<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST ________, 1998
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
PRENTISS PROPERTIES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MARYLAND 75-2261588
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
3890 W. NORTHWEST HIGHWAY, SUITE 400
DALLAS, TEXAS 75220
(214) 654-0886
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
J. KEVAN DILBECK
PRENTISS PROPERTIES TRUST
3890 W. NORTHWEST HIGHWAY, SUITE 400
DALLAS, TEXAS 75220
(214) 654-0886
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
MR. RANDALL S. PARKS
HUNTON & WILLIAMS
RIVERFRONT PLAZA, EAST TOWER
951 EAST BYRD STREET
RICHMOND, VIRGINIA 23219-4074
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT IN LIGHT OF MARKET
CONDITIONS AND OTHER FACTORS.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. [X]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [_]
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 UNDER
THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX: [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest,
$.01 par value, per share 2,500,000 $24.0313 $60,078,250 $17,724
====================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1993 based on the
average of the high and low sales prices reported on the New York Stock
Exchange on August 3, 1998.
- --------------------------------------------------------------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained in this Prospectus is subject to completion or
amendment. A registration statement relating to these securities had been filed
with the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus supplement shall not constitute an offer to
sell or the solitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED AUGUST ________, 1998
PROSPECTUS
PRENTISS PROPERTIES TRUST
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
2,500,000 COMMON SHARES OF BENEFICIAL INTEREST
Prentiss Properties Trust (the "Company") hereby offers participation in its
Dividend Reinvestment and Share Purchase Plan (the "Plan") to holders of the
Company's common shares of beneficial interest, par value $.01 per share
("Common Shares"), holders of the preferred shares of beneficial interest of the
Company, par value $.01 per share ("Preferred Shares"), and other interested
investors. The Plan offers a convenient and economical method to purchase Common
Shares and to reinvest all or a portion of the cash dividends, if any, received
with respect to Common or Preferred Shares in additional Common Shares. The Plan
also is intended to provide the Company with a cost-efficient and flexible
mechanism to raise equity capital because shares issuable under the Plan will be
newly issued Common Shares. A glossary of the defined terms used herein appears
on pages 21-22. Some of the significant features of the Plan are as follows:
- Participants may purchase Common Shares by making optional cash
investments of $100 to $2,500 in a given month. Optional cash
investments of greater than $2,500 may be made only with permission of
the Company.
- Persons who are not presently shareholders of the Company ("Initial
Investors") may purchase Common Shares by making an initial optional
cash investment of $500 to $2,500. Optional cash investments of
greater than $2,500 may be made only with permission of the Company.
- Participants may purchase Common Shares by reinvesting all or portion
of the cash dividends, if any, received on their Common or Preferred
Shares.
With respect to reinvested cash dividends and capital cash investments not
exceeding $2,500, the price to be paid for each Common Share purchased under the
Plan will be the greater of the average of the Daily Prices of one Common Share
for the twelve Trading Days in the applicable Investment Period or the Daily
Price on the Investment Date. With respect to optional cash investments in
excess of $2,500, the price to be paid for each Common Share will be the Daily
Price of one Common Share on the applicable Investment Date. Each month, the
Company may establish a Discount at a percentage between 0% to 5% applicable to
the purchase of Common Shares under the Plan with optional cash investments
pursuant to a Request for Waiver. The Discount initially will be set at 2.25%.
Optional cash investments in excess of $2,500 per month may be made only
pursuant to an accepted written Request for Waiver. At least three days prior to
the applicable Investment Period, the Company (i) will determine whether to
establish a Threshold Price and, if a Threshold Price is established, its amount
and (ii) may establish a Discount from the market price applicable to shares
purchased under the Plan in connection with optional cash investments pursuant
to a Request for Waiver, which Discount may be increased or decreased by the
Company each month. Those determinations will be made by the Company in its sole
discretion after a review of current market conditions, the level of
participation in the Plan, and its current and projected capital needs. For each
Trading Day of an Investment Period in which the Threshold Price is not
satisfied or for each day on which no trades of Common Shares are reported on
the New York Stock Exchange, one-twelfth of the total amount of any optional
cash investment pursuant to a Request for Waiver will be returned without
interest.
A broker, bank or other nominee may reinvest dividends and make optional cash
investments on behalf of Beneficial Owners. Optional cash investments submitted
by brokerage firms or other nominees on behalf of Participants will be
aggregated for purposes of determining whether the $2,500 limit would be
exceeded. Purchasers of shares (including
3
<PAGE>
brokers or dealers) under the Plan who resell such shares may be deemed to be
underwriters.
The Common Shares are quoted on the New York Stock Exchange under the symbol
"PP." On August 3, 1998, the closing price of the Common Shares on the New York
Stock Exchange was $23.8125 per share. The Company will pay the costs of
administration of the Plan, except that Participants will bear the cost of
brokerage commissions for resale of Common Shares purchased under the Plan,
certain service charges and fees and applicable taxes.
This Prospectus contains a summary of the material provisions of the Plan and
should be retained by Participants in the Plan for future reference.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THE DATE OF THIS PROSPECTUS IS AUGUST ___, 1998.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by
the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its Regional Offices at Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and
Suite 1300, 7 World Trade Center, New York, New York 10048, and can also be
inspected and copied at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the prescribed fees or from the
Commission's site on the World Wide Web at http://www.sec.gov.
This Prospectus is part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules of the Commission. For further information, reference is made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(Commission File No. 001-14516) under the Exchange Act are hereby incorporated
by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed March 30, 1997;
(2) the Company's Quarterly Reports on Form 10-Q, for the quarter
ended March 31, 1998, filed May 13, 1998;
(3) the Company's Current Reports on Forms 8-K, filed on January 15,
1998, February 10, 1998, February 17, 1998, February 25, 1998, and July 1, 1998;
(4) the description of the Common Shares contained in the Company's
Registration Statement on Form 8-A, filed on October 17, 1996, under the
Exchange Act, including any reports filed under the Exchange Act for the purpose
of updating such description; and
(5) the description of the Series B Preferred Shares contained in the
Company's Registration Statement on Form 8-A filed on February 17, 1998, as
amended by the Company's Registration Statement of Form 8-A/A filed on March 10,
1998, including any reports filed under the Exchange Act for the purpose of
updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of the offering of all
of the Offered Securities shall be deemed to be incorporated by reference
herein. Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, in any accompanying Prospectus Supplement relating to a
specific offering of any Offered Securities or in any other subsequently filed
document, as the case may be, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus or any accompanying Prospectus
Supplement.
5
<PAGE>
The Company will provide on request and without charge to each person
to whom this Prospectus is delivered a copy (without exhibits) of any or all
documents incorporated by reference into this Prospectus. Requests for such
copies should be directed to Prentiss Properties Trust, 3890 W. Northwest
Highway, Suite 400, Dallas, Texas, 75220, Attention: Secretary (telephone (214)
654-0886).
6
<PAGE>
THE COMPANY
The Company is a self-administered and self-managed REIT engaged in the
business of owning, managing, acquiring and developing office and industrial
properties. The Company operates through Prentiss Properties Acquisition
Partners, L.P. (the "Operating Partnership"), of which it is the sole general
partner and in which it owns an approximately 95.9% interest, and through
Prentiss Properties Limited, Inc., and its affiliates.
As of June 30, 1998, the Company owned interests in a diversified portfolio
of 240 office and industrial properties (the "Properties") containing
approximately 22.2 million net rentable square feet. The Properties are located
in 19 major U.S. markets and consist of 115 office buildings containing
approximately 13.0 million net rentable square feet and 125 industrial buildings
containing approximately 9.2 million net rentable square feet. As of June 30,
1998, the Office Properties were approximately 95% leased to 1,142 tenants, and
the Industrial Properties were approximately 96% leased to 348 tenants. The
Company manages approximately 29.2 million square feet in 256 office and
industrial properties that are owned by third parties.
The Company is a Maryland real estate investment trust. Its executive
offices are located at 3890 W. Northwest Highway, Suite 400, Dallas, Texas
75220, and its telephone number is (214) 654-0886.
DESCRIPTION OF THE PLAN
The following describes in question and answer format the provisions of the
Company's Dividend Reinvestment and Share Purchase Plan (the "Plan").
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide registered holders or beneficial
owners of Common and Preferred Shares (each, a "Participant") and other
interested investors (each, an "Initial Investor") with a convenient and
economical method to purchase Common Shares and to reinvest all or a
portion of their cash dividends in Common Shares. In addition, the Plan
will provide the Company with a cost-efficient and flexible mechanism to
raise equity capital through sales of Common Shares under the Plan.
