<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 2, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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EASTGROUP PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MARYLAND 13-2711135
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
DAVID H. HOSTER II
PRESIDENT AND CHIEF EXECUTIVE OFFICER
300 ONE JACKSON PLACE 300 ONE JACKSON PLACE
188 EAST CAPITOL STREET 188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195 JACKSON, MISSISSIPPI 39201-2195
(601) 354-3555 (601) 354-3555
(ADDRESS, INCLUDING ZIP CODE, (NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) OF AGENT FOR SERVICE)
</TABLE>
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Copies to:
JOSEPH P. KUBAREK, ESQ.
JAECKLE FLEISCHMANN & MUGEL, LLP
800 FLEET BANK BUILDING
TWELVE FOUNTAIN PLAZA
BUFFALO, NEW YORK 14202
(716) 856-0600
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plan, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than the securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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 Commission, acting pursuant to said section 8(a),
may determine.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C> <C>
Common Stock........... 1,000,000 Shares $17.22(1) $17,220,000(1) $5,080
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the rules and regulations under the Securities
Act and based upon the average of the high and low sales prices of the
Common Stock on August 31, 1998.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS 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 SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION 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 SEPTEMBER 2, 1998
PROSPECTUS
EASTGROUP PROPERTIES, INC.
DIRECT STOCK PURCHASE
AND
DIVIDEND REINVESTMENT PLAN
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COMMON STOCK, $0.0001
PAR VALUE PER SHARE
------------------------
EastGroup Properties, Inc. ("EastGroup" or the "Company") is offering its
stockholders and other investors the opportunity to purchase shares of its
common stock, $0.0001 par value per share ("Common Stock"), pursuant to
EastGroup's Direct Stock Purchase and Dividend Reinvestment Plan (the "Plan").
The Plan allows stockholders to automatically reinvest some or all cash
dividends that EastGroup may declare at current market prices and without
brokerage commissions or other expense. The Plan also provides a method for all
investors to purchase shares of Common Stock directly from EastGroup at current
market prices without brokerage commissions or other expense.
Participants in the Plan may:
- Automatically reinvest cash dividends on the shares of Common Stock held
in their names and on all shares of Common Stock held for them in the
Plan.
- Automatically reinvest cash dividends on less than all of the shares of
Common Stock held in their names while continuing to receive the
remainder of their cash dividends not reinvested.
- Make additional investments as often as once a month, at current market
prices, by sending a check or money order to the Plan administrator.
These optional investments must be for at least $500 and no more than
$10,000 in any one quarter.
- Make automatic monthly investments by authorizing electronic funds
transfers from participants' banking or checking accounts. Automated
funds transfers may be for as little as $500 per quarter, but in no case
for more than $10,000 per quarter.
Persons who are not already stockholders may make an initial purchase of
stock directly from EastGroup, at current market prices, in any amount between
$500 and $10,000. Once a Plan account has been established, dividends will
automatically be reinvested at current market prices and optional monthly
investments may be made within the guidelines described above.
Harris Trust and Savings Bank is the administrator of the Plan and acts as
agent for participants in the Plan.
The Plan supersedes in its entirety EastGroup's Dividend Reinvestment Plan.
Stockholders who are currently participating in EastGroup's Dividend
Reinvestment Plan will be automatically enrolled in the Plan.
This Prospectus relates to 1,000,000 shares of Common Stock offered for
purchase under the Plan. It should be retained for future reference. EastGroup's
Common Stock is presently listed for trading on the New York Stock Exchange,
Inc. ("NYSE"), under the symbol "EGP." To maintain its qualification as a real
estate investment trust ("REIT") for federal income tax purposes, EastGroup's
Articles of Incorporation, as amended, impose limitations on the number of
shares of capital stock that may be held by any stockholder. See "The
Plan -- Restrictions on Ownership of Shares."
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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 , 1998.
<PAGE> 3
AVAILABLE INFORMATION
EastGroup is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (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 EastGroup may be inspected at, and,
upon payment of the Commission's customary charges, copies obtained from, the
Public Reference Section maintained by the Commission, 450 Fifth Street, N.W.,
Washington, DC 20549. Such reports, proxy statements and other information are
also available for inspection and copying at prescribed rates at the
Commission's regional offices in New York, New York (7 World Trade Center, 13th
Floor, New York, New York 10048) and in Chicago, Illinois (Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661-2511). The Commission
maintains a Web site (http://www.sec.gov) that also contains reports, proxy
statements and other information concerning EastGroup. In addition, the Common
Stock is traded on the NYSE under the symbol "EGP" and reports and other
information can be inspected and copied at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
EastGroup has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations promulgated thereunder,
with respect to the Common Stock. This Prospectus constitutes the Prospectus of
EastGroup, filed as part of the Registration Statement. As permitted by the
rules and regulations of the Commission, this Prospectus omits certain
information contained in the Registration Statement, and reference is made to
the Registration Statement and the exhibits listed therein, which can be
inspected at the public reference facilities of the Commission noted above, and
copies of which can be obtained from the Commission at prescribed rates as
indicated above. Statements contained in this Prospectus as to the contents of
any contract or other documents are not necessarily complete, and in each
instance, reference is made to the copy of such contract or documents filed as
an exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated into this Prospectus by reference are the documents listed
below filed by EastGroup under the Exchange Act. Copies of any such documents,
other than exhibits to such documents, are available without charge to each
person to whom a copy of this Prospectus has been delivered upon written or oral
request of such person from EastGroup, 300 One Jackson Place, 188 East Capitol
Street, Jackson, Mississippi 39201-2195, Attention: Chief Financial Officer;
telephone number (601) 354-3555.
The following documents are hereby incorporated into this Prospectus by
reference and are made a part hereof:
(1) EastGroup Properties, Inc.'s Registration Statement on Form 8-B
dated June 5, 1997.
(2) EastGroup Properties, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1997 (Commission File No. 1-7094).
(3) EastGroup Properties, Inc.'s Proxy Material for its Annual Meeting
of Stockholders held on June 4, 1998 (Commission File No. 1-7094).
(4) EastGroup Properties, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 (Commission File No. 1-7094).
(5) EastGroup Properties, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (Commission File No. 1-7094).
(6) EastGroup Properties, Inc.'s Quarterly Report on Form 10-Q/A dated
August 19, 1998 (Commission File No. 1-7094).
