FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION NUMBER 333-70969
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 25, 1999)
750,000 SHARES
JONES LANG LASALLE INCORPORATED
COMMON STOCK
-------------------------------
The stockholders of Jones Lang LaSalle Incorporated listed in the
prospectus under the caption "Selling Stockholders" are offering to sell up
to 750,000 shares of our common stock under this prospectus supplement. We
will not receive any of the proceeds from such sales.
Our common stock is listed on the New York Stock Exchange under the
trading symbol "JLL." On April 1, 1999, the closing price of the common
stock was $29.19 per share.
The shares will be purchased from the selling stockholders by
NationsBanc Montgomery Securities LLC, as underwriter, at a price of
$29.125, resulting in $21,843,750 aggregate net proceeds, before expenses,
to the selling stockholders.
The shares may be offered by the underwriter from time to time in one
or more transactions (which may involve block transactions) on the New York
Stock Exchange, through negotiated transactions or otherwise at market
prices prevailing at the time of the sale, at prices related to the
prevailing market prices or at prices otherwise negotiated, subject to
prior sale when, as and if delivered to and accepted by the underwriter.
See "Underwriting."
Investing in the common stock involves risks which are described in
the "Risk Factors" section beginning on page 5 of the prospectus.
-------------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
-------------------------------
The shares offered by this prospectus supplement are offered by the
underwriter, subject to prior sale when, as and if accepted by the
underwriter and subject to approval of certain legal matters by counsel to
the underwriter. It is expected that delivery of the shares will be made on
or about April 7, 1999, at the office of NationsBanc Montgomery Securities
LLC against payment therefor in immediately available funds.
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NationsBanc Montgomery Securities LLC
April 5, 1999
No dealer, salesperson or other person has been authorized to give
any information or to make any representation not contained in this
prospectus supplement or the prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized by Jones Lang LaSalle or the underwriter. This prospectus
supplement and the prospectus do not constitute an offer to sell or a
solicitation of any offer to buy any security other than the shares offered
hereby, nor do they constitute an offer to sell or a solicitation of an
offer to buy any securities offered hereby to any person in any
jurisdiction in which it is unlawful to make such an offer or solicitation
to such person. Neither the delivery of this prospectus supplement and the
prospectus nor any sale made hereunder or thereunder shall under any
circumstances imply that the information contained herein or therein is
correct as of a date subsequent to their respective dates.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Selling Stockholders...............................................S-2
Underwriting.......................................................S-3
Legal Matters......................................................S-4
PROSPECTUS
Summary.............................................................2
Risk Factors....................................................... 5
Cautionary Statement Concerning Forward-looking Statements.........14
Where You Can Find More Information................................14
Use of Proceeds....................................................15
The Company........................................................16
Selling Stockholders...............................................20
Plan of Distribution...............................................22
Legal Matters......................................................23
Experts............................................................23
SELLING STOCKHOLDERS
The selling stockholders own the number of shares set forth in the
following table. As of March 11, 1999, Jones Lang LaSalle had 30,518,292
shares issued and outstanding. The information contained in the following
chart has been provided by the selling stockholders.
<TABLE>
<CAPTION>
Shares Owned Shares Owned
Prior to the Shares After the
Offering Offered Offering
---------------- ------------- -----------------
Selling Stockholders Number Percent Number Percent
<S> <C> <C> <C> <C> <C>
Lizanne Galbreath (1)(2).................. 1,187,278 3.9% 130,434 669,700 2.2%
Galbreath Holdings, LLC (1)............... 475,000 1.6% 309,783 165,217 *
Lizanne Galbreath Megrue,
and her successors in trust,
as Trustee of the 1997 Grantor
Retained Annuity Trust created
by Lizanne Galbreath Megrue,
dated June 18, 1997....................... 293,738 1.0% 77,361 216,377 *
John W. Galbreath II, and
his successors in trust,
as Trustee of the 1997 Grantor
Retained Annuity Trust created
by John W. Galbreath II,
dated June 19, 1997....................... 183,828 * 48,403 135,425 *
Laurie Galbreath Nichols,
and her successors in trust,
as Trustee of the 1997 Grantor
Retained Annuity Trust created
by Laurie Galbreath Nichols,
dated June 19, 1997....................... 183,742 * 48,397 135,345 *
Laurie Galbreath Nichols.................. 118,870 * 77,524 41,346 *
John W. Galbreath II...................... 89,084 * 58,098 30,986 *
</TABLE>
- ---------------------
* Ownership is less than 1%.
(1) Ms. Lizanne Galbreath owns, either directly or through a trust for
which she is the trustee, a 45.0% interest in, and is the managing
member of, Galbreath Holdings, LLC. Because Ms. Galbreath is the
managing member of Galbreath Holdings, Ms. Galbreath might be deemed
to be the beneficial owner of all shares of common stock owned by
Galbreath Holdings for purposes of Rule 13d-3 under the Securities
Exchange Act. Ms. Galbreath disclaims beneficial ownership of such
shares of common stock, except to the extent of her ownership
interests. Ms. Galbreath also holds directly 399,790 shares of common
stock.
(2) The 1,187,278 shares reported in the table above consist of the
399,790 shares of common stock owned directly by Ms. Galbreath, the
475,000 shares of common stock owned by Galbreath Holdings, the
293,738 shares of common stock held by Ms. Galbreath, and her
successors in trust, as trustee of the 1997 Grantor Retained Annuity
Trust created by Ms. Galbreath, and the 18,750 shares which Ms.
Galbreath has the right to acquire through stock options granted
under our 1997 Stock Award and Incentive Plan exercisable within 60
days of January 25, 1999. The 669,700 shares reported in the table
above consist of the 269,356 shares of common stock to be owned by
Ms. Galbreath, the 165,217 shares of common stock to be owned by
Galbreath Holdings, the 216,377 shares of common stock to be held by
Ms. Galbreath, and her successors in trust, as trustee of the 1997
Grantor Retained Annuity Trust created by Ms. Galbreath, and the
18,750 shares which Ms. Galbreath has the right to acquire through
stock options granted under our 1997 Stock Award and Incentive Plan
exercisable within 60 days of January 25, 1999.
UNDERWRITING
Under the terms and subject to the conditions contained in the
underwriting agreement dated April 1, 1999, the underwriter has agreed to
purchase the shares offered hereby from the selling stockholders at a price
of $29.125 per share. The underwriting agreement provides that the
obligations of the underwriter to pay for and accept delivery of the shares
are subject to the approval of certain legal matters by counsel and to
certain other conditions. Under the terms and conditions of the
underwriting agreement, the underwriter is obligated to take and pay for
all the shares if any are taken.
The underwriter will offer the shares from time to time for sale in
one or more transactions (which may involve block transactions) on the New
York Stock Exchange, through negotiated transactions or otherwise in a
combination of such methods, at market prices prevailing at the time of the
sale, at prices related to prevailing market prices or at prices otherwise
negotiated, subject to prior sale when, as and if delivered to and accepted
by the underwriter. The underwriter may effect such transactions by selling
shares to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriter
and/or the purchasers of the shares for whom they may act as agents or to
whom they may sell as principal.
In connection with the sale of the shares, the underwriter may
receive compensation from purchasers of the shares for whom it may act as
agent or to whom it may sell as principal in the form of commissions or
discounts, in each case in amounts which will not exceed those customary in
the types of transactions involved. The underwriter and any dealers that
participate in the distribution of the shares may be deemed to be
underwriters, and any discounts received by them and any compensation
received by them on resale of the shares by them may be deemed to be
discounts and commissions under the Securities Act of 1933, as amended.
