain pension trusts owning more than 10% of our equity
interests could be required to report a portion of any dividends they receive
from us as unrelated business taxable income. For
tax-exempt U.S. stockholders that are social clubs, voluntary employee benefit
associations, supplemental unemployment benefit trusts and qualified group
legal
services plans exempt from U.S. federal income taxation under Sections
501(c)(7), (c)(9), (c)(17) and (c)(20) of the Internal Revenue Code,
respectively, income from an investment in us will constitute unrelated business
taxable income unless the organization properly sets aside or reserves such
amounts for purposes specified in the Internal Revenue Code. These tax-exempt
U.S. stockholders should consult their own tax advisers concerning these "set
aside" and reserve requirements.
Special
Tax Considerations for Foreign Stockholders
The
rules
governing United States income taxation of non-resident alien individuals,
foreign corporations, foreign partnerships and foreign trusts and estates,
which
we refer to collectively as "non-U.S. stockholders," are complex, and the
following discussion is intended only as a summary of these rules. Special
rules
may apply to certain non-U.S. stockholders such as "controlled foreign
corporations" and "passive foreign investment companies." Prospective non-U.S.
stockholders should consult with their own tax advisors to determine the impact
of U.S. federal, state and local income tax laws on an investment in our common
or preferred stock, including any reporting requirements.
Ordinary
Dividends. The portion of dividends received by non-U.S. stockholders payable
out of our current and accumulated earnings and profits which are not
attributable to capital gains and which are not effectively connected with
a
U.S. trade or business of the non-U.S. stockholder will be subject to U.S.
withholding tax at the rate of 30% (unless reduced by an applicable income
tax
treaty). In general, non-U.S. stockholders will not be considered engaged in
a
U.S. trade or business solely as a result of their ownership of our common
or
preferred stock. In cases where the dividend income from a non-U.S.
stockholder's investment in our common or preferred stock is effectively
connected with the non-U.S. stockholder's conduct of a U.S. trade or business
(or, if an income tax treaty applies, is attributable to a U.S. permanent
establishment of the non-U.S. stockholder), the non-U.S. stockholder generally
will be subject to U.S. tax at graduated rates, in the same manner as U.S.
stockholders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax in the case of a corporate non-U.S.
stockholder).
Non-Dividend
Distributions. Unless our stock constitutes a USRPI (as defined below),
distributions by us which are not paid out of our current and accumulated
earnings and profits will not be subject to U.S. income or withholding tax.
If
it cannot be determined at the time a distribution is made whether or not such
distribution will be in excess of our current and accumulated earnings and
profits, the distribution will be subject to withholding at the rate applicable
to dividends. However, the non-U.S. stockholder may seek a refund of such
amounts from the Internal Revenue Service if it is subsequently determined
that
such distribution was, in fact, in excess of our current and accumulated
earnings and profits. If our common or preferred stock constitutes a USRPI,
a
distribution in excess of current and accumulated earnings and profits will
be
subject to 10% withholding tax and may be subject to additional taxation under
FIRPTA (as defined below). However, the 10% withholding tax will not apply
to
distributions already subject to the 30% dividend withholding.
We
expect
to withhold U.S. income tax at the rate of 30% on the gross amount of any
distributions of ordinary income made to a non-U.S. stockholder unless (1)
a
lower treaty rate applies and proper certification is provided or (2) the
non-U.S. stockholder files an Internal Revenue Service Form W-8ECI with us
claiming that the distribution is effectively connected with the non-U.S.
stockholder's conduct of a U.S. trade or business (or, if an income tax treaty
applies, is attributable to a U.S. permanent establishment of the non-U.S.
stockholder). However, the non-U.S. stockholder may seek a refund of such
amounts from the Internal Revenue Service if it is subsequently determined
that
such distribution was, in fact, in excess of our current and accumulated
earnings and profits.
