As filed with the Securities and Exchange Commission on March 7, 2003
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Capital Trust, Inc.
------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland
------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
94-6181186
------------------------------------------------------------------
(I.R.S. Employer Identification Number)
410 Park Avenue, 14th Floor
New York, New York 10022
(212) 655-0220
------------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
John R. Klopp
Chief Executive Officer
Capital Trust, Inc.
410 Park Avenue, 14th Floor
New York, New York 10022
(212) 655-0220
------------------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Michael L. Zuppone, Esq.
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
(212) 318-6000
------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
Calculation of Registration Fee
=================================================================================================
Amount to Proposed maximum Proposed maximum Amount of
Title of each class of be offering price aggregate registration fee
securities to be registered per offering
registered share(1) price
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Class A Common Stock, par 22,036,581 6.18 $136,186,071 $11,031.10
value $0.01 per share
=================================================================================================
(1) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(c) of the rules and
regulations promulgated under the Securities Act. Pursuant to Rule
457(c), the proposed maximum offering price per share is based upon the
average of the high and low trading price for the class A common stock
as reported on the New York Stock Exchange on March 5, 2003.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
================================================================================
The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where such offer or sale is not
permitted.
================================================================================
PRELIMINARY PROSPECTUS DATED MARCH 7, 2003
SUBJECT TO COMPLETION
CAPITAL TRUST, INC.
22,036,581 Shares of Class A Common Stock
------------
All of the shares of our class A common stock covered by this prospectus
are beneficially owned by the selling shareholders listed in the section of this
prospectus called "Selling Shareholders." A description of such securities is
set forth in the section of this prospectus called "Description of Our Stock."
This prospectus relates to the offer and sale by the selling
shareholders of up to 22,036,581 shares of class A common stock. Each of the
selling shareholders may sell any or all of its shares covered by this
prospectus from time to time in one or more types of transactions, which may
include block transactions or involve brokers who act as agents for the seller
or the buyer, effected:
o on the New York Stock Exchange or any national securities
exchange or quotation service on which the shares of class A common stock
may be listed or quoted at the time of sale;
o in the over-the-counter market; or
o otherwise than on a national securities exchange or quotation
service or in the over-the-counter market or through the writing of
options relating to such shares.
All shares covered by this prospectus may be sold at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. Further details regarding the
distribution of the shares covered by this prospectus may be found in this
prospectus in the section entitled "Plan of Distribution."
We have issued 9,216,309 shares of class A common stock to certain of
the selling shareholders and may issue up to 12,820,272 additional shares of
class A common stock to other selling shareholders upon the conversion of our
outstanding convertible trust preferred securities. We are filing the
registration statement of which this prospectus is a part to fulfill our
contractual obligations to the holders of the securities discussed above.
We will not receive any proceeds from the sales effected by the selling
shareholders. We have agreed to bear all expenses related to this offering,
other than underwriting discounts and commissions and any transfer taxes on the
shares of stock that the selling shareholders are offering.
Our class A common stock is listed for trading on the New York Stock
Exchange under the symbol "CT." On March 6, 2003, the last reported sale price
of our class A common stock on the New York Exchange was $6.05.
------------
Investing in the securities covered by this prospectus involves risks.
See "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is __________, 2003.
================================================================================
You should rely only on the information contained in this prospectus or
referred to in this prospectus. We have not authorized anyone to provide you
with information different from that contained in this prospectus. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or any sale of
the shares of stock covered by this prospectus.
Unless the context otherwise indicates, references in this prospectus to
"we," "us," "our" or "Capital Trust" refer to Capital Trust, Inc., a Maryland
corporation.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the information incorporated into it by
reference, includes forward-looking statements. These statements predict or
describe the future of our future operations as a REIT, the effects of our
reverse stock split, our business plans and strategies, and do not relate solely
to historical matters. We have identified forward-looking statements contained
and incorporated by reference into this prospectus using words such as
"believes," "expects," "may," "will," "should," "seeks," "approximately,"
"intends," "plans," "estimates", "anticipates" and similar words. Because these
statements reflect our current views concerning future events, they involve
risks, uncertainties and assumptions which may lead to actual results that are
materially different from those contemplated in the forward-looking statements.
Some, but not all, of the factors that may cause these differences are discussed
in the "Risk Factors" section of this prospectus and in other information
incorporated by reference into this prospectus.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
i
PROSPECTUS SUMMARY
This summary highlights some of the information in this prospectus. It
is not a substitute for the detailed information and financial statements
appearing elsewhere in, or incorporated by reference into, this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. Capital Trust's actual results could differ materially from the
results anticipated in these forward-looking statements. You should read the
entire prospectus carefully, including the risk factors and financial
statements.
Our Company
We are an investment management and real estate finance company
positioned to take advantage of high-yielding lending and investment
opportunities in commercial real estate and related assets. We make investments,
for our own portfolio and as an investment manager for funds we manage, in
various types of income-producing commercial real estate. Our current investment
program emphasizes senior and junior commercial mortgage loans, direct equity
investments and subordinated interests in commercial mortgage-backed securities.
Pursuant to our current business strategy, we seek to manage our portfolio of
loans and other assets so that a majority of our investments are subordinate to
third-party financing but senior to the owner/operator's equity position and
therefore represent "mezzanine" capital.
We are the co-sponsor and exclusive investment manager of CT Mezzanine
Partners II LP, or Fund II, the largest dedicated commercial real estate
mezzanine investment fund in the United States with total equity commitments of
$845 million. Our business strategy is to continue to expand our investment
management business by sponsoring other funds, and, following the investment
period for Fund II, other commercial real estate mezzanine investment funds. We
believe that these funds will generate additional investment management fees and
incentive compensation tied to the performance of their portfolios of
investments. We continue to manage our existing portfolio of balance sheet
assets originated prior to the commencement of our investment management
business and are positioned to selectively add to our balance sheet investments
by investing in a diverse array of real estate and investment
management/finance-related assets and enterprises, including operating
companies.
In December 2002, our board of directors authorized our election to be
taxed as a REIT for the 2003 tax year. We will continue to make for our own
account and as investment manager for the account of funds under management,
loans and debt related investments in various types of commercial real estate
and related assets, and, to the extent necessary, we will tailor our balance
sheet investment program to originate or acquire loans and investments to
produce a portfolio that meets the asset and income tests necessary to maintain
our qualification as a REIT. In order to accommodate our REIT status, the legal
structure of future investment funds we sponsor may be different from the legal
structure of our existing investment funds.
For more information regarding our election to be taxed as a REIT and
proposed amendments to our charter related to such election and our proposed one
(1) for three (3) reverse stock split, please see our Schedule 14A definitive
proxy statement, as filed with the Securities and Exchange Commission on March
3, 2003 which is incorporated herein by reference.
We were incorporated in Maryland on April 7, 1998 as a successor to a
business trust organized in the 1960s and our principal executive offices are
located at 410 Park Avenue, 14th Floor, New York, New York 10022, and our
telephone number is (212) 655-0220.
Securities That May Be Offered
This prospectus relates to the offer and sale from time to time of (i)
up to 9,216,309 shares of class A common stock currently held by certain of the
individuals and entities listed under the "Selling Shareholders" section of this
prospectus and (ii) up to 12,820,272 additional shares of class A common stock
which may be issued to other selling shareholders upon the conversion of our
outstanding convertible trust preferred securities.
We will not receive any cash proceeds from the sale by the selling
shareholders of the class A common stock to which this prospectus relates.
2
RISK FACTORS
An investment in our class A common stock involves various risks. You
should carefully consider the following risk factors in conjunction with the
other information contained and incorporated by reference into this prospectus
before purchasing our class A common stock. If any of the risks discussed in
this prospectus actually occur, our business, operating results, prospects
and/or financial condition could be harmed. This could cause the market price of
our class A common stock to decline and could cause you to lose all or part of
your investment.
Risk Factors Related to Our Business
Because we commenced our investment management business in March 2000, we are
subject to risks and uncertainties associated with developing and operating a
new business, and we may not achieve from this new business the investment
returns that we expect.
Our investment management business commenced in March 2000 and therefore
has a limited track record of proven results upon which to evaluate our
performance. We will encounter risks and difficulties as we proceed to develop
and operate our investment management business. In order to achieve our goals as
an investment manager, we must:
o manage our mezzanine funds successfully by investing a majority of
our fund capital in suitable investments that meet the funds'
specified investment criteria,
o incent our management and professional staff to the task of
developing and operating the investment management business,
o structure, sponsor and capitalize future real estate related funds
and other investment products under our management that provide
investors with attractive investment opportunities, and
o convince third party investors that an investment in our future funds
will meet their investment objectives and will generate attractive
returns.