(7) EastGroup Properties, Inc.'s Current Report on Form 8-K dated
February 23, 1998 (Commission File No. 1-7094).
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<PAGE> 4
(8) EastGroup Properties, Inc.'s Current Report on Form 8-K dated June
1, 1998 (Commission File No. 1-7094).
(9) EastGroup Properties, Inc.'s Current Report on Form 8-K dated June
19, 1998 (Commission File No. 1-7094).
Each document filed by EastGroup subsequent to the date of this Prospectus
pursuant to Sections 13(a), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering of all shares of Common Stock to which this
Prospectus relates shall be deemed to be incorporated by reference in this
Prospectus and shall be part hereof from the date of filing of such document.
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 in this
Prospectus (in the case of a previously filed document incorporated or deemed to
be incorporated by reference herein) or in any other subsequently filed document
that is also incorporated or 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. Subject to the foregoing, all information
appearing in this Prospectus is qualified in its entirety by the information
appearing in the documents incorporated by reference.
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<PAGE> 5
Unless the context otherwise requires, all references in this Prospectus to
"EastGroup" shall mean EastGroup Properties, Inc. and its subsidiaries on a
consolidated basis or, where the context so requires, EastGroup Properties, Inc.
only, and, as the context may require, their predecessors.
THE COMPANY
EastGroup is a self-administered REIT focused primarily on the ownership,
acquisition and selective development of industrial properties located in major
Sunbelt markets throughout the United States. EastGroup pursues a unique
three-pronged investment strategy that includes: (i) the acquisition of
industrial properties at favorable initial yields, with opportunities to improve
cash flow performance through active and efficient management; (ii) the
selective development of industrial properties in markets where EastGroup
already has a presence and where market conditions justify such investments; and
(iii) the acquisition of existing public and private real estate companies or
REITs. EastGroup is the successor to EastGroup Properties, a Maryland REIT
("Parent"). EastGroup was incorporated under the laws of the State of Maryland
on April 4, 1997. Formed as a wholly-owned subsidiary of Parent, EastGroup
merged with Parent on June 5, 1997 (the "Merger"), pursuant to the Agreement and
Plan of Merger dated April 23, 1997 by and between EastGroup and Parent. As a
result of the Merger, EastGroup succeeded to the business and operations of
Parent.
EastGroup's principal executive offices are located at 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi 39201-2195. Its telephone
number is (601) 354-3555.
USE OF PROCEEDS
EastGroup will receive all proceeds from the sale of shares of Common Stock
since the shares will be purchased by the Plan administrator from EastGroup.
EastGroup does not know the number of shares of Common Stock that will
ultimately be purchased pursuant to the Plan, or the prices at which such shares
will be purchased. The proceeds from the purchases of shares of Common Stock
under the Plan will be used for general corporate purposes, including, without
limitation, the acquisition of real estate properties, whether by acquisition of
properties directly or through potential business combination transactions,
development of new real estate properties, the repayment of debt and to fund
working capital requirements.
THE PLAN
PURPOSE AND FEATURES OF THE PLAN
The purpose of the Plan is to provide stockholders of EastGroup and other
investors with a convenient and economical way to purchase shares of Common
Stock and to systematically build their investment through automatic dividend
reinvestment and optional cash investments through the Agent (as defined below).
There is no limit on the amount of dividends that may be reinvested under the
Plan. The minimum amount of optional cash purchases under the Plan is $500 per
investment. The maximum of optional cash purchases is $10,000 per quarter.
The Plan enables participants in the Plan ("Participants") to (i) have all
or part of their Common Stock dividends automatically reinvested in additional
shares of Common Stock of EastGroup; (ii) make additional cash purchases of
Common Stock, including monthly purchases by automatic deduction from a
designated bank account; and (iii) make initial investments in Common Stock
through the Plan. Because Common Stock acquired under the Plan will be purchased
directly from EastGroup, no brokerage commissions will be incurred by
Participants in making the purchases.
CONSIDERATIONS PRIOR TO PARTICIPATION
Prior to participating in the Plan, new investors should consider the
following. Certain fees are required under the Plan in the event the Participant
requests that the Agent put one or more certificates representing Common Stock
into safekeeping, in the event of a Participant's request for certificates for
shares purchased under
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the Plan and in the event of termination by the Participant of his or her
participation in the Plan. In addition, because the prices at which the Plan
shares are purchased are averaged, Participants may lose certain advantages
otherwise available from being able to select the timing of their investments.
For example, because the price charged to Participants for shares purchased
under the Plan is the average of the high and low sales prices on a certain
date, Participants may pay a higher price for shares purchased under the Plan
than for shares that could be purchased outside of the Plan on the same date. No
interest is paid on initial or voluntary cash payments or reinvesting dividends
pending their investment in Common Stock.
ADMINISTRATION OF THE PLAN
Harris Trust and Savings Bank (the "Agent"), which also serves as
EastGroup's transfer agent, registrar and dividend paying agent for the Common
Stock, will administer the Plan, purchase and hold shares of Common Stock
acquired under the Plan, keep records, send statements of account activity to
Participants and perform other duties related to the Plan. Participants may
contact the Agent by writing to:
Harris Trust and Savings Bank
Attention: Dividend Reinvestment Unit
311 West Monroe Street
P.O. Box A3309
Chicago, Illinois 60690
or by telephoning the Stockholder Customer Service Helpline as follows:
AUTOMATED STOCKHOLDER CUSTOMER SERVICE: (800) 942-5909
Available 24 hours a day, seven days a week.
CUSTOMER SERVICE REPRESENTATIVES: (800) 942-5909
Available 8:30 a.m. -- 5:00 p.m., Eastern Time, each business
day.
NON-STOCKHOLDERS REQUESTING PLAN MATERIALS: (800) 286-9178
Available 24 hours a day, seven days a week.
The Agent may also be contacted at the Internet address: www.harrisbank.com
or the E-mail address: [email protected].
ELIGIBILITY AND ENROLLMENT
Any person or entity, whether or not a holder of record of shares of Common
Stock, is eligible to participate in the Plan, provided that such person
fulfills the prerequisites for participation described herein.
After being furnished with a copy of this Prospectus, eligible applicants
may join the Plan in the following manner:
- Existing stockholders of record can enroll in the automatic dividend
reinvestment feature of the Plan at any time by completing and
returning to EastGroup or the Agent such authorization form as
EastGroup or the Agent may from time to time or upon request furnish a
person or entity and which shall be returned to the Agent by such
person or entity to indicate their election to participate in
specified portions of the Plan (the "Authorization Form").
