"As a result, no individual other than Mr. Ford may, without board approval, own or be deemed to own," more than the new maximum limit, according to a filing with the Securities and Exchange Commission. "Any attempted transfer of ARC's common stock which, if effective, would result in any individual owning shares of ARC's common stock in excess of the 7.3% ownership limit or would otherwise result in ARC's failing to qualify as a REIT."
It also will result in the number of shares causing the violation, rounded to the nearest whole share, to be automatically transferred to a trust for the exclusive benefit of one or more qualifying charitable organizations to be designated by ARC, and the intended transferee will acquire no rights to the stock, according to the SEC document. The new rule applies to individuals, but generally not to entities such as corporations, partnerships or limited liability companies. Any individual stockholder who currently owns between 7.3% and 9.8% of the stock will be permitted to maintain the holdings.
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