There can be no assurance that we will successfully develop and operate
our investment management business to achieve the investment returns we expect.
Our success in developing and operating the investment management business will
depend in part on the demand for real estate related investment opportunities
such as those provided by our mezzanine funds and other real estate related
funds and other investment products.
Our ability to develop, operate and sustain our investment management
business will depend in part on the strength of the market for private equity
investments generally and the demand for real estate related private equity
investments in particular. Markets for real estate related investments can be
materially and adversely affected by factors beyond our control, including
volatility in the global capital markets, adverse changes in general economic
conditions, an unfavorable market for real estate and competition from other
investment opportunities available to third party investors.
We will face substantial competition from established participants in the
private equity market as we offer the mezzanine and other real estate related
funds to third party investors.
We are a recent entrant into the investment management business. As we
offer our mezzanine and other real estate related funds as investment
opportunities to third party investors, we will face significant competition
from established Wall Street investment banking firms and large financial
institutions which have proven track records in marketing and managing private
equity investment funds and are otherwise competitively advantaged because they
have access to pre-existing third party investor networks into which they can
channel competing investment opportunities. If our competitors offer investment
products that are competitive with the mezzanine and
3
other fund investments offered by us, we will find it more difficult to attract
investors and to capitalize our mezzanine and other real estate related funds.
Our success in deploying our mezzanine funds' capital to originate or acquire a
targeted portfolio of assets will depend on the availability of, and the degree
of competition for, attractive investments.
Our operating results will be dependent upon the availability of, as
well as our ability to identify, consummate, manage and realize, high yielding
real estate investment opportunities. If we are not successful in investing all
available equity capital for our funds, it will reduce the potential revenues we
earn following our funds' investment period when our management fee base shifts
from the amount of capital commitments to the amount of invested assets. We may
expend significant time and resources in identifying and consummating targeted
investments. In general, the availability of desirable high yielding real estate
opportunities and, consequently, our funds' investment returns will be affected
by the level and volatility of interest rates, by conditions in the financial
markets and by general economic conditions. No assurance can be given that we
will be successful in identifying and consummating investments which satisfy our
rate of return objectives or that such investments, once consummated, will
perform as anticipated. We will be engaged in a competitive business and will be
competing for attractive investments with traditional lending sources as well as
existing funds, or funds formed in the future, with similar investment
objectives.
Our loans and investments will expose us to a high degree of risk associated
with investing in commercial real estate related assets.
Real estate historically has experienced significant fluctuations and
cycles in value that may result in reductions in the value of real estate
related investments. The performance and value of our loans and investments once
originated or acquired by us will depend on many factors beyond our control. The
ultimate performance and value of our investments will be subject to the varying
degrees of risk generally incident to the ownership and operation of the
commercial property which collateralize or support our investments. The ultimate
performance and value of our loans and investments depends upon the commercial
property owner's ability to operate the property so that it produces the
revenues and cash flow needed to pay the interest and principal due to us on the
loans and investments. Revenues and cash flow may be adversely affected by:
o changes in national economic conditions,
o changes in local real estate market conditions due to changes in
national or local economic conditions or changes in neighborhood
characteristics,
o competition from other properties offering the same or similar
services,
o changes in interest rates and in the availability of mortgage
financing on favorable terms,
o the impact of present or future environmental legislation and
compliance with environmental laws,
o the ongoing need for capital improvements (particularly in older
structures),
o changes in real estate tax rates and other operating expenses,
o adverse changes in governmental rules and fiscal policies, civil
unrest, acts of God, including earthquakes, hurricanes and other
natural disasters, acts of war or terrorism, which may result in
uninsured losses,
o adverse changes in zoning laws, and
o other factors that are beyond our control and the control of the
commercial property owners.
4
In the event that any of the properties underlying our loans and
investments experience any of the foregoing events or occurrences, the value of,
and return on, such investments would be negatively impacted.
Our balance sheet asset portfolio continues to become more concentrated in
mark-to-market mortgage backed securities and related hedges which subjects us
to greater swings in equity and income as we record balance sheet gains and
losses on such assets.
Our current venture agreement with affiliates of Citigroup Inc. has
placed restrictions on our ability to originate new assets for our balance sheet
until the end of the investment period for Fund II. Our balance sheet portfolio
therefore has become more concentrated in mark-to-market mortgage backed
securities, which generally have longer terms than non-mark-to-market loans that
mature or may be paid off early. In an environment of lower interest rates,
there is a higher risk that our existing loans will pay off early. We have
adopted accounting policies under which such securities will impact either or
both shareholders' equity or net income depending on the characterization of the
change in market value. If a reduction in market value is deemed to be permanent
(generally due to a change in the credit risk), the reduction in value will be
recorded as a reduction of net income. If any of the available-for-sale
securities are sold, the resulting gain or loss will be recorded through the
income statement. All other changes in market value will impact shareholders
equity only. The more concentrated our balance sheet becomes in mark-to-market
assets, the greater the potential for swings in equity and income as we record
gains and losses on such assets on our balance sheet. If interest rates
fluctuate and affect significantly the market value of such mark-to-market
assets the corresponding reductions or increases in equity and income may be
significant.
We may not achieve our targeted rate of return on our investments.
We will originate or acquire investments based on our estimates or
projections of internal rates of return and current returns, which in turn are
based on, among other considerations, assumptions regarding the performance of
assets, the amount and terms of available financing and the manner and timing of
dispositions, including possible asset recovery and remediation strategies, all
of which are subject to significant uncertainty. In addition, events or
conditions that have not been anticipated may occur and may have a significant
effect on the actual rate of return received on an investment.
We may not be able to obtain the level of leverage necessary to optimize our
return on investment. If we do incur significant leverage, we will be subject to
the risks of holding leveraged investments.
Our return on investment will depend, in part, upon our ability to grow
our funds' portfolio of invested assets through the use of leverage. Our ability
to obtain the necessary leverage on attractive terms will ultimately depend upon
our ability to maintain interest coverage ratios meeting prevailing market
underwriting standards which will vary according to lenders' assessments of our
and our funds' creditworthiness and the terms of the borrowings. The failure to
obtain and/or maintain leverage at desired levels, or to obtain leverage on
attractive terms, could have a material adverse effect on our funds'
performance. Moreover, we are dependent upon a few lenders to provide the
primary credit facilities for our origination or acquisition of loans and
investments.
Leverage creates an opportunity for increased net income, but at the
same time creates risks. For example, leveraging magnifies changes in the net
worth of our funds. We expect that our funds will leverage assets only when
there is an expectation that leverage will enhance returns, although there can
be no assurance that the use of leverage will prove to be beneficial. Where
pledged assets are marked-to-market, a decline in market value may require us to
pledge additional collateral to secure our borrowings. Moreover, there can be no
assurance that our funds will be able to meet their debt service obligations
and, to the extent that they cannot, they risk the loss of some or all of their
assets or a financial loss if they are required to liquidate assets at a
commercially inopportune time.
We are dependent upon our senior management team to develop and operate our
business.
Our ability to develop and operate our business depends to a substantial
extent on the experience, relationships and expertise of our senior management
and key employees. There can be no assurance that these individuals will remain
in our employ. The employment agreement with our chief executive officer, John
R. Klopp,
5
following the expected extension thereof, expires in 2003, unless further
extended. The loss of the services of our senior management and key employees
could have a material adverse effect on our operations.
We will be exposed to the risks involved with making subordinated investments.
Our investments will involve the additional risks attendant to
investments consisting of subordinated loan positions. In many cases, management
of our investments and our remedies with respect thereto, including the ability
to foreclose on the collateral securing such investments, will be subject to the
rights of senior lenders and the rights as set forth in certain intercreditor
agreements.
Our loans and investments may be subject to fluctuations in interest rates which
may not be adequately protected, or protected at all, by our hedging strategies.
We intend to make loans with "floating" interest rates to protect
against fluctuations in interest rates. However, the funds may from time to time
make fixed rate loans. In such cases, the funds may employ various hedging
strategies to limit the effects of changes in interest rates on its operations,
including engaging in interest rate swaps, caps, floors and other interest rate
exchange contracts. No strategy can completely insulate the funds from the risks
associated with interest rate changes and there is a risk that they may provide
no protection at all. Hedging transactions involve certain additional risks such
as the legal enforceability of hedging contracts, the early repayment of hedged
transactions and the risk that unanticipated and significant changes in interest
rates may cause a significant loss of basis in the contract and a change in
current period expense. There can be no assurance that our funds will be able to
enter into hedging transactions or that such hedging transactions will
adequately protect the funds against the foregoing risks. In addition, cash flow
hedges which are not perfectly correlated with a variable rate financing will
impact our income as gains and losses on the ineffective portion of such hedges
will be recorded.
