PROSPECTUS APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. Direct

56 Pages·2011·0.22 MB·English

PROSPECTUS
APOLLOCOMMERCIALREALESTATEFINANCE,INC.
DirectStockPurchaseandDividendReinvestmentPlan
OurDirectStockPurchaseandDividendReinvestmentPlan,orthePlan,providesnewinvestorsandexisting
holdersofourcommonstockwithaconvenientandeconomicalmethodtopurchasesharesofourcommonstock.
ByparticipatinginthePlan,youmaypurchaseadditionalsharesofourcommonstockbyreinvestingsomeorall
ofthecashdividendsthatyoureceiveonyoursharesofourcommonstock.Inaddition,thePlanpermitsyouto
makeoptionalcashinvestmentsofupto$10,000permonth,and,withourpriorapproval,optionalcash
investmentsinexcessof$10,000permonth,forthepurchaseofadditionalsharesofourcommonstock.Wemay,
inthefuture,offeradiscountfromthemarketpriceofourcommonstockrangingfrom0%to5%,includingthe
paymentbyusofapplicablebrokeragefees,pursuanttothedividendreinvestmentoroptionalcashinvestment
featuresofthePlan,atoursolediscretion.
Planhighlightsinclude:
• AnyregisteredholderofourcommonstockmayelecttoparticipateinthePlan.
• Interestednewinvestorswhoarenotcurrentlyholdersofourcommonstockmaymaketheirinitial
purchasethroughthePlan.
• Fullorpartialdividendreinvestmentoptions.
• Optionalcashinvestmentsofupto$10,000permonth,and,withourpriorapproval,optionalcash
investmentsinexcessof$10,000permonth,forthepurchaseofadditionalsharesofourcommon
stock;wemay,inthefuture,offeradiscountfromthemarketpriceofourcommonstockrangingfrom
0%to5%,includingthepaymentbyusofapplicablebrokeragefees,atoursolediscretion.
• Youmaybuildyourinvestmentovertime,startingwithaslittleas$250,or$100,ifyouauthorize
automaticmonthlycashinvestments.
• Youmayaccessyouraccountonlinetoreviewandmanageyourinvestment.
• Optionalautomaticinvestmentwithdrawalsfromyourbankaccount.
Thisprospectusrelatestotheofferandsaleofupto2,000,000authorizedbutunissuedsharesofour
commonstockunderthePlan.Planparticipantsshouldretainthisprospectusforfuturereference.
Toensurethatwemaycontinuetoqualifyasarealestateinvestmenttrust,orREIT,forU.S.federalincome
taxpurposes,nostockholdermayownmorethan9.8%(invalueornumber,whicheverismorerestrictive)ofthe
outstandingsharesofourcommonorcapitalstock,unlessourboardofdirectorswaivesthislimitation.Seethe
discussionunder“U.S.FederalIncomeTaxConsiderations”formoreinformation.
OurcommonstockislistedontheNewYorkStockExchange,orNYSE,underthesymbol“ARI.”
Aninvestmentinourcommonstockentailscertainmaterialrisksanduncertaintiesthatshouldbe
considered.See“RiskFactors”beginningonpage5ofourAnnualReportonForm10-Kfortheyear
endedDecember31,2010.
NeithertheSecuritiesandExchangeCommissionnoranystatesecuritiescommissionhasapprovedor
disapprovedofthesesecuritiesorpassedupontheadequacyoraccuracyofthisprospectus.Any
representationtothecontraryisacriminaloffense.