Whether significant capital is raised may be affected, in part, by the
Company's decision whether or not to permit optional cash investments in
excess of $2,500 pursuant to Requests for Waiver. See Question 13
regarding the Company's criteria for granting a Request for Waiver.
PARTICIPATION OPTIONS
2. WHAT OPTIONS ARE AVAILABLE UNDER THE PLAN?
Participants and Initial Investors may elect to participate in the Plan.
Participants may make optional cash investments to purchase Common Shares,
subject to a minimum investment of $100 and a maximum investment of $2,500
per month. Optional cash investments submitted by brokerage firms or other
nominees on behalf of Participants will be aggregated for purposes of
determining whether the $2,500 limit will be exceeded. Initial Investors
may make initial optional cash investments in Common Shares of not less
than $500 and not more than $2,500. In certain instances, however, the
Company may permit greater optional cash investments. See Question 12
regarding optional cash investments and Question 13 regarding a Request for
Waiver. Participants also may elect to have cash dividends, if any,
received with respect to all or a portion of their Common and Preferred
Shares automatically reinvested in additional Common Shares. A Participant
may elect to reinvest dividends, to make optional cash purchases, or both.
3. WHAT ARE THE BENEFITS AND RESTRICTIONS OF THE PLAN?
7
<PAGE>
BENEFITS
Participants may purchase Common Shares pursuant to optional cash
investments of not less than $100 and not more than $2,500 (other than
pursuant to a Request for Waiver) in any month. Optional cash investments
may be made occasionally or at regular intervals, as each Participant
desires. The Plan also provides Participants the opportunity to
automatically reinvest the cash dividends, if any, received on all or a
portion of their Common and Preferred Shares. Participants may make
optional cash investments even if they have not elected dividend
reinvestment under the Plan.
Initial Investors may become Participants by making an initial cash
investment of not less than $500 and not more than $2,500 (other than
pursuant to a Request for Waiver) to purchase Common Shares under the Plan.
Common Shares purchased by Participants and Initial Investors with optional
cash investments pursuant to a Request for Waiver, which, like all Plan
shares, will be purchased directly from the Company under the Plan, may be
issued at a Discount to the market price; such Discount may vary each month
between 0% and 5% at the sole discretion of the Company. See Questions 12
and 13 regarding Optional Cash Investments and Requests for Waiver.
Participants will avoid the need for safekeeping of certificates for Common
Shares credited to their Plan accounts and may submit for safekeeping
certificates held by them and registered in their name. See Questions 15
and 16.
Participants that are registered holders may direct the Administrator to
sell or transfer all or a portion of their Common Shares held in their Plan
account and therefore may find the Plan an economical way to liquidate
their holdings. See Question 17.
Periodic statements reflecting all current activity in Plan accounts,
including purchases, sales and latest balances, will simplify recordkeeping
for registered holders. See Question 18.
RESTRICTIONS
Participants and Initial Investors may not be able to depend on the
availability of a Discount regarding Common Shares acquired under the Plan
with optional cash investments pursuant to a Request for Waiver, and such
optional cash investments may be subject to the trading price for Common
Shares satisfying a minimum price (a "Threshold Price") during the
applicable Investment Period. See Question 11 regarding the establishment
of a Threshold Price. Any Discount established in any month for the
purchase of Common Shares pursuant to a Request for Waiver will not insure
the availability of a Discount or the same Discount in future months. Each
month the Company may establish a Discount, may not establish a Discount,
or may change or eliminate the Discount or set any Threshold Price without
prior notice to Participants. Discounts, if any, will not apply either to
the purchase of shares pursuant to reinvestment of dividends or to optional
cash investments of $2,500 or less (unless part of a larger optional cash
investment made pursuant to a Request for Waiver). See Question 13.
Because of certain tax concerns which the Company has as a REIT, a Request
for Waiver will only be considered for investors who certify that they are
NOT participating in the dividend reinvestment portion of the plan.
Execution of sales of Common Shares held in the Plan may be subject to
delay. See Questions 12 and 17.
No interest will be paid on funds held by the Company pending dividend
reinvestment or purchase of Common Shares with optional cash investments.
See Questions 12 and 13.
Common Shares deposited in a Plan account may not be pledged until the
shares are withdrawn from the
8
<PAGE>
Plan. See Question 27.
4. WHO WILL ADMINISTER THE PLAN?
The Plan will be administered by First Chicago Trust Company of New York or
such successor administrator as the Company may designate (the
"Administrator"). The Administrator acts as agent for Participants, keeps
records of the accounts of Participants, sends regular account statements
to Participants, and performs other duties relating to the Plan. Common
Shares purchased for each Participant under the Plan will be held by the
Administrator and will be registered in the name of such Participant unless
and until a Participant requests that a share certificate for all or part
of such shares be issued, as more fully described in Question 15.
Correspondence with the Administrator should be sent to:
PRENTISS PROPERTIES TRUST DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
Mail Suite 4692
P.O. Box 2534
Jersey City, NJ 07303-2534
TELEPHONE: 201-222-4115
FAX NUMBER: 201-222-4129
PARTICIPATION ELIGIBILITY
5. WHO IS ELIGIBLE TO PARTICIPATE?
A "registered holder" (which means a shareholder whose Common or Preferred
Shares are registered in the stock transfer books of the Company in his or
her name) or a "beneficial owner" (which means a shareholder whose Common
or Preferred Shares are registered in the stock transfer books of the
Company in a name other than his or her name, for example, in the name of a
broker, bank, or other nominee), may participate in the Plan. A registered
holder may participate in the Plan directly; a beneficial owner must either
become a registered holder by having such shares transferred into his or
her name or by making arrangements with his or her broker, bank or other
nominee to participate in the Plan on the Participant's behalf. In
addition, an Initial Investor may participate in the Plan by making an
initial optional cash investment in Common Shares of not less than $500 or
more than $2,500. In certain circumstances, however, the Company may permit
greater optional cash investments. See Question 6 regarding enrollment and
Question 13 regarding a Request for Waiver.
The right to participate in the Plan is not transferable to another person
apart from a transfer of the underlying shares. The Company reserves the
right to exclude from participation in the Plan persons who use the Plan to
engage in short-term trading activities that cause aberrations in the
trading volume of Common Shares. In addition, the Company reserves the
right, but not the obligation, to treat optional cash investments submitted
on forms reflecting Participants with the same name, address or social
security or taxpayer identification number as a single investment for
purposes of determining whether the $2,500 limit would be exceeded.
Participants residing in jurisdictions in which their participation in the
Plan would be unlawful will not be eligible to participate in the Plan.
ENROLLMENT
6. HOW DOES AN ELIGIBLE HOLDER OF COMMON SHARES OR ANY OTHER INITIAL INVESTOR
ENROLL IN THE PLAN AND BECOME A PARTICIPANT?
Each eligible registered holder of Common or Preferred Shares may enroll in
the Plan and become a Participant by completing and signing an
Authorization and Enrollment Form (enclosed herein) and returning it to the
Administrator at the address set forth in Question 4. An Authorization and
Enrollment
9
<PAGE>
Form may also be obtained at any time upon request from the Administrator
at the same address. If shares are registered in more than one name (e.g.,
joint tenants, trustees), all registered holders of such shares must sign
the Authorization and Enrollment Form exactly as their names appear on the
account registration.
Eligible Beneficial Owners must instruct their brokers, banks or other
nominees in whose name their shares are held to participate in the Plan on
their behalf. If a broker, bank or other nominee holds shares through a
securities depository, such broker, bank or other nominee may also be
required to provide a Broker and Nominee Form (a "B/N Form") to the
Administrator in order to participate in the optional cash investment
portion of the Plan. Optional cash investments submitted by brokerage firms
or other nominees on behalf of Participants, whether on the same B/N Form
or different B/N Forms, will be aggregated for purposes of determining
whether the $2,500 limit will be exceeded. See Questions 12 and 13.
An Initial Investor may join the Plan by signing an Authorization and
Enrollment Form and forwarding it, together with its initial investment, to
the Administrator at the address set forth in Question 4. See Question 12
regarding initial optional cash investments.
7. WHAT DOES THE AUTHORIZATION AND ENROLLMENT FORM PROVIDE?
The Authorization and Enrollment Form will appoint the Administrator as
agent for the Participant and direct the Administrator to apply optional
cash investments (transmitted with the Authorization and Enrollment Form as
well as optional cash investments subsequently submitted) to the purchase
on such Participant's behalf of full and fractional Common Shares in
accordance with the Plan.
