SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
DUKE-WEEKS REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1740409
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
(317) 808-6000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Dennis D. Oklak
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
(317) 808-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
Alan W. Becker, Esq.
Bose McKinney & Evans LLP
135 North Pennsylvania Street, Suite 2700
Indianapolis, Indiana 46204
(317) 684-5000
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
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, other than 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 delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share (1) Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 151,051 $21.53125 $3,252,316.84 $904.14
par value
Total 151,051 $3,252,316.84 $904.14
</TABLE>
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(1) Estimated using August 10, 1999 data solely for the purpose of calculating
the registration fee pursuant to Rule 457(c).
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 the Registration Statement
shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
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PROSPECTUS
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151,051 SHARES
logo
DUKE-WEEKS REALTY CORPORATION
COMMON STOCK
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The selling shareholders identified in this prospectus may offer and sell
up to 151,051 shares of our common stock. They would receive these shares in
exchange for units of limited partnership interest issued in connection with
contributions of real estate to Duke-Weeks Realty Limited Partnership. The
registration of these shares of our common stock does not necessarily mean
that any of these shares will be sold by any of the selling shareholders. We
will not receive any cash proceeds from the exchange of units for our common
stock or from any sale of our common stock by the selling shareholders.
Our common stock is listed on the New York Stock Exchange under the symbol
DRE. On August 10, 1999 the closing price of one share of our common stock as
reported on the New York Stock Exchange was $21-1/2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is ___________, 1999.
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IF IT IS AGAINST THE LAW IN ANY STATE OR OTHER JURISDICTION TO MAKE AN
OFFER TO SELL OUR COMMON STOCK (OR TO SOLICIT AN OFFER FROM SOMEONE TO BUY
OUR COMMON STOCK), THEN THIS PROSPECTUS DOES NOT APPLY TO ANY PERSON IN THAT
STATE, AND THIS PROSPECTUS MAKES NO OFFER OR SOLICITATION TO ANY SUCH PERSON.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. NEITHER WE NOR ANY OF THE
SELLING SHAREHOLDERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS
OR ANY SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF
THESE DOCUMENTS.
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TABLE OF CONTENTS
PAGE
The Company 3
Use of Proceeds 3
Restrictions on Ownership of Shares 4
Federal Income Tax Considerations 4
Selling Shareholders 13
Plan of Distribution 14
Legal Opinions 15
Experts 15
Where You Can Find More Information 16
FORWARD-LOOKING STATEMENTS
This prospectus and any prospectus supplement includes and incorporates
by reference forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future events.
These forward-looking statements are subject to risks, uncertainties and
assumptions about us, including, among other things:
// Our anticipated future acquisition and development strategies;
// Tax risks, including our continued qualification as a real estate
investment trust;
// The limited geographic diversification of our real estate
portfolio; and
// General real estate investment risks, including local market
conditions and rental rates, competition for tenants, tenant
defaults, possible environmental liabilities and financing risks.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus supplement and discussed
in or incorporated by reference in the accompanying prospectus may not occur.
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THE FOLLOWING INFORMATION MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS AND ANY ACCOMPANYING
SUPPLEMENT, AS WELL AS THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION. UNLESS INDICATED OTHERWISE,
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS PRESENTED AS OF JUNE 30,
1999. ALL REFERENCES TO "WE" OR "DUKE" IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS MEAN DUKE-WEEKS REALTY CORPORATION AND ALL ENTITIES
OWNED OR CONTROLLED BY DUKE-WEEKS REALTY CORPORATION, EXCEPT WHERE IT IS MADE
CLEAR THAT THE TERM MEANS ONLY THE PARENT COMPANY.
THE COMPANY
We are a self-administered and self-managed real estate investment trust
(a "REIT") that began operations through a related entity in 1972. On July 2,
1999, Weeks Corporation merged with us. Immediately following the merger, we:
// Owned 905 industrial, office and retail properties
(including properties under development), consisting of over 97
million square feet located in 13 states; and
// Owned or controlled approximately 4,600 acres of land with an
estimated future development potential of approximately 63 million
square feet of industrial, office and retail properties.
We provide the following services for our properties and for certain
properties owned by third parties:
// leasing
// management
// construction
// development
// other tenant-related services
We directly or indirectly hold all of our interests in our properties and
land and we conduct all of our operations through Duke-Weeks Realty Limited
Partnership (the "Operating Partnership"). Holders of units in the Operating
Partnership (other than us) may exchange them for our common stock on a one
for one basis. When units are exchanged for common stock, our percentage
interest in the Operating Partnership increases. We control the Operating
Partnership as its sole general partner and own, as of July 2, 1999,
approximately 86% of the Operating Partnership's units.
We are an Indiana corporation that was originally incorporated in the
State of Delaware in 1985, and reincorporated in the State of Indiana in
1992. Our executive offices are located at 8888 Keystone Crossing, Suite
1200, Indianapolis, Indiana 46240, and our telephone number is (317) 808-6000.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
by the selling shareholders.
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RESTRICTIONS ON OWNERSHIP OF SHARES
For us to qualify as a REIT for federal income tax purposes, no more than
50% in value of our 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. In addition, our 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 we expect to continue to qualify as a REIT, our Articles of
Incorporation contain a restriction intended to ensure compliance with these
requirements which:
// authorizes, but does not require, our board of directors to refuse
to give effect to a transfer of common stock which, in its opinion,
might jeopardize our status as a REIT;
// voids any acquisition of shares which would result in our
disqualification as a REIT;
// gives our board of directors the authority to take any actions it
thinks are advisable to enforce the provision, which might include,
but are not limited to, refusing to give effect to, or seeking to
enjoin, a transfer which might jeopardize our status as a REIT; and
// requires any shareholder to provide us with any information
regarding his or her direct and indirect ownership of common stock
that we reasonably require.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of material federal income tax considerations
relevant to us and to an investor in shares of our common stock. You should
be aware of the following about this summary:
// It is based upon current law.
// It does not cover all possible tax considerations.
// It does not include a detailed description of any state, local,
or foreign tax considerations.
// It does not describe all of the aspects of Federal income taxation
that may be relevant to you in light of your particular
circumstances.
// It does not describe all of the aspects of Federal income taxation
that may be relevant to certain types of shareholders (including
insurance companies, tax exempt entities, financial institutions
or broker dealers, foreign corporations and persons who are not
citizens or residents of the United States) subject to special
treatment under the federal income tax laws.
Holders of units intending to exchange their units for shares of common stock
should consult with their own tax advisors with respect to Federal, state,
local and other tax laws applicable to their specific situations. As used in
this section, the terms "we" and "Duke" refer solely to Duke-Weeks Realty
Corporation.
YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES TO YOU OF THE ACQUISITION,
OWNERSHIP AND SALE OF COMMON STOCK IN DUKE AND OUR ELECTION TO BE TAXED AS A
REIT, INCLUDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
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TAXATION OF THE COMPANY
GENERAL. We expect to continue to be taxed as a REIT for federal income
tax purposes. Our management believes that we were organized and have
operated in a manner that meets the requirements for qualification and
taxation as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"), and that we intend to continue to operate in such a manner. We cannot
assure you, however, that we will continue to operate in a manner that will
allow us to remain qualified as a REIT.