ProspectusdatedOctober18,2011
TABLEOFCONTENTS
Page
SUMMARYINFORMATION............................................................. 1
RISKFACTORS ....................................................................... 1
FORWARD-LOOKINGSTATEMENTS .................................................... 2
DESCRIPTIONOFTHEPLAN ........................................................... 4
OTHERPLANINFORMATION........................................................... 22
SUMMARYOFIMPORTANTDEADLINES ................................................ 24
USEOFPROCEEDS .................................................................... 26
PLANOFDISTRIBUTION ............................................................... 26
U.S.FEDERALINCOMETAXCONSIDERATIONS.......................................... 27
LEGALMATTERS ..................................................................... 52
EXPERTS ............................................................................. 52
WHEREYOUCANFINDMOREINFORMATION ........................................... 52
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Thefollowinginformationisqualifiedinitsentiretybythemoredetailedinformationandfinancial
statementsandnotestheretoappearingelsewherein,orincorporatedbyreferenceinto,thisprospectus.We
encourageyoutoreadthisprospectus,aswellastheinformationwhichisincorporatedbyreferenceherein,in
theirentireties.Youshouldcarefullyconsiderthematerialrisksofinvestinginourcommonstockreferenced
underthecaption“RiskFactors”ofthisprospectusbeforemakingadecisiontoparticipateinthePlan.Inthis
prospectus,unlessotherwisespecifiedorifthecontextrequiresotherwise,weusetheterms“company,”“we,”
“us”and“our”torefertoApolloCommercialRealEstateFinance,Inc.,aMarylandcorporation,togetherwith
itsconsolidatedsubsidiaries;referencesinthisprospectusto“Apollo”refertoApolloGlobalManagement,
LLC,aDelawarelimitedliabilitycompany,togetherwithitssubsidiaries;referencesinthisprospectusto“our
Manager”refertoACREFIManagement,LLC,aDelawarelimitedliabilitycompanyandanindirectsubsidiary
ofApolloGlobalManagement,LLC.
SUMMARYINFORMATION
Weareacommercialrealestatefinancecompanythatoriginates,acquires,investsinandmanages
performingcommercialfirstmortgageloans,commercialmortgage-backedsecurities,orCMBS,mezzanine
loansandB-Notesandothercommercialrealestate-relateddebtinvestmentsintheUnitedStates.Wereferto
theseassetclassesasourtargetassets.
WeareexternallymanagedandadvisedbyACREFIManagement,LLC,orourManager,anindirect
subsidiaryofApolloGlobalManagement,LLC.Pursuanttothetermsofthemanagementagreementbetweenus
andourManager,ourManagerisresponsibleforadministeringourbusinessactivitiesandday-to-dayoperations
andprovidinguswithourmanagementteamandappropriatesupportpersonnel.Wearetaxedasarealestate
investmenttrust,oraREIT,forU.S.federalincometaxpurposes.
Ourprincipalexecutiveofficesarelocatedat9West57thStreet,43rdFloor,NewYork,NewYork10019.
Ourtelephonenumberis(212)515-3200.Ourwebsiteiswww.ApolloReit.com.Theinformationonourwebsite
isnotconsideredpartofthisprospectus.
RISKFACTORS
Investmentinourcommonstockinvolvesahighdegreeofrisk.Youshouldcarefullyconsidertherisks
describedinthesection“RiskFactors”containedinourAnnualReportonForm10-Kfortheyearended
December31,2010,whichhasbeenfiledwiththeSecuritiesandExchangeCommission,ortheSEC,aswellas
otherinformationinthisprospectusandanyaccompanyingprospectussupplementbeforepurchasingour
commonstock.Eachoftherisksdescribedcouldmateriallyadverselyaffectourbusiness,financialcondition,
resultsofoperations,orabilitytomakedistributionstoourstockholders.Insuchcase,youcouldloseallora
portionofyouroriginalinvestment.See“WhereYouCanFindMoreInformation”beginningonpage52ofthis
prospectus.