With respect to dividends, the Authorization and Enrollment Form will
appoint the Administrator as agent for the Participant and direct the
Company to pay to the Administrator the Participant's cash dividends, if
any, on all or a specified number of Common and/or Preferred Shares owned
by the Participant on the applicable record date and designated by the
Participant to be included in the Plan and to reinvest, at the
Participant's discretion, cash dividends, if any, on whole and fractional
shares that have been credited to the Participant's account pursuant to
dividend reinvestment or optional cash investment ("Plan Shares"). Cash
dividends, if any, will continue to be reinvested with respect to the
number of Common and Preferred Shares (including Plan Shares) designated on
the Authorization and Enrollment Form until the Participant specifies
otherwise in writing or terminates participation in the Plan or until the
Plan is terminated.
The Authorization and Enrollment Form provides for the purchase of Common
Shares through the following investment options:
(1) "FULL DIVIDEND REINVESTMENT"
This option directs the Administrator to invest in accordance with the
Plan all cash dividends, if any, on all Common and Preferred Shares
then or subsequently registered in the Participant's name. This option
also permits the Participant to make optional cash investments and
directs the Administrator to apply such investments towards the
purchase of Common Shares in accordance with the Plan.
(2) "PARTIAL DIVIDEND REINVESTMENT"
This option directs the Administrator to invest in accordance with the
Plan all cash dividends, if any, on a specified number of Common and
Preferred Shares then registered in the Participant's name and so
designated in the appropriate space on the Authorization and
Enrollment Form. If this option is selected, the Participant will
continue to receive cash dividends, if any, in the usual manner on all
Common and Preferred Shares that have not been designated for
participation in the Plan. This option also permits the Participant to
make optional cash investments and directs the Administrator to apply
such investments towards the purchase of Common Shares in accordance
with the Plan.
10
<PAGE>
(3) "OPTIONAL CASH INVESTMENTS ONLY"
This option permits a Participant to make optional cash investments
and directs the Administrator to apply such investments towards the
purchase of Common Shares in accordance with the Plan. If this option
is selected, unless the Participant designates such additional shares
for participation in the Plan, the Participant will continue to
receive cash dividends, if any, on all shares registered in his or her
name in the usual manner, and the Administrator will apply only
optional cash investments received from the Participant towards the
purchase of Common Shares.
Any one of the above three options may be selected. In each case, cash
dividends, if any, will be reinvested on all shares designated for
participation in the Plan until the Participant specifies otherwise or
withdraws from the Plan altogether, or until the Plan is terminated.
Any Participant who returns a properly executed Authorization and
Enrollment Form to the Administrator without electing an investment option
will be enrolled as having selected Full Dividend Reinvestment.
8. WHEN WILL PARTICIPATION IN THE PLAN BEGIN?
A Participant who has properly completed and submitted an Authorization and
Enrollment Form may submit an optional cash investment to purchase shares
under the Plan with such Authorization and Enrollment Form. Thereafter,
optional cash investments may be made at any time, but not more frequently
than once each month, through the use of the appropriate forms sent to
Participants with each periodic statement. Payments received by the
Administrator by 12:00 (Noon) Central Time on the last business day prior
to the first day of an Investment Period (as defined in Question ll) will
be used to purchase shares on the applicable Investment Date (as defined
below).
If a properly completed Authorization and Enrollment Form requesting
reinvestment of dividends is received by the Administrator on or before the
record date, if any, established by the Company's Board of Trustees for a
particular cash dividend, that dividend will be used to purchase Common
Shares for the Participant on the next applicable Investment Date following
the dividend payment date. If an Authorization and Enrollment Form is
received from a Participant after the record date established for a
particular dividend, the reinvestment of dividends will begin with respect
to dividends paid following the next dividend record date. For a discussion
of the price to Participants of the Common Shares purchased under the Plan
and the limitations on optional cash investments, see Questions 11 and 13,
respectively.
The dates on which optional cash investments are to be invested and any
dividends are to be reinvested are herein collectively referred to as the
"Investment Dates." With respect to the reinvestment of dividends and the
investment of optional cash investments not exceeding $2,500, the
Investment Date will be the last Trading Day of the Investment Period.
With respect to optional investments in excess of $2,500 pursuant to a
Request for Waiver which has been granted by the Company, each Trading Day
of the Investment Period will be an Investment Date with respect to 1/12 of
such optional cash investment. A "Trading Day" means a day on which trades
in Common Shares are reported on the New York Stock Exchange ("NYSE").
See Schedule A hereto for listing of key dates over the next two years with
respect to Optional Cash Investments.
No interest will be paid on optional cash investments or cash dividends
pending investment in Common Shares.
Participants and Initial Investors may enroll in the Plan at any time. Once
enrolled, a Participant will remain enrolled until the Participant
discontinues participation or until the Company terminates the Plan. See
Question 19 regarding withdrawal from the Plan and Question 26 regarding
termination of the Plan.
11
<PAGE>
PURCHASES
9. WHEN WILL SHARES BE ACQUIRED UNDER THE PLAN?
Dividends, if any, and optional cash investments will be reinvested or
invested, as the case may be, on the Investment Date, as defined herein.
The "Investment Period" is a period of twelve Trading Days, where, in the
case of optional cash investments not exceeding $2,500 and reinvested
dividends, the last Trading Day of the Investment Period is the relevant
Investment Date and where, in the case of optional cash investments
exceeding $2,500 pursuant to a Request for Waiver which has been granted by
the Company, each Trading Day of the Investment Period is an Investment
Date with respect to 1/12 of such optional cash investment. Accordingly,
for optional cash investments not exceeding $2,500 and reinvested
dividends, the entire investment will be made on the Investment Date which
is the last Trading Day of the Investment Period. For optional cash
investments exceeding $2,500 pursuant to a Request for Waiver which has
been granted by the Company, 1/12 of the investment will be made on each
Investment Date of the Investment Period. Optional cash investments must be
received by 12:00 (noon) central time on the last business day prior to the
first day of the applicable Investment Period in order to be invested with
that month's investment. Any funds received after the deadline will be
invested with the next monthly investment. No interest will be paid on any
funds held by the Administrator between Investment Dates. Accordingly,
participants are urged to time their optional cash investments so that they
will be received by the Administrator shortly before, but not after, the
deadline or to enroll in the Automatic Funds Transfer Option which assures
the most timely transfer of funds to the Administrator. See Schedule A for
key dates over the next two years with respect to Optional Cash
Investments.
10. WHAT IS THE SOURCE OF COMMON SHARES TO BE PURCHASED UNDER THE PLAN?
Optional cash investments and dividends reinvested through the Plan will be
used to purchase Common Shares directly from the Company from authorized
but unissued shares.
11. WHAT WILL BE THE PRICE OF COMMON SHARES PURCHASED UNDER THE PLAN?
The price to Participants and Initial Investors of each Common Share
purchased with optional cash investments not exceeding $2,500 or with cash
dividends will be the greater of (i) the average of the Daily Prices
(defined below) of a Common Share for the twelve Trading Days in the
applicable Investment Period and (ii) the Daily Price for a Common Share on
the Investment Date. In the case of an optional cash investment exceeding
$2,500 approved by the Company pursuant to a Request for Waiver, the
purchase price of Common Shares purchased on each Investment Date in the
relevant Investment Period with 1/12 of such optional cash investment will
be the average of the Daily Price for the relevant Investment Date, less
any applicable Discount. The Company may establish a Discount of 0% to 5%
applicable to the purchase of Common Shares under the Plan pursuant to a
Request for Waiver. The Discount will not apply to shares purchased
pursuant to the dividend reinvestment feature of the Plan or to optional
cash investments of $2,500 or less. See Question 13. The period
encompassing the first twelve Trading Days of each calendar month
constitutes the relevant "Investment Period" for that particular month. See
Schedule A for a list of Investment Periods over the next two years. The
Daily Price for a Trading Day will be the average of the high and low
trading prices of the Common Shares on that day on the NYSE, rounded to
three decimal places.
The Company may, in its sole discretion, establish for any given Investment
Period a minimum price (the "Threshold Price") that the Daily Price must
meet in order to consider such Daily Price in the determination of the
purchase price for Common Shares purchased with optional cash investments
pursuant to a Request for Waiver. Any such Threshold Price will be a stated
dollar amount established by the Company at least three Trading Days prior
to the commencement of each Investment Period. In addition, a portion of
each optional cash investment will be returned for each Trading Day of an
Investment Period in which the Threshold Price is not satisfied. The
returned amount will equal 1/12 of the total amount of such optional cash
investment (not just the amount exceeding $2,500) for each Trading Day that
the Threshold Price is
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not satisfied. See Question 13 for information on the determination and
application of a "Threshold Price."