Our loans and investments may be illiquid which will constrain our ability to
vary our portfolio of investments.
Real estate investments are relatively illiquid. Such illiquidity may
limit our ability to vary our funds' portfolio of investments in response to
changes in economic and other conditions. Illiquidity may result from the
absence of an established market for investments as well as the legal or
contractual restrictions on their resale. In addition, illiquidity may result
from the decline in value of a property securing one of the funds' investments.
There can be no assurance that the fair market value of any of the real property
serving as security will not decrease in the future, leaving the funds'
investment under-collateralized or not collateralized at all.
We may invest in troubled assets which are subject to a higher degree of
financial risk.
We may make investments in non-performing or other troubled assets that
involve a higher degree of financial risk and there can be no assurance that our
investment objectives will be realized or that there will be any return on
investment. Furthermore, investments in properties operating in work-out modes
or under bankruptcy protection laws may, in certain circumstances, be subject to
additional potential liabilities that could exceed the value of an investor's
original investment, including equitable subordination and/or disallowance of
claims or lender liability.
We may not have control over certain of our loans and investments.
Our ability to manage our portfolio of loans and investments will be
subject to the form in which they are made. In certain situations, our funds
may:
o acquire only a minority interest,
o co-invest with third parties through partnerships, joint ventures or
other entities, thereby acquiring non-controlling interests,
6
o rely on independent third party management or strategic partners with
respect to the management of an asset, or
o acquire only a participation in an asset underlying an investment.
Therefore, we may not be able to exercise control over the loan or
investment. Such financial assets may involve risks not present in investments
where third party controlling investors or third parties are not involved. For
example, a third party partner or co-venturer may have financial difficulties
resulting in a negative impact on such asset, may have economic or business
interests or goals which are inconsistent with ours and those of the funds, or
may be in a position to take action contrary to the funds' investment
objectives. In addition, our funds may, in certain circumstances, be liable for
the actions of its third party partners or co-venturers.
Our mezzanine and other funds will be subject to the risk of defaults by third
party investors on their capital commitments.
The capital commitments made by third party investors to our mezzanine
and other funds represent promises by those investors to contribute cash to the
funds from time to time as investments are made by the funds. We will therefore
be subject to general credit risks that the investors may default on their
capital commitments. If defaults occur, we may not be able to close loans and
investments we have identified and negotiated, which could materially and
adversely affect the fund's investment program or make us liable for breach of
contract, in either case to the detriment of our franchise in the private equity
market.
We must manage our portfolio and the portfolios of our funds in a manner that
allows us to rely on an exclusion from registration under the Investment Company
Act of 1940 in order to avoid the consequences of regulation under this Act.
We rely on an exclusion from registration as an investment company
afforded by Section 3(c)(5)(C) of the Investment Company Act. Under this
exclusion, we are required to maintain, on the basis of positions taken by the
SEC staff in interpretive and no-action letters, a minimum of 55% of the value
of the total assets of our portfolio in "mortgages and other liens on and
interests in real estate." We refer to this category of investments herein as
"Qualifying Interests." In addition, we must maintain an additional minimum of
25% of the value of our total assets in Qualifying Interests or other real
estate-related assets. Because registration as an investment company would have
a material adverse effect on us and our share price, since it would
significantly affect our ability to engage in certain transactions or to
organize ourselves in the manner as we currently do, we intend to maintain our
qualification for this exclusion from registration.
If our portfolio did not comply with the requirements of the exclusion
we rely upon, we could be forced to alter our portfolio by selling or otherwise
disposing of a substantial portion of the assets that are not Qualifying
Interests or by acquiring significant position in assets that are Qualifying
Interests. Altering our portfolio in this manner may have a material adverse
effect on our investment if we are forced to dispose of or acquire assets in an
unfavorable market.
Risk Factors Relating to Our Stock
Because a limited number of shareholders, including members of our management
team, own a substantial number of our shares, decisions made by them may be
detrimental to your interests.
By virtue of their direct and indirect share ownership, John R. Klopp, a
director and our president and chief executive officer, Craig M. Hatkoff, a
director and former officer, and other shareholders indirectly owned by trusts
for the benefit of our chairman of the board, Samuel Zell, have the power to
significantly influence our affairs and are able to influence the outcome of
matters required to be submitted to shareholders for approval, including the
election of our directors, amendments to our charter, mergers, sales of assets
and other acquisitions or sales. The influence exerted by these shareholders
over the company's affairs might not be consistent with the interests of other
shareholders. We cannot assure you that these shareholders will not exercise
their influence over us in a manner
7
detrimental to your interests. As of the date hereof, these shareholders
collectively own and control 7,694,181 shares of our class A common stock
representing approximately 46.6% of our outstanding class A common stock. This
concentration of ownership may have the effect of delaying or preventing a
change in control of our company and might affect the market price of our class
A common stock.
The conversion of the outstanding convertible trust preferred securities
held by EOP Operating Limited Partnership, Vornado Realty, L.P. and the General
Motors Employes Global Group Pension Trust could result in other significant
concentrated holdings of class A common stock. EOP Operating Limited
Partnership, Vornado Realty, L.P. and General Motors Employes Global Group
Pension Trust may each acquire 4,273,424 shares of our class A common stock.
Officers, directors or other related persons of these securityholders serve on
our board of directors and therefore have the power to significantly influence
our affairs. If these securityholders acquire a significant ownership position,
they may acquire the ability to influence the outcome of matters submitted for
shareholder approval.
Some provisions of our charter and bylaws and Maryland law may deter takeover
attempts, which may limit the opportunity of our shareholders to sell their
shares at a favorable price.
Some of the provisions of our charter and bylaws and Maryland law
discussed below could make it more difficult for a third party to acquire us,
even if doing so might be beneficial to our shareholders, by providing them with
the opportunity to sell their shares at a premium to the then current market
price.
Issuance of Preferred Stock Without Shareholder Approval. Following the
adoption of proposed amendments to our charter, our charter will authorize our
board of directors to authorize and issue up to 100,000,000 shares of preferred
stock and up to 100,000,000 shares of common stock. Our charter also authorizes
our board of directors, without shareholder approval, to classify or reclassify
any unissued shares of our common stock and preferred stock into other classes
or series of stock and to increase the aggregate number of shares of stock of
any class or series that may be issued. The board therefore has the power to
increase the number of shares of preferred stock we may issue without
shareholder approval. Preferred stock may be issued in one or more series, the
terms of which may be determined without further action by shareholders. These
terms may include preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption. No shares of preferred stock are currently outstanding and we
have no present plans for the issuance of any preferred stock. The issuance of
any preferred stock, however, could materially adversely affect the rights of
holders of our common stock, and therefore could reduce its value. In addition,
specific rights granted to future holders of preferred stock could be used to
restrict our ability to merge with, or sell assets to, a third party. The power
of the board of directors to issue preferred stock could make it more difficult,
delay, discourage, prevent or make it more costly to acquire or effect a change
in control, thereby preserving the current shareholders' control.
Advance Notice Bylaw. Our bylaws contain advance notice procedures for
the introduction of business and the nomination of directors. These provisions
could discourage proxy contests and make it more difficult for you and other
shareholders to elect shareholder-nominated directors and to propose and approve
shareholder proposals opposed by management.
Maryland Takeover Statutes. We are subject to the Maryland Business
Combination Act which might enable our management to resist an unsolicited
takeover of our company. The statute substantially restricts the ability of
third parties who acquire, or seek to acquire, control of our company to
complete mergers and other business combinations without the approval of our
board of directors even if such transaction would be beneficial to shareholders.
"Business combinations" between such a third party acquiror and our company are
prohibited if the acquiror becomes an "interested shareholder" by obtaining
beneficial ownership of 10 percent or more of shareholder voting power. If our
board of directors approved in advance the transaction that would otherwise give
rise to the acquiror attaining such status, the acquiror would not become an
interested shareholder and, as a result, it could enter into a business
combination with us. Our board of directors could choose not to negotiate with
an acquirer if the board determined in its business judgment that considering
such an acquisition was not in the strategic interests of our company. Even
after the lapse of the five-year prohibition period, any business
8
combination with an interested shareholder must be recommended by our board of
directors and approved by the affirmative vote of at least:
o 80% of the votes entitled to be cast by shareholders and
o two-thirds of the votes entitled to be cast by shareholders other
than the interested shareholder and affiliates and associates
thereof.
The super-majority vote requirements do not apply if the transaction
complies with a minimum price requirement prescribed by the statute.