Capital
Gain Dividends. Under the Foreign Investment in Real Property Tax Act of 1980,
or FIRPTA, a distribution made by us to a non-U.S. stockholder, to the extent
attributable to gains ("USRPI Capital Gains") from dispositions of United States
Real Property Interests, or USRPIs, will be considered effectively connected
with a U.S. trade or business of the non-U.S. stockholder and therefore will
be
subject to U.S. income tax at the rates applicable to U.S. stockholders, without
regard to whether such distribution is designated as a capital gain dividend.
(The properties owned by the Operating Partnership generally are USRPIs.)
Distributions subject to FIRPTA may also be subject to a 30% branch profits
tax
in the hands of a corporate non-U.S. stockholder that is not entitled to treaty
exemption. Notwithstanding the preceding, distributions received on our common
or preferred stock, to the extent attributable to USRPI Capital Gains, will
not
be treated as gain recognized by the non-U.S. stockholder from the sale or
exchange of a USRPI if (1) our common or preferred stock is regularly traded
on
an established securities market located in the United States and (2) the
non-U.S. stockholder did not own more than 5% of such class of stock at any
time
during the 1-year period ending on the date of the distribution. The
distribution will instead be treated as an ordinary dividend to the non-U.S.
stockholder, and the tax consequences to the non-U.S. stockholder will be as
described above under "Ordinary Dividends."
Distributions
attributable to our capital gains which are not USRPI Capital Gains generally
will not be subject to income taxation, unless (1) investment in the shares
is
effectively connected with the non-U.S. stockholder's U.S. trade or business
(or, if an income tax treaty applies, is attributable to a U.S. permanent
establishment of the non-U.S. stockholder), in which case the non-U.S.
stockholder will be subject to the same treatment as U.S. stockholders with
respect to such gain (except that a corporate non-U.S. stockholder may also
be
subject to the 30% branch profits tax), or (2) the non-U.S. stockholder is
a
non-resident alien individual who is present in the United States for 183 days
or more during the taxable year and certain other conditions are present, in
which case the nonresident alien individual will be subject to a 30% tax on
the
individual's capital gains.
We
generally will be required to withhold and remit to the Internal Revenue Service
35% of any distributions to non-U.S. stockholders that are designated as capital
gain dividends, or, if greater, 35% of a distribution that could have been
designated as a capital gain dividend. Distributions can be designated as
capital gains to the extent of our net capital gain for the taxable year of
the
distribution. The amount withheld is creditable against the non-U.S.
stockholder's U.S. federal income tax liability. This withholding will not
apply
to any amounts paid to a holder of not more than 5% of our common shares while
such shares are regularly traded on an established securities market. Instead,
those amounts will be treated as described above under "Ordinary
Dividends."
If
our
common or preferred stock does not constitute a USRPI, a sale of our common
or
preferred stock by a non-U.S. stockholder generally will not be subject to
U.S.
federal income taxation unless (1) investment in the common or preferred
stock is effectively connected with the non-U.S. stockholder's U.S. trade or
business, in which case, as discussed above, the non-U.S. stockholder would
be
subject to the same treatment as U.S. stockholders on the gain,
(2) investment in the common or preferred stock is attributable to a
permanent establishment that the non-U.S. stockholder maintains in the United
States if that is required by an applicable income tax treaty as a condition
for
subjecting the non-U.S. stockholder to U.S. taxation on a net income basis,
in
which case the same treatment would apply to the non-U.S. stockholder as to
U.S.
stockholders with respect to the gain or (3) the non-U.S. stockholder is a
nonresident alien individual who was present in the United States for
183 days or more during the taxable year and who has a tax home in the
United States, in which case the nonresident alien individual will be subject
to
a 30% tax on the individual's capital gain.
The
offered securities will not constitute a USRPI if we are a domestically
controlled REIT. A domestically controlled REIT is a real estate investment
trust in which at all times during a specified testing period less than 50%
in
value of its shares is held directly or indirectly by non-U.S. stockholders.
We
believe we are a domestically controlled REIT, and therefore that the sale
of
our common or preferred stock will not be subject to taxation under FIRPTA.
However, because we are publicly traded, we may not continue to be a
domestically controlled REIT.