Pursuant to the underwriting agreement, Jones Lang LaSalle and the
selling shareholders have agreed to indemnify the underwriter against
certain liabilities, including liabilities under the Securities Act of
1933, as amended.
From time to time in the ordinary course of its business, the
underwriter and its affiliates have engaged in and may in the future engage
in commercial and/or investment banking transactions with us including
equity or debt transactions.
The principal business address of NationsBanc Montgomery Securities
LLC is 600 Montgomery Street, San Francisco, California 94111.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares will
be passed upon for Jones Lang LaSalle by Hagan & Associates, Chicago,
Illinois. Members of Hagan & Associates own an aggregate of 27,464 shares
and options to purchase an aggregate of 7,000 shares of Jones Lang LaSalle.
Members of Hagan & Associates serve as Vice President and Assistant
Secretary and Assistant Secretary of Jones Lang LaSalle. Certain legal
matters related to the offering will be passed upon for the underwriter by
O'Melveny & Myers LLP, San Francisco, California.
PROSPECTUS Issued March 25, 1999
1,150,000 SHARES
JONES LANG LASALLE INCORPORATED
COMMON STOCK
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The stockholders of Jones Lang LaSalle Incorporated listed in this
prospectus under the caption "Selling Stockholders" may offer to sell up to
1,150,000 shares of our common stock under this prospectus. We will not
receive any of the proceeds from such sales.
The selling stockholders may sell the shares from time to time,
through agents, brokers, underwriters or dealers, on or off the New York
Stock Exchange, in private negotiated transactions, or in a combination of
any such methods, at prices then obtainable.
The selling stockholders and participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of
1933 with respect to the sale of the shares.
Our common stock is listed on the New York Stock Exchange under the
trading symbol "JLL." On March 24, 1999, the closing price of the common
stock was $29.75 per share.
Investing in the common stock involves risks which are described in
the "Risk Factors" section beginning on page 5 of this prospectus.
-------------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
-------------------------------
The date of this prospectus is March 25, 1999
TABLE OF CONTENTS
Page
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Summary.............................................................2
Risk Factors....................................................... 5
Cautionary Statement Concerning Forward-looking Statements.........14
Where You Can Find More Information................................14
Use of Proceeds....................................................15
The Company........................................................16
Selling Stockholders...............................................20
Plan of Distribution...............................................22
Legal Matters......................................................23
Experts............................................................23
SUMMARY
THE COMPANY
GENERAL
Jones Lang LaSalle is a leading full-service real estate firm that
provides real estate property management services, corporate and financial
services and investment management services to corporations and other real
estate owners and investors worldwide. We operate across 96 markets in 34
countries on five continents.
We changed our name from "LaSalle Partners Incorporated" to "Jones
Lang LaSalle Incorporated" as part of our acquisition of the property and
asset management, advisory and other real estate businesses operated by a
series of partnerships and corporations in Europe, Asia, Australia, North
America and New Zealand under the name "Jones Lang Wootton" or "JLW," which
was completed on March 11, 1999. Throughout this prospectus, when we use
the terms "us," "we," "our," and similar terms, we are referring to Jones
Lang LaSalle Incorporated, unless we are referring to the period prior to
March 11, 1999, in which case we are referring to Jones Lang LaSalle
Incorporated prior to the closing of the Jones Lang Wootton acquisition.
Our holding company headquarters are located at 200 East Randolph
Drive, Chicago, Illinois 60601. Our telephone number is (312) 782-5800.
JLW COMPANIES ACQUISITION
GENERAL.
The JLW companies provide a wide range of real estate advisory,
transactional and asset management services to a broad variety of local,
national and international clients in many industrial and service business
areas and in both the private and public sectors. These services cover many
types of commercial real estate, including hotel, industrial, office and
retail property.
In the aggregate, we issued 14,254,116 shares of common stock, which
amount is subject to a post-closing net worth adjustment, and paid
approximately $6.2 million in cash, for the JLW companies. As part of the
acquisition, we also amended our stock award and incentive plan to increase
the number of shares issuable pursuant to such plan from 2,215,000 to
4,160,000. Of the 14,254,116 shares of common stock that we issued,
12,481,792 shares, subject to a post-closing net worth adjustment, were
delivered to former JLW shareholders. The other 1,772,324 shares of common
stock were issued to an irrevocable trust, principally for issuance to key
employees of the JLW companies.
For a more complete discussion of the acquisition and more detailed
information regarding the JLW companies, please see our Proxy Statement on
Schedule 14A, which was filed on February 8, 1999 with the Securities and
Exchange Commission and our Form 8-K which was filed with the Commission on
March 24, 1999, each of which is incorporated herein by reference.
Stockholder Agreements; DEL Stockholder Agreements. In connection
with the acquisition, each former JLW shareholder entered into a separate
Stockholder Agreement with us. In addition, in the cases where a former JLW
shareholder was not a natural person, the employee of the JLW companies who
owned or held an interest in such former JLW shareholder entered into a
Stockholder Agreement along with that former JLW shareholder. The
Stockholder Agreements will terminate on the earlier of (1) the first
business day immediately following our fifth annual meeting following March
11, 1999, and (2) June 1, 2003. Each Stockholder Agreement contains
standstill covenants, covenants restricting activities affecting our
management and corporate control, sale and transfer restrictions, and
voting agreements relating to the election of directors and other matters.
Each of our and our subsidiaries' directors, officers and employees
(a "LaSalle Partners Employee Stockholder") who is a former partner of
DEL-LPL Limited Partnership and DEL-LPAML Limited Partnership entered into
an agreement (a "DEL Stockholder Agreement"), that contains provisions
similar to those contained in the Stockholder Agreements. These
partnerships were composed of our senior employees and held approximately 7
million of our shares.
As a result of the Stockholder Agreements and DEL Stockholder
Agreements, as long as persons who are parties or otherwise subject to
these agreements own or control a majority of the issued and outstanding
shares of common stock entitled to vote, all director nominees of our board
of directors will be elected, all sale or merger transactions opposed by
the board will not be approved and all stockholder proposals will be
decided in accordance with the board's recommendation. As of the closing of
the acquisition, approximately 69% of our outstanding common stock was held
by persons who are subject to these agreements.
Operating Charges. We expect to incur compensation expense associated
with the issuance of shares totaling approximately $117.3 million in the
year ended December 31, 1999 and $93.4 million in the year ended December
31, 2000, assuming that the JLW companies have the required net worth at
the closing of the acquisition. Included in the total estimated
compensation expense of $210.7 million is expense of $49.2 million which
will be subject to fluctuation based on quarterly changes in the price of
common stock. We anticipate that this compensation expense, $210.3 million
of which represents a non-cash charge, will cause us to report operating
losses for these periods. For a more complete discussion of the accounting
treatment of the acquisition, please see our Proxy Statement on Schedule
14A filed with the Commission on February 8, 1999, and our Form 10-K for
the year ended December 31, 1999, each of which is incorporated herein by
reference.
COMPASS ACQUISITION
In October 1998, we acquired Compass Management and Leasing, Inc. and
related affiliates which together conducted the worldwide commercial
property management and leasing, facilities management and project
management operations, and United States retail property management
operations, of Lend Lease Corporation Limited, a real estate services firm
based in Australia.