Our board of directors has exempted any business combination involving
family partnerships controlled separately by John R. Klopp and Craig M. Hatkoff
and a limited liability company indirectly controlled by a trust for the benefit
of Samuel Zell and his family. As a result, the persons described above may
enter into business combinations with us without compliance with the
super-majority vote requirements and the other provisions of the statute.
We are also subject to the Maryland Unsolicited Takeovers Act which
permits our board of directors, among other things, to elect on our company's
behalf to stagger the terms of directors, to increase the shareholder vote
required to remove a director and to provide that shareholder-requested meetings
may be called only upon the request of shareholders entitled to cast at least a
majority of the votes entitled to be cast at the meeting. Such an election would
significantly restrict the ability of third parties to wage a proxy fight for
control of our board of directors as a means of advancing a takeover offer. If
an acquirer was discouraged from offering to acquire us, or prevented from
successfully completing a hostile acquisition, you could lose the opportunity to
sell your shares at a favorable price.
Risk Factors Related to our REIT Election
Our proposed amended and restated charter does not permit ownership of over 2.5%
of our class A common stock by individuals, and attempts to acquire our common
stock in excess of the 2.5% limit would be void without the prior approval of
our board of directors.
For the purpose of preserving our REIT qualification, our proposed
amended and restated charter would prohibit direct or constructive ownership by
any individual of more than 2.5% of the lesser of the total number or value of
the outstanding shares of our class A common stock as a means of preventing
ownership of more than 50% of our class A common stock by five or fewer
individuals. The amended and restated charter's constructive ownership rules are
complex and may cause the outstanding class A common stock owned by a group of
related individuals or entities to be deemed to be constructively owned by one
individual. As a result, the acquisition of less than 2.5% of our outstanding
class A common stock by an individual or entity could cause an individual to own
constructively in excess of 2.5% of our outstanding class A common stock, and
thus be subject to the amended and restated charter's ownership limit. The
ownership limit was established following a review of the aggregate ownership of
the top five direct or constructive individual shareholders. There can be no
assurance that our board of directors, as permitted in the amended and restated
charter, will increase this ownership limit in the future. Any attempt to own or
transfer shares of our class A common stock in excess of the ownership limit
without the consent of our board of directors shall be void, and will result in
the shares being transferred by operation of law to a charitable trust, and the
person who acquired such excess shares will not be entitled to any distributions
thereon or to vote such excess shares.
After reviewing the top five shareholders treated as individuals for
REIT qualification purposes, our board of directors fixed the ownership limit at
2.5%. The amended and restated charter contains a provision that would exempt
certain of our officers and directors and related persons from the ownership
limit. Based on the number of shares outstanding on the date hereof, this
exemption would permit these top five shareholders collectively to hold up to
48.6% of our outstanding shares of class A common stock.
9
The 2.5% ownership limit may have the effect of precluding a change in
control of Capital Trust by a third party without the consent of our board of
directors, even if such change in control would be in the interest of our
stockholders (and even if such change in control would not reasonably jeopardize
our REIT status).
There are no assurances of our ability to pay dividends in the future.
We intend to pay quarterly dividends and to make distributions to our
shareholders in amounts such that all or substantially all of our taxable income
in each year, subject to certain adjustments, is distributed. This, along with
other factors, should enable us to qualify for the tax benefits accorded to a
REIT under the Internal Revenue Code. We have not established a dividend payment
level. All distributions will be made at the discretion of our board of
directors and will depend on our earnings, our financial condition, maintenance
of our REIT status and such other factors as our board of directors may deem
relevant from time to time. There are no assurances as to our ability to pay
dividends in the future. In addition, some of our distributions may include a
return of capital.
An increase in market interest rates may lead prospective purchasers of our
class A common stock to expect a higher dividend yield, which would adversely
affect the market price of our class A common stock.
One of the factors that will influence the price of our class A common
stock will be the dividend yield on our stock (distributions as a percentage of
the price of our stock) relative to market interest rates. An increase in market
interest rates may lead prospective purchasers of our common stock to expect a
higher dividend yield, which would adversely affect the market price of our
class A common stock.
Tax legislation proposed by President Bush may have negative consequences for
REITs.
Recent tax legislation proposed by President Bush would, if enacted,
allow corporations to pay dividends that are tax-free to shareholders or, to the
extent dividends are not paid, allow shareholders to increase the tax basis of
their shares. As currently described, this proposal would not apply to REITs.
Although the proposal does not adversely affect the tax treatment of REITs, it
may cause investments in non-REIT corporations to become relatively more
desirable. As a result, the capital markets may be less favorable to REITs when
they seek to raise equity capital, and the prices at which REIT equity
securities trade may decline or underperform non-REIT corporations.
We will be dependent on external sources of capital to finance our growth.
As with other REITs, but unlike corporations generally, our ability to
finance our growth must largely be funded by external sources of capital because
we generally will have to distribute to our shareholders 90% of our taxable
income in order to qualify as a REIT (including taxable income where we do not
receive corresponding cash). Our access to external capital will depend upon a
number of factors, including general market conditions, the market's perception
of our growth potential, our current and potential future earnings, cash
distributions and the market price of our stock.
If we do not maintain our qualification as a REIT, we will be subject to tax as
a regular corporation and face a substantial tax liability.
We expect to operate so as to qualify as a REIT under the Internal
Revenue Code. However, qualification as a REIT involves the application of
highly technical and complex Internal Revenue Code provisions for which only a
limited number of judicial or administrative interpretations exist. Even a
technical or inadvertent mistake could jeopardize our REIT status. Furthermore,
new tax legislation, administrative guidance or court decisions, in each
instance potentially with retroactive effect, could make it more difficult or
impossible for us to qualify as a REIT. If we fail to qualify as a REIT in any
tax year, then:
o we would be taxed as a regular domestic corporation, which under
current laws, among other things, means being unable to deduct
distributions to shareholders in computing taxable income and being
subject to federal income tax on our taxable income at regular
corporate rates;
10
o any resulting tax liability could be substantial, could have a
material adverse effect on our book value and could reduce the amount
of cash available for distribution to shareholders; and
o unless we were entitled to relief under applicable statutory
provisions, we would be required to pay taxes, and thus, our cash
available for distribution to shareholders would be reduced for each
of the years during which we did not qualify as a REIT.
Complying with REIT requirements may cause us to forego otherwise attractive
opportunities.
In order to qualify as a REIT for federal income tax purposes, we must
continually satisfy tests concerning, among other things, our sources of income,
the nature and diversification of our investments in commercial real estate and
related assets, the amounts we distribute to our shareholders and the ownership
of our stock. We may also be required to make distributions to shareholders at
disadvantageous times or when we do not have funds readily available for
distribution. The REIT provisions of the tax code may substantially limit our
ability to hedge our financial assets and related borrowings. Thus, compliance
with REIT requirements may hinder our ability to operate solely on the basis of
maximizing profits.
Complying with REIT requirements may force us to liquidate or restructure
otherwise attractive investments.
In order to qualify as a REIT, we must also ensure that at the end of
each calendar quarter, at least 75% of the value of our assets consists of cash,
cash items, government securities and qualified REIT real estate assets. The
remainder of our investment in securities cannot include more than 10% of the
outstanding voting securities of any one issuer or 10% of the total value of the
outstanding securities of any one issuer. In addition, no more than 5% of the
value of our assets can consist of the securities of any one issuer. If we fail
to comply with these requirements, we must dispose of a portion of our assets
within 30 days after the end of the calendar quarter in order to avoid losing
our REIT status and suffering adverse tax consequences.
Complying with REIT requirements may force us to borrow to make distributions to
shareholders.
From time to time, our taxable income may be greater than our cash flow
available for distribution to shareholders. If we do not have other funds
available in these situations, we may be unable to distribute substantially all
of our taxable income as required by the REIT provisions of the Internal Revenue
Code. Thus, we could be required to borrow funds, sell a portion of our assets
at disadvantageous prices or find another alternative. These options could
increase our costs or reduce our equity.
USE OF PROCEEDS
We will not receive any proceeds from the sale of any securities covered
by this prospectus by the selling shareholders.
11
SELLING SHAREHOLDERS
As discussed elsewhere in this prospectus, the selling shareholders are
individuals or entities which either hold shares of our class A common stock or
may acquire the same upon the conversion of certain convertible trust preferred
securities. The following table sets forth, as of the date of this prospectus:
o the name of each selling shareholder;
o the number of shares of class A common stock beneficially owned by
each selling shareholder;
o the number of shares of class A common stock that may be offered for
the account of each selling shareholder; and
o the number and percentage of shares of class A common stock that will
be beneficially owned by each selling shareholder following the
offering to which this prospectus relates.