If
we did
not constitute a domestically controlled REIT, whether a non-U.S. stockholder's
sale of our common or preferred stock would be subject to tax under FIRPTA
as
sale of a USRPI would depend on whether the common or preferred stock is
"regularly traded," as defined by applicable Treasury Regulations, on an
established securities market (e.g.,
the New
York Stock Exchange, on which the common or preferred stock will be listed)
and
on the size of the selling stockholder's interest in our company. If the gain
on
the sale of our common or preferred stock were subject to taxation under FIRPTA,
the non-U.S. stockholder would be subject to the same treatment as a U.S.
stockholder with respect to the gain, and subject to applicable alternative
minimum tax or a special alternative minimum tax in the case of nonresident
alien individuals. In any event, a purchaser of our common or preferred stock
from a non-U.S. stockholder will not be required under FIRPTA to withhold on
the
purchase price if the purchased common or preferred stock is regularly traded
on
an established securities market or if we are a domestically controlled REIT.
Otherwise, under FIRPTA, the purchaser of common or preferred stock may be
required to withhold 10% of the purchase price and remit that amount to the
IRS.
Information
Reporting Requirements and Backup Withholding Tax
U.S.
Stockholders
Under
certain circumstances, U.S. stockholders may be subject to backup withholding
on
payments made with respect to, or on cash proceeds of a sale or exchange of,
our
common or preferred stock. Backup withholding generally will apply if the holder
(1) fails to furnish its taxpayer identification number, which, for an
individual, would be his social security number, (2) furnishes an incorrect
taxpayer identification number, (3) is notified by the IRS that it has
failed to report properly payments of interest and dividends or (4) under
certain circumstances fails to certify, under penalty of perjury, that it has
furnished a correct taxpayer identification number and has not been notified
by
the IRS that it is subject to backup withholding for failure to report interest
and dividend payments. Backup withholding generally will not apply with respect
to payments made to certain exempt recipients, such as corporations and
tax-exempt organizations. U.S. stockholders should consult their own tax
advisors regarding their qualification for exemption from backup withholding
and
the procedure for obtaining this exemption.
Non-U.S.
Stockholders
Proceeds
from a disposition of our common or preferred stock will not be subject to
information reporting and backup withholding if the beneficial owner of the
common or preferred stock is a non-U.S. stockholder. However, if the proceeds
of
a disposition are paid by or through a United States office of a broker, the
payment may be subject to backup withholding or information reporting if the
broker cannot document that the beneficial owner is a non-U.S. person. In order
to document the status of a non-U.S. stockholder, a broker may require the
beneficial owner of the common or preferred stock securities to provide
it with a completed, executed IRS Form W-8BEN, certifying under penalty of
perjury to the beneficial owner's non-U.S. status.
A
non-U.S. stockholder should consult its tax advisor regarding application of
withholding and backup withholding in its particular circumstance and the
availability of and procedure for obtaining an exemption from withholding and
backup withholding under current Treasury Regulations.
Refunds
Backup
withholding is not an additional tax. Rather, the amount of any backup
withholding with respect to a payment to a stockholder will be allowed as a
credit against any U.S. federal income tax liability of the stockholder. If
withholding results in an overpayment of taxes, a refund may be obtained,
provided that the required procedures are followed.
State
and Local Taxation
We
and
our stockholders may be subject to state or local taxation in various
jurisdictions, including those in which we or they transact business or reside.
The state and local tax treatment of us and our stockholders may not conform
to
the U.S. federal income tax consequences discussed above. Consequently,
prospective stockholders should consult their own tax advisors regarding the
effect of state and local tax laws on an investment in our company.
Tax
Aspects of the Operating Partnership
The
following discussion summarizes certain U.S. federal income tax considerations
applicable solely to our investment in the Operating Partnership through CBL
Holdings I and CBL Holdings II. The discussion does not cover state or local
tax
laws or any U.S. federal tax laws other than income tax laws.
Income
Taxation of the Operating Partnership and Its Partners
Partners,
Not the Operating Partnership, Subject to
Tax.
A
partnership is not a taxable entity for U.S. federal income tax purposes.