We paid Lend Lease approximately $180 million in cash for the
acquired companies and incurred transaction costs of approximately $4.1
million. We are obligated to pay up to $77.5 million to Lend Lease over
five years if revenues generated by us from Lend Lease and its affiliates
reach defined revenue targets. We anticipate incurring approximately $10.3
million in after-tax transition expenses in connection with the acquisition
of the Compass businesses. These expenses will be charged against earnings
primarily in 1998 and the first half of 1999.
THE OFFERING
All of the 1,150,000 shares which may be offered pursuant to this
prospectus will be offered by the Selling Shareholders. We will not receive
any proceeds from the sale of these shares.
RISK FACTORS
Before you invest in our common stock, you should be aware that
making such an investment involves various risks, including those described
below. You should carefully consider these risk factors, together with all
of the other information included in this prospectus and the information
incorporated by reference, before you decide whether to purchase shares of
our common stock.
Risks Related to the Acquisition of the JLW Companies
We May Not Successfully Integrate the Business Operations of, or
Realize the Benefits from, our Acquisitions. The success of the acquisition
of the Compass businesses and the JLW companies will depend upon a number
of factors, most importantly the ability of the combined company to realize
opportunities for revenue growth presented by strengthened product and
service offerings and expanded geographic market coverage, and expected
cost savings associated with combining offices, reducing infrastructure
functions such as accounting, human resources and information technology,
and taking advantage of the buying power of the combined company. The
integration of the JLW companies and the Compass businesses into our
existing business operations prior to the acquisition may place a
significant burden on management and require the expenditure of significant
sums of money. Such integration is subject to a number of risks, including:
o loss of key employees;
o the difficulty associated with assimilating our broad and
geographically dispersed personnel and operations;
o the disruption of our ongoing business and acquisition
strategy; and
o the difficulty in maintaining uniform standards,
controls, procedures and policies.
We can not be sure that the anticipated benefits from the acquisition
of the JLW companies or the Compass businesses will be realized or that we
will be able to integrate the businesses successfully. If we fail to
successfully integrate these businesses, it could have a material adverse
effect on our business, operating results and financial condition.
If Different Compensation Structure for Employees of JLW Companies
Does Not Provide Adequate Incentives, Employee Performance and Retention
May be Negatively Affected. We can not be sure that the compensation
structure put in place following the acquisition of the JLW companies will
provide the same performance incentives as existed prior to such
acquisition. If such employees are not adequately incentivized, their
performance and retention levels may be adversely affected. The JLW
companies have historically operated as partnerships or in a manner
resembling partnerships even though in certain jurisdictions the businesses
are structured as corporations. As such, the profits of the various
partnerships and corporations have been paid to the owners and key
employees as profit distributions, bonuses or dividends, according to the
business structure and tax regime in which the businesses operate. As a
result of the acquisition, former owners and key employees of the JLW
companies will receive market-based compensation packages similar to those
of our other employees. While most of the former owners and employees of
the JLW companies have significant equity interests in our company, their
actual compensation is in certain circumstances lower. Furthermore,
although the vesting and forfeiture provisions of a portion of the shares
issued to the former JLW shareholders and the shares placed in an
irrevocable trust are intended in part to incent such former JLW
shareholders and other key employees of the JLW companies to remain with
us, there can be no assurance that they will be effective.
Our Business, Operating Results and Financial Condition Are Subject
to Risks Resulting from Increased International Operations. As a result of
the acquisition of the JLW companies, we are now subject to significantly
greater international exposure than we were prior to the acquisition. After
giving pro forma effect to the acquisition of the JLW companies and the
Compass businesses, we would have derived approximately 53.7% and 54.1% of
our total revenue from sales outside the United States in the fiscal year
ended December 31, 1998 and 1997. The increased scope of international
operations may lead to more volatile financial results than you could
predict based upon our historical results. The combined businesses would
have had operations in 34 countries, and would have employed 2,600
employees in the United States and 3,800 employees in other countries,
excluding, in both cases, on-site personnel responsible for the maintenance
of properties on behalf of clients. This may make it more difficult for us
to manage our business. Reasons for this include the following:
o political instability;
o greater difficulty in collecting accounts receivable in
certain geographic regions;
o unexpected changes in regulatory requirements;
o currency restrictions;
o delays and tariffs;
o difficulties and costs of staffing and managing international
operations;
o potentially adverse tax consequences;
o share ownership restrictions on foreign operations;
o currency fluctuations;
o the burden of complying with multiple and potentially
conflicting laws;
o the impact of business cycles and economic instability;
and
o the geographic, time zone, language and cultural
differences between personnel in different areas of
the world.
We expect to commit additional resources to expand our worldwide
sales and marketing activities, to globalize our service offerings and
products in selected markets and to develop local sales and support
channels. If we are unable to successfully implement these plans, to
maintain adequate long-term strategies which successfully manage the risks
associated with our global business or to adequately manage operational
fluctuations, our business, operating results and financial condition could
be materially and adversely affected.
Our Business, Operating Results and Financial Condition Are Subject
to Particular Risks in Certain Regions of the World. We may experience an
operating loss in one or more regions of the world for one or more periods,
which could have a material adverse effect on our business, operating
results and financial condition. Our ability to manage such operational
fluctuations and to maintain adequate long-term strategies in the face of
such developments will be critical to our continued growth and
profitability. After giving pro forma effect to the acquisition of the JLW
companies and the acquisition of the Compass businesses, we would have
generated 46.3% of our revenue in the United States, 37.3% in Europe, 7.8%
in Australasia and 8.6% in Asia for the year ended December 31, 1998
compared to 45.0% in the United States, 33.1% in Europe, 12.0% in Asia and
9.0% in Australia for the year ended December 31, 1997.
Asia
During 1997 and 1998, Southeast and East Asia were impacted by
financial turmoil which was initially reflected in rapidly falling exchange
rates relative to the US Dollar. This led to falling stock market indices
and asset values and reduced economic growth prospects. Several property
markets were affected by speculative developments resulting in an
oversupply of completed or partially completed space. Property prices fell
along with prices of other investments and asset values. These events are
referred to herein as the "Asian Crisis."
The Asian Crisis reduced Asian economic growth in 1998 and, as
economic growth is generally a significant factor affecting property
markets, demand for property in Asia is generally weaker than in recent
years. A recovery in the Asian demand for property is unlikely to occur
until stability and economic growth returns to Asian financial markets.
However, also important to a recovery in Asian property markets will be the
adjustment to the current significant oversupply of space in many markets,
which is likely to take time to correct. The short-term outlook for real
estate in Asia is, therefore, for depressed rents and capital values. The
length and severity of the downturn is likely to vary in different markets
within the region. A worsening of the Asian Crisis or its expansion to
different regions could have a material adverse effect on our business,
operating results and financial condition.
Australia and New Zealand
In addition, the Australia and New Zealand real estate markets, while
mature by world standards, are characterized by their relative lack of
depth. The lack of a fully comprehensive domestic industrial
infrastructure, requiring imports of many manufactured goods such as motor
vehicles and industrial equipment, together with a heavily resource based
economy, means that the real economy is significantly influenced by
external economic events and developments. This gives rise to a somewhat
higher level of exposure to economic and financial volatility. The
Australian real estate markets are correspondingly small and prone to
external influences. Sydney and Melbourne, the primary commercial centers,
for example, have a total office market stock of some 64.6 million and 53.8
million square feet, respectively. Retail and industrial markets operate in
similar proportion and with a parallel degree of international exposure.
Thus, our economic performance in Australia and New Zealand is
significantly dependent on international trading conditions, particularly
in primary industries and commodities. Weakness and/or volatility in these
areas can sharply impact the condition of the real estate markets and
thereby, result in a material adverse effect on our business, operating
results and financial condition.