Reinvestment of dividends will commence with dividends paid on the
next date on which dividends are paid on the Common Stock (the
"Dividend Payment Date"). These dates usually occur in the fourth week
of March, June, September and December.
- Existing stockholders of record can make cash investments as often as
monthly by completing and returning to EastGroup or the Agent the
Authorization Form and a check or money order; provided, however that
the minimum amount of any optional cash purchase under the Plan is
$500 per investment and the maximum amount of optional cash purchases
is $10,000 in any one quarter. Checks and money orders should be made
payable to the order of "Harris Bank/EastGroup
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Properties, Inc." and sent directly to the Agent. Each statement sent
to Plan Participants will include a tear-off form to accompany
subsequent cash investments they may wish to make in any amount
subject to the quarterly restrictions set forth above.
- Any person or entity which is not a holder of record of shares of
Common Stock may also enroll in the Plan by completing and signing an
Authorization Form and returning it to the Agent together with a check
or money order (an "Initial Cash Payment") payable to "Harris
Bank/EastGroup Properties, Inc." in any amount not less than $500, but
not more than $10,000. Upon acceptance of such Initial Cash Payment
and completed Authorization Form, such person or entity will become a
Participant under the Plan.
Following an Initial Cash Payment, Participants may make cash investments
by check, money order or automatic quarterly deduction from a designated bank
account. Cash investments payable by automatic quarterly deduction from a
designated bank account will be drawn on the day that is five business days
prior to the Purchase Date (as defined herein), or the next business day if such
date falls on a weekend or holiday, and will be invested in Common Stock on the
next Purchase Date.
Beneficial owners of Common Stock whose shares are registered in names
other than their own (for example, in the name of a bank, broker, nominee or
other record holder) may participate in the Plan by either arranging for
participation with the bank, broker, nominee or other record holder or having
their shares of Common Stock transferred into their own names. Although the
Common Stock is not registered in their own names, EastGroup may permit
participants in its employee benefits plan to participate in the Plan on such
terms and conditions as EastGroup may from time to time establish for such
purposes. EastGroup reserves the right to refuse to permit a bank, broker,
nominee or other record holder to participate in the Plan if the terms of such
participation would in EastGroup's judgment result in excessive cost or burden
to EastGroup or endanger EastGroup's status as a REIT. EastGroup reserves the
right to exclude from participation in the Plan or modify, suspend or terminate
participation in the Plan by otherwise eligible persons in order to eliminate
practices which are not consistent with the purposes of the Plan, including but
not limited to utilization of the Plan to engage in short-term trading
activities that could cause aberrations in the composite trading volume or price
of the Common Stock.
PURCHASE PROCEDURES, PRICES AND CUSTODY OF SHARES
The Agent shall purchase Common Stock on behalf of the Plan once a month,
on the last business day of the month or on the Dividend Payment Date for the
quarter if such date is not on the last business day of the month (each, a
"Purchase Date"), with the proceeds of all dividend payments received by the
Agent prior to such Purchase Date and "Cash Payments" (defined to include any
cash investments, including Initial Cash Payments, made by Participants)
received by the Agent at least two business days prior to such Purchase Date,
except to the extent that applicable law may require the curtailment or
suspension of or otherwise limit purchases of Common Stock. 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 Agent between Purchase Dates.
Accordingly, Participants are urged to time their investments so that they will
be received shortly before, but not after, the regular investment deadline dates
or to enroll in the automatic funds transfer option that assures the most timely
transfer of funds to the Agent.
The price at which Common Stock shall be purchased by reinvested dividends
and for purchases made with Cash Payments shall be the average of the high and
low sales prices of the shares of Common Stock as reported in The Wall Street
Journal for the New York Stock Exchange Composite Transactions on the Purchase
Date, or if no such transactions are reported on such date, then on the next
preceding date when such shares of Common Stock have been sold. If The Wall
Street Journal is not published, in the case of reinvested dividends or in the
case of a Cash Payment, on a Purchase Date, EastGroup may determine the price of
the Common Stock by reference to The New York Times or by any other appropriate
method.
Cash Payments will not be accepted by the Agent if a Participant imposes
any restrictions with respect to the number of shares to be purchased, the price
at which shares are to be purchased, the timing of a purchase or what the
Participant's balance will be following a purchase. In addition, the Agent
cannot purchase shares for a Participant without advance payment, nor can it
refund any part of a Participant's Cash Payment unless a written
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<PAGE> 8
request for a refund is received by the Agent at least two business days before
the applicable Purchase Date. It is not possible for the Agent to tell a
Participant in advance how much money to send for the purchase of a full or
fractional share because the per share price will not be known until the shares
are purchased.
All dividends paid on shares held in a Participant's account will be
reinvested pursuant to the Plan. If any dividend or Cash Payment is not
sufficient to purchase a whole share of Common Stock, a fractional share
equivalent will be credited to a Participant's account and will earn a
proportionate share of future dividends. All fractional shares are rounded to
three decimal places.
No interest will be paid on any funds held by the Agent in a Plan account.
CERTIFICATES FOR SHARES
Shares purchased and held under the Plan will be held in safekeeping by the
Agent in Agent's name or in the name of Agent's nominee. The number of shares
(including fractional interests) held for each Participant will be shown on each
account statement. Participants may obtain certificates for shares purchased
under the Plan by notifying the Agent in writing to that effect and forwarding a
$5.00 service fee with such notice. However, no certificate will be issued for
fractional shares of Common Stock. Instead, the market value of any fractional
shares will be paid in cash to a stockholder requesting a certificate for all of
the stockholder's noncertificated shares of Common Stock. Participants will be
charged a $5.00 service fee in the event of a request for certificates.
Participants in the Plan have no right to draw checks or drafts against the
shares held in the Participant's Plan account. A Participant who wishes to
pledge or assign any such shares must request that a certificate for such shares
be issued in the Participant's name.
SHARE SAFEKEEPING
At the time of enrollment in the Plan or at any later time, Participants
may use the Plan's share certificate safekeeping service to deposit any Common
Stock certificates in their possession with the Agent. By using the Plan's share
safekeeping service, Participants no longer bear the risk associated with the
loss, theft or destruction of stock certificates. Participants who wish to
deposit their Common Stock certificates with the Agent must mail their written
request, a $5.00 service fee and their certificates to the Agent. The
certificates should not be endorsed. It is recommended that when mailing
certificates to the Agent, the Participant should use registered, insured mail.