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FORWARD-LOOKINGSTATEMENTS
Certainstatementsinthisprospectusandthedocumentsincorporatedbyreferenceinthisdocument,other
thanpurelyhistoricalinformation,includingestimates,projections,statementsrelatingtoourbusinessplans,
objectivesandexpectedresults,andtheassumptionsuponwhichthosestatementsarebased,are
“forward-lookingstatements”withinthemeaningofthePrivateSecuritiesLitigationReformActof1995,
Section27AoftheSecuritiesActof1933,asamended,ortheSecuritiesAct,andSection21EoftheSecurities
ExchangeActof1934,asamended,ortheExchangeAct,andsuchstatementsareintendedtobecoveredbythe
safeharborprovidedbythesame.Forward-lookingstatementsaresubjecttosubstantialrisksanduncertainties,
manyofwhicharedifficulttopredictandaregenerallybeyondourcontrol.Theseforward-lookingstatements
includeinformationaboutpossibleorassumedfutureresultsofourbusiness,financialcondition,liquidity,
resultsofoperations,plansandobjectives.Whenweusethewords“believe,”“expect,”“anticipate,”“project,”
“estimate,”“plan,”“continue,”“intend,”“should,”“may”orsimilarexpressions,weintendtoidentify
forward-lookingstatements.Statementsregardingthefollowingsubjects,amongothers,maybeforward-looking:
• markettrendsinourindustry,interestrates,realestatevalues,thedebtsecuritiesmarketsorthegeneral
economyorthedemandforcommercialrealestateloans;
• ourbusinessandinvestmentstrategy;
• ourprojectedoperatingresults;
• actionsandinitiativesoftheU.S.governmentandchangestoU.S.governmentpoliciesandthe
executionandimpactoftheseactions,initiativesandpolicies;
• thestateoftheU.S.economygenerallyorinspecificgeographicregions;
• economictrendsandeconomicrecoveries;
• ourabilitytoobtainandmaintainfinancingarrangements,includingsecuritizations;
• theamountofcommercialmortgageloansrequiringrefinancingoverthe2011to2015period;
• theanticipatedshortfallofdebtfinancingfromtraditionallenders;
• thevolumeofshort-termloanextensions;
• thedemandfornewcapitaltoreplacematuringloans;
• ourexpectedleverage;
• generalvolatilityofthesecuritiesmarketsinwhichweparticipate;
• changesinthevalueofourassets;
• interestratemismatchesbetweenourtargetassetsandanyborrowingsusedtofundsuchassets;
• changesininterestratesandthemarketvalueofourtargetassets;
• changesinprepaymentratesonourtargetassets;
• effectsofhedginginstrumentsonourtargetassets;
• ratesofdefaultordecreasedrecoveryratesonourtargetassets;
• thedegreetowhichourhedgingstrategiesmayormaynotprotectusfrominterestratevolatility;
• impactofandchangesingovernmentalregulations,taxlawandrates,accountingguidanceandsimilar
matters;
• ourabilitytomaintainourqualificationasaREITforU.S.federalincometaxpurposes;
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• ourabilitytomaintainourexemptionfromregistrationundertheInvestmentCompanyActof1940,as
amended,ortheInvestmentCompanyAct;
• availabilityofopportunitiestoacquirecommercialmortgage-related,realestate-relatedandother
securities;
• availabilityofqualifiedpersonnel;
• estimatesrelatingtoourabilitytomakedistributionstoourstockholdersinthefuture;and
• ourunderstandingofourcompetition.
Wecautionthattheforegoinglistoffactorsisnotexclusive.Allsubsequentwrittenandoral
forward-lookingstatementsconcerningusoranypersonactingonourbehalfareexpresslyqualifiedintheir
entiretybythecautionarystatementsabove.Wecautionnottoplaceunduerelianceuponanyforward-looking
statements,whichspeakonlyasofthedatemade.Wedonotundertakeoracceptanyobligationorundertaking
toreleasepubliclyanyupdatesorrevisionstoanyforward-lookingstatementtoreflectanychangeinour
expectationsoranychangeinevents,conditionsorcircumstancesonwhichanysuchstatementisbased.