Rather, we will be required to take into account our allocable share of the
Operating Partnership's income, gains, losses, deductions and credits for any
taxable year of the Operating Partnership ending within or with our taxable
year, without regard to whether we have received or will receive any direct
or
indirect distribution from the Operating Partnership.
Operating
Partnership Allocations. Although
a partnership agreement will generally determine the allocation of income and
losses among partners, these allocations will be disregarded for tax purposes
under Section 704(b) of the Internal Revenue Code if they do not comply
with the provisions of that section and the Treasury Regulations promulgated
under that section.
If
an
allocation is not recognized for U.S. federal income tax purposes, the item
subject to the allocation will be reallocated in accordance with the partners'
interests in the partnership, which will be determined by taking into account
all of the facts and circumstances relating to the economic arrangement of
the
partners with respect to the item. The Operating Partnership's allocations
of
taxable income and loss, and those of the property partnerships, are intended
to
comply with the requirements of Section 704(b) of the Internal Revenue Code
and the Treasury Regulations promulgated under that section.
In
general, the partners who contributed appreciated assets to the Operating
Partnership will be allocated lower amounts of depreciation deductions for
tax
purposes and increased taxable income and gain on sale by the Operating
Partnership of the contributed assets (including some of our properties). This
will tend to eliminate the book-tax difference over time. However, the special
allocation rules under Section 704(c) of the Internal Revenue Code do not always
entirely rectify the book-tax difference on an annual basis or with respect
to a
specific taxable transaction, such as a sale. Thus, the carryover basis of
the
contributed assets in the hands of the Operating Partnership may, as to certain
contributed assets, cause us to be allocated lower depreciation and other
deductions, and possibly greater amounts of taxable income in the event of
a
sale of such contributed assets, in excess of the economic or book income
allocated to us as a result of such sale. This may cause us to recognize taxable
income in excess of cash proceeds, which might adversely affect our ability
to
comply with the REIT distribution requirements. See
"—Requirements for Qualification - Annual Distribution Requirements." In
addition, the application of Section 704(c) of the Internal Revenue Code to
the
Operating Partnership is not entirely clear and may be affected by authority
that may be promulgated in the future.
Basis
in Operating Partnership Interest. Our
adjusted tax basis in our indirect partnership interest in the Operating
Partnership generally (1) will be equal to the amount of cash and the basis
of any other property that we contribute to the Operating Partnership,
(2) will be increased by (a) our allocable share of the Operating
Partnership's income and (b) our allocable share of certain indebtedness of
the Operating Partnership and of the property partnerships and (3) will be
reduced, but not below zero, by our allocable share of (a) the Operating
Partnership's loss and (b) the amount of cash distributed directly or
indirectly to us, and by constructive distributions resulting from a reduction
in our share of certain indebtedness of the Operating Partnership and of the
property partnerships. With respect to increases in our adjusted tax basis
in
our indirect partnership interest in the Operating Partnership resulting from
certain indebtedness of the Operating Partnership, Section 752 of the
Internal Revenue Code and the regulations promulgated under that section provide
that a partner may include its share of partnership liabilities in its adjusted
tax basis of its interest in the partnership to the extent the partner bears
the
economic risk of loss with respect to the liability. Generally, a partnership's
non-recourse debt is shared proportionately by the partners. However, if a
partner guarantees partnership debt or is personally liable for all or any
portion of the debt, the partner will be deemed to bear the economic risk of
loss for the amount of the debt for which it is personally liable. Thus, the
partner may include that amount in its adjusted tax basis of its interest in
the
partnership.
By
virtue
of our status as the sole stockholder of CBL Holdings I, which is the sole
general partner of the Operating Partnership, we will be deemed to bear the
economic risk of loss with respect to indebtedness of the Operating Partnership
that is not nonrecourse debt as defined in the Internal Revenue Code. As a
result, our adjusted tax basis in our indirect partnership interest in the
Operating Partnership may exceed our proportionate share of the total
indebtedness of the Operating Partnership.