Participants will be charged a fee of $5.00 for each transaction involving the
putting of one or more certificates into safekeeping.
NO SALE OF SHARES THROUGH PLAN
Participants may not sell shares through the Plan. A Participant must
terminate the account to the extent of those shares of Common Stock the
Participant intends to sell and the Participant is solely responsible for the
sale of such shares. See "Modification or Termination of Participation."
VOTING OF SHARES
All Common Stock credited to a Participant's account under the Plan shall
be voted by the Participant. If, on the record date for a meeting of
stockholders, there are shares of Common Stock credited to the Plan account of a
Participant, that Participant will be sent the proxy material for the meeting
and a proxy covering all of the Participant's Common Stock, including shares of
Common Stock credited to the Participant's Plan account. If the Participant
returns an executed proxy to the Agent, the Common Stock will be voted as
directed with respect to all of Participant's shares of Common Stock (including
any fractional shares), or the Participant may vote all of the Common Stock in
person at the meeting. In the absence of any such direction or attendance at the
meeting, such Common Stock will not be voted by the Agent.
STOCK SPLITS OR STOCK DIVIDENDS
Any dividends of Common Stock resulting from stock splits or stock
dividends will be credited to the Participant's Plan account.
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<PAGE> 9
MODIFICATION OR TERMINATION OF PARTICIPATION
Participants may modify participation in the dividend reinvestment portion
of the Plan by notifying the Agent in writing of the increased or decreased
number of shares of Common Stock with which they wish to participate. A
Participant, by notifying the Agent in writing, may also request that (i) the
Agent send all future dividends to the Participant by check and continue to hold
the Participant's shares in the Plan account; or (ii) the Agent discontinue any
automatic withdrawals of funds and purchase of shares. Participants may
terminate participation in the dividend reinvestment portion of the Plan at any
time by notifying the Agent in writing to that effect and forwarding a $5.00
service fee with such notice. Any notice is effective only upon receipt. If such
notice is received by the Agent before any record date for dividend payment, the
Agent will modify or terminate the reinvestment of the Participant's dividends
under the Plan as of that Dividend Payment Date. A service charge of $5.00 will
be charged by the Agent and is required to be forwarded by the Participant with
any notice of termination or such fee may be deducted from the Participant's
account in the event of termination by the Participant of his or her
participation in the Plan. To reenter the Plan after termination, the
stockholder must complete a new Authorization Form. The Agent may terminate the
participation of any account by written notice to the Participant and EastGroup.
Upon termination of participation in the Plan, the Agent will send the
Participant a certificate for the Common Stock and cash for any fractional
shares of Common Stock, as provided herein.
The Agent shall terminate the Participant's Plan account upon receipt of
written notice of the Participant's death or adjudication of incompetency,
provided, however, in the event of any such notice, the Agent shall retain all
Common Stock in the Participant's Plan account until the Participant's legal
representative shall have been appointed and furnished proof satisfactory to the
Agent of the legal representative's right to receive such Common Stock.
EastGroup reserves the right to modify, suspend or terminate participation
in the Plan by otherwise eligible persons in order to eliminate practices not
consistent with the purposes of the Plan, including, but not limited to,
utilization of the Plan to engage in short-term trading activities that could
cause aberrations in the composite trading volume or price of the Common Stock.
RESPONSIBILITIES OF EASTGROUP AND THE AGENT
Neither EastGroup, the Agent, nor any agent for either, in administering
the Plan, shall be liable for any act or failure to act taken in good faith,
including, without limitation, any claim of liability (i) arising out of a
failure to terminate the Participant's account upon such Participant's death or
adjudication of incompetency prior to receipt of notice in writing of such death
or incompetency; (ii) with respect to the prices at which Shares are purchased
for a Participant's account; or (iii) with respect to any fluctuation in market
value before or after any purchase of shares. Neither the Agent, EastGroup, nor
any agent for either, shall have any duties, responsibilities or liabilities
except such as are expressly set forth in the Plan.
EastGroup's obligation to offer, issue or sell its Common Stock hereunder
shall be subject to EastGroup's obtaining any necessary approval, authorization
and consent from any regulatory authorities having jurisdiction over the
issuance and sale of the Common Stock. EastGroup may elect not to offer or sell
its Common Stock hereunder to stockholders residing in any jurisdiction where,
in the sole discretion of EastGroup, the burden or expense of compliance with
applicable blue sky or securities laws makes that offer or sale impracticable or
inadvisable.
Since EastGroup has delegated responsibility for administering the Plan to
the Agent, EastGroup specifically disclaims any responsibility for any of the
Agent's actions or inactions in connection with the administration of the Plan.
Neither the directors, officers nor stockholders of EastGroup shall have any
personal liability under the Plan. Any such limited liability provisions do not
extend to violations of the federal securities laws.
EastGroup reserves the right to modify, suspend or terminate the Plan at
any time. Participants in the Plan will be notified of any suspension,
termination or significant modification of the Plan. EastGroup also reserves the
right to refuse to permit any broker, bank, nominee or other record holder to
participate in the Plan if the terms of
8
<PAGE> 10
such participation would in EastGroup's judgment result in excessive cost or
burden to EastGroup or endanger EastGroup's status as a REIT. EastGroup reserves
the right to interpret and regulate the Plan at its discretion.
The risk to Participants is the same as with any other investment in Common
Stock of EastGroup. Participants must recognize that neither EastGroup nor the
Agent can in any way assure a profit or protect against a loss to a Participant
on shares purchased under the Plan.
EastGroup takes no position on whether current stockholders or other
investors should participate in the Plan.
RESTRICTIONS ON OWNERSHIP OF SHARES
For EastGroup to qualify as a REIT for federal income tax purposes, no more
than 50% in value of its outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the law to include
certain entities) during the last half of a taxable year or during a
proportionate part of a shorter taxable year, and the Common Stock must also be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year or during a proportionate part of a shorter taxable year. Because EastGroup
expects to continue to qualify as a REIT, EastGroup's Articles of Incorporation,
as amended, contain a restriction that provides that ownership by a single
holder of more than 9.8% of any class or series of the capital stock of
EastGroup is restricted in order to ensure that EastGroup remains a qualified
REIT for federal income tax purposes.