12. HOW ARE OPTIONAL CASH INVESTMENTS MADE?
All registered holders, including brokers, banks and nominees with respect
to shares registered in their name on behalf of beneficial owners, that
have submitted signed Authorization and Enrollment Forms are eligible to
make optional cash investments at any time.
A broker, bank or nominee, as holder on behalf of a beneficial owner, may
utilize an Authorization and Enrollment Form for optional cash investments
unless it holds the shares in the name of a securities depository. In that
event, the optional cash investment must be accompanied by a Broker and
Nominee Form ("B/N Form").
The B/N Form provides the sole means by which a broker, bank or other
nominee holding shares on behalf of beneficial owners in the name of a
securities depository may make optional cash investments on behalf of such
beneficial owners. In such case, the broker, bank or other nominee must use
a B/N Form for transmitting optional cash investments on behalf of the
beneficial owners. A B/N Form must be delivered to the Administrator at the
address specified in Question 4 each time that such broker, bank or other
nominee transmits optional cash investments on behalf of the beneficial
owners. B/N Forms will be furnished by the Administrator upon request.
Initial Investors also are eligible to make such an initial investment in
Common Shares through an optional cash investment by submitting
Authorization and Enrollment Forms and funds representing their desired
initial investment.
The Administrator will apply all optional cash investments, for which good
funds are received on or before 12:00 (Noon) Central Time on the business
day immediately preceding the first day of the Investment Period, to the
purchase of Common Shares on the Investment Dates in the next following
Investment Period. All optional cash investments are subject to collection
by the Administrator for full face value in U.S. dollars.
There is no obligation to make an optional cash investment at any time, and
the amount of such investments may vary from time to time.
Optional cash investments and initial cash investments must be received by
the Administrator no earlier than the 23rd day of the calendar month
immediately preceding the applicable Investment Period and no later than
12:00 (Noon) Central Time on the business day immediately preceding the
relevant Investment Period in order to be invested. If an investor wishes
to make an optional cash investment in excess of $2,500, the investor must
submit a Request for Waiver to the Company on or before 12:00 (Noon)
Central Time two business days preceding the first day of the applicable
Investment Period. See Schedule A for a list of the beginning and ending
dates of the Investment Periods over the next two years. Because of
certain tax concerns which the Company has as a REIT, a Request for Waiver
may only be considered for investors who certify that they are NOT
participating in the dividend reinvestment component of the Company's plan.
A Request for Waiver should be directed to the Chief Financial Officer of
the Company at (214) 654-0886, or at such other number as may be
established by the Company from time to time. Optional cash investments
exceeding $2,500 must be received (together with the written approval of
the Company waiving the $2,500 limitation) by the Administrator no later
than 12:00 (Noon) Central Time on the business day immediately preceding
the related Investment Period in order for such funds to be invested on the
related Investment Dates. Otherwise, the optional cash investment or
initial cash investment amount will be returned automatically by the
Administrator to the participant as soon as is practicable. Furthermore,
upon a Participant's or Initial Investor's written request received by the
Administrator no later than two business days prior to the Investment
Period, a timely optional cash investment or initial cash investment not
already invested under the Plan will be canceled or returned to the
participant, as appropriate. However, in the latter event, no refund of a
check or money order will be made until the funds have been actually
received by the Administrator. Accordingly, such refunds may be delayed by
up to three weeks.
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No interest will be earned on optional cash investments or dividends held
pending investment nor on amounts to be refunded. The Company suggests
therefore that any optional cash investment should be sent so as to reach
the Administrator as close as possible to the first business day preceding
the first day of the applicable Investment Period. Any questions regarding
these dates should be directed to the Administrator at the address or
telephone number set forth in Question 4.
Participants and Initial Investors should be aware that since investments
under the plan are made as of specified dates, a Participant or Initial
Investor may lose any advantage that otherwise might be available from
being able to select the timing of an investment. Neither the Company nor
the Administrator can assure a profit or protect against a loss on shares
purchased under the Plan.
All optional cash investments made by check should be made payable to FIRST
CHICAGO TRUST -- PRENTISS PROPERTIES TRUST and mailed to the Administrator
at the address listed in Question 4. Any checks not drawn on a United
States bank or not payable in United States dollars will be returned, as
will any third party checks. Other forms of payment, such as wire
transfers, may be made, but only if approved in advance by the
Administrator. Inquiries regarding other forms of payments and all other
written inquiries should be directed to the Administrator at the address
listed in Question 4.
13. WHAT LIMITATIONS APPLY TO OPTIONAL CASH INVESTMENTS?
MINIMUM/MAXIMUM LIMITS. Optional cash investments made by Participants are
subject to a minimum of $100 and a maximum of $2,500 per month (except as
noted below), and optional cash investments made by Initial Investors are
subject to a minimum initial investment of $500 and a maximum of $2,500
(except as noted below). See Question 8 regarding the determination of
Investment Dates for optional cash investments. Optional cash investments
of less than the allowable monthly minimum amount and that portion of any
optional cash investment that exceeds the allowable monthly maximum amount
will be returned promptly, except as noted below, without interest.
Optional cash investments submitted by brokerage firms or other nominees on
behalf of Participants, whether on the same B/N Form or different B/N
Forms, will be aggregated for purposes of determining whether the $2,500
limit will be exceeded. In addition, the Company reserves the right to
treat optional cash investments submitted on forms reflecting Participants
or Initial Investors with the same name, address or social security or
taxpayer identification number as a single investor for purposes of
determining whether the $2,500 limit would be exceeded.
REQUEST FOR WAIVER. Optional cash investments in excess of $2,500 per month
may be made only pursuant to a request for waiver (a "Request for Waiver")
accepted by the Company. Because of certain tax concerns which the Company
has as a REIT, a Request for Waiver will only be considered for investors
who certify that they are NOT participating in the dividend reinvestment
component of the Plan. Participants and Initial Investors who wish to
submit an optional cash investment in excess of $2,500 for any Investment
Period, including those whose proposed investments have been aggregated so
as to exceed $2,500 as described above, must obtain the prior written
approval of the Company and a copy of such written approval must accompany
any such optional cash investment. See Question 12. A Request for Waiver
should be directed to the Chief Financial Officer of the Company at (214)
654-0886, or at such other number as may be established by the Company from
time to time, and must be received by the Company on or before 12:00 (Noon)
Central Time two business days preceding the applicable Investment Period.
The Company has sole discretion to grant any approval for optional cash
investments in excess of $2,500.
In deciding whether to approve a Request for Waiver, the Company will
consider relevant factors including, but not limited to, the Company's need
for additional funds, the attractiveness of obtaining such additional funds
through the sale of Common Shares as compared to other sources of funds,
the purchase price likely to apply to any sale of Common Shares, and the
aggregate amount of optional cash investments in excess of $2,500 for which
Requests for Waiver have been submitted by all Participants and Initial
Investors. If Requests for Waiver are submitted for any Investment Period
for an aggregate amount in excess of the amount the Company is then willing
to accept, the Company, in its sole discretion, may honor the requests
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<PAGE>
of Initial Investors before it honors the requests of Participants.
However, if the Company decides to grant the Request for Waiver of any
Participant for an Investment Period, the Company will honor all Requests
for Waiver from Participants pro rata for such Investment Period.
The Company reserves the right to modify, suspend or terminate
participation in the Plan by otherwise eligible Participants for any reason
whatsoever including elimination of practices that are not consistent with
the purposes of the Plan.
THRESHOLD PRICE WITH RESPECT TO OPTIONAL CASH INVESTMENTS MADE PURSUANT TO
REQUESTS FOR WAIVER. The Company may establish for any Investment Period a
Threshold Price applicable to optional cash investments made pursuant to
Requests for Waiver. At least three Trading Days prior to the first day of
the applicable Investment Period, the Company will determine whether to
establish a Threshold Price and if a Threshold Price is established, its
amount, and will so notify the Administrator. This determination will be
made by the Company in its sole discretion after a review of current market
conditions, the level of participation in the Plan, and current and
projected capital needs. Participants may ascertain whether a Threshold
Price has been set or waived for any given Investment Period by telephoning
the Company at (214) 654-0886 or at such other number as may be established
by the Company from time to time.
If established for any Investment Period, the Threshold Price will be
stated as a dollar amount that the Daily Price for each Trading Day of the
relevant Investment Period must equal or exceed. In the event that the
Threshold Price is not satisfied for a Trading Day in the Investment
Period, then no investment will occur on that Investment Date.
In addition, a portion of each optional cash investment will be returned
for each Trading day of an Investment Period in which the Threshold Price
is not satisfied. The returned amount will equal 1/12 of the total amount
of such optional cash investment (not just the amount exceeding $2,500) for
each Trading Day that the Threshold Price is not satisfied. Thus, for
example, if the Threshold Price is not satisfied for three of the twelve
Trading Days in an Investment Period, 3/12 (i.e., 25%) of such optional
cash investment will be returned to the Participant by check (or wire
transfer, if payment was received by wire transfer) without interest.