Theforward-lookingstatementscontainedinthisprospectusandthedocumentsincorporatedbyreference
hereinreflectourbeliefs,assumptionsandexpectationsofourfutureperformance,takingintoaccountall
informationcurrentlyavailabletous.Forward-lookingstatementsarenotpredictionsoffutureevents.These
beliefs,assumptionsandexpectationsaresubjecttorisksanduncertaintiesandcanchangeasaresultofmany
possibleeventsorfactors,notallofwhichareknowntous.SomeofthesefactorsareincludedinourAnnual
ReportonForm10-KforthefiscalyearendedDecember31,2010,and“Management’sDiscussionandAnalysis
ofFinancialConditionandResultsofOperations”includedinourQuarterlyReportsonForm10-Qforthe
quartersendedMarch31,2011andJune30,2011whichisincorporatedbyreferenceintothisprospectus.Ifa
changeoccurs,ourbusiness,financialcondition,liquidityandresultsofoperationsmayvarymateriallyfrom
thoseexpressedinourforward-lookingstatements.Anyforward-lookingstatementspeaksonlyasofthedateon
whichitismade.Newrisksanduncertaintiesariseovertime,anditisnotpossibleforustopredictthoseevents
orhowtheymayaffectus.Suchnewrisksanduncertaintiesmaybeincludedinthedocumentsthatwefile
pursuanttoSections13(a),13(c),14or15(d)oftheExchangeActafterthedateofthisprospectuswhichwillbe
consideredtobeincorporatedbyreferenceintothisprospectus.Exceptasrequiredbylaw,wearenotobligated
to,anddonotintendto,updateorreviseanyforward-lookingstatements,whetherasaresultofnewinformation,
futureeventsorotherwise.Youshouldcarefullyconsidertheserisksbeforeyoumakeaninvestmentdecision
withrespecttoourcommonstock.
Formoreinformationregardingrisksthatmaycauseouractualresultstodiffermateriallyfromany
forward-lookingstatements,see“RiskFactors”inourAnnualReportonForm10-Kfortheyearended
December31,2010andinthedocumentsthatwefilepursuanttoSections13(a),13(c),14or15(d)ofthe
ExchangeActafterthedateofthisprospectus,whichwillbeconsideredtobeincorporatedbyreferenceintothis
prospectus.
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DESCRIPTIONOFTHEPLAN
OurDirectStockPurchaseandDividendReinvestmentPlanisdescribedinthefollowingquestionsand
answers:
1. WhyisthePlanbeingoffered?
ThepurposeofthePlanistoprovideaconvenientandeconomicalmethodforourcurrentstockholdersto
acquiresharesofourcommonstockbyinvestingcashdividendspaidontheirsharesofourcommonstock
topurchaseadditionalsharesofourcommonstock.ThePlanalsoprovidesourcurrentstockholdersand
newinvestorswithaconvenientwaytoacquiresharesofourcommonstockbymakingoptionalcash
investmentstopurchasesharesofourcommonstock.Intheseways,thePlanisintendedtobenefitour
long-terminvestorsbyallowingthemtoincreasetheirinvestmentinourcommonstock.ThePlanalso
providesuswithacost-efficientwaytoraiseadditionalcapitalthroughthedirectsaleofourcommonstock
toparticipantsinthePlan.Sharesofourcommonstockcreditedtoaparticipant’saccountareconsidered
“PlanShares.”
2. WhatfeaturesdoesthePlanoffer?
• Automaticdividendreinvestment.Youcanincreaseyourholdingsofourcommonstockthrough
automaticreinvestmentofyourcashdividends.Youcanelecttoreinvestallorapercentageofyour
dividends.
• Optionalcashinvestments.Youcanincreaseyourholdingsofourcommonstockthroughoptional
cashinvestmentsof$100ormore.Youcanmakeoptionalcashinvestmentsbycheckorbyauthorizing
aone-timedebitorautomaticmonthlydeductionsfromyourbankcheckingorsavingsaccount(see
Question9).