If
the
allocation of our distributive share of the Operating Partnership's loss would
reduce the adjusted tax basis of our partnership interest in the Operating
Partnership below zero, the recognition of the loss will be deferred until
the
recognition of the loss would not reduce our adjusted tax basis below zero.
To
the extent that the Operating Partnership's distributions, or any decrease
in
our share of the nonrecourse indebtedness of the Operating Partnership or of
a
property partnership, would reduce our adjusted tax basis below zero, such
distributions and constructive distributions will normally be characterized
as
capital gain, and if our partnership interest in the Operating Partnership
has
been held for longer than the long-term capital gain holding period (currently,
one year), the distributions and constructive distributions will constitute
long-term capital gain. Each decrease in our share of the nonrecourse
indebtedness of the Operating Partnership or of a property partnership is
considered a constructive cash distribution to us.
Depreciation
Deductions Available to the Operating Partnership. The
Operating Partnership was formed in 1993 principally by way of contributions
of
certain properties or appreciated interests in property partnerships owning
properties. Accordingly, the Operating Partnership's depreciation deductions
attributable to the properties will be based on the contributing partners'
depreciation schedules and in some cases on new schedules under which the
property will be depreciated on depreciation schedules of up to 40 years,
using, initially, the adjusted basis of the contributed assets in the hands
of
the contributing partners.
Generally,
any gain realized by the Operating Partnership on the sale of property held
by
the Operating Partnership or a property partnership or on the sale of a
partnership interest in a property partnership will be capital gain, except
for
any portion of the gain that is treated as depreciation or cost recovery
recapture. Any unrealized gain attributable to the excess of the fair market
value of the properties over their adjusted tax bases at the time of
contribution to the Operating Partnership must, when recognized by the Operating
Partnership, generally be allocated to the limited partners, including
CBL & Associates, Inc., under Section 704(c) of the Internal
Revenue Code and Treasury Regulations promulgated under that section.
In
the
event of the disposition of any of the properties which have pre-contribution
gain, all income attributable to the undepreciated gain will be allocated to
the
limited partners of the Operating Partnership, including to us, and we generally
will be allocated only our share of capital gains attributable to depreciation
deductions we enjoyed and appreciation, if any, occurring since the acquisition
of our interest in the Operating Partnership. Any decision relating to the
potential sale of any property that would result in recognition of gain of
this
kind will be made by the independent directors on our Board of Directors. The
Operating Partnership will be required in this case to distribute to its
partners all of the net cash proceeds from the sale up to an amount reasonably
believed necessary to enable the limited partners, including us, to pay any
income tax liability arising from the sale.
Our
share
of any gain realized by the Operating Partnership on the sale of any property
held by the Operating Partnership or property partnership as inventory or other
property held primarily for sale to customers in the ordinary course of the
Operating Partnership's or property partnership's trade or business will be
treated as income from a prohibited transaction that is subject to a 100%
penalty tax. Under
existing law, whether property is inventory
or other property held primarily for sale to customers in the ordinary course
of
trade or business
is a
question of fact that depends on all the facts and circumstances with respect
to
the particular transaction. For
more
information about the penalty tax, see "—Requirements for Qualification—Income
Tests" above. Prohibited transaction income of this kind will also have an
adverse effect upon our ability to satisfy the gross income tests for REIT
status. See "—Requirements for Qualification—Income Tests" above for more
information about these tests. Under existing law, whether property is held
as
inventory or primarily for sale to customers in the ordinary course of a trade
or business is a question of fact that depends on all the facts and
circumstances with respect to the particular transaction. The Operating
Partnership and the property partnerships intend to hold their properties for
investment with a view to long-term appreciation, to engage in the business
of
acquiring, developing, owning and operating the properties and other shopping
centers and to make occasional sales of the properties, including peripheral
land, that are consistent with the Operating Partnership's and the property
partnerships' investment objectives.
The
financial statements, the related financial statement schedules, and
management’s report on the effectiveness of internal control over financial
reporting, incorporated in this prospectus by reference from CBL &
Associates Properties, Inc.’s Current Report on Form 8-K filed on January 10,
2006, have been audited by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of
such
firm given upon their authority as experts in accounting and
auditing.