TAX CONSEQUENCES
Under Internal Revenue Service rulings in connection with similar plans,
dividends reinvested will be treated as taxable notwithstanding that the
dividends are reinvested in stock. A Participant will be treated for federal
income tax purposes as having received on each dividend payment date a
distribution equal to the fair market value of the shares of Common Stock
purchased plus any cash actually distributed.
Distributions of REITs are treated as dividends to the extent a REIT has
earnings and profits for federal income tax purposes. To the extent that the
amount distributed by a REIT exceeds the current and accumulated earnings and
profits of the REIT, the distribution will first be treated as a return of
capital to the stockholder to the extent of basis, with any excess taxable as
gain realized from the sale of shares.
The holding period for shares credited to a Participant's Plan account
pursuant to the dividend reinvestment aspect of the Plan will begin on the day
following the date on which the shares were purchased for the Participant's
account. The holding period for shares purchased by optional cash payments will
begin on the day following the date of purchase. In the case of stockholders
whose dividends are subject to United States federal income tax withholding or
backup withholding, the Agent will reinvest dividends less the amount of tax
required to be withheld.
Participants in the Plan are urged to consult with their own tax advisors
with respect to federal, state, local and other tax laws applicable to their
specific situations. In addition, the tax consequences of participation in the
Plan by retirement plans differ from those outlined herein for individuals.
Since the laws and regulations regarding the federal income tax consequences of
retirement plan participation are complex and subject to change, a retirement
plan considering such participation should consult with its own retirement plan
trustees, custodians or tax advisors for specific information.
9
<PAGE> 11
EXPERTS
The consolidated financial statements and financial statement schedules of
EastGroup as of December 31, 1997 and 1996, and for each of the years in the
three year period ended December 31, 1997, and the December 31, 1997 historical
summaries of gross income and direct operating expenses of Wal-Mart Distribution
Center, World Houston 1 and 2, Estrella Distribution Center and Industry
Distribution Center, have been incorporated by reference in the Prospectus and
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The legality of the Securities will be passed upon for EastGroup by Jaeckle
Fleischmann & Mugel, LLP, Buffalo, New York.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
issuance and distribution of the Securities, other than underwriting discounts
and commissions. All of the amounts shown are estimated except the Securities
and Exchange Commission ("Commission") registration fee.
<TABLE>
<S> <C>
Commission Registration Fee................................. $ 5,080
New York Stock Exchange, Inc. Listing Fee................... $ 3,750
Blue Sky fees and expenses.................................. $ 500
Printing and engraving expenses............................. $ 5,000
Legal fees and expenses..................................... $ 5,000
Accounting fees and expenses................................ $ 5,000
Miscellaneous............................................... $ 5,670
-------
Total............................................. $30,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
EastGroup's Articles of Incorporation, as amended, contain a provision
authorizing EastGroup to indemnify and hold harmless, to the fullest extent
permitted by Maryland law, directors and officers involved in an action, suit or
proceeding.
Section 2-418 of the Maryland General Corporation Law (the "Indemnification
Statute"), the law of the state in which EastGroup is organized, empowers a
corporation, subject to certain limitations, to indemnify its officers and
directors against expenses, including attorneys' fees, judgments, penalties,
fines, settlements and expenses, actually and reasonably incurred by them in any
suit or proceeding to which they are parties unless the act or omission of the
director was material to the matter giving rise to the proceeding and was
committed in bad faith, or was the result of active and deliberate dishonesty,
or the director received an improper personal benefit or, with respect to a
criminal action or proceeding, the director had no reasonable cause to believe
the director's conduct was unlawful.
EastGroup has entered into an indemnification agreement (the
"Indemnification Agreement") with each of its directors and officers, and the
Board of Directors has authorized EastGroup to enter into an Indemnification
Agreement with each of the future directors and officers of EastGroup. The
Indemnification Statute permits a corporation to indemnify its directors and
officers. However, the protection that is specifically afforded by the
Indemnification Statute authorizes other arrangements for indemnification of
directors and officers, including insurance. The Board of Directors has approved
and the stockholders have ratified the Indemnification Agreement, which is
intended to provide indemnification to the maximum extent allowable by, or not
in violation of, or offensive to, any law of the State of Maryland.
The Indemnification Agreement provides that EastGroup shall indemnify a
director or officer who is a party to the agreement (the "Indemnitee") if he or
she was or is a party to or otherwise involved in any proceeding by reason of
the fact that he or she was or is a director or officer of EastGroup, or was or
is serving at its request in a certain capacity of another entity, against
losses incurred in connection with the defense or settlement of such proceeding.
This indemnification shall be provided to the fullest extent permitted by
Maryland law. This is similar to the indemnification provided by the
Indemnification Statute except that indemnification is not available to the
Indemnitee who is adjudged liable on the basis that a personal benefit was
improperly received or who pays any amount in settlement of a proceeding without
EastGroup's written consent.
II-1
<PAGE> 13
ITEM 16. EXHIBITS.
The following exhibits are filed herewith (or incorporated by reference):
<TABLE>
<S> <C>
(5) Opinion of Jaeckle Fleischmann & Mugel, LLP regarding
legality of securities being registered.+
(23)(a) Consent of KPMG Peat Marwick LLP.+
(b) Consent of Jaeckle Fleischmann & Mugel, LLP (incorporated by
reference to Exhibit 5).
(24) Powers of Attorney.+
(99) EastGroup Properties, Inc. Direct Stock Purchase and
Dividend Reinvestment Plan.+
</TABLE>
- ---------------
+ Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 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 paragraphs (a)(1)(i) and (a)(1)(ii) 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 Sections 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 14
(c) Insofar as indemnification for liabilities arising under the Securities
Act 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 in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities 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 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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 15
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 Jackson, State of Mississippi as of the 31st day of
August 1998.
EASTGROUP PROPERTIES, INC.