In the opinion of Bose McKinney & Evans LLP, which has acted as our
counsel, if the assumptions and representations referred to below are true,
our proposed methods of operation and the proposed methods of operation of
the Operating Partnership and Duke Realty Services Limited Partnership (the
"Services Partnership") since and including 1994 has permitted and will
permit us to continue to qualify to be taxed as a REIT for all years since
and including 1994 and for our current and subsequent taxable years. This
opinion is:
// based on an assumption that we were organized in conformity with
and have satisfied the requirements for qualification and taxation
as a REIT under the Code for each of our taxable years from and
including the first year for which we made the election to be
taxed as a REIT through 1993;
// based upon certain assumptions relating to the organization and
operation of Duke Services, Inc. ("DSI"), the Operating
Partnership and the Services Partnership;
// conditioned upon certain representations made by our personnel
and affiliates as to certain factual matters relating to our past
operations and our intended manner of future operation and the
intended manner of future operation of the Operating Partnership
and the Services Partnership; and
// based upon our receipt of a letter ruling from the IRS dated
September 30, 1994, which concluded that the Operating
Partnership's and our distributive shares of the gross income of
the Services Partnership will be in proportion to the respective
percentage shares of the capital interests of the partners of the
Services Partnership.
Bose McKinney & Evans LLP is not aware of any facts or circumstances which
are inconsistent with these assumptions and representations. Unlike a tax
ruling, an opinion of counsel is not binding upon the IRS, and we cannot be
sure that the IRS will not challenge our status as a REIT for Federal income
tax purposes. Our qualification and taxation as a REIT has depended and will
depend upon, among other things, our ability to meet on a continuing basis,
through ownership of assets, actual annual operating results, receipt of
qualifying real estate income, distribution levels and diversity of stock
ownership, the various qualification tests imposed under the Code discussed
below. Bose McKinney & Evans LLP will not review compliance with these tests
on a periodic or continuing basis. Accordingly, neither Bose McKinney & Evans
LLP nor we can assure you that we will continue to satisfy these tests. See
"Taxation of the Company - Failure to Qualify."
The following is a general summary of the Code sections which govern the
Federal income tax treatment of a REIT and its shareholders. These sections
of the Code are highly technical and complex. This summary is qualified in
its entirety by the applicable Code provisions, Treasury Regulations, and
administrative and judicial interpretations as currently in effect.
So long as we qualify for taxation as a REIT and distributes at least 95%
of our REIT taxable income (computed without regard to net capital gains or
the dividends paid deduction) for our taxable year to our shareholders, we
will generally not be subject to federal income tax with respect to income
which we distribute to our shareholders. However, we may be subject to
federal income tax under certain circumstances, including taxes at regular
corporate rates on any undistributed REIT taxable income, the "alternative
minimum tax" on our items of tax preference,
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<PAGE>
and taxes imposed on income and gain generated by certain extraordinary
transactions.
REQUIREMENTS FOR QUALIFICATION. The Code defines a REIT as a corporation,
trust or association:
(1) which is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable
shares or by transferable certificates of beneficial interest;
(3) which would be taxable as a domestic corporation but for Sections
856 through 859 of the Code;
(4) which is neither a financial institution nor an insurance company
subject to certain provisions of the Code;
(5) which has the calendar year as its taxable year;
(6) the beneficial ownership of which is held by 100 or more persons;
(7) during the last half of each taxable year not more than 50% in
value of the outstanding stock of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to
include certain entities); and
(8) which meets certain income and assets tests, described below.
We believe we currently satisfy all requirements.
Income Tests. In order to qualify as a REIT, there are two gross income
tests that must be satisfied annually. For purposes of these tests, we are
deemed to be entitled to a share of the gross income attributable to our
proportionate interest in any partnerships in which we hold an interest. The
tests are:
// First, at least 75% of our gross income (excluding gross income
from prohibited transactions) for each taxable year must be
derived directly or indirectly from investments relating to real
property (including "rents from real property," gain from the sale
of real property and, in certain circumstances, interest) or from
qualified types of temporary investments.
// Second, at least 95% of our gross income (excluding gross income
from prohibited transactions) for each taxable year must be
derived from the same items which qualify under the 75% income
test or from dividends, interest and gain from the sale or
disposition of stock or securities, or from any combination of
the foregoing.
Rents we receive will qualify as "rents from real property" in satisfying
the gross income tests for a REIT described above only if several conditions
(related to the relationship of the tenant to us, the method of determining
the rent payable and nature of the property leased) are met. We do not
anticipate receiving rents in excess of a de minimis amount that fail to meet
these conditions. Finally, for rents received to qualify as "rents from real
property," we generally must not operate or manage the property or furnish
or render services to tenants, other than through an "independent contractor"
that is adequately compensated and from whom we derive no income. However, we
may perform services "usually or customarily rendered" in connection with
the rental of space for occupancy only and not otherwise considered
"rendered to the occupant" ("Permissible Services").
We provide certain management, development, construction and other tenant
related services (collectively, "Real Estate Services") with respect to our
properties through the Operating Partnership, which is not an independent
contractor. Our management believes that the material services provided to
tenants by the Operating Partnership are
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Permissible Services. To the extent services to tenants do not constitute
Permissible Services, such services are performed by independent contractors.
Under the Taxpayer Relief Act of 1997 (the "1997 Act"), in determining
whether a REIT satisfies the income tests, a REIT's rental income from a
property will not cease to qualify as "rents from real property" merely
because the REIT performs services for a tenant other than permitted
customary services if the amount that the REIT is deemed to have received as
a result of performing impermissible services does not exceed one percent of
all amounts received directly or indirectly by the REIT with respect to such
property. The amount that a REIT will be deemed to have received for
performing impermissible services is at least 150% of the direct cost to the
REIT of providing those services.
We derive a portion of our income from the Operating Partnership's
interest as a limited partner in the Services Partnership and our ownership
of DSI which is a general partner of the Services Partnership. The Services
Partnership receives fees for Real Estate Services with respect to properties
that are not owned directly by the Operating Partnership and fees in
consideration for the performance of management and administrative services
with respect to properties that are not entirely owned by the Operating
Partnership. All or a portion of such fees will not qualify as "rents from
real property" for purposes of the 75% or 95% gross income tests. Pursuant to
Treasury Regulations, a partner's capital interest in a partnership
determines its proportionate interest in the partnership's gross income from
partnership assets for purposes of the 75% and 95% gross income tests. For this
purpose, the capital interest of a partner is determined by dividing its
capital account by the sum of all partners' capital accounts.