The
separate statements of certain revenues and certain operating expenses of
Lafayette Associates, L.L.C. (d/b/a The Mall of Acadiana) and Oak Park
Investments, L.P. for the year ended December 31, 2004, incorporated in this
prospectus by reference from CBL & Associates Properties, Inc.’s Current
Report on Form 8-K filed on January 18, 2006, have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance
upon
the reports of such firm given upon their authority as experts in accounting
and
auditing.
The
validity of the shares of the offered securities and certain legal matters
described under “Certain U.S. Federal Income Tax Considerations” in this
registration statement will be passed upon for us by Morrison & Foerster
LLP, New York, New York. Certain other matters will be passed upon for us by
Shumacker Witt Gaither & Whitaker, P.C., Chattanooga, Tennessee. Certain
members of Shumacker Witt Gaither & Whitaker, P.C. serve as our assistant
secretaries. Any underwriters will be advised about other issues relating to
any
offering by their own legal counsel.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other
Expenses of Issuance and Distribution.
An
estimate of the various expenses in connection with the sale and distribution
of
the securities being offered will be included in the applicable prospectus
supplement.
Item
15. Indemnification
of Directors and Officers.
We
are a
Delaware corporation. In our Certificate of Incorporation, we have adopted
the
provisions of Section 102(b)(7) of the Delaware General Corporation Law (the
“Delaware Law”), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for monetary damages for breach of the director’s
fiduciary duty, except (i) for any breach of the director’s duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the Delaware Law (providing for liability
of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit.
We
have
also adopted indemnification provisions pursuant to Section 145 of the Delaware
Law, which provides that a corporation may indemnify any persons, including
officers and directors, who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or
in
the right of the corporation), by reason of the fact that such person was an
officer, director, employee or agent of the corporation, or is or was serving
at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation’s best interests and, with respect to criminal proceedings, had no
reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify officers or directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification
is
permitted without judicial approval if the officer or director is adjudged
to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against expenses (including attorneys’ fees) that
such officer or director actually and reasonably incurred.
We
have
entered into indemnification agreements with each of our officers and directors.
The indemnification agreements require, among other things, that we 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. We are
also
required to indemnify and advance all expenses incurred by officers and
directors who are successful in seeking to enforce their rights under the
indemnification agreements, and to cover officers and directors under our
directors’ and officers’ liability insurance, provided that such insurance is
commercially available at reasonable expense. Although the indemnification
agreements offer substantially the same scope of coverage afforded by provisions
in our certificate of incorporation and bylaws, they provide greater assurance
to directors and officers that indemnification will be available, because,
as a
contract, they cannot be modified unilaterally in the future by the Board of
Directors or by the shareholders to eliminate the rights they
provide.
Item
16. Exhibits.
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1.
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Form
of Underwriting Agreement(1)
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3.1
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Amended
and Restated Certificate of Incorporation of the
Company(2)
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3.2
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Amended
and Restated Bylaws of the Company(3)
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4.1
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See
Amended and Restated Certificate of Incorporation of the Company,
relating
to the Common Stock, Exhibits 3.1 above.
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4.2
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Certificate
of Designation, dated April 30, 1999, relating to the Series 1999
Junior
Participating Preferred Stock(4)
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4.3
|
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Certificate
of Designations, dated June 11, 2002, relating to the 8.75% Series
B
Cumulative Redeemable Preferred Stock(5)
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|
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4.4
|
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Certificate
of Designations, dated August 13, 2003, relating to the 7.75% Series
C
Cumulative Redeemable Preferred Stock(6)
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4.5
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Certificate
of Correction of the Certificate of Designations relating to the
7.75%
Series C Cumulative Redeemable Preferred Stock(7)
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4.6
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Certificate
of Designations, dated December 10, 2004, relating to the 7.375%
Series D
Cumulative Redeemable Preferred Stock(7)
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5.1
|
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Opinion
of Morrison & Foerster LLP, counsel for the
Company(8)
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8.1
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Tax
opinion of Morrison & Foerster LLP, counsel for the
Company.