By: /s/ DAVID H. HOSTER II
------------------------------------
David H. Hoster II
President and Chief Executive
Officer
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints each of David H. Hoster II or N. Keith
McKey his or her true and lawful attorney-in-fact and agent, each with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each
attorney-in-fact and agent, full power and authority to do and perform each such
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and the foregoing Powers of Attorney have been signed by
the following persons in the capacities indicated and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ LELAND R. SPEED Chairman and Director August 31, 1998
- ------------------------------------------------
Leland R. Speed
/s/ DAVID H. HOSTER II Chief Executive Officer, President August 31, 1998
- ------------------------------------------------ and Director
David H. Hoster II
/s/ N. KEITH MCKEY Executive Vice President, Chief August 31, 1998
- ------------------------------------------------ Financial Officer, Treasurer and
N. Keith McKey Secretary
/s/ DIANE W. HAYMAN Vice President and Controller August 31, 1998
- ------------------------------------------------ (Principal Accounting Officer)
Diane W. Hayman
/s/ ALEXANDER G. ANAGNOS Director August 20, 1998
- ------------------------------------------------
Alexander G. Anagnos
/s/ H.C. BAILEY, JR. Director August 19, 1998
- ------------------------------------------------
H.C. Bailey, Jr.
/s/ FREDRIC H. GOULD Director August 31, 1998
- ------------------------------------------------
Fredric H. Gould
/s/ DAVID M. OSNOS Director August 20, 1998
- ------------------------------------------------
David M. Osnos
/s/ JOHN N. PALMER Director August 31, 1998
- ------------------------------------------------
John N. Palmer
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5
JAECKLE FLEISCHMANN & MUGEL, LLP
A T T O R N E Y S A T L A W
FLEET BANK BUILDING TWELVE FOUNTAIN PLAZA BUFFALO, NEW YORK 14202-2292
TEL (716) 856-0600 FAX (716) 856-0432
August 31, 1998
EastGroup Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Ladies and Gentlemen:
Re: EastGroup Properties, Inc.
Registration Statement on Form S-3
----------------------------------
We have acted as counsel to EastGroup Properties, Inc. ("EastGroup"), a
Maryland corporation, in connection with the preparation and filing with the
Securities and Exchange Commission of a Registration Statement on Form S-3 (the
"Registration Statement"), covering 1,000,000 shares of common stock, $0.0001
par value per share, of EastGroup (the "Common Stock"), which Common Stock will
be sold pursuant to the terms and conditions of EastGroup's Direct Stock
Purchase and Dividend Reinvestment Plan substantially in the form of EastGroup's
Direct Stock Purchase and Dividend Reinvestment Plan filed as Exhibit 99 to the
Registration Statement (the "Plan").
We have examined such corporate records of EastGroup and other documents
as we have deemed necessary and appropriate under the circumstances to furnish
the following opinions:
1. EastGroup is a corporation duly organized and validly existing under
the laws of the State of Maryland.
2. When the Registration Statement has become effective under the
Securities Act of 1933, as amended, and the Common Stock has been sold and
delivered pursuant to the terms and conditions set forth in the Plan, the Common
Stock will be validly issued, fully-paid and non-assessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and we further consent to any and all references to our
name therein.
Very truly yours,
JAECKLE FLEISCHMANN & MUGEL, LLP
Buffalo, New York - Rochester, New York
<PAGE> 1
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
EastGroup Properties, Inc.:
We consent to the use of our reports, as listed below, incorporated herein by
reference:
- - Reports dated March 16, 1998 with respect to the consolidated
balance sheets of EastGroup Properties, Inc. and subsidiaries as
of December 31, 1997 and 1996 and the related consolidated
statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended
December 31, 1997, and all related schedules, which reports appear
in the December 31, 1997 annual report on Form 10-K of EastGroup
Properties, Inc.; and
- - Reports dated April 28, 1998, April 28, 1998, April 30, 1998 and
May 19, 1998, respectively, with respect to the December 31, 1997
historical summaries of gross income and direct operating expenses
of Wal-Mart Distribution Center, World Houston 1 and 2, Estrella
Distribution Center and Industry Distribution Center,
respectively, which reports appear in the Form 8-K of EastGroup
Properties, Inc. dated June 1, 1998.
We also consent to the reference to our Firm under the heading "Experts" in the
prospectus.
KPMG Peat Marwick LLP
Jackson, Mississippi
August 31, 1998
<PAGE> 1
EXHIBIT 99
DIRECT STOCK PURCHASE
AND
DIVIDEND REINVESTMENT PLAN
This Plan supersedes the EastGroup Properties, Inc. Dividend
Reinvestment Plan in its entirety. Stockholders who are currently participating
in the EastGroup Properties, Inc. Dividend Reinvestment Plan will be
automatically enrolled in the Plan. See Paragraph 9 "Initial Direct Stock
Purchase" for information regarding initial purchases of Common Stock through
the Plan.
1. DEFINITIONS
The following terms when used herein shall have the following
definitions:
"Agent" shall mean any dividend reinvestment agent as from time to
time may be appointed by EastGroup as agent to administer the Plan. EastGroup
has appointed Harris Trust and Savings Bank as Agent for the Plan.
"Authorization Form" shall mean such authorization form as
EastGroup or the Agent may from time to time or upon request furnish a person or
entity and which shall be returned to the Agent by such person or entity to
indicate their election to participate in specified portions of the Plan.
"Cash Payment" shall have the meaning set forth in Paragraph 8.
"Common Stock" shall mean shares of common stock, $0.0001 par
value per share, of EastGroup.
"Dividend Payment Date" shall mean the date on which dividends are
paid on the Common Stock. These dates usually occur in the fourth week of March,
June, September and December.
"EastGroup" shall mean EastGroup Properties, Inc.
"Initial Cash Payment" shall have the meaning set forth in
Paragraph 9.
"New York Stock Exchange" shall mean the New York Stock Exchange,
Inc. or any successor institution on which the Common Stock is listed.
<PAGE> 2
"Participant" shall mean any person or entity who has returned a
properly completed Authorization Form to EastGroup or the Agent indicating
election to participate in any portion of the Plan and who has been enrolled in
that portion of the Plan by EastGroup.
"Plan" shall mean this Direct Stock Purchase and Dividend
Reinvestment Plan.
"Purchase Date" shall have the meaning set forth in Paragraph 7.
2. PURPOSE
The purpose of this Plan is to enable Participants to (i) have all
or part of their Common Stock dividends automatically reinvested in additional
shares of Common Stock of EastGroup; (ii) make additional cash purchases of
Common Stock, including monthly purchases by automatic deduction from a
designated bank account; and (iii) make initial investments in Common Stock.
Because Common Stock acquired under the Plan will be purchased directly from
EastGroup, no brokerage commissions will be incurred by Participants in making
the purchases.