Exposure to Currency Losses From Currency Fluctuations Could Result
from the Transactions. Due to the constantly changing currency exposures to
which we are subject, and the volatility of currency exchange rates, we can
not be sure that we will not experience currency losses in the future. We
also cannot predict the effect of exchange rate fluctuations upon future
operating results. Historically, our revenue from non-United States
operations was primarily denominated in US Dollars. The JLW companies
historically generated revenues, incurred expenses and made distributions
and dividends to partners and shareholders in the local currency where the
associated revenue was earned. Thus, neither we nor the JLW companies
experienced significant fluctuations in revenues and earnings because of
corresponding fluctuations in foreign currency exchange rates. With the
integration of our operations with those of the JLW companies, our exposure
to currency rate fluctuations is significantly increased. For the year
ended December 31, 1998, on a pro forma basis excluding compensation
expense relating to the accounting treatment applied to some of the shares
issued in connection with the acquisition of the JLW companies, 68% of our
net earnings would have been denominated in US Dollars and 32% would have
been denominated in other currencies. As a result, fluctuations in the
value of the US Dollar relative to the other currencies in which we will
generate earnings could materially adversely affect our business, operating
results and financial condition. Fluctuations in currencies relative to the
US Dollar may make it more difficult to perform period-to-period
comparisons of our reported results of operations.
We and the respective JLW companies have in the past performed
hedging transactions only on a limited basis because neither company has
historically engaged in a significant amount of cross border transactions
which would require the use of such instruments. In the future, our
management will evaluate its on-going capital requirements on a global
basis. Our management may decide to use currency hedging instruments,
including foreign currency forward contracts, purchased currency options
where applicable and borrowings in foreign currency. Economic risks
associated with these hedging instruments include: (1) unexpected
fluctuations in interest rates impacting our future buying power for
purchasing foreign currencies; and (2) unexpected changes in the timing and
collection of funds related to the hedging instruments, both of which can
cause hedging instruments to be ineffective. An ineffective hedging
instrument may expose us to currency losses, which could have an adverse
effect on our business, financial condition and results of operations.
There can be no assurance that such hedging will be effective.
Operating Losses Reflecting Non-Cash Charges For Acquisition-Related
Compensation Expense Could Negatively Affect Trading Price. We expect to
incur compensation expense associated with the issuance of shares totaling
approximately $117.3 million in the year ended December 31, 1999 and $93.4
million in the year ended December 31, 2000, as a result of the accounting
treatment applied to the acquisition of the JLW companies, assuming that
the post-closing purchase price adjustment does not change the
consideration paid. The total estimated compensation expense of $210.7
million includes expense of $49.2 million which will be subject to
fluctuation based on quarterly changes in the price of our common stock. We
anticipate that this compensation expense, $210.3 million of which
represents a non-cash charge, will cause us to report operating losses for
the years ended December 31, 1999 and 2000.
The Stockholder Agreements, the DEL Stockholder Agreements, Our
Charter and Amended Bylaws, and the Maryland General Corporate Law Could
Delay, Defer or Prevent a Change of Control, Which Could Negatively Affect
Trading Price. The Stockholder Agreements, the DEL Stockholder Agreements
and our charter and amended bylaws include provisions that may discourage,
delay, defer or prevent a takeover attempt that may be in the best interest
of our stockholders and may adversely affect the market price of our common
stock. The Stockholder Agreements and the DEL Stockholder Agreements
require (1) each former JLW shareholder, (2) in the cases where a former
JLW shareholder is not a natural person, each employee of the JLW companies
who owns or holds an interest in such former JLW shareholder (such
employee, a "Related JLW Owner"), and (3) each LaSalle Partners Employee
Stockholder, to vote all shares of our common stock owned or controlled by
such stockholder:
o for persons nominated by our board of directors pursuant
to the amended bylaws; and
o in accordance with the recommendations of a majority of our
board of directors on all matters (1) submitted to the vote of
our stockholders which have been proposed by any stockholder
as to which our board of directors has recommended against
approving and (2) relating to any merger, sale of all or
substantially all of our assets, or any similar transactions
as to which our board of directors has recommended against
approving.
As a result, during the term of the Stockholder Agreements and the
DEL Stockholder Agreements, as long as persons who hold a majority of our
issued and outstanding common stock continue to be bound by these
agreements, our board of directors will be composed of individuals
nominated in accordance with the procedures set forth in the amended
bylaws, and you and our other stockholders will have a limited influence on
the outcome of votes of our stockholders on the matters covered by such
agreements. The former JLW shareholders, the Related JLW Owners and the
LaSalle Partners Employee Stockholders currently hold approximately 69% of
our issued and outstanding shares of common stock. The Stockholder
Agreements and the DEL Stockholder Agreements also restrict the former JLW
Shareholders, the Related JLW Owners and the LaSalle Partners Employee
Stockholders from rendering shares into a tender offer recommended against
by our board of directors.
In addition, pursuant to our charter, we have a classified board of
directors, under which directors are divided into three classes, with
three-year staggered terms. The classified board provision could increase
the likelihood that, in the event an outside party acquired a controlling
block of our capital stock or initiated a proxy contest, incumbent
directors nevertheless would retain their positions for a substantial
period, which may have the effect of discouraging, delaying or preventing a
change in control of our company. In addition, our charter and amended
bylaws provide for:
o the ability of our board of directors to establish one or more
classes and series of capital stock including the ability to
issue up to 10,000,000 shares of preferred stock, and to
determine the price, rights, preferences and privileges of
such capital stock without any further stockholder approval;
o a requirement that any stockholder action taken without a
meeting be pursuant to unanimous written consent; and
o advance notice procedures for our stockholders nominating
candidates for election to our board of directors.
Under the Maryland General Corporate Law, "Business Combinations"
between a Maryland corporation and any person who beneficially owns 10% or
more of the voting power of the corporation's shares or an affiliate of the
corporation who, at any time within the two-year period prior to the date
in question, was the beneficial owner of 10% or more of the voting power of
the then-outstanding voting stock of the corporation (an "Interested
Stockholder") or an affiliate of the Interested Stockholder are prohibited
for five years after the most recent date on which the Interested
Stockholder became an Interested Stockholder. Thereafter, any such Business
Combination must be recommended by the board of directors of such
corporation and approved by the affirmative vote of at least (1) 80% of the
votes entitled to be cast by holders of outstanding voting shares of the
corporation and (2) 66-2/3 of the votes entitled to be cast by holders of
outstanding voting shares of the corporation other than shares held by the
Interested Stockholder with whom the Business Combination is to be
effected, unless, among other things, the corporation's stockholders
receive a minimum price as set forth in the Maryland General Corporate Law
for their shares and the consideration is received in cash or in the same
form as previously paid by the Interested Stockholder for its shares. Under
the Maryland General Corporate Law, these provisions also do not apply to
Business Combinations which are approved or exempted by the board of
directors of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder.
The provisions of the agreements described above, as well as our
charter and amended bylaws, and the Maryland General Corporate Law, could
discourage bids for common stock as well as adversely affect the market
price of common stock.
RIsks Inherent in the Industry or Particular to Jones Lang LaSalle
Negative Real Estate Economic Climate or General Economic Conditions
May Adversely Affect Our Business. An economic downturn in several real
estate markets or in significant markets could have a material adverse
effect on our business, results of operations and financial condition. The
real estate services business and, therefore, our business and results of
operations, is negatively impacted by periods of economic slowdown or
recession, rising interest rates or declining demand for real estate. These
economic conditions, including the following, could have a number of
effects which could have a material adverse impact on certain segments of
our business:
o a general decline in rents;
o a decline in the level of investment in real estate;
o a decline in the value of real estate investments; and
o a general decline in sales prices and the supply of capital
invested in commercial real estate and related assets.