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23.1
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Consent
of Morrison & Foerster LLP (included in Exhibit 5.1 and Exhibit
8.1).
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23.2
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Consent
of Deloitte & Touche LLP
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| |
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23.3
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Consent
of Deloitte & Touche LLP
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| |
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23.4
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Consent
of Deloitte & Touche LLP
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24.1
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Powers
of Attorney of certain officers and directors of the Company (included
on
signature page).
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(1)
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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.
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(2)
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Incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005 (SEC File
No. 001-12494).
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(3)
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Incorporated
by reference to Post-Effective Amendment No. 1 to the Company’s
Registration Statement on Form S-11 (SEC File No. 33-67372), as filed
with
the Commission on January 27, 1994.
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(4)
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Incorporated
by reference to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2001 (SEC File No. 001-12494).
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(5)
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Incorporated
by reference to the Company’s Current Report on Form 8-K dated June 10,
2002, filed on June 17, 2002 (SEC File
No. 001-12494).
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(6)
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Incorporated
by reference to the Company's Registration Statement on Form 8-A,
filed on
August 21, 2003 (SEC File No. 001-12494).
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(7)
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Incorporated
by reference to the Company's Registration Statement on Form 8-A,
filed on
December 10, 2004 (SEC File No. 001-12494).
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(8)
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To
be filed by post-effective amendment at the time of each proposed
issuance
of the securities registered hereunder.
|
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, as amended (the “Securities Act”);
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement;
(iii)
To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
Provided,
however,
paragraphs
(1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information
required to be included in a post-effective amendment by those paragraphs
is
contained in reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement,
or is contained in a form of prospectus filed pursuant to Rule 424(b) that
is
part of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act, each
such
post-effective amendment will 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.
(4)
That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(i)
Each
prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed
to
be part of the registration statement as of the date the filed prospectus
was
deemed part of and included in the registration statement; and
(ii)
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose
of
providing the information required by Section 10(a) of the Securities Act
shall
be deemed to be part of and included in the registration statement as of
the
earlier of the date such form of prospectus is first used after effectiveness
or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the
securities in the registration statement to which the prospectus relates,
and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided,
however,
that no
statement made in a registration statement or prospectus that is part of
the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of
the
registration statement will, as to a purchaser with a time of contract of
sale
prior to such effective date, supersede or modify any statement that was
made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(5)
That,
for the purpose of determining liability of a Registrant under the Securities
Act to any purchaser in the initial distribution of the securities, the
undersigned Registrant undertakes that in a primary offering of securities
of
the undersigned Registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser,
if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to
the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i)
Any
preliminary prospectus or prospectus of an undersigned Registrant relating
to
the offering required to be filed pursuant to Rule 424;
(ii)
Any
free writing prospectus relating to the offering prepared by or on behalf
of an
undersigned Registrant or used or referred to by an undersigned
Registrant;
(iii)
The
portion of any other free writing prospectus relating to the offering containing
material information about an undersigned Registrant or its securities provided
by or on behalf of an undersigned Registrant; and
(iv)
Any
other communication that is an offer in the offering made by an undersigned
Registrant to the purchaser.
(b) The
undersigned Registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the Registrant’s annual
report pursuant to Section l3(a) or Section 15(d) of the Exchange Act and each
filing of an employee benefit plan’s annual report pursuant to Section 15(d) of
the Exchange Act that is incorporated by reference in the registration statement
will be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time will be deemed
to be the initial bona fide offering thereof.
(c) Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act, 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
Chattanooga, State of Tennessee, on the 18th
day of
January, 2006.
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CBL
& ASSOCIATES PROPERTIES, INC.
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By: |
/s/ JOHN
N.
FOY |
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John
N. Foy |
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Vice
Chairman of the Board
and
Chief Financial
Officer
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POWER
OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Charles B. Lebovitz, John N. Foy and Stephen D.