The establishment of a Threshold Price and the possible return of a portion
of the investment applies only to optional cash investments made pursuant
to a Request for Waiver but applies to the entire amount thereof, including
the first $2,500. Setting a Threshold Price for an Investment Period shall
not affect the setting of a Threshold Price for any subsequent Investment
Period. For any particular month, the Company may waive its right to set a
Threshold Price by failing to set such a price at least three Trading Days
prior to the first day of the Investment Period. Unlike the procedure for
establishing a Discount, if the Company fails to set a Threshold Price for
any Investment Period, the Threshold Price for the previous Investment
Period will not continue to apply in the current Investment Period.
Neither the Company nor the Administrator shall be required to provide any
written notice to Participants as to the Threshold Price for any Investment
Period. Participants may, however, ascertain whether a Threshold Price has
been set or waived for any given Investment Period by telephoning the
Company at (214) 654-0886 or at such other number as may be established by
the Company from time to time.
DISCOUNT. Each month, at least three Trading Days prior to the first day of
the applicable Investment Period, the Company may establish a discount from
the Daily Price applicable to shares purchased under the Plan with optional
cash investments made pursuant to a Request for Waiver. Such discount (the
"Discount") may be between 0% and 5% of the purchase price. The Discount
initially will be 2.25%. The Company may change the amount of the Discount
prior to each Investment Period in its sole discretion after a review of
current market conditions, the level of participation in the Plan, and
current and the Company's projected capital needs. If the Company does not
affirmatively change the Discount at least three Trading Days prior to the
first day of the applicable Investment Period, the Discount will remain the
same as it was for the previous month. Participants may obtain the Discount
applicable to the next Investment Period by telephoning the Company at
(214) 654-0886 or at such other number as may be established by the Company
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<PAGE>
from time to time. Discounts apply only to shares purchased in connection
with optional cash investments made pursuant to a Request for Waiver, and
apply to the entire amount thereof, including the first $2,500.
14. WHAT IF A PARTICIPANT HAS MORE THAN ONE ACCOUNT?
For the purpose of the limitations discussed in Question 13, the Company
reserves the right to aggregate all optional cash investments for
Participants with more than one account using the same name, address or
social security or taxpayer identification number. For Participants unable
to supply a social security or taxpayer identification number,
participation may be limited by the Company to only one Plan account. Also
for the purpose of such limitations, all Plan accounts that the Company
believes to be under common control or management or to have common
ultimate beneficial ownership may be aggregated. In the event the Company
exercises its right to aggregate investments and the result would be an
investment in excess of $2,500 without an approved Request for Waiver, the
Company will return, without interest, as promptly as practicable, any
amounts in excess of the investment limitations.
CERTIFICATES
15. WILL CERTIFICATES BE ISSUED FOR SHARE PURCHASES?
All shares purchased pursuant to the Plan will be held in "book entry" form
through accounts maintained by the Administrator. This service protects
against the loss, theft, or destruction of certificates evidencing shares.
Upon written request of a Participant or upon withdrawal of a Participant
from the Plan or upon the termination of the Plan, the administrator will
have certificates issued and delivered for all full shares credited to that
Participant's account. Certificates will be issued only in the same names
as those enrolled in the Plan. In no event will certificates for fractional
shares be issued. See Questions 16 and 17.
16. MAY A PARTICIPANT ADD SHARES TO HIS OR HER ACCOUNT BY TRANSFERRING SHARE
CERTIFICATES THAT THE PARTICIPANT POSSESSES?
Any Participant may send to the Plan for safekeeping all Common and
Preferred Share certificates which such Participant holds. Certificates
forwarded to the Administrator by registered mail will be automatically
covered by an Administrator blanket bond up to the first $250,000 of value.
The safekeeping of shares offers the advantage of protection against loss,
theft or destruction of certificates as well as convenience, if and when
shares are sold through the Plan. All shares represented by such
certificates will be kept for safekeeping in "book entry" form and combined
with any full and fractional shares then held by the Plan for the
Participant.
To deposit certificates for safekeeping under the Plan, a Participant must
be enrolled in the Plan. Share certificates as well as all written
inquiries about the safekeeping service should be directed to the
Administrator at the address listed in Question 4.
Shares deposited for safekeeping may be withdrawn by the Participant by
submitting a written request to the Administrator.
SALE OF COMMON SHARES
17. CAN PARTICIPANTS SELL SHARES HELD UNDER THE PLAN?
Participants may request that all or a portion of the Common or Preferred
Shares held in their accounts by the Plan (including shares held for
safekeeping) be sold. Following receipt of written instructions from a
Participant, the Administrator will sell, through an independent broker or
institution, those shares as soon as practicable and will remit a check for
the proceeds of such sale, less applicable brokerage charges, trading fees,
service charges and any taxes. Shares to be sold will be aggregated by the
Administrator and generally
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<PAGE>
sold once per week at then current market prices in transactions carried
out through one or more brokerage firms. This procedure for selling shares
may be particularly attractive to holders of small amounts of shares
because the Plan can combine odd lots and small numbers of shares into
larger blocks to be sold, and thereby take advantage of lower trading fees
that otherwise might not be available to individual Participants upon the
sale of their shares. The initial trading fee for sales of shares will be
$15.00 per transaction plus $.12 per share. See Question 23.
REPORTS
18. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Unless a Participant participates in the Plan through a broker, bank or
nominee, each Participant will receive from the Administrator a detailed
statement of the Participant's account following each dividend payment and
account transaction. These detailed statements will show total cash
dividends received, if any, total optional cash investments received, total
shares purchased (including fractional shares), price paid per share, and
total shares held in the Plan. These statements should be retained by the
Participant to determine the tax basis for shares purchased pursuant to the
Plan. Any Participant that participates in the Plan through a broker, bank
or nominee should contact such party for such a statement.
WITHDRAWAL
19. HOW MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
Except as set forth below, a Participant may terminate enrollment in the
Plan by giving written notice to the Administrator no later than two days
prior to the first day of the next Investment Period, and thereafter all
cash dividends, if any, on shares owned by such Participant will be sent to
the Participant. See Question 17. In the event that a purchase of shares on
behalf of a Participant pursuant to the Plan is pending, such Participant
may not terminate enrollment until after the last Investment Date relating
to such Investment Period. Any fractional shares held in the Plan at the
time of termination will be converted to cash on the basis of the then
current market price of the Common Shares. If a Participant's Plan account
balance falls below one full share, the Administrator reserves the right to
liquidate the fractional share and remit the proceeds, less any applicable
fees, to the Participant at its address of record.
TAXES
20. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN?
In the case of Common Shares purchased by the Plan Administrator pursuant
to the reinvestment feature of the Plan, Participants will be treated for
federal income tax purposes as having received, on the distribution payment
date, a distribution in an amount equal to the amount of the cash
distribution that was reinvested. Such distribution will be taxable as a
dividend to the extent of the Company's current and accumulated earnings
and profits. To the extent the distribution exceeds the Company's current
and accumulated earnings and profits, the distribution will be treated
first as a tax-free return of capital, reducing the tax basis in a
Participant's shares, and the distribution in excess of a Participant's tax
basis will be taxable as gain realized from the sale of its shares. A
Participant's tax basis in Common Shares acquired with reinvested dividends
will be equal to the amount of the cash distribution that was reinvested to
purchase the Common Shares.
It is not entirely clear under current law how purchases of Common Shares
pursuant to the optional cash investment feature of the Plan should be
treated for federal income tax purposes. The tax treatment of the purchase
of Common Shares by a Participant pursuant to an optional cash investment
will differ depending on whether the Participant is participating in the
dividend reinvestment feature of the Plan. The Company currently intends to
take the position for tax reporting purposes that Participants that are not
participating in the dividend reinvestment feature of the Plan and Initial
Investors will not be treated for federal income tax purposes as having
received a distribution from the Company upon the purchase of Common Shares
with optional cash investments. For those Participants and Initial
Investors, the tax basis in the Common Shares purchased will equal the
amount paid for such shares. However, the Company currently intends to take
position for tax reporting purposes that Participants that participate in
the dividend reinvestment future of the Plan will be treated for federal
income tax purposes as having received a distribution from the Company upon
the purchase of Common Shares with optional cash investments in an amount
equal to the excess, if any, of (i) the Daily Price of a Common Share on
the Investment Date (the "Tax FMV"), multiplied by the number of Common
Shares (including any
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<PAGE>
fractional share) purchased, over (ii) the purchase price of such Common
Shares, taking into account any Discount, and that any such distribution
will be treated as a taxable dividend to the extent of the Company's
current and accumulated earnings and profits. The Company currently intends
to take the position for tax reporting purposes that such Participants that
participate in the dividend reinvestment feature of the Plan will receive a
tax basis in Common Shares acquired with optional cash investments equal to
the greater of the Tax FMV or the purchase price of the shares.