• Initialinvestment.Ifyouarenotacurrentstockholder,youcanmakeaninitialinvestmentinour
commonstock,startingwithaslittleas$250,or$100ifyousignupforautomaticmonthlyinvestments
(seeQuestion7).
• Automatedtransactions.YoucanexecutemanyofyourPlantransactionsonlineorbyphoneifyou
haveestablishedautomatedprivileges.
RefertoQuestion8fordetailsonfeeschargedforthesetransactionsandservices.
3. WhataretheprimarybenefitsanddisadvantagesofthePlan?
TheprimarybenefitsofparticipatinginthePlanareasfollows:
• Youmayautomaticallyreinvestcashdividendsonalloraportionofyourholdingsofour
commonstockinadditionalsharesofourcommonstock.
• Youmayalsoinvestinsharesofourcommonstockbymakingoptionalcashinvestments.Subject
tocertainexceptionsinthecaseofLargeCashPurchases(asdefinedherein)(seeQuestion26),
yourtotaloptionalcashinvestmentforanymonthislimitedto$10,000.Youcanmakeoptional
cashinvestmentsbycheckorbyauthorizingaone-timedebitorautomaticmonthlydeductions
fromyourbankcheckingorsavingsaccount.
• IfweissuenewsharesofourcommonstocktoparticipantsinthePlan,wemaysellthemata
discountofupto5%fromthemarketpriceofourcommonstock.IfthePlanAdministrator
acquiresoursharesintheopenmarketforparticipantsinthePlan,wemaydiscountsuchshares
bypayingupto5%ofthepurchasepriceforsuchshares,treatinganybrokeragefeeswepayas
includedinthediscount.Youshouldnote,however,thatwearenotinitiallyanticipatingoffering
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sharesatadiscountordiscountingthepurchasepriceofoursharesunderthePlan.Anysuch
discountswillbemadeatoursolediscretion.
• ThePlanprovidesparticipantswiththeopportunitytoacquireadditionalsharesofourcommon
stockdirectlyfromuswithouthavingtopay,subjecttocertainexceptions,thetradingfeesor
servicechargesassociatedwithanindependentpurchase(seeQuestion8).
• YoumaydirectthePlanAdministratortotransfer,atanytimeandatnocosttoyou,allora
portionofyoursharesinthePlantoaPlanaccountforanotherpersonaslongasyoumeetallof
thetransferrequirementssetforthinQuestion19.
• ThePlanoffersa“sharesafekeeping”servicethatallowsyoutodeposityourcompanystock
certificateswiththePlanAdministratoratnocosttoyouandtohaveyourownershipofcommon
stockpurchasedunderthePlanmaintainedonthePlanAdministrator’srecordsinuncertificated
formaspartofyourPlanaccount,ifyousodesire.
• Inordertosimplifyyourrecordkeeping,thePlanAdministratorwillsendyouanaccount
statementassoonaspracticableaftereachdividendreinvestmentandaftereachoptionalcash
investment.ThePlanAdministrator(asdefinedinQuestion11below)willalsosendyouan
accountstatementafteranytransfer,saleorwithdrawalofPlanShares.
TheprimarydisadvantagesofparticipatinginthePlanareasfollows:
• YourinvestmentinthePlanisnodifferentfromanyinvestmentinsharesofourcommonheldby
you.IfyouchoosetoparticipateinthePlan,thenyoushouldrecognizethatnoneofus,our
subsidiariesandaffiliates,northePlanAdministratorcanassureyouofaprofitorprotectyou
againstlossonthesharesthatyoupurchaseunderthePlan.Youbeartheriskoflossinvalueand
enjoythebenefitsofgainswithrespecttoallofyourshares.
• WhenyoureinvestdividendsunderthePlan,youwillbetreatedforU.S.federalincometax
purposesashavingreceivedadividendontherelateddateofpurchaseofsharesofcommonstock
underthePlan,whichmaygiverisetoataxpaymentobligationwithoutprovidingyouwith
immediatecashtopaysuchtaxwhenitbecomesdue.SeeQuestion24.