The information with respect to ownership after the offering assumes the
sale of all of the shares offered and no purchases of additional shares. We have
set forth in the footnotes to the table additional information regarding the
selling shareholders and their shares, including the nature of any position,
office or other material relationship that a selling shareholder has had with
Capital Trust or any of our affiliates within the past three years. The selling
shareholders may offer all or part of the shares covered by this prospectus at
any time or from time to time.
For purposes of the table, the number of shares "beneficially owned" are
those beneficially owned as determined under the rules of the SEC. Such
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
a person has sole or shared voting power or investment power and any shares for
which the person has the right to acquire such power within 60 days through the
exercise of any option, warrant or right, through conversion of any security or
pursuant to the automatic termination of a power of attorney or revocation of a
trust, discretionary account or similar arrangement.
Total Number of
Total Number Shares of Class Total Number of Percentage of
of Shares of A Common Stock Shares of Class Shares of Class
Class A Common that may be A Common Stock A Common Stock
Stock Offered for the to to be
Beneficially Account of the be Beneficially Beneficially
Owned Prior to Selling Owned after Owned after this
Name this Offering Shareholder this Offering Offering
---- -------------- --------------- --------------- ----------------
Veqtor Finance Company, L.L.C. (1) 2,692,288 2,692,288 -- --%
Callahan-CT General Partnership (2) 209,711 209,711 -- --%
CMH Investment Partnership LP (3) 1,830,132 (9) 1,830,132 -- --%
GRG Investment Partnership LP (4) 419,423 (10) 419,423 -- --%
JRK Investment Partnership LP (5) 1,800,132 (11) 1,800,132 -- --%
Rosenberg-CT General Partnership (6) 419,423 (12) 419,423 -- --%
EOP Operating Limited Partnership 4,273,424 (13) 4,273,424 -- --%
Vornado Realty, L.P. 4,273,424 (13) 4,273,424 -- --%
JPMorgan Chase Bank, as trustee for
General Motors Employe Global
Group Pension Trust (7) 299,140 (14) 299,140 -- --%
JPMorgan Chase Bank, as trustee for
GMAM Group Pension Trust II (7) 3,974,284 (15) 3,974,284 -- --%
Stichting Pensioenfonds ABP 1,770,200 1,770,200 -- --%
Samstock, L.L.C. (8) 75,000 75,000 -- --%
---------------------
12
(1) Zell General Partnership, Inc., or Zell GP, is the sole managing member of
Veqtor Finance Company, L.L.C. The sole shareholder of Zell GP is the Sam
Investment Trust, a trust established for the benefit of the family of
Samuel Zell, our chairman of the board. Chai Trust Company, L.L.C. serves
as trustee of the Sam Investment Trust.
(2) Timothy H. Callahan and Meg Siegler Callahan are general partners of
Callahan-CT General Partnership.
(3) Craig M. Hatkoff, our former vice chairman and a member of our board of
directors, is the sole general partner of CMH Investment Partnership LP.
(4) Gary R. Garrabrant, a member of our board of directors, is the sole general
partner of GRG Investment Partnership L.P.
(5) John R. Klopp, our president and chief executive officer and a member of
our board of directors, is the sole general partner of JRK Investment
Partnership LP.
(6) Sheli Z. Rosenberg, a member of our board of directors, and Burton X.
Rosenberg are the sole general partners of Rosenberg-CT General
Partnership.
(7) Each trust is a pension trust formed pursuant to the laws of the State of
New York for the benefit of certain employee benefit plans of General
Motors Corporation, or GM, its subsidiaries and unrelated employers. These
shares may be deemed to be owned beneficially by General Motors Investment
Management Corporation, or GMIMCo, a wholly-owned subsidiary of GM. GMIMCo
is registered as an investment adviser under the Investment Advisers Act of
1940. GMIMCo's principal business is providing investment advice and
investment management services with respect to the assets of certain
employee benefit plans of GM, its subsidiaries and unrelated employers, and
with respect to the assets of certain direct and indirect subsidiaries of
GM and associated entities. GMIMCo is serving as investment manager with
respect to these shares and in that capacity it has the sole power to
direct the trustee as to the voting and disposition of these shares.
Because of the trustee's limited role, beneficial ownership of the shares
by the trustee is disclaimed.
(8) SZ Investments, L.L.C., or SZI, is the sole member of Samstock, L.L.C. The
sole manager of SZI is Zell GP.
(9) Excludes 18,000 shares of class A common stock owned by Craig M. Hatkoff,
141,667 shares issuable upon the exercise of vested stock options and
11,924 shares issuable upon conversion of vested stock units held by Mr.
Hatkoff.
(10) Excludes 30,710 shares of class A common stock which may be obtained upon
conversion of vested stock units held by Gary R. Garrabrant, and 35,000
shares of class A common stock issuable upon exercise of vested stock
options held by Mr. Garrabrant.
(11) Excludes 69,259 shares of class A common stock owned by John R. Klopp,
29,630 shares of class A common stock subject to an unvested restricted
stock grant, and 424,999 shares issuable upon exercise of vested stock
options held by Mr. Klopp.
(12) Excludes 30,710 shares of class A common stock which may be obtained upon
conversion of vested stock units held by Sheli Z. Rosenberg.
(13) Represents shares which may be obtained upon conversion of $29,914,000 in
convertible amount of Variable Step Up Convertible Trust Preferred
Securities issued by our company's consolidated Delaware statutory business
trust subsidiary, CT Convertible Trust I.
(14) Represents shares which may be obtained upon conversion of $2,093,980 in
convertible amount of Variable Step Up Convertible Trust Preferred
Securities issued by our company's consolidated Delaware statutory business
trust subsidiary, CT Convertible Trust I.
(15) Represents shares which may be obtained upon conversion of $27,820,020 in
convertible amount of Variable Step Up Convertible Trust Preferred
Securities issued by our company's consolidated Delaware statutory business
trust subsidiary, CT Convertible Trust I.
13
PLAN OF DISTRIBUTION
We are registering shares of class A common stock on behalf of the
selling shareholders. As used in this section of the prospectus, the term
"selling shareholders" includes the selling shareholders named in the table
above and any of their pledgees, donees, transferees or other
successors-in-interest who receive shares offered hereby from a selling
shareholder as a gift, pledge, partnership distribution or other non-sale
related transfer and who subsequently sell any of such shares after the date of
this prospectus.
All costs, expenses and fees in connection with the registration of the
shares offered hereby will be borne by Capital Trust. Underwriting discounts,
brokerage commissions and similar selling expenses, if any, attributable to the
sale of the securities covered by this prospectus will be borne by the
respective selling shareholders.
The selling shareholders may sell under this prospectus the shares of
class A common stock which are outstanding or are issuable upon conversion of
the convertible trust preferred securities at different times. The selling
shareholders will act independently of us in making decisions as to the timing,
manner and size of each sale. The sales may be made on the New York Stock
Exchange or any national securities exchange or quotation system on which the
shares of class A common stock may be listed or quoted at the time of sale, in
the over-the-counter market or other than in such organized and unorganized
trading markets, in one or more transactions, at:
o fixed prices, which may be changed;
o prevailing market prices at the time of sale;
o prices determined at the time of sale; or
o negotiated prices.
The shares may be sold by one or more of the following methods in
addition to any other method permitted under this prospectus:
o a block trade in which the broker-dealer so engaged may sell the
shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
o a purchase by a broker-dealer as principal and resale by such
broker-dealer for its own account;
o an ordinary brokerage transaction or a transaction in which the
broker solicits purchasers;
o a privately negotiated transaction;
o an underwritten offering;
o securities exchange or quotation system sale that complies with the
rules of the exchange or quotation system;
o through the writing of options relating to such shares; or
o through a combination of the above methods of sale.
In connection with sales of the shares of class A common stock, any
selling shareholder may:
o enter into and cover hedging transactions with broker-dealers, that
may in turn engage in short sales of the shares of class A common
stock in the course of hedging the positions they assume;
14
o sell short and deliver shares of class A common stock to close out
the short positions; or
o loan or pledge shares of class A common stock to broker-dealers that
in turn may sell the shares.
We have been advised by the selling shareholders that they have not, as
of the date of this prospectus, entered into any agreements, understandings or
arrangements with underwriters or broker-dealers regarding the sale of their
shares, nor have we been advised that there is an underwriter or broker-dealer
acting as of the date of this prospectus in connection with the proposed sale of
the shares by the selling shareholders.
The selling shareholders may effect such transactions by selling the
shares covered by this prospectus directly to purchasers, to or through
broker-dealers, which may act as agents for the seller and buyer or principals,
or to underwriters who acquire shares for their own account and resell them in
one or more transactions. Such broker-dealers or underwriters may receive
compensation in the form of discounts, concessions, or commissions from the
selling shareholders and/or the purchasers of the shares covered by this
prospectus for whom such broker-dealers may act as agents or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions) and such discounts, concessions, or
commissions may be allowed or re-allowed or paid to dealers.