Participants and Initial Investors are encouraged to consult with their own
tax advisors with regard to the federal income tax treatment of optional
cash purchases.
The holding period for Common Shares acquired pursuant to the Plan will
begin on the day following the Investment Date. A share consisting of
fractional shares purchased on different Investment Dates will have a split
holding period, with the holding period for each fractional component
beginning the day after the Investment Date on which it was purchased.
When a Participant receives certificates for whole shares credited to the
Participant's account under the Plan, the Participant will not realize any
taxable income. However, a Participant that receives a cash adjustment for
a fraction of a share will realize gain or loss with respect to such
fraction. Gain or loss also will be realized by the Participant whenever
whole shares are sold, either pursuant to the Participant's request, upon
withdrawal from the Plan or after withdrawal from the Plan. The amount of
such gain or loss will be the difference between the amount that the
Participant receives for the shares (including any fractional share) and
the tax basis of the Participant in the shares.
THE FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES OF
PARTICIPATION IN THE PLAN AND DOES NOT CONSTITUTE TAX ADVICE. THIS SUMMARY
DOES NOT REFLECT EVERY POSSIBLE OUTCOME THAT COULD RESULT FROM
PARTICIPATION IN THE PLAN AND, THEREFORE, PARTICIPANTS ARE ADVISED TO
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES
APPLICABLE TO THEIR PARTICULAR SITUATIONS.
OTHER PROVISIONS
21. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS SHARES OR ACQUIRES
ADDITIONAL SHARES?
If a Participant has elected to have dividends automatically reinvested in
the Plan and subsequently sells or transfers all or any part of the shares
registered in the Participant's name, automatic reinvestment will continue
as long as shares are registered in the name of the Participant or held for
the Participant by the Administrator or until termination of enrollment.
Similarly, if a Participant has elected the "Full Dividend Reinvestment"
option under the Plan and subsequently acquires additional shares
registered in the Participant's name, dividends paid on such shares will
automatically be reinvested until termination of enrollment. If, however, a
Participant has elected the "Partial Dividend Reinvestment" option and
subsequently acquires additional shares that are registered in the
Participant's name, dividends paid on such shares will not be automatically
reinvested under the Plan. See Question 7. Participants may, however,
change their dividend reinvestment elections by submitting new Enrollment
Forms.
22. HOW WILL A PARTICIPANT'S SHARES BE VOTED?
For any meeting of shareholders, each Participant will receive proxy
materials in order to vote all shares held by the Plan for the
Participant's account. All shares will be voted as designated by the
Participant or may be voted in person at the meeting of shareholders.
23. WHO PAYS THE EXPENSES OF THE PLAN?
There is no fee for enrolling in the program. Participation is voluntary
and a Participant may discontinue its
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participation at any time. However, there are fees associated with the Plan
and the Administrator's services. Shares for the Plan will be purchased
directly from the Company. Except as provided below, there will be no
trading fees or service charges in connection with purchases of shares by
current shareholders. In addition, Participants that request the sale of
any of their shares held in the Plan must pay a fee initially equal to
$15.00 per transaction plus $.12 per share plus any applicable taxes and
brokerage charges. The Administrator may effect any sale of shares for the
Plan through a broker-dealer, in which case such broker-dealer will receive
a commission for effecting such transactions. The Administrator may also
charge Participants for additional services not provided under the Plan or
where specified charges are indicated. Any fees may be changed by the
Administrator at any time, without notice to Participants. Participants may
obtain a current listing of all applicable administrative fees by
contacting the Administrator at the address or telephone number listed in
Question 4 above. Brokers or nominees that participate on behalf of
beneficial owners for whom they are holding shares may also charge such
beneficial owners fees in connection with such participation, for which
neither the Administrator nor the Company will be responsible. The table
below provides certain information with regard to fees paid by the
Participant on certain transactions.
INVESTOR PAID FEES
------------------
<TABLE>
<S> <C>
PURCHASES
Initial purchase for non-shareholders....................... $10.00 per initial purchase
Voluntary cash purchases.................................... $5.00 per purchase by check
Automatic fund transfer (ACH) debit for purchases........... $2.00 per purchase by ACH
</TABLE>
REINVESTMENT
Reinvestment of dividends each quarter will be charged to the
shareholder at the rate of 5% of the investing amount, with a maximum
charge of $3.00 per quarter.
SALES
Sales are charged $15.00 per transaction, plus $0.12 per share sold.
24. WHAT ARE THE RESPONSIBILITIES OF THE COMPANY AND THE ADMINISTRATOR UNDER
THE PLAN?
Neither the Company nor the Administrator will be liable for any act done
in good faith or for any good faith omission to act, including, without
limitation, any claims of liability arising out of a failure to terminate a
Participant's account upon such Participant's death or adjudication of
incompetence prior to the receipt of notice in writing by the Company or
the Administrator of such death or adjudication of incompetence, the prices
at which shares are purchased for the Participant's account, the times when
purchases are made or fluctuations in the market value of the Common
Shares. Neither the Company nor the Administrator has any duties,
responsibilities or liabilities except those expressly set forth in the
Plan.
Participants should recognize that the Company cannot assure profit or
protect against a loss on the shares purchased by a Participant under the
Plan.
25. WHAT HAPPENS IF THE COMPANY ISSUES A SHARE DIVIDEND OR DECLARES A SHARE
SPLIT?
Any shares distributed by the Company as a result of a share dividend or a
share split on shares held under the Plan for a Participant will be
credited to the Participant's account.
26. IF THE COMPANY HAS A RIGHTS OFFERING RELATED TO THE COMMON SHARES, HOW WILL
A PARTICIPANT'S ENTITLEMENT BE COMPUTED?
A Participant's entitlement in a rights offering related to the Common
Shares will be based upon the number of whole shares credited to the
Participant's account. Rights based on a fraction of a share credited to a
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Participant's Plan account will be sold for that account and the net
proceeds will be invested as an optional cash payment on the next
Investment Date. In the event of a rights offering, transaction processing
may be curtailed or suspended by the Administrator for a short period of
time following the record date for such action to permit the Administrator
to calculate the rights allocable to each account.
27. MAY SHARES IN A PARTICIPANT'S ACCOUNT BE PLEDGED?
No shares credited to a Participant's account may be pledged and any such
purported pledge will be void. If a Participant wishes to pledge shares,
those shares must be withdrawn from the Plan. See Question 19.
28. MAY A PARTICIPANT TRANSFER ALL OR A PART OF THE PARTICIPANT'S SHARES
HELD IN THE PLAN TO ANOTHER PERSON?
A Participant who is not an affiliate of the Company may transfer or give
gifts of shares to anyone by contacting the Administrator and requesting a
Gift/Transfer Form. A notice indicating the deposit of shares will be
forwarded to the recipient. A Participant who is not an affiliate of the
Company may also transfer all or a portion of his or her shares into an
account established for another person within the Plan. In order to effect
such a "book-to-book" transfer, the transferee must complete an
Authorization and Enrollment Form to open a new account within the Plan.
(See Question 7) . The Authorization and Enrollment Form should be sent to
the Administrator along with a written request to effect the "book-to-book"
transfer indicating the number of shares to be transferred to the new
account.
Participants who are affiliates of the Company and who wish to transfer
shares in his or her account should call the Corporate Secretary of the
Company at (214) 654-0886.
29. MAY THE PLAN BE CHANGED OR TERMINATED?
While the Plan is intended to continue indefinitely, the Company reserves the
right to amend, modify, suspend or terminate the Plan at any time. Participants
will be notified in writing of any modifications made to the Plan.
USE OF PROCEEDS
The Company intends to contribute the net proceeds of the sale of the Common
Shares offered hereby to the Operating Partnership in exchange for an equal
number of units of limited partnership interest in the Operating Partnership.
The Operating Partnership will use such proceeds to repay indebtedness or for
general purposes.