• Youwillhavelimitedcontroloverthespecifictimingofpurchasesandsalesofourcommonstock
underthePlan.BecausethePlanAdministratormustreceivefundsforacashpurchasepriortothe
actualpurchasedateofthecommonstock,yourinvestmentsmaybeexposedtochangesinmarket
conditions.
• NointerestwillbepaidonfundsthatthePlanAdministratorholdspendinginvestmentorthat
mayultimatelybereturnedtoyou.SeeQuestion9.
• ThepurchasepriceforsharesofcommonstockpurchasedunderthePlanmayexceedthepriceof
acquiringsharesofcommonstockontheopenmarketatanygiventimeontheactualpurchase
date.
4. WhomayparticipateinthePlan?
YoumayparticipateinthePlanifyouare:
• acurrentownerofsharesofourcommonstock;
• afirst-timeinvestorthatisaU.S.citizenoracorporationorotherentityorganizedordomiciledin
theUnitedStates;or
• afirst-timeinvestorthatisaforeigncitizenoracorporationorotherentityorganizedordomiciled
outsidetheU.S.,iftherearenolawsorgovernmentalregulationsthatwouldprohibityoufrom
participating,orthatwouldaffectthetermsofthePlan.
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5. HowdoIenrollinthePlanifIamacurrentstockholderofrecord?
Ifyoualreadyownsharesofourcommonstockandthesharesareregisteredinyourname,youcanjointhe
PlanbyenrollingonlinebyaccessingyourshareowneraccountthroughthePlanAdministrator’swebsiteat
www.shareowneronline.comorbycompletinganenrollmentformandreturningittothePlan
Administrator.
6. HowdoIenrollifmysharesareheldotherthaninmyname?
Ifyouholdsharesofourcommonstockin“streetname”inabrokerage,bankorotherintermediaryaccount,
youcanparticipateinthePlanbyinstructingyourbroker,bankorotherintermediarytohaveyourshares
transferredintoyourname.Afteryoursharesaretransferredintoyournameyouwillreceiveashareowner
accountstatementandinstructionsforenrollinginthePlanasdescribedinQuestion5above.Ifyoudonot
wishtotransferyoursharesofcommonstockintoyournamefromyourbrokerage,bankorother
intermediary,youcanparticipatebymakingcashinvestmentsinthePlanasdescribedinQuestion7below.
7. HowdoIenrollifIamnotcurrentlyastockholder?
Ifyoudonotcurrentlyownanysharesofourcommonstock,orifyouholdsharesofourcommonstockin
“streetname”inabrokerage,bankorotherintermediaryaccountandyoudonotwishtotransferyourshares
ofcommonstockintoyourname,youcanenrollinthePlanby:
• enrollingonlineatwww.shareowneronline.comandauthorizingthePlanAdministratortomakea
one-timedeductionfromyourbankaccountofatleast$250;
• completingandreturninganenrollmentform,togetherwithaninitialinvestmentofatleast$250;
• enrollingonlineatwww.shareowneronline.comandagreeingtomakeaone-timedeductionfrom
yourbankaccountofatleast$100andauthorizingfuturemonthlycashinvestmentsofatleast
$100;or
• completingandreturninganenrollmentformtogetherwithaninitialinvestmentofatleast$100
authorizingfutureautomaticmonthlycashinvestmentsofatleast$100.
Regulationsincertaincountriesmaylimitorprohibitparticipationinthistypeofplan.Persons
residingoutsidetheUnitedStateswhowishtoparticipateinthePlanshouldfirstdeterminewhether
theyaresubjecttoanygovernmentalregulationprohibitingtheirparticipation.
8. WhatarethefeesassociatedwithparticipationinthePlan?
ThereisnofeetoenrollinthePlan.