3. ELIGIBILITY FOR PARTICIPATION IN THE PLAN
Any person, whether or not a holder of record of shares of Common
Stock, is eligible to participate in the Plan and may do so by completing,
signing and returning to EastGroup or the Agent the Authorization Form furnished
to them by EastGroup or the Agent. The Agent shall make such arrangements as are
necessary and customary to permit participation in the Plan by beneficial owners
of Common Stock whose shares are registered in names other than their own
through brokers, banks, nominees or other record holders; provided, however,
that EastGroup reserves the right to refuse to permit such a broker, bank,
nominee or other record holder to participate in the Plan if the terms of such
participation would in EastGroup's judgment result in excessive cost or burden
to EastGroup or endanger EastGroup's status as a real estate investment trust.
Although the Common Stock is not registered in their own names, EastGroup may
permit participants in its employee benefits plan to participate in the Plan on
such terms and conditions as EastGroup may from time to time establish for such
purposes. EastGroup reserves the right to exclude from participation in the Plan
or modify, suspend or terminate participation in the Plan by otherwise eligible
persons in order to eliminate practices that are not consistent with the
purposes of the Plan, including, but not limited to, utilization of the Plan to
engage in short-term trading activities that could cause aberrations in the
composite trading volume or price of the Common Stock.
4. ADMINISTRATION OF THE PLAN
The Agent shall administer the Plan and EastGroup shall pay all
the costs of such administration. The Agent will maintain records and perform
such other duties as may be required. In addition, the Agent will send to each
Participant (i) after each purchase of Common Stock, a statement that will show
the amount of the Cash Payment or dividend, the purchase price per share of
Common Stock, the number of shares of Common Stock purchased, the total number
of certificated and noncertificated shares of Common Stock owned by the
Participant and the total number of shares of Common Stock owned by the
Participant; and (ii) annual and other reports to stockholders, proxy statements
and income tax information for reporting dividends.
2
<PAGE> 3
Common Stock purchased by a Participant through Cash Payments or reinvested
dividends will be credited to the Participant's Plan account. Upon request of
the Participant and the payment of a $5.00 service fee, the Agent will furnish
certificates for shares of Common Stock in the Participant's Plan account. No
certificates will be issued for fractional shares but the market value thereof
will be paid in cash to a requesting Participant. See Paragraph 13 "Certificates
for Purchased Common Stock."
The Agent will have the responsibility for furnishing certificates
for shares of Common Stock and any cash payment in lieu of fractional shares
owned by a Participant upon request or termination of participation by the
Participant. See Paragraph 12 "Termination Fee."
5. REINVESTMENT OF DIVIDENDS
Participants may elect to have dividends on all or part of their
Common Stock automatically reinvested by completing the Authorization Form to
that effect and returning it to the Agent. Reinvestment of dividends shall
commence with dividends paid on the next Dividend Payment Date following receipt
of the Authorization Form provided it is received before the record date for the
dividend. Should an Authorization Form be received by the Agent on or after the
record date, dividend reinvestment will commence with the following dividend.
6. PURCHASE OF SHARES
The Agent shall apply all dividend reinvestments and Cash Payments
to the purchase of Common Stock. Such purchases shall be made directly from
EastGroup. The price at which Common Stock shall be purchased by reinvested
dividends and Cash Payments on each Purchase Date shall be the average of the
high and low sales prices of the shares of Common Stock as reported in The Wall
Street Journal for the New York Stock Exchange Composite Transactions, on the
Purchase Date, or if no such transactions are reported on such date, then on the
next preceding date when such shares of Common Stock have been sold. If The Wall
Street Journal is not published, in the case of reinvested dividends or in the
case of a Cash Payment, on a Purchase Date, EastGroup may determine the price of
the Common Stock by reference to The New York Times or by any other appropriate
method.
7. PURCHASE PROCEDURES
The Agent shall purchase Common Stock on behalf of the Plan once a
month, on the last business day of the month or on the Dividend Payment Date if
such date is not on the last business day of the month (each, a "Purchase
Date"), with the proceeds of all dividend payments received by the Agent prior
to such Purchase Date and Cash Payments received by the Agent at least two
business days prior to such Purchase Date, except to the extent that applicable
law may require the curtailment or suspension of or otherwise limit purchases
of Common Stock. Upon completion of the purchase of Common Stock by the
Agent with any payment received by it representing dividends and/or Cash
Payments, the Agent shall calculate the number of shares of Common Stock
purchased and the aggregate purchase prices for purchases from dividends and
3
<PAGE> 4
for purchases from Cash Payments. 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 Agent between Purchase Dates.
8. CASH PAYMENTS
Any Participant may, at his or her option, at any time and from
time to time, including, but not limited to, monthly, send to the address
indicated in Paragraph 22 a check or money order payable to the order of "Harris
Bank/EastGroup Properties, Inc." in any amount (provided, however, that the
minimum amount of any optional cash purchase under the Plan is $500 per
investment and the maximum amount of optional cash purchases under the Plan is
$10,000 in any one quarter) accompanied by written instructions directing that
the payment be applied to the purchase of additional shares of Common Stock for
the Participant under the Plan. Any such Cash Payment by a Participant, as well
as any Initial Cash Payment described in Paragraph 9, is referred to herein as a
"Cash Payment." The Agent shall credit a Cash Payment to the Plan account of the
Participant as described in Paragraph 7 above. The Agent shall apply all such
Cash Payments, whether received in conjunction with dividend reinvestments or
separately, to the purchase of additional shares of Common Stock as described in
Paragraph 6 above. Participants may obtain a refund of any Cash Payment not yet
invested provided the request for such refund is received in writing at the
address indicated in Paragraph 22 at least two business days prior to the time
the payment would otherwise be applied to the purchase of additional shares. All
Cash Payments must be in United States funds and drawn on a United States bank.
A Participant may authorize the Agent (using such forms as shall be acceptable
to the Agent) to deduct a specified amount each month as a Cash Payment from an
account maintained by such Participant at a bank or other financial institution,
and any such automatic transfer of funds shall be treated in the same manner as
other Cash Payments; provided, however, that any such amount or amounts so
deducted shall be not less than $500 and such amount or amounts shall not be in
the aggregate more than $10,000 in any one quarter.