The partnership agreement of the Services Partnership provides, however,
for varying allocations of income which differ from capital interests,
subject to certain limitations on the aggregate amount of gross income which
may be allocated to the Operating Partnership and DSI. We have obtained a
letter ruling from the IRS that allocations according to capital interests are
proper for applying the 75% and 95% gross income tests. Thus, for purposes of
these gross income tests, the Services Partnership allocates its gross income
to the Operating Partnership and DSI based on their capital interests in the
Services Partnership. Although certain of the fees allocated from the Services
Partnership do not qualify under the 75% or 95% gross income tests as "rents
from real property," we believe that the aggregate amount of such fees (and
any other non-qualifying income) allocated to us in any taxable year has not
and will not cause us to exceed the limits on non-qualifying income under the
75% or 95% gross income tests described above.
If we fail to satisfy one or both of the 75% or 95% gross income tests for
any taxable year, we may nevertheless qualify as a REIT for such year if we
are entitled to relief under certain provisions of the Code. It is not
possible, however, to state whether in all circumstances we would be entitled
to the benefit of these relief provisions. Even if these relief provisions
apply, a tax would be imposed on certain excess net income.
ASSET TESTS. In order for us to maintain our qualification as a REIT, at
the close of each quarter of our taxable year, we must also satisfy three
tests relating to the nature of our assets. These tests are:
// First, at least 75% of the value of our total assets must be
represented by "real estate assets," cash, cash items, and
government securities.
// Second, not more than 25% of our total assets may be represented
by securities other than those in the 75% assets class.
// Third, of the assets held in securities other than those in the
75% assets class, the value of any one issuer's securities owned
by us may not exceed 5% of the value of our total assets, and we
may not own more than 10% of any one issuer's outstanding voting
securities (excluding securities of a qualified REIT subsidiary as
defined in the Code or another REIT).
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We are deemed to directly hold our proportionate share of all real estate
and other assets of the Operating Partnership as well as our proportionate
share of all assets deemed owned by the Operating Partnership and DSI through
their ownership of partnership interests in the Services Partnership and other
partnerships. As a result, our management believes that more than 75% of our
assets are real estate assets. In addition, our management does not expect
us to hold:
// any securities representing more than 10% of any one issuer's
voting securities other than DSI, which is a qualified REIT
subsidiary; nor
// securities of any one issuer exceeding 5% of the value of our
gross assets (determined in accordance with generally accepted
accounting principles).
ANNUAL DISTRIBUTION REQUIREMENTS. In order to qualify as a REIT, we
generally must distribute dividends (other than capital gain dividends) to
our shareholders in an amount at least equal to:
// the sum of:
// 95% of our "REIT taxable income" (computed without regard to
the dividends paid deduction and our net capital gain); and
// 95% of the net income (after tax), if any, from foreclosure
property;
// minus the sum of certain items of non cash income.
To the extent that we do not distribute all of our net capital gain or
distribute at least 95%, but less than 100%, of our "REIT taxable income,"
as adjusted, we will be subject to tax on the undistributed amount at
regular capital gains and ordinary corporate tax rates. Furthermore, we will
be subject to regular capital gains and ordinary corporate tax rates on
undistributed income and also may be subject to a 4% excise tax on
undistributed income in certain events if we should fail to distribute during
each calendar year at least the sum of:
// 85% of our REIT ordinary income for such year;
// 95% of our REIT net capital gain income for such year; and
// any undistributed taxable income from prior periods.
Under the 1997 Act, certain non-cash income, including income from
cancellation of indebtedness and original issue discount, will be excluded
from income in determining the amount of dividends that a REIT is required to
distribute. In addition, a REIT may elect to retain and pay income tax on
any net long-term capital gains and require its shareholders to include such
undistributed net capital gains in their income. If a REIT made such an
election, the REIT's shareholders would receive a tax credit attributable to
their share of capital gains tax paid by the REIT on the undistributed net
capital gain that was included in the shareholders' income, and such
shareholders would receive an increase in the basis of their shares in the
amount of undistributed net capital gain included in their income reduced
by the amount of the credit.
We believe that we have made and intend to continue to make timely
distributions sufficient to satisfy the annual distribution requirements.
In this regard, the partnership agreement of the Operating Partnership
authorizes us, as general partner, to take such steps as may be necessary to
cause the Operating Partnership to distribute to its partners an amount
sufficient to permit us to meet these distribution requirements. It is
possible, however, that from time to time we may not have sufficient cash or
other liquid assets to meet the 95% distribution requirement due primarily to
the expenditure of cash for nondeductible expenses such as principal
amortization or capital expenditures. In such
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event, we may borrow or may cause the Operating Partnership to arrange for
short term or other borrowing to permit the payment of required dividends or
pay dividends in the form of taxable stock dividends. If the amount of
nondeductible expenses exceeds non-cash deductions, the Operating Partnership
may refinance its indebtedness to reduce principal payments and borrow funds
for capital expenditures.
Failure to Qualify. If we fail to qualify for taxation as a REIT in any
taxable year, we will be subject to tax (including any applicable corporate
alternative minimum tax) on our taxable income at regular corporate rates.
Distributions to shareholders in any year in which we fail to qualify will
not be required to be made and, if made, will not be deductible by us. Unless
entitled to relief under specific statutory provisions, we also will be
disqualified from taxation as a REIT for the four taxable years following the
year during which qualification was lost. It is not possible to state
whether in all circumstances we would be entitled to such statutory relief.
The 1997 Act contains a number of technical provisions that reduce the risk
that a REIT will inadvertently fail to qualify as a REIT.
TAX ASPECTS OF OUR INVESTMENTS IN PARTNERSHIPS
EFFECT OF TAX STATUS OF OPERATING PARTNERSHIP AND SERVICES PARTNERSHIP AND
OTHER PARTNERSHIPS ON REIT QUALIFICATION. All of our investments are through
DSI and the Operating Partnership, which in turn hold interests in other
partnerships, including the Services Partnership. We believe that the
Operating Partnership, and each other partnership in which it holds an
interest, are properly treated as partnerships for tax purposes (and not as
an association taxable as a corporation). If, however, the Operating
Partnership were treated as an association taxable as a corporation, we would
cease to qualify as a REIT.
TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. The Operating Partnership
was formed by way of contributions of appreciated property (including certain
of the Properties) to the Operating Partnership. When property is
contributed to a partnership in exchange for an interest in the partnership,
the partnership generally takes a carryover basis in that property for tax
purposes equal to the adjusted basis of the contributing partner in the
property, rather than a basis equal to the fair market value of the
property at the time of contribution (this difference is referred to as
"Book Tax Difference"). The partnership agreement of the Operating
Partnership requires allocations of income, gain, loss and deduction with
respect to a contributed property be made in a manner consistent with the
special rules of Section 704(c) of the Code and the associated regulations,
which will tend to eliminate the Book Tax Differences with respect to the
contributed properties over the life of the Operating Partnership. However,
because of certain technical limitations, the special allocation rules of
Section 704(c) may not always entirely eliminate the Book Tax Differences on
an annual basis or with respect to a specific taxable transaction such as a
sale. Thus, the carryover basis of the contributed properties in the hands of
the Operating Partnership could cause the following effects:
// We could be allocated lower amounts of depreciation and
other deductions for tax purposes than would be allocated to
us if all of our properties were to have a tax basis equal
to their fair market value at the time of contribution.