The real estate market tends to be cyclical and related to the
condition of the economy as a whole or, at least, to the perceptions of
investors and users as to the economic outlook. For example, if property
owners believe that an economic downturn is likely to occur in the near
future, some may sell their properties in anticipation. This could result
in the new owners changing property and investment management firms which
could cause us to lose some clients or assignments or to make the clients
or assignments we retain less profitable.
If We Lose Service Agreements or Client Relationships, Our Business,
Financial Condition and Results of Operations Could be Negatively Affected.
We are substantially dependent on long-term client relationships and on
revenue received for services under various service agreements. The loss of
a substantial number of service agreements or client relationships could
have a material adverse effect on our business, operating results and
financial condition. Many service agreements are cancellable by the client
for any reason on as little as 30 to 60 days' notice. These contracts may
be cancelled prior to their expiration or not renewed when their respective
terms expire. In addition, the acquisition of the JLW companies and the
Compass businesses give a significant number of clients the right to
terminate their service agreements with us.
We provide related services such as property management and leasing
services to our investment management clients and earn substantial fees for
providing these services. If our investment management clients terminate or
do not renew our services or if a property which is part of an investment
management portfolio is sold, other related services provided to the
investment management clients may also be terminated or not renewed. In
addition, some clients may have concerns about potential conflicts of
interest in having us serve as both investment manager and property manager
with respect to properties or in having us act as investment manager and
co-investment partner in respect of real estate investment funds. As a
result, they may terminate relationships and service agreements for one or
all services to avoid a potential conflict.
We Compete Against a Number of Competitors Across a Variety of
Business Disciplines. We compete across a variety of business disciplines
within the commercial real estate industry, including investment
management, tenant representation, corporate facility management,
construction and development management, property management, leasing,
valuation and investment banking. Depending on the business discipline, we
will face competition from a variety of competitors, such as other real
estate service providers, institutional lenders, insurance companies,
investment banking firms, investment managers and accounting firms. In
general, with respect to each of our business disciplines, we can not
assure that we will be able to continue to compete effectively, will be
able to maintain current fee or margin levels or arrangements or will not
encounter increased competition.
If Our Properties Do Not Perform Well, Our Revenue Generation Could
be Negatively Affected. Our revenue will be adversely affected by decreases
in the performance of the properties we manage. This is because our revenue
from property management services will generally be based upon percentages
of the revenue generated by the properties that we manage and our leasing
commissions typically will be based on the value of the lease revenue
commitments. Property performance typically depends upon our ability to
attract and retain creditworthy tenants, our ability to control operating
expenses, financial conditions generally and in the specific areas where
properties are located and the real estate market generally.
Our Co-investment Activities Subject Us to Real Estate Investment
Risks Which Could Cause Fluctuations in Our Earnings and Cash Flow. An
important part of our investment strategy includes investing our capital in
real estate investments with our investment management clients. Our
participation in real estate transactions through co-investment activity
could increase fluctuations in our earnings and cash flow. Other risks
associated with such activities include:
o loss of our investments;
o potential conflicts of interest with clients leading them to
terminate their other relationships with us;
o difficulties associated with international co-investment; and
o our potential loss of control over the timing of the
recognition of gains, losses or potential incentive
participation fees.
Year 2000 Issues May Adversely Affect Our Operations. Many computer
systems and software products are coded to accept only two digit entries in
the date code field. As a result, such computer programs and systems may
recognize a date using "00" as the year 1900 rather than the year 2000.
Significant uncertainty exists concerning the potential effects associated
with these Year 2000 issues.
We rely heavily upon our computer systems. Without the use of our
computer systems, we would have difficulty processing transactions, paying
invoices or engaging in similar normal business activities. We are
implementing plans to review, test, remediate and upgrade or replace our
existing computer systems to ensure that they are Year 2000 compliant.
However, if we are unable to attract and retain qualified personnel who are
able to detect and remediate any Year 2000 problems, or to do so in a
timely manner, or if such Year 2000 problems are more costly than
anticipated to remediate, there could be a material adverse effect on our
business, operating results and financial condition.
There is also "embedded technology" in our core property systems.
Embedded technology consists of micro-processing chips which are embedded
in the workings of mechanical devices, for example elevators in the
buildings we manage. If non- compliant embedded technology fails, it may
cause our core property systems to fail. As a result, the building's
tenants may be able to cancel leases, the owner may be subject to fines or
penalties under terms of the leases and owners may be unable to compensate
us for our services. These events could have a material adverse effect on
our business, results of operations and financial condition. Additionally,
although we are not aware of any threatened claims related to the Year
2000, we may be subject to litigation from such claims. Adverse outcomes of
any such litigation could also have a material adverse effect on our
business, operating results and financial condition.
Furthermore, if our suppliers have not successfully become Year 2000
compliant, they may not be able to provide the services or deliver the
products to us as currently provided and delivered. If our suppliers fail
to become Year 2000 compliant, there could be a material adverse effect on
our business, operating results and financial condition. We would then have
to try to contract with other suppliers with sufficient capacity to
accommodate our needs. However, we can not be sure that we would be able to
contract with any such new suppliers on acceptable terms, if at all.
The Concentration of Our Income in the Fourth Quarter May Cause a
Loss in Other Quarters. Our operating income and earnings have historically
been substantially lower during the first three calendar quarters than in
the fourth quarter. The reasons for the concentration of income and
earnings in the fourth quarter include:
o a general, industry-wide focus on completing transactions by
calendar year end;
o our lack of complete discretion over the timing dispositions
of properties and, therefore, over the timing of payments of
performance fees which are paid for meeting certain
performance targets with respect to a property and generally
paid when the property is disposed of; and
o the constant nature of our non-variable expenses throughout
the year versus the seasonality of our revenues, which has
historically resulting in a small loss in the first quarter, a
small profit or loss in the second and third quarters and a
larger profit in the fourth quarter, excluding the recognition
of investment generated performance fees.
Certain countries in which we now operate do not have the same degree
of seasonality as the United States. Therefore, we expect to recognize a
lower percentage of our total earnings in the fourth quarter than has
historically been the case. We can not be sure of the seasonality of the
combined earnings of our business and the JLW companies because such
seasonality is dependent upon many factors outside of our control,
including general economic conditions and the timing of the closing of
transactions.
We May Incur Liabilities Related to Our Subsidiaries Being General
Partners of Numerous General and Limited Partnerships. We have subsidiaries
which are general partners in numerous general and limited partnerships
which invest in or manage real estate assets. Any subsidiary which is a
general partner is potentially liable to its partners and for obligations
of its partnership. If our exposure as a general partner is not limited, or
if our exposure as a general partner is expanded in the future, any
resulting losses may have a material adverse effect on our business,
results of operations and financial condition. We own our general
partnership interests through special purpose subsidiaries. We believe this
structure will limit our exposure to the total amount we have invested in,
or the total amount of committed capital in, and notes from or advances to,
such special purpose subsidiaries. However, this limited exposure may be
expanded in the future based upon, among other things, changes in our
operating practices, changes in applicable laws or the application of
additional laws to our business.