PLAN OF DISTRIBUTION
The Common Shares acquired under the Plan are being sold directly by the
Company. The Company may sell Common Shares to owners of shares (including
brokers or dealers) who, in connection with any resales of such shares, may be
deemed to be underwriters. Such shares, including shares acquired pursuant to
Requests for Waiver granted with respect to the optional cash investment feature
of the Plan, may be resold in market transactions (including coverage of short
positions) on any national securities exchange on which Common Shares trade or
in privately negotiated transactions. These exchanges include the NYSE, the
national exchange on which the Common Shares are currently listed. The
difference between the price such owners pay to the Company for Common Shares
acquired under the Plan after deduction of the applicable Discount, if any, and
the price at which such shares are resold, may be deemed to constitute
underwriting commissions received by such owners in connection with such
transactions. The Company does not have any formal or informal understanding
with any such owners. The Company reserves the right to exclude from
participation in the Plan persons who use the Plan to engage in short-term
trading activities that cause alterations in the trading volume of the Common
Shares.
The Company will pay any expenses incurred in connection with purchases of
Common Shares under the Plan. Participants that request the sale of any of their
Common Shares held in the Plan must pay a fee initially equal to $10.00 per
transaction plus $.12 per share plus any applicable taxes and, if the sale is
effected through a broker-dealer, a commission.
20
<PAGE>
Common Shares may not be available under the Plan in all states. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, any
Common Shares or other securities in any state or any other jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Shares
offered hereby have been passed upon for the Company by Hunton & Williams,
Richmond, Virginia, who have relied on the opinion of Ballard Spahr Andrews &
Ingersoll, LLP, Baltimore, Maryland, with respect to matters of Maryland law.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1997 and
1996 and for the year ended December 31, 1997 and the period October 22, 1996
(inception of operations) to December 31, 1996 and the combined financial
statements of the Predecessor Company as of December 31, 1995 and the period
January 1, 1996 to October 21, 1996 and the year ended December 31, 1995 are
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1997 and incorporated by reference herein. The combined statements of
revenue and certain operating expenses for the Newport National Properties and
the Silicon Valley Properties for the year ended December 31, 1996 and the
statement of revenue and certain operating expenses for the Carrara Place
Property for the year ended June 30, 1997 are included in the Company's Current
Report on Form 8-K dated February 5, 1998 and incorporated by reference herein.
These reports have been incorporated herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
FORWARD-LOOKING INFORMATION
This Prospectus, any Prospectus Supplement and the documents incorporated
by reference herein may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including, without limitation, statements containing the words
"believes," "anticipates," "expects" and words of similar import. Such forward-
looking statements relate to future events, the future financial performance of
the company, and involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Company or industry to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements. Prospective investors should specifically consider the various
factors identified in the Prospectus, any Prospectus Supplement, and the
documents incorporated by reference herein, which could cause actual results to
differ, including particularly those discussed in the section entitled "Risk
Factors." The Company disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.
GLOSSARY
"Administrator" First Chicago Trust Company of New York or such
successor administrator as the Company may designate.
"Beneficial Owner" Shareholder whose Common Shares are registered in the
stock transfer books of the Company in a name other
than his or her name.
"Business Day" Any day other than Saturday, Sunday or a legal holiday
on which the NYSE is closed or on which the
Administrator is authorized or obligated by law to
close.
"B/N Form" Broker and Nominee Form.
"Common Shares" Common shares of beneficial interest, par value $.01
per share, of the Company.
"Daily Price" The average of the high and low trading prices of the
Common Shares on a day on NYSE, rounded to three
decimal places.
"Discount" Discount between 0% and 5% of the purchase price as
established, at the sole discretion of the Company,
each month at least three Trading Days prior to the
first day of the
21
<PAGE>
applicable Investment Period; provided, however, that
in no event shall the Discount be set such that the
purchase price for a Common Share is less than 95% of
its Tax FMV.
"Initial Investor" Person other than a Participant making an optional cash
investment in the Common Shares.
"Investment Date" Date on which optional cash investments are to be
invested and any dividends are to be reinvested. With
respect to optional cash investments not exceeding
$2,500, the last Trading Day of the Investment Period
is the Investment Date, and with respect to optional
cash investments exceeding $2,500 pursuant to a Request
for Waiver that has been granted by the Company, each
Trading Day of the period is an Investment Date for
one-twelfth of the investment.
"Investment Period" A period encompassing the first 12 Trading Days of each
month, in which, with respect to optional cash
investments not exceeding $2,500, the last Trading Day
of the period is the Investment Date and in which, with
respect to optional cash investments exceeding $2,500
pursuant to a Request for Waiver that has been granted
by the Company, each Trading Day of the period is an
Investment Date with respect to 1/12 of such optional
cash investment.
"Participant" Registered holder or beneficial owner of Common Shares
under the Plan.
"Plan Shares" Common Shares that have been credited to the
Participant's account pursuant to dividend reinvestment
or optional cash investment.
"Preferred Shares" Preferred shares of beneficial interest, par value $.01
per share, of the Company.
"Registered Holder" Shareholder whose Common Shares are registered in the
stock transfer books of the Company in his or her name.
"Request for Waiver" Request that the Company waive the maximum requirement
for optional cash investments of $2,500 per month.
"Tax FMV" Daily Price of a Common Share on the applicable
Investment Date.
"Threshold Price" Minimum price that the Daily Price must meet in order
to consider prices from such Trading Day in determining
the purchase price of Common Shares purchased with
optional cash investments pursuant to a Request for
Waiver.
"Trading Day" Day on which trades in Common Shares are reported on
NYSE.
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES TO ANY PERSON
OR BY ANYONE IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
22
<PAGE>
SCHEDULE A
OPTIONAL CASH INVESTMENTS
<TABLE>
<CAPTION>
Threshold Price Record Date and
and Optional Cash Investment Period Investment Period
Discount Set Date Investment Due Date Commencement Date Conclusion Date
- ----------------- ------------------- ----------------- -----------------
<S> <C> <C> <C>
August 27, 1998 August 31, 1998 September 1, 1998 September 17, 1998
September 28, 1998 September 30, 1998 October 1, 1998 October 16, 1998
October 28, 1998 October 30, 1998 November 2, 1998 November 17, 1998
November 25, 1998 November 30, 1998 December 1, 1998 December 16, 1998
December 29, 1998 December 31, 1998 January 4, 1999 January 20, 1999
January 27, 1999 January 29, 1999 February 1, 1999 February 17, 1999
February 24, 1999 February 26, 1999 March 1, 1999 March 16, 1999
March 29, 1999 March 31, 1999 April 1, 1999 April 19, 1999
April 28, 1999 April 30, 1999 May 3, 1999 May 18, 1999
May 26, 1999 May 28, 1999 June 1, 1999 June 16, 1999
June 28, 1999 June 30, 1999 July 1, 1999 July 19, 1999
July 28, 1999 July 30, 1999 August 2, 1999 August 17, 1999
August 27, 1999 August 31, 1999 September 1, 1999 September 17, 1999
September 28, 1999 September 30, 1999 October 1, 1999 October 18, 1999
October 27, 1999 October 29, 1999 November 1, 1999 November 16, 1999
November 26, 1999 November 30, 1999 December 1, 1999 December 16, 1999
December 29, 1999 December 31, 1999 January 3, 2000 January 19, 2000
January 27, 2000 January 31, 2000 February 1, 2000 February 16, 2000
February 25, 2000 February 29, 2000 March 1, 2000 March 16, 2000
March 29, 2000 March 31, 2000 April 3, 2000 April 18, 2000
April 26, 2000 April 28, 2000 May 1, 2000 May 16, 2000
May 26, 2000 May 31, 2000 June 1, 2000 June 16, 2000
June 28, 2000 June 30, 2000 July 3, 2000 July 19, 2000
July 27, 2000 July 31, 2000 August 1, 2000 August 16, 2000
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information..................................................... 5
Incorporation of Certain Documents by Reference........................... 5
The Company............................................................... 7
Description of the Plan................................................... 7
Purpose................................................................. 7
Participation Options................................................... 7
Benefits................................................................ 8
Restrictions............................................................ 8
Participation Eligibility............................................... 9
Enrollment.............................................................. 9
Purchases............................................................... 12
Certificates............................................................ 16
Sale of Common Shares................................................... 16
Reports................................................................. 17
Withdrawal.............................................................. 17
Taxes................................................................... 17
Other Provisions........................................................ 18
Use of Proceeds........................................................... 20
Plan of Distribution...................................................... 20
Legal Matters............................................................. 21
Experts................................................................... 21
Forward-Looking Information............................................... 21
Glossary.................................................................. 21
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.. $17,724
Accounting fees and expenses......................... 3,000
Professional fees and expenses....................... 10,000
Miscellaneous........................................ 4,276
TOTAL........................................... $35,000
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Maryland REIT Law permits a Maryland real estate investment trust
to include in its Declaration of Trust a provision limiting the liability of its
trustees and officers to the trust 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 as being material to the cause of action. The
Declaration of Trust of the Company contains such a provision which eliminates
such liability to the maximum extent permitted by the Maryland REIT Law.