// We could possibly be allocated taxable gain in the event of a sale
of such contributed properties in excess of the economic or book
income allocated to us as a result of such sale.
These principles also apply in determining our earnings and profits for
purposes of determining the portion of distributions taxable as dividend
income. The application of these rules over time may result in a higher
portion of distributions being taxed as dividends than would have occurred
had we purchased our interests in the Properties at their agreed values.
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TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS
As long as we qualify as a REIT, dividend distributions made to our taxable
domestic shareholders out of current or accumulated earnings and profits (and
not designated as capital gain dividends) will be taken into account by them
as ordinary income and will not be eligible for the dividends received
deduction for corporations. In addition, any dividend we declare in October,
November or December of any year payable to a shareholder of record on a
specified date in any such month will be treated as both paid by us and
received by the shareholder on December 31 of such year, provided that we
actually pay the dividend during January of the following calendar year.
Distributions in excess of current and accumulated earnings and profits
will not be taxable to a holder to the extent that they do not exceed the
adjusted basis of the holder's shares, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions exceed the
adjusted basis of a holder's shares, they will be included in income as long-
term capital gain (or short-term capital gain if the shares have been held
for one year or less) assuming the shares are a capital asset in the hands of
the holder. Shareholders may not include in their individual income tax
returns any of our net operating losses or capital losses.
In general, a domestic shareholder will realize capital gain or loss on the
disposition of common stock equal to the difference between (i) the amount of
cash and the fair market value of any property received on such disposition
and (ii) the shareholder's adjusted basis of such common stock. Under the
1997 Act, as revised by the recently-enacted IRS Restructuring Act, for gains
realized after December 31, 1997, and subject to certain exceptions:
// the maximum rate of tax on net capital gains of individuals,
trusts and estates from the sale or exchange of assets held for
more than 12 months has been reduced to 20%;
// the maximum rate of tax on net capital gains of individuals,
trusts and estates from the sale or exchange of assets is reduced
to 18% for assets acquired after December 31, 2000 and held for
more than five years;
// for taxpayers who would be subject to a maximum tax rate of 15%,
the rate on net capital gains is reduced to 10%;
// for taxpayers who would be subject to a maximum tax rate of 15%,
effective for taxable years commencing after December 31, 2000,
the rate is reduced to 8% for assets held for more than five years;
// the maximum rate for net capital gains attributable to the sale of
depreciable real property held for more than 12 months is 25% to
the extent of the deductions for depreciation with respect to such
property; and
// long-term capital gain we allocate to a shareholder will be
subject to the 25% rate to the extent that the gain does not
exceed depreciation on real property we sell.
The taxation of capital gains of corporations was not changed by the 1997 Act
or the IRS Restructuring Act. Loss upon a sale or exchange of common stock by
a shareholder who has held such common stock for six months or less (after
applying certain holding period rules) will be treated as a long-term capital
loss to the extent of distributions from us required to be treated by such
shareholder as long-term capital gain.
TAXATION OF TAX-EXEMPT SHAREHOLDERS
Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. However, they are subject
to taxation on their unrelated business taxable income ("UBTI"). While many
investments in real estate generate UBTI, the IRS has issued a publishing
ruling that dividend distributions from a REIT to an exempt employee pension
trust do not constitute UBTI, provided that the shares of the REIT are not
otherwise used in an unrelated
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<PAGE>
trade or business of the exempt employee pension trust. Based on that ruling,
amounts we distribute to Exempt organizations generally should not constitute
UBTI. However, if an Exempt Organization finances its acquisitions of the
common shares with debt, a portion of its income from us will constitute UBTI
pursuant to the "debt-financed property" rules. Furthermore, social
clubs, voluntary employee benefit associations, supplemental unemployment
benefit trusts, and qualified group legal services plans that are exempt
from taxation under paragraphs (7), (9), (17), and (20), respectively, of Code
section 501(c) are subject to different UBTI rules, which generally will
require them to characterize distributions from us as UBTI.
In addition, in certain circumstances, a pension trust that owns more than
10% of our shares is required to treat a percentage of the dividends from us
as UBTI (the "UBTI Percentage"). The UBTI Percentage is our gross income
derived from an unrelated trade or business (determined as if we were a
pension trust) divided by our gross income for the year in which the
dividends are paid. The UBTI rule applies to a pension trust holding more
than 10% of our stock only if:
// the UBTI Percentage is at least 5%;
// we qualify as a REIT by reason of the modification of the "five or
fewer" stock ownership requirement that allows the beneficiaries of
the pension trust to be treated as holding our shares in proportion
to their actuarial interests in the pension trust; and
// either:
// one pension trust owns more than 25% of the value of our
shares; or
// a group of pension trusts individually holding more than 10%
of the value of our shares collectively owns more than 50% of
the value of our shares.
BACKUP WITHHOLDING
We will report to our domestic shareholders and the IRS the amount of
dividends paid during each calendar year, and the amount of tax withheld, if
any. Under the backup withholding rules, a shareholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless
such holder:
// is a corporation or comes within certain other exempt categories
and, when required, demonstrates this fact; or
// provides a taxpayer identification number, certifies as to no loss
of exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules.
A shareholder that does not provide us with his or her correct taxpayer
identification number may also be subject to penalties imposed by the IRS. A
shareholder can credit any amount paid as backup withholding against the
shareholder's income tax liability. In addition, we may be required to
withhold a portion of capital gain distributions made to any shareholders who
fail to certify their non-foreign status to us.
The Treasury Department recently issued proposed regulations regarding the
withholding and information reporting rules discussed above. In general, the
proposed regulations do not alter the substantive withholding requirements
but unify current certification procedures and forms, and clarify and modify
reliance standards. If finalized in their current form, the proposed
regulations would generally be effective for payments made after December 31,
1997, subject to certain transition rules.
TAXATION OF NON-U.S. SHAREHOLDERS
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<PAGE>
The rules governing U.S. Federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships, and other foreign
shareholders (collectively, "Non-U.S. Shareholders") are complex, and we will
not attempt to provide more than a limited summary of those rules.
Prospective Non-U.S. Shareholders should consult with their own tax advisors
to determine the impact of U.S. Federal, state and local income tax laws on
an investment in common stock, including any reporting requirements.
Distributions that are not attributable to gain from our sales or
exchanges of U.S. real property interests and not designated by us as capital
gain dividends will be treated as dividends of ordinary income to the extent
that they are made out of our current or accumulated earnings and profits.
Such distributions, ordinarily, will be subject to a withholding tax equal to
30% of the gross amount of the distribution unless an applicable tax treaty
reduces that tax. Distributions in excess of our current and accumulated
earnings and profits will not be taxable to a Non-U.S. Shareholder to the
extent that they do not exceed the adjusted basis of the shareholder's common
stock, but rather will reduce the adjusted basis of that common stock. To the
extent that such distributions exceed the adjusted tax basis of a Non-U.S.
