<PAGE> 1
foregoing percentage limitation with or without notice, or redemption of shares,
in order to protect the Company's status as a qualified REIT.
Registrar and Transfer Agent
The transfer agent and registrar for the Common Stock is Chemical Mellon
Shareholder Services, L.L.C.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the Common Stock
sold by the Selling Shareholders nor will any such proceeds be available for use
by the Company or otherwise for the Company's benefit.
SELLING SHAREHOLDERS
The Exchange Shares issuable upon exchange of the Units are being
registered by the Company under the terms of the Registration Rights Agreement.
The Company is registering the Exchange Shares for resale by the Selling
Shareholders listed below, each of which is a transferee of Northpoint
Associates No. 18, a California limited liability company, the initial limited
partner of the Partnership. Selling Shareholders Barry C. L. Fernald and Larry
D. Russel have served as directors the Company since November 1996.
The following table provides the names of each Selling Shareholder and
the number of Exchange Shares to be owned upon exchange of Units by each
Selling Shareholder that are being registered hereunder. Since the Selling
Shareholders may sell all, some or none of their Exchange Shares, no estimate
can be made of the aggregate number of Exchange Shares that are to be offered
hereby or that will be owned by each Selling Shareholder upon completion of the
offering to which this Prospectus relates. If, however, each of the Selling
Shareholders were to sell all of the Exchange Shares set forth across from his
name, the Selling Shareholders would no longer own any Common Stock or Units.
The Exchange Shares offered by this Prospectus may be offered from
time to time by the Selling Shareholders named below:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL SHARES
NAME SHARES(1) OUTSTANDING (1)
<S> <C> <C>
Barry C. L. Fernald 406,250 2.9%
Larry D. Russel 406,250 2.9%
G. Gerald Engles 406,250 2.9%
Gary Filizetti 406,250 2.9%
--------- ----
1,625,000 11.6%
========= ====
</TABLE>
(1) Assumes the issuance of all of the Exchange Shares.
EXCHANGE OF UNITS
General
Each Unitholder may, after October 31, 1997 and subject to certain
limitations, require that the Company exchange all or a portion of the Units
held by such holder by delivering a notice to the Company. Upon exchange, a
Unitholder will receive, at the sole option of the Company, either (i) a number
of shares of Common Stock equal to the number of Units exchanged, or (ii) cash
in an amount equal to the market value of the number of shares of Common Stock
the Unitholder would have received pursuant to (i). The market value of the
Common Stock for this purpose will be equal to the average of the closing
trading price of the Company's Common Stock for the 10 trading days before the
day on which the exchange notice was received by the Company.
The Company anticipates that it generally will elect to satisfy any
exchange right exercised by a Unitholder through the issuance of the shares of
Common Stock pursuant to this Prospectus, whereupon the Company will acquire the
Units being exchanged and such Units will automatically be deemed to be an equal
number of general partnership units owned by the Company. Such an acquisition by
the Company will be treated as a sale of the Units to the Company for Federal
income tax purposes. See "- -Tax Consequences of Exchange" below. Upon exchange,
such Unitholder's right to receive distributions with respect to the Units
exchanged will cease. However, the Unitholder will then have rights as a
shareholder of the Company from the time of his or her acquisition of Common
Stock, including the payment of dividends.
A Unitholder must notify the Company of the holder's desire to require
the Company to exchange Units by sending a notice in the form attached as an
exhibit to the Partnership Agreement, a copy of which is available from the
Company. An exchange generally will occur on the 7th calendar day after the
notice is delivered by the Unitholder (or 15th calendar day if the Company
elects to pay the Unitholder cash), except that no exchange can occur if the
delivery of Exchange Shares would cause any violation of the Securities Act, the
Exchange Act, or any applicable state securities law, or cause the Company to be
out of compliance with REIT requirements.
Tax Consequences of Exchange
The following discussion summarizes certain Federal income tax
considerations that may be relevant to a Unitholder who exercises his or her
right to require the exchange of his or her Units.
Tax Treatment of Exchange of Units. If a Unitholder exercises his or her
right to require the exchange of Units, the Partnership Agreement provides that
the exchange will be treated by the
- 12 -
<PAGE> 2
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 Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of San Mateo,
State of California, on the 5th day of November, 1997.
FRANKLIN SELECT REALTY TRUST
By: /s/ David P. Goss
- ---------------------------
David P. Goss
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO.
1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David P. Goss Chief Executive Office, November 5, 1997
- ----------------------------- President (Principal
David P. Goss Executive Officer) and Director
Mark A. TenBoer* Vice President-Finance November 5, 1997
- ----------------------------- and Chief Financial Officer
Mark A. TenBoer (Principal Financial and
Accounting Officer)
Barry C. L. Fernald* Director November 5, 1997
- -----------------------------
Barry C. L. Fernald
</TABLE>
- 33 -
<PAGE> 3
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Lloyd D. Hanford, Jr.* Director November 5, 1997
- -----------------------------
Lloyd D. Hanford, Jr.
Egon H. Kraus* Director November 5, 1997
- -----------------------------
Egon H. Kraus
E. Samuel Wheeler* Director November 5, 1997
- -----------------------------
E. Samuel Wheeler
</TABLE>
*By /s/ David P. Goss
-------------------------
David P. Goss
Attorney-in Fact
- 34 -