We May Incur Environmental Liability in Our Role as On-site Property
Manager. Various national, state and local laws and regulations impose
liability on current or previous real property owners or operators for the
cost of investigating, cleaning up or removing contamination caused by
hazardous or toxic substances at the property. We may be held liable as an
operator for such costs in our role as an on-site property manager. We
could be held liable not only for liability incurred at our properties, but
also for liability incurred at the properties of the JLW companies prior to
their acquisition. The liability may be imposed even if the original
actions were legal and we did not know of, or were not responsible for, the
presence of such hazardous or toxic substances. We may also be solely
responsible for the entire payment of the liability if we are subject to
joint and several liability with other responsible parties who are unable
to pay. We may be subject to additional liability if we fail to disclose
environmental issues to a buyer or lessee of property or if a third party
is damaged or injured as a result of environmental contamination emanating
from the site. Additionally, some environmental laws create a lien on the
site in favor of the government for damages and costs it incurs in
connection with the contamination. We may also be liable under common law
to third parties for damages and injuries resulting from environmental
contamination emanating from the site, including the presence of asbestos
containing materials. We can not be sure that any of such liabilities to
which we or any of our affiliates may become subject will not have a
material adverse effect upon our business, results of operations or
financial condition.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this
filing and elsewhere may constitute "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance, achievements, plans and objectives to be materially different
from any future results, performance, achievements, plans and objectives
expressed or implied by such forward-looking statements. Such factors are
discussed in:
o our Registration Statement (No. 333-25741) under the caption
"Risk Factors" and elsewhere;
o our Annual Report on Form 10-K for the year ended December 31,
1998 in Item 1, "Business," Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
and elsewhere;
o our definitive Proxy Statement on Schedule 14A, filed February
8, 1999, under the captions "Risk Factors," "The
Transactions," "The Purchase Agreements," "JLW Management's
Discussion and Analysis of Financial Condition and Results of
the Operations of the JLW Companies" and elsewhere;
o our Current Reports on Form 8-K, dated October 1, 1998,
February 22, 1999 and March 24, 1999; and
o other reports filed by us with the SEC.
We expressly disclaim any obligation or undertaking to update or
revise any forward-looking statements to reflect any changes in events or
circumstances or in our expectations or results. Statements in this
prospectus regarding parties other than us are based upon representations
of such other parties.
WHERE CAN YOU FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later
information filed with the SEC will update and supercede this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended.
o Annual Report on Form 10-K for the year ended December 31,
1998
o Current Reports on Form 8-K, dated October 1, 1998, February
22, 1999 and March 24, 1999
o Proxy Statement on Schedule 14A, filed February 8, 1999
o The description of the Common Stock contained in our
registration statement on Form 8-A, dated June 27, 1997,
including any amendment or report filed before or after this
prospectus for the purpose of updating such description
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Jones Lang LaSalle Incorporated
200 East Randolph Drive
Chicago, Illinois 60601
(312) 228-2430
Attn: Investor Relations
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares
by the selling stockholders.
THE COMPANY
General
Jones Lang LaSalle is a leading full-service real estate firm that
provides real estate property management services, corporate and financial
services and investment management services to corporations and other real
estate owners and investors worldwide. We operate across 96 markets in 34
countries on five continents.
We changed our name from "LaSalle Partners Incorporated" to "Jones
Lang LaSalle Incorporated" as part of our acquisition of the JLW companies
on March 11, 1999.
JLW Companies Acquisition
General. The JLW companies provide a wide range of real estate
advisory, transactional and asset management services to a broad variety of
local, national and international clients in many industrial and service
business areas and in both the private and public sectors. These services
cover many types of commercial real estate, including hotel, industrial,
office and retail property.
In the aggregate, we issued 14,254,116 shares of common stock, which
amount is subject to a post-closing net worth adjustment, and paid
approximately $6.2 million in cash, for the JLW companies. As part of our
acquisition of the JLW companies we also amended our stock award and
incentive plan to increase the number of shares issuable pursuant to such
plan from 2,215,000 to 4,160,000.
Of the 14,254,116 shares of common stock that we issued for the JLW
companies, we delivered, or caused to be delivered:
o 12,481,792 shares of common stock, subject to reduction
pursuant to the post-closing net worth adjustment described
below, to or for the account of approximately 339 former JLW
shareholders, 325 of which were partners or employees of the
JLW companies; and
o 1,772,324 shares of common stock to an irrevocable trust,
principally for issuance to key employees of the JLW companies
that are not equity owners in order to recognize such
employees as major contributors to the JLW companies and to
incentivize such employees to remain with us.
The aggregate consideration payable in connection with the
acquisition of the JLW companies is predicated on the JLW companies having
an aggregate net worth of $36.3 million, subject to adjustment based on the
date of the closing. The number of shares deliverable will be reduced to
the extent that the JLW companies do not have the required net worth.
Of the shares of common stock issued to each former JLW shareholder:
o a portion is being held by an escrow agent and will either be
returned to us or issued to such former JLW shareholder
following the determination of the net worth of the JLW
companies as of the closing of the acquisition;
o a portion is being held by the same escrow agent to support the
indemnification obligations of such former JLW shareholder
under an indemnity and escrow agreement entered into by all
former JLW shareholders; and
o another portion is being held by a separate escrow agent and is
subject to forfeiture by such former JLW shareholder if such
shareholder leaves our employ under limited circumstances.
The remaining portion of the shares issuable to a former JLW shareholder
were issued to such former JLW shareholder at closing.
915,542 of the shares deposited in the irrevocable trust were
allocated at the closing of the acquisition, 246,415 will be allocated on
December 31, 1999 and 610,367 shares will be allocated on December 31,
2000, principally to our employees on such dates. A portion of these shares
will be subject to vesting conditions.
Stockholder Agreements; DEL Stockholder Agreements. As a part of the
acquisition of the JLW companies, each former JLW shareholder and Related
JLW Owner has entered into a separate Stockholder Agreement with us. Unless
otherwise agreed, the term of such Stockholder Agreements commenced upon
the closing on March 11, 1999, and will terminate on the earlier of (1) the
first business day immediately following our fifth annual meeting of
stockholders following March 11, 1999, and (2) June 1, 2003.
The Stockholder Agreements are intended to provide, among other
things, appropriate representation on our board of directors for our
stockholders and the former JLW shareholders during a transitional period
of approximately four years, as well as to ensure compliance with United
States securities laws. Pursuant to the Stockholder Agreements, each former
JLW shareholder and Related JLW Owner has:
o agreed to standstill covenants and covenants restricting
activities affecting our management and corporate control;
o agreed not to sell, except pursuant to limited exceptions, any
shares received in connection with the acquisition during the
period commencing on the date of the closing and ending one
year from such date, and to more limited restrictions on the
transferability of such shares after such period;
o agreed to vote all shares of our common stock owned by such
former JLW shareholder and Related JLW Owner in favor of
persons nominated by our board of directors and in accordance
with the recommendation of our board of directors on
stockholder proposals and matters involving a sale or merger
of our company which such board has recommended against
approving; and
o agreed not to tender their shares into a tender offer
recommended against by our board of directors.