Shareholder's common stock, the Non-U.S. Shareholder will have tax liability
if the Non-U.S. Shareholder would otherwise be subject to tax on any gain
from the sale or disposition of his or her common stock as described below (in
which case the shareholder may also be required to pay a 30% branch profits
tax if the shareholder is a foreign corporation). As a result of a
legislative change made by the Small Business Job Protection Act of 1996,
we are required to withhold 10% of any distribution in excess of our current
accumulated earnings and profits. Consequently, although we intend to
withhold at a rate of 30% on the entire amount of any distribution, to the
extent that we do not do so any portion of a distribution not subject to
withholding at a rate of 30% will be subject to withholding at a rate of
10%. However, the Non-U.S. Shareholder may seek a refund of such amounts
from the IRS if it is subsequently determined that such distribution was, in
fact, in excess of our current or accumulated earnings and profits, and the
amount withheld exceeds the Non-U.S. Shareholder's United States tax
liability, if any, with respect to the distribution.
For any year in which we qualify as a REIT, distributions that are
attributable to gain from our sales or exchanges of U.S. real property
interests will be taxed to a Non-U.S. Shareholder under the provisions of
the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") at the
normal capital gain rates applicable to domestic shareholders (subject to
applicable alternative minimum tax and a special alternative minimum tax in
the case of nonresident alien individuals). Also, distributions subject to
FIRPTA may be subject to a 30% branch profits tax in the hands of a
corporation Non-U.S. Shareholder not entitled to treaty relief or exemption.
We are required to withhold 35% of any distribution that we designate or
could designate as a capital gain dividend. The amount withheld is creditable
against the Non-U.S. Shareholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of common stock
generally will not be taxed under FIRPTA if we are a "domestically
controlled REIT," defined generally as a REIT in which at all times during a
specified testing period less than 50% in value of the stock was held
directly or indirectly by foreign persons. We believe that we are a
"domestically controlled REIT," and, therefore, that the sale of common stock
will not be subject to taxation under FIRPTA. If the gain on the sale of
common stock were to be subject to tax under FIRPTA, the Non-U.S.
Shareholder would be subject to the same treatment as domestic shareholders
with respect to such gain (subject to applicable alternative minimum tax and
a special alternative minimum tax in the case of nonresident alien
individuals), and the purchaser of the common stock would be required to
withhold and pay to the IRS 10% of the purchase price.
STATE AND LOCAL TAXES
We or our shareholders or both may be subject to state, local or other
taxation in various state, local or other jurisdictions, including those in
which we or they transact business or reside. The tax treatment in such
jurisdictions may differ from the Federal income tax consequences discussed
above. Consequently, you should consult your own tax advisor regarding the
effect of state and local tax laws on an investment in our shares.
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<PAGE>
SELLING SHAREHOLDERS
As described previously, the selling shareholders are persons who have
received or will receive shares of common stock in exchange for units,
together with donees and pledgees and persons to whom units will be given by
other owners of units pursuant to a planned giving program. The following
table provides the names of the selling shareholders and the maximum number
of such shares of common stock each selling shareholder will offer with this
prospectus. The selling shareholders may sell all, some or none of their
common stock received in exchange for units, so no estimate can be made of
the total number of such shares that are to be offered by this prospectus,
or the total number of shares of common stock that will be owned by each
selling shareholder upon completion of the offering to which this prospectus
relates.
<TABLE>
<CAPTION>
MAXIMUM NUMBER
OF EXCHANGE SHARES
NAME(1) OFFERED
- ---------------------------------------------------------------------
<S> <C>
Friedrich K. M. Bohm 8,300
Lori Fenner 10,000
R-Inn Venture, Inc. 6,154
United Department Stores Company #1, Inc. 24,290
Ursuline Foundation 1,550
Joan K. Veres 3,000
Greater Cincinnati Foundation 200
Towne Investment Co., L.P. 91,000
DGML Company LLC 5,774
Walter Feder 733
Archdiocese of Cincinnati 50
-------
TOTAL 151,051
=======
</TABLE>
- ------------
(1) Selling shareholders that are entities may distribute shares
of common stock received by them in exchange for units to their
equity owners prior to sale under this prospectus. The selling
shareholders may also include persons who are donees or pledgees
of the listed selling shareholders. Any such persons will be
identified by a supplement to this prospectus.
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<PAGE>
PLAN OF DISTRIBUTION
This prospectus relates to the offer and sale from time to time of shares
of common stock by persons who have received or will receive them without
registration. We have registered these shares for sale to provide the selling
shareholders with freely tradeable securities, but registration of such
shares does not necessarily mean that all or any of such shares will be
offered or sold by the selling shareholders. We have not and will not receive
any proceeds from the offering by the selling shareholders or from the
issuance of the shares to holders of units (but we will acquire from such
holders the units tendered for exchange).
Subject to the terms and conditions contained in the partnership
agreement of the Operating Partnership, we have agreed, as general partner of
the Operating Partnership, to exchange all or a portion of the units held by
limited partners in the Operating Partnership for shares of common stock at a
ratio determined in accordance with the Operating Partnership's partnership
agreement. Following any such exchange, we will become the owner of the
units so exchanged.
The common stock is listed on the New York Stock Exchange.
As used in this prospectus, "selling shareholders" includes donees and
pledgees selling shares received from a named selling shareholder after the
date of this prospectus.
The selling shareholders will pay all costs, expenses and fees in
connection with the registration of the shares offered by this prospectus.
We expect these expenses to be approximately $10,000. These expenses are
estimated to include registration fees of $900, printing and reproduction
costs of $100, legal fees of $5,000, New York Stock Exchange listing fees of
$3,500 and miscellaneous expenses of $500. The selling shareholders will also
pay brokerage commissions and similar selling expenses, if any, for the sale
of these shares.
Selling shareholders may sell shares from time to time in one or more
types of transactions (which may include block transactions) on the New York
Stock Exchange, in the over-the-counter market, in negotiated transactions,
through put or call options transactions relating to the shares, through
short sales of shares, or a combination of such methods of sale, at market
prices prevailing at the time of sale, or at negotiated prices. Such
transactions may or may not involve brokers or dealers. The selling
shareholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers
regarding the sale of their shares, nor is there an underwriter or
coordinating broker acting in connection with any proposed sale of shares by
the selling shareholders.
The selling shareholders may sell shares directly to purchasers or to or
through broker-dealers, which may act as agents or principals. Such broker-
dealers may receive compensation in the form of discounts, concessions, or
commissions from the selling shareholders and/or the purchasers of shares for
whom such broker-dealers may act as agents or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in
excess of customary commissions).
The selling shareholders and any broker-dealers that act in connection
with the sale of common stock might be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, and any commissions
received by such broker-dealers and any profit on the resale of the shares
of common stock sold by them while acting as principals might be deemed to
be underwriting discounts or commissions under the Securities Act.
Because selling shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling shareholders
will be subject to the prospectus delivery requirements of the Securities
Act, which may include delivery through the facilities of the New York Stock
Exchange pursuant to Rule 153 under the Securities Act.