The Declaration of Trust of the Company authorizes it, to the maximum
extent permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former Trustee or officer or (b) any individual who, while a
Trustee of the Company and at the request of the Company, serves or has served
another real estate investment trust, corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a trustee, director,
officer or partner of such real estate investment trust, corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a trustee, director, officer or partner of such real estate investment trust,
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise from and against any claim or liability to which such person may
become subject or which such person may incur by reason of his status as present
or former shareholder. The Bylaws of the Company obligate it, to the maximum
extent permitted by Maryland law, to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former Trustee or officer who is made a party to the proceeding by
reason of his service in that capacity or (b) any individual who, while a
Trustee of the Company and at the request of the Company, serves or has served
another real estate investment trust, corporation partnership, joint venture,
trust, employee benefit plan or any other enterprise as a trustee, director,
officer or partner of such real estate investment trust, corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made a party to the proceeding by reason of his service in that capacity.
The Declaration of Trust and Bylaws also permit the Company to indemnify and
advance expenses to any person who served a predecessor of the Company in any of
the capacities described above and to any employee or agent of the Company or a
predecessor of the Company. The Bylaws require the Company to indemnify a
Trustee or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he is made a party by reason of his service
in that capacity.
Maryland REIT Law permits a Maryland real estate investment trust to
indemnify and advance expenses to its trustees, officers, employees and agents
to the same extent as is permitted by the MGCL for directors and officers of
Maryland corporations. The MGCL permits a 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,
II-1
<PAGE>
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, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation. In accordance with the
MGCL, the Bylaws of the Company require it, as a condition to advancing
expenses, to obtain (a) a written affirmation by the Trustee or officer of his
good faith belief that he has met the standard of conduct necessary for
indemnification by the Company as authorized by the Bylaws and (b) a written
statement by or on his behalf to repay the amount paid or reimbursed by the
Company if it shall ultimately be determined that the standard of conduct was
not met.
ITEM 16. EXHIBITS
4.1 * Form of Common Shares Certificate.
4.2 * Form of Amended and Restated Declaration of Trust of the Company.
4.3 * Articles Supplementary to the Amended and Restated Declaration of
Trust Classifying and Designating the Series A Preferred Shares (filed
as Exhibit 3.1 to the company's current Report on Form 8-K filed
January 14, 1998).
4.4 Articles Supplementary to the Amended and Restated Declaration of
Trust Classifying and Designating the Series B Preferred Shares (filed
as Exhibit 3 to the company's Registration Statement on Form 8-K filed
February 17, 1998).
4.5 * Bylaws of the Company.
4.6 Rights Agreement, dated February 6, 1998, between the Company and
First Chicago Trust Company of New York, as Rights Agent (filed as an
Exhibit to the Company's Registration Statement on Form 8-A filed on
February 17, 1998.
4.7 Form of Rights Certificate (included as Exhibit A to the Rights
Agreement).
5.1 Opinion of Hunton & Williams.
23.1 Consent of Hunton & Williams (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (located on the signature page of this Registration
Statement).
_______________________________
* Filed as an Exhibit to the Company's Registration Statement on Form S-11,
File No. 33-09863, as amended, and incorporated by reference herein.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement (Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
II-2
<PAGE>
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement); and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in subparagraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby further 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 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 this 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; and
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that the in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against the
registrant 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.
The undersigned registrant further hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus 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.
II-3
<PAGE>
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 Dallas, State of Texas, on the 22nd day of July,
1998.
Prentiss Properties Trust,
a Maryland real estate investment trust
(Registrant)
By: /s/ Thomas F. August
-------------------------------------------
Thomas F. August
President and Chief Operating Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Michael V. Prentiss, Thomas F. August and Gregory S. Imhoff, or any of them, his
true and lawful attorney-in-fact, for him and in his name, place and stead, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, to sign any Registration Statements filed pursuant to
Rule 462(b) of the Securities Act of 1933, and to cause the same to be filed
with the Securities and Exchange Commission, hereby granting to said attorneys-
in-fact full power and authority to do and perform all and every act and thing
whatsoever requisite or desirable to be done in and about the premises as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all acts and things that said attorneys-in-fact
may do or cause to be done by virtue of these presents.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on the 22nd day of July, 1998 by
the following persons in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ Michael V. Prentiss
- -------------------------------
Michael V. Prentiss Chairman of the Board and Chief Executive
Officer (Principal Executive Officer)
/s/ Thomas F. August
- -------------------------------
Thomas F. August President, Chief Operating Officer and
Trustee
/s/ Thomas J. Hynes, Jr.
- -------------------------------
Thomas J. Hynes, Jr. Trustee
/s/ Barry J. C. Parker
- -------------------------------
Barry J.C. Parker Trustee
/s/ Leonard M. Riggs, Jr.
- -------------------------------
Leonard M. Riggs, Jr. Trustee
/s/ Ronald G. Steinhart
- -------------------------------
Ronald G. Steinhart Trustee
II-4
<PAGE>
/s/ Lawrence A. Wilson
- -------------------------------
Lawrence A. Wilson Trustee
/s/ Mark R. Doran
- -------------------------------
Mark R. Doran Executive Vice President, Chief Financial
Officer and Treasurer (Principal Financial
Officer)
/s/ Richard J. Bartel
- -------------------------------
Richard J. Bartel Executive Senior Vice President--Financial
Operationsand Administration, and Chief
Administrative Officer (Principal Accounting
Officer)
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT PAGE
- ------ ------- ----
4.1* Form of Common Shares Certificate.
4.2* Form of Amended and Restated Declaration of Trust of the Company.
4.3* Articles Supplementary to the Amended and Restated Declaration of
Trust Classifying and Designating the Series A Preferred Shares (filed
as Exhibit 3.1 to the company's current Report on Form 8-K filed
January 14, 1998).
4.4 Articles Supplementary to the Amended and Restated Declaration of
Trust Classifying and Designating the Series B Preferred Shares (filed
as Exhibit 3 to the company's Registration Statement on Form 8-K filed
February 17, 1998).
4.5* Bylaws of the Company.
4.6 Rights Agreement, dated February 6, 1998, between the Company and
First Chicago Trust Company of New York, as Rights Agent (filed as an
Exhibit to the Company's Registration Statement on Form 8-A filed on
February 17, 1998.
4.7 Form of Rights Certificate (included as Exhibit A to the Rights
Agreement).
5.1 Opinion of Hunton & Williams.
23.1 Consent of Hunton & Williams (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (located on the signature page of this Registration
Statement).
_______________________________
* Filed as an Exhibit to the Company's Registration Statement on Form S-11,
File No. 33-09863, as amended, and incorporated by reference herein.
II-6
<PAGE>
Exhibit 5.1
-----------
August 4, 1998
Board of Directors
Prentiss Properties Trust
3890 W. Northwest Highway, Suite 400
Dallas, TX 75220
Prentiss Properties Trust
Registration Statement on Form S-3
____________________________________
Ladies and Gentlemen:
We are counsel for Prentiss Properties Trust, a Maryland real estate
investment trust, (the "Company") in connection with its registration under
the Securities Act of 1933 of 2,500,000 of the Company's common shares of
beneficial interest, par value $.01 per share ("the Shares") which are
proposed to be offered and sold as described in the Company's Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") on August 5, 1998.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers
and of public officials as we have deemed necessary. With respect to matters
of Maryland law, we have relied upon the opinion of Ballard Spahr Andrews &
Ingersoll, LLP.
Based upon the foregoing, we are of the opinion that:
1. The Company is a real estate investment trust duly formed and existing
under and by virtue of the laws of the State of Maryland and is in good
standing with the State Department of Assessments and Taxation of Maryland.
2. When the issuance of the shares has been duly authorized by
appropriate action and the Shares have been offered and sold as described in
the Registration Statement, the Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and the reference to our firm under the
heading "Legal Matters" in the Registration Statement.
Very truly yours,
Hunton & Williams
1
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDANT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 (File No. 333-____) of our reports dated (i) February 5, 1998 on our
audits of the consolidated and combined financial statements and financial
statements schedule of Prentiss Properties Trust and the Predecessor Company,
(ii) October 20, 1997 on our audit of the combined statement of revenues and
certain operating expenses of the Silicon Valley Properties and (iii) February
6, 1998 on our audits of the combined statement of revenues and certain
operating expenses of the Newport National Properties and the statement of
revenues and certain operating expenses of the Carrara Place Property. We also
consent to the reference to our firm under the caption "Experts."
Dallas, Texas
August 3, 1998