Each LaSalle Partners Employee Stockholder who is a former partner of
DEL- LPL Limited Partnership and DEL-LPAML Limited Partnership, two former
employee partnerships, has entered into a DEL Stockholder Agreement that
contains all the stockholder covenants and voting provisions contained in
the Stockholder Agreements. The DEL Stockholder Agreements also contain
limited transfer restrictions with respect to shares of common stock owned
by LaSalle Partners Employee Stockholders, including a restriction on
tendering shares into a tender offer recommended against by our board of
directors. Prior to their dissolution, which was effective June 30, 1998,
the employee partnerships were the entities through which our employee
owners prior to our initial public offering held their shares of common
stock. The approximately seven million shares of common stock held by the
employee partnerships were issued to them in connection with our
incorporation. Such shares have been distributed to their beneficial owners
as a result of the dissolution. The employee partnerships dissolved to
permit, among other things, the employee owners to hold their common stock
directly. The DEL Stockholder Agreements were required by the beneficial
owners of the JLW companies as a condition to their agreement to enter into
the Stockholder Agreements.
As a result of the Stockholder Agreements and DEL Stockholder
Agreements, as long as persons who are parties or otherwise subject to such
agreements own or control a majority of the issued and outstanding shares
of our common stock entitled to vote, all director nominees of our board of
directors will be elected, all sale or merger transactions opposed by the
board will not be approved and all stockholder proposals will be decided in
accordance with the board's recommendation. Approximately 69% of our
outstanding common stock is currently owned by our employees or related
parties who are subject to the Stockholder Agreements and the DEL
Stockholder Agreements. Approximately 47% of our issued and outstanding
shares of common stock are owned by the former JLW shareholders and
approximately 22% of our issued and outstanding shares are owned by
the LaSalle Partners Employee Stockholders.
Anticipated Accounting Treatment. The issuance of shares of common
stock and cash payments to the former JLW shareholders and the irrevocable
trust will be accounted for in part as purchase consideration under APB
Opinion No. 16, "Business Combinations" and in part as compensation expense
under APB Opinion No. 25, "Accounting for Stock Issued to Employees." Of
the 14,254,116 total shares issued, 7,578,385 shares, or 53%, will be
accounted for under purchase accounting and 6,675,731 shares, or 47%, will
be accounted for as compensation expense.
Operating Charges. We expect to incur compensation expense associated
with the issuance of shares totaling approximately $117.3 million in the
year ended December 31, 1999 and $93.4 million in the year ended December
31, 2000, assuming that the post-closing purchase price adjustment does not
result in a change in the purchase price. Included in the total estimated
compensation expense of $210.7 million is expense of $49.2 million which
will be subject to fluctuation based on quarterly changes in the price of
common stock. We anticipate that this compensation expense, $210.3 million
of which represents a non-cash charge, will cause us to report operating
losses for these periods.
Compass Acquisition
In October 1998, we acquired Compass Management and Leasing, Inc. and
related affiliates, which together conducted the worldwide commercial
property management and leasing, facilities management and project
management operations, and United States retail property management
operations, of Lend Lease Corporation Limited, a real estate services firm
based in Australia. We combined the businesses operated by the acquired
companies with those conducted by Jones Lang LaSalle Management Services,
Inc., our operating subsidiary that conducts our property management and
leasing, facilities management and development management businesses.
We paid Lend Lease approximately $180 million in cash for the
acquired companies and incurred transaction costs of approximately $4.1
million. We are obligated to pay up to $77.5 million to Lend Lease over
five years if revenues generated by us from Lend Lease and its affiliates
reach defined revenue targets. We anticipate incurring approximately $10.3
million in after-tax transition expenses in connection with the acquisition
of the Compass businesses. These expenses will be charged against earnings
primarily in 1998 and the first half of 1999.
SELLING STOCKHOLDERS
The selling stockholders own the number of shares set forth in the
following table. As of the closing of the acquisition of the JLW companies
on March 11, 1999, we had 30,518,292 shares issued and outstanding. We can
provide no estimate as to the exact number of shares the selling
stockholders will hold after completion of this offering because the
selling stockholders may sell all or any portion of their shares pursuant
to the offering contemplated by this prospectus. Lizanne Galbreath, who is
one of the selling stockholders, was a director of our company from April
23, 1997 through October 22, 1998 and continues to serve as an officer. The
information contained in the following chart has been provided by the
selling stockholders.
Number of
Shares Percent of Shares
Name of Selling Beneficially Outstanding Registered
Stockholder Owned Shares Hereby
- --------------- ------------ ----------- ----------
Lizanne Galbreath (1)(2) 1,187,278 3.9% 200,000
Galbreath Holdings, LLC (1) 475,000 1.6% 475,000
Lizanne Galbreath Megrue,
and her successors in trust,
as Trustee of the 1997 Grantor
Retained Annuity Trust created
by Lizanne Galbreath Megrue,
dated June 18, 1997 293,738 1.0% 118,620
John W. Galbreath II, and
his successors in trust,
as Trustee of the 1997 Grantor
Retained Annuity Trust created
by John W. Galbreath II,
dated June 19, 1997 183,828 * 74,218
Laurie Galbreath Nichols, and
her successors in trust, as
Trustee of the 1997 Grantor
Retained Annuity Trust created
by Laurie Galbreath Nichols,
dated June 19, 1997 183,742 * 74,208
Laurie Galbreath Nichols 118,870 * 118,870
John W. Galbreath II 89,084 * 89,084
- ------------------
* Ownership is less than 1%.
(1) Ms. Lizanne Galbreath owns, either directly or through a trust for
which she is the trustee, a 45.0% interest in, and is the managing
member of, Galbreath Holdings, LLC. Because Ms. Galbreath is the
managing member of Galbreath Holdings, Ms. Galbreath might be deemed
to be the beneficial owner of all shares of common stock owned by
Galbreath Holdings for purposes of Rule 13d-3 under the Exchange Act.
Ms. Galbreath disclaims beneficial ownership of such shares of common
stock, except to the extent of her ownership interests. Ms. Galbreath
also holds directly 399,790 shares of common stock.
(2) The 1,187,278 shares reported in the table above consist of the
399,790 shares of common stock owned directly by Ms. Galbreath, the
475,000 shares of common stock owned by Galbreath Holdings, the
293,738 shares of common stock held by Ms. Galbreath, and her
successors in trust, as trustee of the 1997 Grantor Retained Annuity
Trust created by Ms. Galbreath, and the 18,750 shares which Ms.
Galbreath has the right to acquire through stock options granted
under our 1997 Stock Award and Incentive Plan exercisable within 60
days of January 25, 1999.
The registration statement of which this prospectus is a part (the
"Registration Statement") will also cover any additional shares of common
stock which become issuable in connection with the shares registered for
sale hereby by reason of any stock split, stock dividend, combination or
reclassification or through a merger, consolidation, reorganization or
recapitalization, or by any other similar means effected without the
receipt of consideration that results in an increase in the number of
outstanding shares of common stock.
The selling stockholders acquired the shares of common stock to be
offered pursuant to this prospectus as a result of our acquisition of The
Galbreath Company in April 1997. In connection with the acquisition of The
Galbreath Company, Ms. Lizanne Galbreath, the managing member of Galbreath
Holdings and the holder of a 45.0% interest in Galbreath Holdings, entered
into an employment agreement under which she serves as the Chairman of
Jones Lang LaSalle Management Services, Inc. Ms.Galbreath served as a
director of our company from April 1997 through October 1998. Ms. Galbreath
was Chairman and Chief Executive Officer of The Galbreath Company prior to
its acquisition.
In connection with the acquisition of The Galbreath Company, we
entered into a Registration Rights Agreement, by and among us, Galbreath
Holdings, the employee partnerships, and DSA-LSPL, Inc. and DSA-LSAM, Inc.