We have informed the selling shareholders that the anti-manipulative
provisions of Regulation M promulgated
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<PAGE>
under the Securities Exchange Act of 1934 may apply to their sales in the
market. Regulation M prohibits, with certain exceptions, any selling
broker-dealer or agent and any "affiliated purchasers" from bidding for
or purchasing any security which is the subject of a distribution until
his participation in that distribution is completed. In addition, Regulation
M under the Exchange Act prohibits certain "stabilizing bids" or "stabilizing
purchases" for the purpose of pegging, fixing or stabilizing the price of
common stock in connection with an offering.
Selling shareholders also may resell all or a portion of their
shares in open market transactions in reliance upon Rule 144
under the Securities Act, provided they meet the criteria and
conform to the requirements of that rule.
If we are notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the
sale of shares of common stock under this prospectus through a
block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required, pursuant to Rule
424(b) under the Securities Act, disclosing the following:
// the name of each such selling shareholder and of the
participating broker-dealer(s);
// the number of shares of common stock involved;
// the price at which such shares of common stock were sold;
// the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable;
// that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
// other facts material to the transaction.
In addition, if we are notified by a selling shareholder that a donee or
pledgee intends to sell more than 500 shares of common stock, a supplement to
this prospectus will be filed.
We have agreed to indemnify each selling shareholder against certain
liabilities, including liabilities arising under the Securities Act. The
selling shareholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the
Shares against certain liabilities, including liabilities arising under the
Securities Act.
LEGAL OPINIONS
The legality of the securities offered by this prospectus is being passed
upon for us by Bose McKinney & Evans LLP, Indianapolis, Indiana. The
description of Federal income tax matters contained in this prospectus
entitled "Federal Income Tax Considerations" is also based on the opinion of
Bose McKinney & Evans LLP. Darell E. Zink, Jr., one of our officers and
directors, was a partner in Bose McKinney & Evans through 1982, and was of
counsel to that firm until December, 1990.
EXPERTS
The consolidated financial statements and related schedule of Duke Realty
Investments, Inc. as of December 31, 1998 and 1997, and for each of the years
in the three-year period ended December 31, 1998, incorporated herein by
reference, have been incorporated herein in reliance on 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 consolidated financial statements and schedule of Weeks and its
subsidiaries as of December 31, 1998 and
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<PAGE>
1997, and for each of the three years in the period ended December 31, 1998,
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
With respect to the unaudited interim financial information for the periods
ended March 31, 1999 and 1998, incorporated by reference herein, the
independent certified public accountants have reported that they applied
limited procedures in accordance with their professional standards for a
review of such information. However, their separate report included in our
quarterly report on Form 10-Q of the quarter ended March 31, 1998, and
incorporated by reference herein, states that they did not audit and they do
not express an opinion on that interim financial information. Accordingly,
the degree of reliance on their reports on such information should be
restricted in light of the limited nature of the review procedures applied.
The accountants are not subject to the liability provisions of section 11 of
the Securities Act of 1933 for their report on the unaudited interim
financial information because that report is not a "report" or a "part" of
the registration statement prepared or certified by the accountants within
the meaning of sections 7 and 11 of such Act.
WHERE YOU CAN 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
following SEC public reference rooms:
450 Fifth Street, N.W. 7 World Trade Center 500 WestMadison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
Our SEC filings can also be read at the following address:
New York Stock Exchange
20 Broad Street
New York, New York 10005
Our SEC filings are also available to the public from the SEC's Web Site at
http://www.sec.gov.
This prospectus is part of a registration statement we filed with the SEC.
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 that we
file with the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act until all the selling shareholders sell all of the shares of common stock
to which this prospectus relates or the offering is otherwise terminated. We
also specifically incorporate by reference any such filings made after the
date of the initial registration statement and prior to effectiveness of the
registration statement.
1. Our Annual Report on Form 10-K (file no. 1-9044) for the year ended
December 31, 1998.
2. Our Quarterly Report on Form 10-Q (file no. 1-9044) for the quarter
ended March 31, 1999.
3. Our Current Reports on Form 8-K (file no. 1-9044) filed January 19,
1999, March 3, 1999 and July 15, 1999, and on Form 8-K/A filed
August 6, 1999.
4. The description of our common stock contained in our registration
statement on Form 8-A (file no. 1-9044) as amended.
- 16 -
<PAGE>
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
Duke-Weeks Realty Corporation
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
Telephone: (317) 808-6000
- 17 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee . . . . . . . . . . . . . $ 900
Printing and Reproduction . . . . . . . . 100
NYSE Listing Fee . . . . . . . . . . . . . 3,500
Professional Fees and Expenses . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . 500
--------
Total . . . . . . . . . . . . . . . . . $10,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Duke-Weeks Realty Corporation is an Indiana corporation. Duke's
officers and directors are and will be indemnified under Indiana
law, the Second Amended and Restated Articles of Incorporation of
Duke, and the partnership agreements of the Operating Partnership
and Duke Realty Services Limited Partnership against certain
liabilities. Chapter 37 of The Indiana Business Corporation Law
(the "IBCL") requires a corporation, unless its articles of
incorporation provide otherwise, to indemnify a director or an
officer of the corporation who is wholly successful, on the
merits or otherwise, in the defense of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal,
against reasonable expenses, including counsel fees, incurred in
connection with the proceeding. Duke's Second Amended and
Restated Articles of Incorporation do not contain any provision
prohibiting such indemnification.
The IBCL also permits a corporation to indemnify a director,
officer, employee or agent who is made a party to a proceeding
because the person was a director, officer, employee or agent of
the corporation against liability incurred in the proceeding if
(i) the individual's conduct was in good faith and (ii) the
individual reasonably believed (A) in the case of conduct in the
individual's official capacity with the corporation that the
conduct was in the corporation's best interests and (B) in all
other cases that the individual's conduct was at least not
opposed to the corporation's best interests and (iii) in the
case of a criminal proceeding, the individual either (A) had
reasonable cause to believe the individual's conduct was lawful
or (B) had no reasonable cause to believe the individual's
conduct was unlawful. The IBCL also permits a corporation to pay
for or reimburse reasonable expenses incurred before the final
disposition of the proceeding and permits a court of competent
jurisdiction to order a corporation to indemnify a director or
officer if the court determines that the person is fairly and
reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the person met the
standards for indemnification otherwise provided in the IBCL.
II-1
<PAGE>
Duke's Second Amended and Restated Articles of Incorporation
provide for certain additional limitations of liability and
indemnification. Section 13.01 of the Second Amended and Restated
Articles of Incorporation provides that a director shall not be
personally liable to Duke or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's duty of loyalty to
the Company or its shareholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (3) for voting for or assenting to an unlawful
distribution, or (4) for any transaction from which the director
derived an improper personal benefit. Section 13.02 of the
Second Amended and Restated Articles of Incorporation generally
provides that any director or officer of Duke or any person who
is serving at the request of Duke as a director, officer,
employee or agent of another entity shall be indemnified and held
harmless by Duke to the fullest extent authorized by the IBCL
against all expense, liability and loss (including attorneys'
fees, judgments, fines, certain employee benefits excise taxes or
penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered in connection with a civil,
criminal, administrative or investigative action, suit or
proceeding to which such person is a party by reason of the
person's service with or at the request of Duke. Section 13.02
of the Second Amended and Restated Articles of Incorporation also
provides such persons with certain rights to be paid by Duke the
expenses incurred in defending any such proceeding in advance of
the final disposition and the right to enforce indemnification
claims against Duke by bringing suit against Duke.