The selling shareholders and any broker-dealers that participate with
the selling shareholders in the sale of the shares covered by this prospectus
may be deemed to be "underwriters" within the meaning of Section 2(a)(11) of the
Securities Act, and any commissions received by such broker-dealers and any
profit on the resale of the shares sold by them while acting as principals might
be deemed to be underwriting discounts or commissions under the Securities Act.
The selling shareholders and any broker-dealer that may be deemed to be
"underwriters" within the meaning of Section 2(a)(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act. We
will make copies of this prospectus available to the selling shareholders and
have informed them of their obligation to deliver copies of this prospectus to
purchasers at or before the time of any sale of the shares. Such requirement may
be satisfied by delivery through the facilities of the New York Stock Exchange
pursuant to Rule 153 under the Securities Act.
We have informed the selling shareholders that the anti-manipulation
provisions of Regulation M promulgated under the Securities Exchange Act of
1934, may apply to their sales in the market.
The selling shareholders also may resell all or a portion of their
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, or any other available exemption from required registration
under the Securities Act, provided they meet the criteria and conform to the
requirements of such exemption.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a selling
shareholder that any material arrangements have been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange or secondary distribution or a purchase by a broker-dealer. Such
supplement will disclose:
o the name of each such selling shareholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus; and
15
o other facts material to the transaction.
In addition, upon receiving notice from a selling shareholder that a
donee, pledgee or transferee or other successor-in-interest intends to sell more
than 500 shares covered by this prospectus, we will file a supplement to this
prospectus pursuant to Rule 424(b) under the Securities Act to identify the
non-sale transferee.
We have agreed with the selling shareholders to keep the registration
statement of which this prospectus is a part effective until all shares are sold
by the selling shareholders or all unsold shares are immediately saleable
without restriction (including without volume limitations) and without
registration under the Securities Act.
The selling shareholders are not restricted as to the price or prices at
which they may sell their shares. Sales of such shares may have an adverse
effect on the market price of the securities, including the market price of the
class A common stock. Moreover, the selling shareholders are not restricted as
to the number of shares that may be sold at any time, and it is possible that a
significant number of shares could be sold at the same time, which may have an
adverse effect on the market price of the class A common stock.
We will bear all costs, expenses and fees in connection with the
registration of the shares. We have agreed to indemnify and hold the selling
shareholders harmless against certain liabilities under the Securities Act that
could arise in connection with the sale by the selling shareholders of the
shares. The selling shareholders will bear all commissions and discounts, if
any, attributable to the sales of the shares. The selling shareholders may agree
to indemnify any broker-dealer or agent that participates in transactions
involving sales of the shares against certain liabilities, including liabilities
arising under the Securities Act.
16
DESCRIPTION OF OUR STOCK
The following description of our common and preferred stock, provisions
of our amended and restated charter and bylaws and specific provisions of the
Maryland General Corporation Law are only summaries, and are qualified in their
entirety by reference to the Maryland General Corporation Law and to our amended
and restated charter and bylaws which are filed as exhibits to our registration
statement on Form S-3 of which this prospectus is a part. As discussed below
under the caption - Proposed Charter Amendments, we have proposed amendments to
our charter, which upon the effective date thereof, will change certain of the
provisions of our charter discussed below.
General
Under our charter, we may issue up to 300,000,000 shares of stock
comprised of the following:
o 100,000,000 shares of class A common stock, par value $.01 per share;
o 100,000,000 shares of class B common stock, par value $.01 per share;
and
o 100,000,000 shares of preferred stock, par value $.01 per share.
As of the date hereof, 16,515,965 shares of class A common stock were
issued and outstanding and no shares of either class B common stock or preferred
stock were issued and outstanding. As of the date hereof, no shares of preferred
stock were designated as a particular class or series. Under Maryland law, our
shareholders generally are not liable for our debts or obligations.
Common Stock
Together, the class A common stock and the class B common stock
constitute all of the common stock of Capital Trust. The class A common stock is
listed on the New York Stock Exchange under the symbol "CT".
All shares of class A common stock covered by this prospectus are, or
upon their issuance will be, duly authorized, fully paid and nonassessable.
Holders of our common stock are entitled to receive dividends when authorized by
our board of directors out of assets legally available for the payment of
dividends. They are also entitled to share ratably in our assets legally
available for distribution to our shareholders in the event of our liquidation,
dissolution or winding up, after payment of, or adequate provision for, all of
our known debts and liabilities. These rights are subject to the preferential
rights of any other class or series of our stock. All shares of class A common
stock will have equal dividend and liquidation rights.
Each outstanding share of class A common stock is entitled to one vote
on all matters to be submitted to a vote of the shareholders. Shares of class B
common stock do not have voting rights. There is no cumulative voting in the
election of our directors, so the holders of a simple majority of the
outstanding class A common stock, voting at a shareholders meeting at which a
quorum is present, can elect all of the directors nominated for election at the
meeting. Holders of our common stock have no exchange, sinking fund, redemption
or appraisal rights and have no preemptive rights to subscribe for any of our
securities. Because holders of common stock do not have preemptive rights, we
may issue additional shares of stock that may reduce each shareholder's
proportionate voting and financial interest in our company. Rights to receive
dividends on our common stock may be restricted by the terms of any future
classified and issued shares of our preferred stock.
Each share of class A common stock is convertible at the option of the
holder at any time into one fully paid and nonassessable share of class B common
stock, and each share of class B common stock is convertible at the option of
the holder at any time into one fully paid and nonassessable share of class A
common stock. If shares of class B common stock are to be converted into shares
of class A common stock, the holder of shares of the class B common stock must
certify to us that he or she will not, upon the issuance of such shares of class
A common stock, own more than 4.9% of any class of our voting stock or that he
or she is not prohibited by the Bank Holding Company Act of 1956, as amended,
from holding more than 4.9% of any class or series of our voting stock.
17
Under Maryland law, a Maryland corporation generally cannot dissolve,
amend its charter, merge, sell all or substantially all of its assets, engage in
a share exchange or engage in similar transactions outside the ordinary course
of business unless approved by the affirmative vote of shareholders holding at
least two-thirds of the shares entitled to vote on the matter. However, a
Maryland corporation may provide in its charter for approval of these matters by
a lesser percentage, but not less than a majority of all of the votes entitled
to be cast on the matter. Our charter provides for approval of these matters by
a majority of all votes entitled to be cast on the matter.
Power to Reclassify Shares of Our Stock and to Increase the Number of Shares of
Our Stock
Our charter authorizes our board of directors, without shareholder
approval, to:
o classify and reclassify any unissued shares of our common stock and
preferred stock into other classes or series of stock, and
o increase or decrease the aggregate number of shares of stock of any
class or series that may be issued.
Prior to the issuance of shares of each class or series, the board is
required by Maryland law and by our charter to set, subject to our charter
restrictions on transfers of stock, the terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption for each
class or series. Thus, the board could authorize the issuance of shares of
preferred stock with terms and conditions which could have the effect of
delaying, deferring or preventing a transaction or a change in control of our
company that might involve a premium price for holders of our common stock or
otherwise be in their best interest.
Power to Issue Additional Shares of Common Stock and Preferred Stock
We believe that the power to issue additional shares of our common stock
or preferred stock, increase the aggregate number of shares of stock of any
class or series that we have the authority to issue and to classify or
reclassify unissued shares of our common or preferred stock and thereafter to
issue the classified or reclassified shares provides us with increased
flexibility in structuring possible future financings and acquisitions and in
meeting other needs which might arise. These actions can be taken without
shareholder approval, unless shareholder approval is required by applicable law
or the rules of any stock exchange or automated quotation system on which our
securities may be listed or traded. Although we have no present intention of
doing so, we could issue a class or series of stock that could delay, defer or
prevent a transaction or a change in control of our company that might involve a
premium price for holders of common stock or otherwise be in their best
interest.
Transfer Agent and Registrar
The transfer agent and registrar for the all of the securities covered
by this prospectus is American Stock Transfer & Trust Company located in
Brooklyn, New York.
Certain Provisions of Maryland Law and Our Charter and Bylaws
Business Combinations
Under Maryland law, "business combinations" between a Maryland
corporation and an interested shareholder or an affiliate of an interested
shareholder are prohibited for five years after the most recent date on which
the interested shareholder becomes an interested shareholder. These business
combinations include a merger, consolidation, share exchange, or, in
circumstances specified in the statute, an asset transfer or issuance or
reclassification of equity securities. An interested shareholder is defined as:
o any person who beneficially owns 10% or more of the voting power of
the corporation's shares; or
18
o an affiliate or associate of the corporation who, at any time within
the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then outstanding
voting stock of the corporation.