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Wewillpayallofyouroptionalcashpurchaseanddividendreinvestmenttransactionfeesandtrading
commissionstotheextentthatsuchfees,includinganydiscountweofferontheshares,donotexceed5%of
thefairmarketvalueofthesharesyouacquire.Youwillpaytheapplicablefeesandtradingcommissions
whenyousellyoursharesofourcommonstockthroughthePlanasdescribedbelow.Thefollowingsets
forththefeesapplicabletoyourparticipationinthePlan:
AdministrationFeesandInvestmentFees
DividendReinvestmentFee None
OptionalCashInvestmentsFee None
ExpensesandTransactionFees
StockSales
Š PlanSales(partialorfull) $15.00persale
Š Saleoffractionalsharesatterminationorwithdrawal $15.00persale
Š Processingfeeonsalesofshares(includinganybrokeragecommissionsthe
PlanAdministratorisrequiredtopay) $0.12pershare
ReturnedChecksorReturnedElectronicPaymentFee $35.00peritem
PriorYearDuplicateStatements $25.00peryear(no
chargeforcurrentor
mostrecent
year-end)
Wemaychangetheseparticipationfeesatanytime.Wewillgiveyounoticeofanyfeeincreasebeforeit
appliestoyou.
Forsaletransactions,transactionfeesandbrokeragecommissionsaredeductedfromthesale
proceeds.
9. Whataremyoptionsforoptionalcashinvestments?
YoumaypurchasesharesofourcommonstockbyusingthePlan’soptionalcashinvestmentfeature,but
youhavenoobligationtomakesuchaninvestment.OptionalcashinvestmentsareappliedbythePlan
Administratortothepurchaseofsharesofourcommonstockonaweeklybasis.IfyouarenotaPlan
participantatthetimeyouwishtomakeyourfirstoptionalcashinvestment,youmustenrollinthePlanin
ordertomakethatinvestment.IfyourinitialinvestmentinthePlanismadeintheformofanoptionalcash
investment,yourinitialminimuminvestmentmustbeatleast$250or$100togetherwithanauthorization
forautomaticfuturemonthlycashinvestmentsof$100(SeeQuestion8).Thereafter,additionaloptional
cashinvestmentsmaybemademonthlyinanyamountbetween$100and$10,000.Ifyouareanexisting
holderofsharesofourcommonstock,youmayalsomakeoptionalcashinvestmentsmonthlyinany
amountbetween$100and$10,000.
MinimumandMaximumInvestments.AfteryouhaveenrolledinthePlanandeitherdepositedsharesofour
commonstockintoyouraccountorsatisfiedtherequirementsforopeningyouraccountbymakinganinitial
cashinvestment,youmaypurchaseadditionalsharesusingtheoptionalcashinvestmentfeature.Youmust
investatleast$100foranyoptionalcashinvestment.Unlessweapproveyourrequesttoinvestmorethan
$10,000monthly(a“LargeCashPurchase”),youmaynotinvestmorethan$10,000inanymonth.See
Question26belowformoreinformationonhowtomakeaLargeCashPurchaserequestinanyparticular
month.Anyoptionalcashinvestmentthatislessormorethanthepermittedinvestmentamountswillbe
returnedtoyouwithoutinterest.
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WeeklyInvestmentDates.InvestmentsofoptionalcashcontributionsreceivedbythePlanAdministrator
willbemadeonMondayofeachweek(unlessthatdayisnotadaythattheNYSEisopenfortrading,in
whichcasetheinvestmentwillbemadeonthenextNYSEtradingday,eachsuchdate,an“Investment
Date”).