Duke's Second Amended and Restated Articles of Incorporation
authorize it to maintain insurance to protect itself and any of
its directors, officers, employees or agents or those of another
corporation, partnership, joint venture, trust or other
enterprise against expense, liability or loss, whether or not
Duke would have the power to indemnify such person against such
expense, liability or loss under the IBCL. Duke currently
maintains officer and director liability insurance.
Each of the partnership agreements for the Operating
Partnership and Duke Realty Services Limited Partnership also
provides for indemnification of Duke and its officers and
directors to substantially the same extent provided to officers
and directors of Duke in its Second Amended and Restated Articles
of Incorporation, and limits the liability of Duke and its
officers and directors to the Operating Partnership and its
partners and to Duke Realty Services Limited Partnership and its
partners, respectively, to substantially the same extent limited
under Duke's Second Amended and Restated Articles of
Incorporation.
II-2
<PAGE>
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
3.1 Second Amended and Restated Articles of Incorporation of Duke-Weeks
Realty Corporation, incorporated by reference from Exhibit 3.1 to the
Current Report of Duke-Weeks Realty Corporation on Form 8-K filed
July 15, 1999.
3.2 Second Amended and Restated Bylaws of Duke-Weeks Realty Corporation,
incorporated by reference from Exhibit 3.2 to the Current Report of
Duke-Weeks Realty Corporation on Form 8-K filed July 15, 1999.
5 Opinion and consent of Bose McKinney & Evans LLP regarding legality
of the securities being registered.
8 Opinion and consent of Bose McKinney & Evans LLP regarding tax matters.
15 Letter regarding unaudited interim financial information.
23.1 Consent of KPMG LLP.
23.2 Consent of Arthur Andersen LLP.
24 Powers of Attorney (appear on signature pages to this Registration
Statement).
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in
Item 15 above, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
The undersigned Registrant hereby further 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;
(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 a prospectus filed
with the Commission pursuant to Rule 424(b) (Section 230.424(b)
of 17 C.F.R.) if, in the aggregate, the changes in volume and
price represent no more than a 20% 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 (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 (Section
239.13 of 17 C.F.R.), Form S-8 (Section 239.16b of 17 C.F.R.) or
Form F-3 (Section 239.33 of 17 C.F.R.), and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 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 of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant further undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the
II-4
<PAGE>
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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Indianapolis, Indiana, on the 28th day of July,
1999.
DUKE-WEEKS REALTY CORPORATION
By: /s/ Darell E. Zink, Jr.
-------------------------
Darell E. Zink, Jr.
Executive Vice President and
Chief Financial Officer
and Director
We, the undersigned directors and officers of Duke-Weeks Realty
Corporation, do hereby constitute and appoint Thomas L. Hefner,
Darell E. Zink, Jr., Dennis D. Oklak and John R. Gaskin, and each
and any of them, our true and lawful attorneys-in-fact and
agents, to do any and all acts and things in our names and on our
behalf in our capacities as directors and officers and to execute
any and all instruments for us and in our name in the capacities
indicated below, which said attorneys-in-fact and agents, or any
of them, may deem necessary or advisable in order to enable Duke-
Weeks Realty Corporation to comply with the Securities Act of
1933 and any rules, regulations and any requirements of the
Securities and Exchange Commission, in connection with this
registration statement, including specifically, but without
limitation, power and authority to sign for us or any of us in
our names in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and we
do hereby ratify and confirm all that said attorneys-in-fact and
agents, or any of them, shall do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the
following persons in the capacities indicated as of the 28th day
of July, 1999.
SIGNATURE TITLE
/s/Thomas L. Hefner Director Chief Executive Officer
- ----------------------- and Chairman of the Board
Thomas L. Hefner (Principal Executive Officer)
/s/ A. Ray Weeks, Jr. Director and President and Chief Operating
- ----------------------- Officer
A. Ray Weeks, Jr.
/s/ Darell E. Zink, Jr. Executive Vice President and Chief
- ------------------------ Financial Officer and a Director
Darell E. Zink, Jr. (Principal Accounting Officer)
/s/ Dennis D. Oklak Executive Vice President and Chief
- ---------------------- Administrative Officer
Dennis D. Oklak
/s/ Barrington H. Branch Director
- ------------------------
Barrington H. Branch
/s/ Geoffrey Button Director
- ------------------------
Geoffrey Button
Director
- ------------------------
William Cavanaugh III
II-6
<PAGE>
/s/ Ngaire E. Cuneo Director
- ------------------------
Ngaire E. Cuneo
/s/ Charles R. Eitel Director
- ------------------------
Charles R. Eitel
/s/ Howard L. Feinsand Director
- ------------------------
Howard L. Feinsand
/s/ L. Ben Lytle Director
- ------------------------
L. Ben Lytle
/s/ William O. McCoy Director
- ------------------------
William O. McCoy
/s/ John W. Nelley, Jr. Director
- ------------------------
John W. Nelley, Jr.
/s/ James E. Rogers Director
- ------------------------
James E. Rogers
/s/ Thomas D. Senkbeil Director
- ------------------------
Thomas D. Senkbeil
/s/ Jay J. Strauss Director
- ------------------------
Jay J. Strauss
II-7
</TABLE>
Exhibit 5
BOSE McKINNEY & EVANS LLP
2700 First Indiana Plaza
135 North Pennsylvania Street
Indianapolis, Indiana 46240
(317) 684-5000
August 10, 1999
Duke-Weeks Realty Corporation
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
Dear Sirs:
We are acting as counsel to Duke-Weeks Realty
Corporation, an Indiana corporation (the "Company"), in
connection with the shelf registration by the Company of
151,051 shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), to be sold by
certain shareholders in connection with the exchange for
Common Stock of units of partnership interest of Duke-
Weeks Realty Limited Partnership. The Common Stock is
the subject of a Registration Statement, as amended (the
"Registration Statement") filed by the Company on
Form S-3 under the Securities Act of 1933, as amended.
We have examined photostatic copies of the Company's
Second Amended and Restated Articles of Incorporation and
Second Amended and Restated Bylaws and such other
documents and instruments as we have deemed necessary to
enable us to render the opinion set forth below. We have
assumed the conformity to the originals of all documents
submitted to us as photostatic copies, the authenticity
of the originals of such documents, and the genuineness
of all signatures appearing thereon.
Based upon and subject to the foregoing, it is our
opinion that the Common Stock has been duly authorized by
all necessary corporate action of the Company and when
(a) the applicable provisions of the Securities Act of
1933 and such state "blue sky" or securities
<PAGE>
Duke-Weeks Realty Corporation
August 10, 1999
Page 2
laws as may be applicable have been complied with and
(b) any shares of Common Stock to be issued by the
Company have been issued and delivered as described in
the Registration Statement, such shares of Common Stock
will be legally issued, fully paid, and nonassessable.