A person is not an interested shareholder under the statute if the board
of directors approved in advance the transaction by which he or she otherwise
would have become an interested shareholder. However, in approving a
transaction, our board of directors may provide that its approval is subject to
compliance, at or after the time of approval, with any terms and conditions
determined by the board.
After the five-year prohibition, any business combination between the
Maryland corporation and an interested shareholder generally must be recommended
by the board of directors of the corporation and approved by the affirmative
vote of at least:
o 80% of the votes entitled to be cast by holders of outstanding shares
of voting stock of the corporation; and
o two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than shares held by the interested
shareholder with whom or with whose affiliate the business
combination is to be effected or the shares held by any affiliate or
associate of the interested shareholder.
These super-majority vote requirements do not apply if the corporation's
common shareholders receive a minimum price, as defined under Maryland law, for
their shares in the form of cash or other consideration in the same form as
previously paid by the interested shareholder for its shares.
The statute permits various exemptions from its provisions, including
business combinations that are exempted by the board of directors prior to the
time that the interested shareholder became an interested shareholder.
Our board of directors has adopted resolutions which exempt Veqtor
Finance Company, L.L.C., JRK Investment Partnership LP and CMH Investment
Partnership LP from the five-year prohibition and the super-majority vote
requirement. The business combination statute may discourage others from trying
to acquire control of us and may increase the difficulty of consummating any
offer relating to the same.
Control Share Acquisitions
Maryland law provides that "control shares" of a Maryland corporation
acquired in a "control share acquisition" have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on the
matter. A control share acquisition means the acquisition of control shares,
subject to certain exceptions. Shares owned by the acquiror, by officers of the
target corporation or by directors of the target corporation who are also
employees are excluded from shares entitled to vote on the matter. Control
shares are voting shares of stock which, if aggregated with all other shares of
stock owned by the acquiror or in respect of which the acquiror is able to
exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), would entitle the acquiror to exercise voting power in
electing directors within one of the following ranges of voting power:
o one-tenth or more but less than one-third;
o one-third or more but less than a majority; or
o a majority or more of all voting power.
Control shares do not include shares the acquiror is entitled to vote as
a result of having previously obtained shareholder approval.
A person who has made or proposes to make a control share acquisition
may compel the board of directors of the corporation to call a special meeting
of shareholders to be held within 50 days of demand to consider the
19
voting rights of the shares. The right to compel the calling of a special
meeting is subject to the satisfaction of certain conditions, including an
undertaking to pay the expenses of the meeting. If no request for a meeting is
made, the corporation may itself present the question at any shareholders
meeting.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then the corporation may redeem for fair value any or all of the
control shares, except those for which voting rights have previously been
approved. The right of the corporation to redeem control shares is subject to
certain conditions and limitations. Fair value is determined, without regard to
the absence of voting rights for the control shares, as of the date of the last
control share acquisition by the acquiror or of any meeting of shareholders at
which the voting rights of the shares are considered and not approved. If voting
rights for control shares are approved at a shareholders meeting and the
acquiror becomes entitled to vote a majority of the shares entitled to vote, all
other shareholders may exercise appraisal rights. The fair value of the shares
as determined for purposes of appraisal rights may not be less than the highest
price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (a) to shares
acquired in a merger, consolidation or share exchange if the corporation is a
party to the transaction, or (b) to acquisitions approved or exempted by the
charter or bylaws of the corporation.
Maryland Unsolicited Takeovers Act
The Maryland Unsolicited Takeovers Act applies to any Maryland
corporation that has a class of securities registered under the Securities
Exchange Act of 1934 and at least three independent directors. Pursuant to such
act, the board of directors of any Maryland corporation fitting such
description, without obtaining shareholder approval and notwithstanding a
contrary provision in its charter or bylaws, may elect to:
o classify the board;
o increase the required shareholder vote to remove a director to
two-thirds of all the votes entitled to be cast by the shareholders
generally in the election of directors; and
o require that a shareholder requested special meeting need be called
only upon the written request of the shareholders entitled to cast a
majority of all the votes entitled to be cast at the meeting.
Additionally, the board could provide that:
o the number of directors may be fixed only by a vote of the board of
directors,
o each vacancy on the board of directors (including a vacancy resulting
from the removal of a director by the shareholders) may be filled
only by the affirmative vote of a majority of the remaining directors
in office, even if the remaining directors do not constitute a
quorum; and
o any director elected to fill a vacancy will hold office for the full
remainder of the term, rather than until the next election of
directors.
The Maryland Unsolicited Takeovers Act does not limit the power of a
corporation to confer on the holders of any class or series of preferred stock
the right to elect one or more directors. We currently have more than three
independent directors and therefore our board of directors could elect to
provide for any of the foregoing provisions. As of the date of this prospectus,
our board of directors has not made any such election.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of
shareholders, nominations of individuals for election to the board of directors
and the proposal of business to be considered by shareholders may be made only:
20
o pursuant to our notice of the meeting;
o by or at the direction of the board of directors; or
o by a shareholder who was a shareholder of record both at the time of
giving of notice and at the time of the annual meeting, who is
entitled to vote at the meeting and who has complied with the advance
notice procedures of the bylaws.
With respect to special meetings of shareholders, only the business
specified in our notice of the meeting may be brought before the meeting.
Nominations of individuals for election to the board of directors at a special
meeting may only be made:
o pursuant to our notice of the meeting;
o by or at the direction of the board of directors; or
o provided that the board of directors has determined that directors
will be elected at the meeting, by a shareholder who is a shareholder
of record both at the time of giving of notice and at the time of the
special meeting and who is entitled to vote at the meeting and has
complied with the advance notice provisions of the bylaws.
Proposed Charter Amendments
In connection with our election to be taxed as a REIT, we have proposed
amendments to our charter which will be acted upon by our shareholders at a
special meeting of shareholders to be held on April 2, 2003. The proposed
amendments would include in our charter certain ownership and transfer
restrictions intended to ensure that five or fewer individuals do not own more
than 50% of the value of our outstanding stock. The proposed amendments would
also eliminate from our charter the 100,000,000 shares of authorized but
unissued shares of class B common stock. Finally, the proposed amendments would
effect a one (1) for three (3) reverse stock split. For a summary description of
our common and preferred stock, provisions of our charter and bylaws and
specific provisions of the Maryland General Corporation Law following the
effectiveness of the charter amendments, please refer to the information under
the caption "Description of Our Stock" contained in our Schedule 14A definitive
proxy statement as filed with the Securities and Exchange Commission on March 3,
2003 which is incorporated herein by reference.
LEGAL MATTERS
Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland, will give
its opinion as to the legality of the shares offered hereby.
EXPERTS
The consolidated financial statements of Capital Trust Inc. and
subsidiaries appearing in Capital Trust Inc. and subsidiaries' Annual Report on
Form 10-K for the year ended December 31, 2001, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
21
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any materials we have
filed with the SEC at the SEC's public reference rooms. The SEC also maintains a
web site (http://www.sec.gov) that contains reports, proxy statements and other
information concerning us. Please call the SEC at 1-800-SEC-0330 for information
concerning the operations of the public reference rooms or visit the SEC at the
following locations:
Public Reference Room Midwest Regional Office
450 Fifth Street Citicorp Center
Room 1024 500 West Madison Street
Washington, D.C. 20549 Suite 1400
Chicago, Illinois 60661-2511
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act to register the securities to be sold in this offering. This
prospectus, which is part of the registration statement, does not contain all of
the information set forth in the registration statement or the exhibits and
schedules to the registration statement. For further information regarding
Capital Trust and our securities, please refer to the registration statement and
the documents filed as exhibits to the registration statement.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those filed documents. The information incorporated by
reference is considered to be part of this prospectus, and information that we
file later with the SEC will automatically update and supersede this
information.
The following documents, which have been filed with the SEC, are hereby
incorporated by reference:
o Our annual report on Form 10-K for the year ended December 31, 2001
filed on April 1, 2002 (File No. 001-14788);
o Our definitive proxy statement on Schedule 14A filed on March 3, 2003
(File No. 001-14788);
o Our preliminary proxy statement on Schedule 14A filed on February 14,
2003 (File No. 001-14788);
o Our definitive proxy statement on Schedule 14A filed on April 30,
2002 (File No. 001-14788);
o Our quarterly report on Form 10-Q for the fiscal quarter ended March
31, 2002 filed on May 15, 2002 (File No. 001-14788);
o Our quarterly report on Form 10-Q for the fiscal quarter ended June
30, 2002 filed on August 14, 2002 (File No. 001-14788); and
o Our quarterly report on Form 10-Q for the fiscal quarter ended
September 30, 2002 filed on November 12, 2002 (File No. 001-14788).