Lebovitz and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this registration statement,
and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do
and perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person, thereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act, this registration statement has
been
signed by the following persons in the capacities and on the dates
indicated:
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Signature
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Title
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Date
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/s/ CHARLES
B. LEBOVITZ
Charles
B. Lebovitz
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Chairman
of the Board of Directors and Chief Executive Officer (Principal
Executive
Officer)
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January
18, 2006
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/s/ JOHN
N. FOY
John
N. Foy
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Director,
Vice Chairman of the Board of Directors, Chief Financial Officer
and
Treasurer (Principal Financial and Accounting Officer)
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January
18, 2006
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/s/ STEPHEN
D. LEBOVITZ
Stephen
D. Lebovitz
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Director,
President and Secretary
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January
18, 2006
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/s/ CLAUDE
M. BALLARD
Claude
M. Ballard
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Director
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January
18, 2006
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/s/ LEO
FIELDS
Leo
Fields
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Director
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January
18, 2006
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/s/ Matthew
S. Dominski
Matthew
S. Dominski
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Director
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January
18, 2006
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/s/ WINSTON
W. WALKER
Winston
W. Walker
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Director
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January
18, 2006
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/s/ MARTIN
J. CLEARY
Martin
J. Cleary
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Director
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January
18, 2006
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/s/ GARY
L. BRYENTON
Gary
L. Bryenton
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Director
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January
18, 2006
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EXHIBIT
INDEX
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Exhibit
No.
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Document
|
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1.
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Form
of Underwriting Agreement(1)
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3.1
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Amended
and Restated Certificate of Incorporation of the
Company(2)
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3.2
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Amended
and Restated Bylaws of the Company(3)
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4.1
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See
Amended and Restated Certificate of Incorporation of the Company,
relating
to the Common Stock, Exhibits 3.1 above.
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4.2
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Certificate
of Designation, dated April 30, 1999, relating to the Series 1999
Junior
Participating Preferred Stock(4)
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4.3
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Certificate
of Designations, dated June 11, 2002, relating to the 8.75% Series
B
Cumulative Redeemable Preferred Stock(5)
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4.4
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Certificate
of Designations, dated August 13, 2003, relating to the 7.75% Series
C
Cumulative Redeemable Preferred Stock(6)
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4.5
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Certificate
of Correction of the Certificate of Designations relating to the
7.75%
Series C Cumulative Redeemable Preferred Stock(7)
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4.6
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Certificate
of Designations, dated December 10, 2004, relating to the 7.375%
Series D
Cumulative Redeemable Preferred Stock(7)
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5.1
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Opinion
of Morrison & Foerster LLP, counsel for the
Company(8)
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8.1
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Tax
opinion of Morrison & Foerster LLP, counsel for the
Company.
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23.1
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Consent
of Morrison & Foerster LLP (included in Exhibit 5.1 and Exhibit
8.1).
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23.2
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Consent
of Deloitte & Touche LLP
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23.3
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Consent
of Deloitte & Touche LLP
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23.4
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Consent
of Deloitte & Touche LLP
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24.1
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Powers
of Attorney of certain officers and directors of the Company (included
on
signature page).
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(1)
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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.
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(2)
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Incorporated
by reference from the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005 (SEC File
No. 001-12494).
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(3)
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Incorporated
by reference to Post-Effective Amendment No. 1 to the Company’s
Registration Statement on Form S-11 (SEC File No. 33-67372), as filed
with
the Commission on January 27, 1994.
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(4)
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Incorporated
by reference to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2001 (SEC File No. 001-12494).
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(5)
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Incorporated
by reference to the Company’s Current Report on Form 8-K dated June 10,
2002, filed on June 17, 2002 (SEC File
No. 001-12494).
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(6)
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Incorporated
by reference to the Company's Registration Statement on Form 8-A,
filed on
August 21, 2003 (SEC File No. 001-12494).
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(7)
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Incorporated
by reference to the Company's Registration Statement on Form 8-A,
filed on
December 10, 2004 (SEC File No. 001-12494).
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(8)
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To
be filed by post-effective amendment at the time of each proposed
issuance
of the securities registered hereunder.
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