(together "Dai-ichi") (two indirect wholly-owned subsidiaries of Dai-Ichi
Mutual Life Insurance Company). The Registration Rights Agreement provides,
among other things, for the registration under the Securities Act of 1933,
as amended, of resales of the common stock that was issued to Galbreath
Holdings as a result of the acquisition of The Galbreath Company and
partially distributed to the other selling stockholders, as well as for the
registration of shares issued to the employee partnerships and Dai-Ichi
prior to our initial public offering. We have filed the Registration
Statement covering resales of the common stock issued to Galbreath Holdings
pursuant to a request in accordance with the Registration Rights Agreement,
and are obligated to use our best efforts to maintain the effectiveness of
the Registration Statement until: (1) the completion of the distribution of
all shares purchased by an underwriter, in the case of a firm commitment
underwritten public offering of the shares to be sold by the selling
stockholders; or (2) the earlier of the sale of all shares registered by
the Registration Statement and 120 days after the effective date of the
Registration Statement, in all other cases. We may suspend our obligation
to maintain the effectiveness of the Registration Statement for not more
than three periods not to exceed an aggregate of 90 days in any 12-month
period if there exists at the time material non-public information relating
to us which, in the reasonable opinion of our board of directors, should
not be disclosed.
Dai-ichi has two similar rights to demand registration of their
shares pursuant to the Registration Rights Agreement.
In addition, the Registration Rights Agreement provides that if we
propose to register any shares of common stock under the Securities Act for
sale, whether for our own account or for the account of other stockholders
or both, parties to the Registration Rights Agreement will have the right
to request us to include in such offering the common stock held by them.
There are certain circumstances under which we have the right to exclude or
limit the common stock held by parties to the Registration Rights Agreement
from participating in such offering.
The Registration Rights Agreement also provides that, prior to the
transfer of any common stock by the selling stockholders or other party to
the agreement, they must provide us with notice of the proposed transfer
unless the proposed transfer is to a party to the Registration Rights
Agreement, certain institutional investors, persons who would own after the
transfer less than 5.0% of the outstanding common stock, purchasers in
transactions pursuant to Rule 144 under the Securities Act, or to an
underwriter in a firm commitment underwriting. We will then have the option
of purchasing the shares proposed to be transferred at a price equal to the
average closing market price of common stock during the five trading days
prior to such notice.
PLAN OF DISTRIBUTION
We are registering this offering of shares on behalf of the selling
stockholders, and we will pay all costs, expenses and fees related to such
registration, including all registration and filing fees, printing
expenses, fees and disbursements of our counsel and independent public
accountants, blue sky fees and expenses, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance and fees and disbursements not to exceed
$50,000 for one counsel for the selling stockholders. The selling
stockholders will pay all underwriting discounts and selling commissions
applicable to the sale of their common stock.
Although none of the selling stockholders has advised us of the
manner in which it currently intends to sell its shares pursuant to this
prospectus, the selling stockholders may choose to sell all or a portion of
such shares from time to time in any manner described herein. The methods
by which the shares may be sold by the selling stockholders include:
o through brokers, acting as principal or agent, in transactions
on the New York Stock Exchange or such other national
securities exchange on which the shares are then listed, at
market prices obtainable at the time of sale, at prices
related to such prevailing market prices, at negotiated prices
or at fixed prices;
o to underwriters who will acquire shares for their own account
and resell them in one or more transactions, including
negotiated transactions, at a fixed public offering price or
at varying prices determined at the time of sale;
o directly by the selling stockholders or through brokers or
agents in private sales at negotiated prices; or
o by any other legally available means.
In addition, any shares covered by this prospectus that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
Offers to purchase shares may also be solicited by agents designated
by the selling stockholders from time to time. Underwriters or other agents
participating in an offering made pursuant to this prospectus, as amended
or supplemented from time to time, may receive underwriting discounts and
commissions under the Securities Act, and discounts or concessions may be
allowed or reallowed or paid to dealers. In addition, brokers or agents
participating in such transactions may receive brokerage or agent's
commissions or fees. The selling stockholders and any underwriters, brokers
or dealers involved in the sale of the common stock hereunder may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities
Act, and any compensation received by them and any profit on any resale of
the common stock as principals may be deemed to be underwriting discounts
and commissions under the Securities Act.
Pursuant to the Registration Rights Agreement, we have agreed to
indemnify each selling stockholder, its officers, directors and agents and
each person who controls such selling stockholder, and each underwriter, if
any, against certain liabilities which may be incurred in connection with
the sale of the common stock under this prospectus, including liabilities
under the Securities Act. In addition, pursuant to the Registration Rights
Agreement, each selling stockholder is obligated to indemnify us against
certain liabilities. The Registration Rights Agreement also provides for
rights of contribution if such indemnification is not available under
certain circumstances.
LEGAL MATTERS
The validity of the shares of common stock registered pursuant to the
Registration Statement will be passed upon for us by Skadden, Arps, Slate,
Meagher & Flom (Illinois), which will rely upon the opinion of Piper &
Marbury L.L.P., Baltimore, Maryland, as to matters of Maryland law.
EXPERTS
The financial statements and schedule of Jones Lang LaSalle
Incorporated (formerly LaSalle Partners Incorporated) as of December 31,
1998 and 1997, and for each of the years in the three-year period ended
December 31, 1998 have been incorporated by reference herein in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The financial statements of Jones Lang Wootton (the English
Partnership and Subsidiaries) as of December 31, 1998 and 1997, and for
each of the years in the three-year period ended December 31, 1998
incorporated by reference herein, have been audited by Deloitte & Touche,
independent auditors and are incorporated by reference in reliance upon the
reports of such firm given upon as experts in accounting and auditing.
The financial statements of Jones Lang Wootton-Scotland as of
December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998 have been incorporated by reference herein
in reliance upon the report of Ernst & Young, independent auditors
incorporated by reference herein, and given the authority of said firm as
experts in accounting and auditing.
The financial statements of Jones Lang Wootton - Irish Practice as of
December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998 incorporated by reference herein, have been
audited by Deloitte & Touche, independent accountants and are incorporated
by reference in reliance upon the reports of such firm given upon as
experts in accounting and auditing.
The financial statements of JLW Asia Holdings Limited and
subsidiaries as of December 31, 1998 and 1997, and for each of the years in
the three-year period ended December 31, 1998 have been incorporated by
reference herein in reliance upon the reports of KPMG and Coopers &
Lybrand, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firms as experts in
accounting and auditing.
The financial statements of the JLW Australasia Group (the JLW
companies in Australia and New Zealand) as of December 31, 1998 and 1997,
and for each of the years in the three-year period ended December 31, 1998
have been incorporated by reference herein in reliance upon the report of
Ernst & Young, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated statements of operations and cash flows of The
Compass Companies for the years ended December 31, 1996 and 1995 and The
Yarmouth Group Property Management, Inc. for the six month period ended
June 30, 1997 and for the years ended December 31, 1996 and 1995
incorporated in this prospectus by reference to the audited historical
financial statements included on pages 21 and 31, respectively, of LaSalle
Partners Incorporated Form 8-K dated October 1, 1998 have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The combined statements of operations and cash flows of the Compass
Companies for the period from January 1, 1997 to June 10, 1997 and the
combined financial statements of the Compass Group as of December 31, 1997,
and for the period from June 11, 1997 to December 31, 1997 have been
incorporated by reference herein in reliance upon the reports of KPMG LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The statements of revenues and direct expenses relating to the office
and industrial business of Lend Lease Property Management (Australia) Pty
Limited for the six-month period ended June 30, 1997 and for the years
ended December 31, 1996 and 1995 have been incorporated by reference herein
in reliance upon the report of KPMG, independent certified public
accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