All other reports and documents subsequently filed by us with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
after the date of this prospectus and prior to the termination of the offering
are deemed incorporated by reference into this prospectus and a part hereof from
the date of filing of those documents. Any statement contained in any document
incorporated by reference shall be deemed to be modified or superseded for the
purposes of this prospectus to the extent that a statement contained in a later
document modifies or supersedes such statement. Any statements so modified or
superseded shall not be deemed to constitute a part of this prospectus, except
as modified or superseded.
22
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any or all of
the documents referred to above which have been or may be incorporated by
reference into this prospectus (other than the exhibits to such documents).
Requests for such documents should be directed to Capital Trust, Inc., 410 Park
Avenue, 14th Floor, New York, New York 10022, Attention: Investor Relations
(telephone: (212) 655-0220).
23
=================================================== ==========================================
You should rely only on the information ___________________
incorporated or contained in this prospectus or
any supplement. We have not authorized anyone
else to provide you with different or additional
information. This prospectus is not an offer to
sell to - nor is it seeking an offer to buy these 22,036,581 Shares of Class A Common Stock
securities from - any person in any jurisdiction
in which it is illegal or impermissible to make
an offer or solicitation. You should not assume CAPITAL TRUST, INC.
that the information in this prospectus or any
supplement is accurate as of any date other than
the date on the front of those documents. PROSPECTUS
__________, 2003
TABLE OF CONTENTS
Page
----
___________________
Note Regarding Forward-Looking Statements.....i
Prospectus Summary............................1
Risk Factors..................................3
Use of Proceeds..............................11
Selling Shareholders.........................12
Plan of Distribution.........................14
Description of Our Stock.....................17
Legal Matters................................21
Experts......................................21
Where You Can Find More Information..........22
=================================================== ==========================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by us in connection with the registration of the
securities being registered (other than underwriting discounts and commissions)
are estimated as set forth below:
Registration statement filing fee.....................................$11,031.10
---------
Transfer agent's fees and expenses*...................................$500
---------
Accounting fees and expenses*.........................................$8,000
---------
Legal fees and expenses*..............................................$25,000
---------
Blue sky fees and expenses*...........................................$ -
New York Stock Exchange fees..........................................$ -
Printing and engraving costs*.........................................$500
---------
Miscellaneous*........................................................$1,000
---------
TOTAL.................................................................$46,031.10
----------
* Estimated pursuant to instruction to Rule 511 of Regulation S-K.
Item 15. Indemnification of Directors and Officers
Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its shareholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services, or (b) active and deliberate dishonesty established by a
final judgment and which is material to the cause of action. Our charter
contains such a provision eliminating such liability to the maximum extent
permitted under Maryland law.
Our charter authorizes Capital Trust, to the maximum extent permitted
under Maryland law, to indemnify any present or former director or officer or
any individual who, while a director of Capital Trust and at the request of
Capital Trust, serves or has served another corporation, real estate investment
trust, partnership, joint venture, trust, employee benefit plan or other
enterprise as a director, officer, partner or trustee, from and against any
claim or liability to which that person may become subject or which that person
may incur by reason of his or her status as a present or former director or
officer of Capital Trust and to pay or reimburse such person's reasonable
expenses in advance of final disposition of a proceeding. Our bylaws obligate
us, to the maximum extent permitted by Maryland law, to indemnify any present or
former director or officer or any individual who, while a director of Capital
Trust and at the request of Capital Trust, serves or has served another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or other enterprise as a director, officer, partner or
trustee and who is made a party to the proceeding by reason of his service in
that capacity from and against any claim or liability to which that person may
become subject or which that person may incur by reason of his or her status as
a present or former director or officer of Capital Trust and to pay or reimburse
such person's reasonable expenses in advance of final disposition of a
proceeding. The charter and bylaws also permit Capital Trust to indemnify and
advance expenses to any person who served a predecessor of Capital Trust in any
of the capacities described above and any employee or agent of Capital Trust or
a predecessor of Capital Trust.
Maryland law requires a Maryland corporation (unless its charter
provides otherwise, which our charter does not) to indemnify a director or
officer who has been successful in the defense of any proceeding to which he or
she is made a party by reason of his or her service in that capacity. Maryland
law permits a Maryland corporation to indemnify its present and former directors
and officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or
omission of the director or officer was material to the matter giving rise to
the proceeding and (i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty, (b) the director or officer actually received
an improper personal benefit in money, property or services, or (c) in the case
of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. However, under Maryland law, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, Maryland law permits a
Maryland corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification by the corporation, and (b) a written
undertaking by such director or officer or on his or her behalf to repay the
amount paid or reimbursed by the corporation if it is ultimately determined that
the standard of conduct was not met.
The Company has a "claims-made" directors and officers liability
insurance policy that insures the directors and officers of the Company against
loss from claimed insured wrongful acts. The policy limit of liability is
$10,000,000 each policy year and is subject to retentions for each loss of
$100,000, or $500,000 with respect to securities laws related losses, for the
Company.
Item 16. Exhibits
The following documents are filed as exhibits to this registration
statement:
Exhibit No.
-----------
3.1 Charter of Capital Trust, Inc. Filed herewith
3.2 Amended and Restated Bylaws of Capital Trust, Filed as Exhibit 3.2 to
Inc., as amended Current Report on Form 8-K
(File No. 001-14788) filed
on January 29, 1999 and
incorporated herein by
reference
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, Filed herewith
LLP as to legality of the shares being
registered
23.1 Consent of Ernst & Young LLP Filed herewith
23.2 Consent of Ballard Spahr Andrews & Ingersoll, Filed herewith
LLP (included in the opinion filed as Exhibit 5.1).
24.1 Power of Attorney (included under the caption Filed herewith
"Signatures").
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.
(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
II-2
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 not more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8,
or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of this offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against such public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expanses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense if any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, state of New York, on March 7, 2003.
CAPITAL TRUST, INC.
By:/s/ John R. Klopp
----------------------------------------
John R. Klopp, Vice Chairman,
Chief Executive Office, and President
POWER OF ATTORNEY
Each person signing below also hereby appoints John R. Klopp and Brian
H. Oswald, and each of them singly, with full power of substitution, his lawful
attorney-in-fact, with full power to execute and file any amendments to the
registration statement, including post-effective amendments, and generally to do
all such things, as such attorney-in-fact may deem appropriate to comply with
the provisions of the Securities Act of 1933 and all requirements of the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/ Samuel Zell Chairman of the Board March 7, 2003
-----------------------------
Samuel Zell
/s/ John R. Klopp Chief Executive Officer, March 7, 2003
----------------------------- President and Director
John R. Klopp
/s/ Brian H. Oswald Chief Financial Officer March 7, 2003
-----------------------------
Brian H. Oswald
/s/ Jeffrey A. Altman Director March 7, 2003
-----------------------------
Jeffrey A. Altman
/s/ Thomas E. Dobrowski Director March 7, 2003
-----------------------------
Thomas E. Dobrowski
/s/ Martin L. Edelman Director March 7, 2003
-----------------------------
Martin L. Edelman
/s/ Gary R. Garrabrant Director March 7, 2003
-----------------------------
Gary R. Garrabrant
/s/ Craig M. Hatkoff Director March 7, 2003
-----------------------------
Craig M. Hatkoff
II-4
/s/ Susan W. Lewis Director March 7, 2003
-----------------------------
Susan W. Lewis
/s/ Sheli Z. Rosenberg Director March 7, 2003
-----------------------------
Sheli Z. Rosenberg
/s/ Steven Roth Director March 7, 2003
-----------------------------
Steven Roth
/s/ Lynne B. Sagalyn Director March 7, 2003
-----------------------------
Lynne B. Sagalyn
/s/ Michael D. Watson Director March 7, 2003
-----------------------------
Michael D. Watson
II-5
EXHIBIT INDEX
Exhibit No.
-----------
3.1 Charter of Capital Trust, Inc. Filed herewith
3.2 Amended and Restated Bylaws of Capital Filed as Exhibit 3.2 to
Trust, Inc., as amended Current Report on Form 8-K
(File No. 001-14788) filed
on January 29, 1999 and
incorporated herein by
reference
5.1 Opinion of Ballard Spahr Andrews & Filed herewith
Ingersoll, LLP as to legality of the shares
being registered
23.1 Consent of Ernst & Young LLP Filed herewith
23.2 Consent of Ballard Spahr Andrews & Filed herewith
Ingersoll, LLP (included in the opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (included under the Filed herewith
caption "Signatures")