We do not hold ourselves out as being conversant with the
laws of any jurisdiction other than those of the United
States and the State of Indiana and, therefore, this
opinion is limited to the laws of those jurisdictions.
We consent to the filing of this opinion as an exhibit to
the Registration Statement on Form S-3 filed under the
Securities Act of 1933 relating to the Common Stock.
Very truly yours,
BOSE McKINNEY & EVANS LLP
EXHIBIT 8
BOSE McKINNEY & EVANS LLP
135 North Pennsylvania Street
Suite 2700
Indianapolis, Indiana 46204
August 10, 1999
Duke-Weeks Realty Corporation
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
Gentlemen:
We have acted as counsel to Duke-Weeks Realty Corporation
(the "Company") with respect to the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") for the sale
of 151,051 shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock") by certain shareholders in
connection with the exchange for Common Stock of units of
partnership interest of Duke-Weeks Realty Limited Partnership
(the "Operating Partnership"). In connection therewith, you have
requested our opinion with respect to the Company's continued
qualification as a real estate investment trust ("REIT") under
the Internal Revenue Code of 1986, as amended (the "Code"). You
have also requested our opinion regarding certain United States
Federal income tax consequences to the Company and its
shareholders of the qualification of the Company as a REIT under
the Code. All capitalized terms used herein have their
respective meanings as set forth in the Registration Statement
unless otherwise stated. The Company is an Indiana corporation
which has qualified as a REIT within the meaning of Section
856(a) of the Code, for each of its taxable years from and
including the first taxable year for which it made an election to
be taxed as a REIT, and intends to continue to so qualify.
In rendering the opinions stated below, we have examined and
relied, with your consent, upon the following:
(i) The Registration Statement;
<PAGE>
Duke-Weeks Realty Corporation
August 10, 1999
Page 2
(ii) The Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership;
(iii) The Second Amended and Restated Agreement of Limited
Partnership of the Services Partnership;
(iv) Such other documents, records and instruments as we
have deemed necessary in order to enable us to render the opinion
referred to in this letter.
In our examination of the foregoing documents, we have
assumed, with your consent, that (i) all documents reviewed by us
are original documents, or true and accurate copies of original
documents, and have not been subsequently amended, (ii) the
signatures on each original document are genuine, (iii) each
party who executed the document had proper authority and
capacity, (iv) all representations and statements set forth in
such documents are true and correct, (v) all obligations imposed
by any such documents on the parties thereto have been or will be
performed or satisfied in accordance with their terms and (vi)
the Company, the Operating Partnership and the Services
Partnership at all times will be organized and operated in
accordance with the terms of such documents. We have further
assumed the accuracy of the statements and descriptions of the
Company's, the Operating Partnership's and the Services
Partnership's intended activities as described in the
Registration Statement and the reports incorporated therein by
reference.
For purposes of rendering the opinions stated below, we have
also assumed, with your consent, the accuracy of the
representations contained in the Certificate of Representations
dated July 28, 1999 provided to us by the Company, the Operating
Partnership and the Services Partnership. These representations
generally relate to the classification and operation of the
Company as a REIT and the organization and operation of the
Operating Partnership and the Services Partnership. Our opinions
are further based upon
<PAGE>
Duke-Weeks Realty Corporation
August 10, 1999
Page 3
the Company's receipt of a letter ruling from the Internal
Revenue Service ("IRS") dated September 30, 1994 which concluded
that the Company's and the Operating Partnership's distributive
shares of the gross income of the Services Partnership will be in
proportion to their respective percentage shares of the capital
interests of the partners of the Services Partnership.
We have also reviewed the Registration Statement as to its
sections concerning certain United States Federal income tax
consequences to the Company and its shareholders of the
qualification of the Company as a REIT under the Code. Based upon
and subject to the foregoing, we are of the opinion that:
1. Assuming the Company was organized in conformity with
and has satisfied the requirements for qualification
and taxation as a REIT under the Code for each of its
taxable years from and including the first taxable year
for which the Company made the election to be taxed as
a REIT through 1993, the proposed methods of operation
of the Company, the Operating Partnership and the
Services Partnership since and including 1994 as
described in the Registration Statement and as
represented by the Company, the Operating Partnership
and the Services Partnership has permitted and will
permit the Company to continue to qualify to be taxed
as a REIT for all years since and including 1994 and
for its current and subsequent taxable years; and
2. The tax consequences to the Company and its
shareholders of qualification of the Company as a REIT
under the Code will be consistent with the discussion
contained in the section entitled "Federal Income Tax
Considerations" in the Registration Statement.
The opinions set forth in this letter represent our
conclusions as to the application of federal income tax laws
<PAGE>
Duke-Weeks Realty Corporation
August 10, 1999
Page 4
existing as of the date of this letter to the transactions
described herein. We can give no assurance that legislative
enactments, administrative changes or court decisions may not be
forthcoming that would modify or supersede our opinions.
Moreover, there can be no assurance that positions contrary to
our opinions will not be taken by the IRS, or that a court
considering the issues would not hold contrary to such opinions.
Further, the opinions set forth above represent our conclusion
based upon the documents, facts and representations referred to
above. Any material amendments to such documents, changes in any
significant facts or inaccuracy of such representations could
affect the opinions referred to herein. Although we have made
such inquiries and performed such investigations as we have
deemed necessary to fulfill our professional responsibilities as
counsel, we have not undertaken an independent investigation of
the facts referred to in this letter.
We express no opinion as to any federal income tax issue or
other matter except those set forth or confirmed above. We
consent to the filing of this opinion as an exhibit to the
Registration Statement
Very truly yours,
BOSE McKINNEY & EVANS LLP
EXHIBIT 15
The Board of Directors
DUKE-WEEKS REALTY CORPORATION:
With respect to the accompanying registration statement, we
acknowledge our awareness of the use therein of our report dated
May 3, 1999 related to our review of interim financial
information.
Pursuant to Rule 436 (c) under the Securities Act of 1933, such
report is not considered a part of a registration statement
prepared or certified by an accountant, or a report prepared or
certified by an accountant within the meaning of sections 7 and
11 of the Act.
KPMG LLP
Indianapolis, Indiana
August 10, 1999
EXHIBIT 23.1
The Board of Directors
DUKE-WEEKS REALTY CORPORATION:
We consent to the use of our report dated January 26, 1999,
except as to note 12, which is as of March 1, 1999, on the
consolidated financial statements of Duke Realty Investments,
Inc. and subsidiaries and the related financial statement
schedule as of December 31, 1998 and 1997 and for each of the
years in the three-year period ended December 31, 1998, which
report appears in the annual report on Form 10-K of Duke Realty
Investments, Inc. for the year ended December 31, 1998
incorporated herein by reference.
KPMG LLP
Indianapolis, Indiana
August 10, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our
report dated February 26, 1999 included in Weeks' Annual Report
on Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
- ------------------------
Atlanta, Georgia
August 10, 1999