ContributionofFundsforInvestment.ThePlanAdministratormustreceiveyourfundsforinvestmentno
laterthantwobusinessdayspriortoanInvestmentDateforaninitialcashinvestmentandonebusinessday
priortoanInvestmentDateforanysubsequentoptionalcashinvestments.IfthePlanAdministratordoes
notreceiveyourfundsbythesedeadlines,itmayholdthosefundsandinvestthemthefollowingweek.No
interestwillbepaidonfundsheldbythePlanAdministratorpendinginvestment.Accordingly,youmay
wanttotakethoseactionsyoudeemnecessarytobeassuredthatanyoptionalcashcontributionswillbe
deliveredtothePlanAdministratorinsufficienttimetobeinvestedonthedesiredInvestmentDate.To
obtainthereturnoffundstransmittedforinvestmentbeforeanyInvestmentDate,thePlanAdministrator
mustreceiveawrittenrequestfromyounolaterthanthesecondbusinessdaybeforetherelevantInvestment
Date.
ContributionPaymentOptions.Youhavethreecontributionpaymentoptions:
• ByOnlineInvestment:Youmaymakeoptionalcashinvestmentsbyaccessingyouraccountonline
atwww.shareowneronline.com.Topurchasesharesviaonlineinvestment,youmustauthorizethe
withdrawaloffundsfromyourU.S.orCanadianbankaccountbyelectronicfundstransfer.
• ByAutomaticMonthlyWithdrawalsfromYourBankAccount:Ifyouwishtomakeregular
periodicpurchaseswithoutwritingchecks,youcanauthorizeautomaticmonthlywithdrawals
fromyourU.S.bankaccount.Participants’bankaccountsaredebitedonthe25thdayofeach
month(or,ifthatdayisnotabusinessday,thenonthepriorbusinessday),andfundswillbe
investedbeginningonthenextInvestmentDate.Youcanauthorizeautomaticmonthly
withdrawalsbyaccessingyouraccountatwww.shareowneronline.com,orbycompletingand
submittingtothePlanAdministratoranAutomaticCashWithdrawalandInvestmentform,which
youmayobtainonlineorbytelephoningthePlanAdministrator.Youshouldallowthreetofour
weeksforyourfirstautomaticwithdrawaltobeinitiated.Youmaychangeorterminateyour
automaticwithdrawalauthorizationonlineorbywrittennoticetothePlanAdministratoratleast
fifteenbusinessdaysbeforethenextscheduledcashwithdrawal.
• ByCheck:YoumaysendthePlanAdministratoracheckinU.S.dollarsdrawnonaU.S.bankor
Canadianfinancialinstitutionandmadepayableto“ShareownerServices.”Ifyouarenotinthe
UnitedStates,pleasecontactyourbanktoverifythatitcanprovideyouwithacheckthatclears
throughaU.S.bankorCanadianfinancialinstitutionandthatthedollaramountprintedisinU.S.
Dollars.ThePlanAdministratorisunabletoacceptpaymentintheformofchecksthatclear
throughnon-U.S.banks.ThePlanAdministratorwillnotacceptpaymentintheformofcash,
moneyorders,traveler’schecksorthird-partychecks.Tofacilitatetheprocessingofyour
investment,pleaseusetheOptionalCashInvestmentformattachedtoyouraccountstatementand
mailyourcheckandformtoShareownerServicesasindicatedontheform.Youmayobtainan
OptionalCashInvestmentformbyaccessingyouraccountonlineatwww.shareowneronline.com
orbycallingthePlanAdministrator.Duringtheperiodthatoptionalcashinvestmentsareheldby
thePlanAdministratorpendingtheirinvestmentunderthePlan,suchfundsmaybeinvestedin
certain“PermittedInvestments.”ForpurposesofthisPlan,“PermittedInvestments”meansany
moneymarketmutualfundsregisteredundertheInvestmentCompanyAct(includingthoseofan
affiliateofthePlanAdministratororforwhichthePlanAdministratororanyofitsaffiliates
providesmanagementadvisoryorotherservices)consistingentirelyof(1)directobligationsof
theUnitedStates,or(2)obligationsfullyguaranteedbytheUnitedStates.Theriskofanyloss
fromsuchPermittedInvestmentsshallbetheresponsibilityofthePlanAdministrator.Investment
incomefromsuchPermittedInvestmentsshallberetainedbythePlanAdministrator.
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