9. INITIAL DIRECT STOCK PURCHASE
Any person or entity who is not a holder of record of shares of
Common Stock may join the Plan by completing and signing an Authorization Form
and returning it to the Agent together with a check or money order (an "Initial
Cash Payment") payable to "Harris Bank/EastGroup Properties, Inc.," in any
amount not less than $500, but not more than $10,000. Upon acceptance of such
Initial Cash Payment and completed Authorization Form, such person or entity
will become a Participant under the Plan.
4
<PAGE> 5
10. CALCULATION OF COMMON STOCK PURCHASED
The number of shares of Common Stock purchased, including
fractional shares of Common Stock rounded to three decimal places, shall be
determined by dividing the amount of the dividends reinvested and/or the Cash
Payments by the purchase price per share of Common Stock.
11. MODIFICATION OR TERMINATION OF PARTICIPATION
Participants may modify participation in the dividend reinvestment
portion of the Plan by notifying the Agent in writing of the increased or
decreased number of shares of Common Stock with which they wish to participate.
Participants may terminate participation in the dividend reinvestment portion of
the Plan at any time by notifying the Agent in writing to that effect and
forwarding a $5.00 service fee with such notice. Any notice is effective only
upon receipt. If such notice and fee is received by the Agent before any record
date for dividend payment, the Agent will modify or terminate the reinvestment
of the Participant's dividends under the Plan as of that Dividend Payment Date.
To reenter the Plan after termination, the stockholder must complete a new
Authorization Form. The Agent may terminate the participation of any account by
written notice to the Participant and to EastGroup. Upon termination of
participation in the Plan, the Agent will send the Participant a certificate for
the Common Stock and cash for any fractional shares of Common Stock, as provided
herein.
The Agent shall terminate the Participant's Plan account upon
receipt of written notice of the Participant's death or adjudication of
incompetency, provided, however, in the event of any such notice, the Agent
shall retain all Common Stock in the Participant's Plan account until the
Participant's legal representative shall have been appointed and furnished proof
satisfactory to the Agent of the legal representative's right to receive such
Common Stock.
12. TERMINATION FEE
A service fee of $5.00 will be charged by the Agent and is
required to be forwarded by the Participant with any notice of termination or
such fee may be deducted from the Participant's account in the event of
termination by the Participant of his or her participation in the Plan.
13. CERTIFICATES FOR PURCHASED COMMON STOCK
A stockholder who has purchased Common Stock under the Plan and
wishes to obtain certificates for those shares of Common Stock may do so by
notifying the Agent in writing to that effect and forwarding a $5.00 service fee
with such notice. However, no certificate will be issued for fractional shares
of Common Stock. The market value of any fractional shares will be paid in cash
to a stockholder requesting a certificate for all of his or
5
<PAGE> 6
her noncertificated shares of Common Stock. Participants will be charged a $5.00
service fee in the event of a request for certificates.
14. CERTIFICATE SAFEKEEPING
The Agent will provide certificate safekeeping. Participants who
wish to deposit their Common Stock certificates with the Agent shall mail their
written request, a $5.00 service fee and their certificates, unendorsed, to the
Agent. Participants will be charged $5.00 for each transaction involving the
putting of one or more certificates into safekeeping.
15. STOCK SPLITS OR STOCK DIVIDENDS
Any dividends of Common Stock resulting from stock splits or stock
dividends will be credited to the Participant's Plan account.
16. VOTING
All Common Stock credited to a Participant's account under the
Plan shall be voted by the Participant. If, on the record date for a meeting of
stockholders, there are shares of Common Stock credited to the Plan account of a
Participant, that Participant will be sent the proxy material for the meeting
and a proxy covering all of the Participant's Common Stock, including shares of
Common Stock credited to the Participant's Plan account. If the Participant
returns an executed proxy to the Agent, the Common Stock will be voted as
directed with respect to all of Participant's shares of Common Stock (including
any fractional shares), or the Participant may vote all of the Common Stock in
person at the meeting. In the absence of any such direction or attendance at the
meeting, such Common Stock will not be voted by the Agent.
17. LIABILITY
Neither EastGroup, the Agent, nor any agent for either, in
administering the Plan, shall be liable for any act or failure to act taken in
good faith, including, without limitation, any claim of liability (i) arising
out of a failure to terminate the Participant's account upon such Participant's
death or adjudication of incompetency prior to receipt of notice in writing of
such death or incompetency; (ii) with respect to the prices at which Shares are
purchased for a Participant's account; or (iii) with respect to any fluctuation
in market value before or after any purchase of shares. Neither the Agent,
EastGroup nor any agent for either shall have any duties, responsibilities or
liabilities except such as are expressly set forth in the Plan.
18. TAX
It is understood that the automatic reinvestment of dividends or
investment of Cash Payments under this Plan does not relieve the Participant of
any income tax liability
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arising as a result of such dividends and investments. The Plan will report to
each Participant the amount of dividends and investments credited to the
Participant's account.
19. TERMINATION, SUSPENSION OR MODIFICATION
EastGroup reserves the right to modify, suspend or terminate the
Plan at any time by written instrument.
20. CHECKS OR DRAFTS
The Participant shall have no right to draw checks or drafts
against the Participant's Plan account or to give instructions to the Agent in
respect of any shares of Common Stock held therein except as expressly provided
herein.
21. COMPLIANCE WITH APPLICABLE LAW AND REGULATIONS
EastGroup's obligation to offer, issue or sell its Common Stock
hereunder shall be subject to EastGroup's obtaining any necessary approval,
authorization and consent from any regulatory authorities having jurisdiction
over the issuance and sale of the Common Stock. EastGroup may elect not to offer
or sell its Common Stock hereunder to stockholders residing in any jurisdiction
where, in the sole discretion of EastGroup, the burden or expense of compliance
with applicable blue sky or securities laws makes that offer or sale
impracticable or inadvisable.
22. NOTICES
Any notice or request required or permitted to be given to the
Agent by a Participant shall be in writing and delivered to Harris Trust and
Savings Bank, Attention: Dividend Reinvestment Unit, 311 West Monroe Street,
P.O. Box A3309, Chicago, Illinois 60690, by first-class mail, postage prepaid.
Notices to the Participant may be given by the Agent by first-class mail,
postage prepaid, addressed to the Participant at his or her last known address
as reflected by the records of the Agent. The Participant agrees to notify the
Agent promptly in writing of any change of address.
23. GOVERNING LAW
This Plan shall be governed by and construed in accordance with
the laws of the State of Maryland.
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