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As filed with the Securities and Exchange Commission on December 7, 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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GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 42-1283895
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 960-5000
(Address, including zip code and telephone number, including area
code, of registrant's principal executive offices)
MR. MATTHEW BUCKSBAUM
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 960-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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with copies to:
MARSHALL E. EISENBERG, ESQ.
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
(312) 269-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
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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 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. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed
Maximum
Title of Each Class of Aggregate Amount of
Securities to be Registered Offering Price(1) Registration Fee
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<S> <C> <C> <C>
Common Stock, par value $.10 per share.................. $ 116,093,175 $ 32,274
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) for the purpose of computing the amount of
registration fee based upon the average of the high and low prices of
the Common Stock as reported on the New York Stock Exchange on December
4, 1998.
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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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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 7, 1998
PROSPECTUS
3,098,400 SHARES
GENERAL GROWTH PROPERTIES, INC.
COMMON STOCK
(PAR VALUE $.10 PER SHARE)
This Prospectus relates to 3,098,400 shares of General Growth
Properties, Inc. common stock that may be sold from time to time by the selling
stockholders in accordance with the plan of distribution described elsewhere in
this Prospectus.
General Growth Properties common stock is listed on the New York Stock
Exchange and traded under the symbol "GGP". The last reported sale price of
General Growth Properties common stock on the New York Stock Exchange on
December 4, 1998, was $37.25 per share.
The principal executive offices of General Growth Properties are
located at 110 North Wacker Drive, Chicago, Illinois 60606 and its telephone
number is (312) 960-5000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is December , 1998.
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AVAILABLE INFORMATION
General Growth Properties, Inc., a Delaware corporation (the
"Company"), 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 can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at the Commission's regional offices at Seven World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Room of the Commission, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. Such materials
also may be accessed electronically by means of the Commission's home page on
the Internet at http://www.sec.gov. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The
common stock, par value $.10 per share (the "Common Stock"), of the Company is
listed on the New York Stock Exchange ("NYSE") and such reports, proxy
statements and other information also can be inspected at the offices of the
NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.
The Company 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"), with respect to the shares of Common Stock
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are contained in schedules and exhibits to the
Registration Statement as permitted by the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are in summary form and
therefore are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. Items and information omitted from this Prospectus but contained
in the Registration Statement may be inspected and copied at the Public
Reference Room of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated in this Prospectus by reference
and are made a part hereof:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1997, dated March 31, 1998 (the "Company 10-K");
2. Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, dated May 14, 1998, as amended by Form 10-Q/A dated May 21, 1998;
3. Quarterly Report on Form 10-Q for the quarter ended June 30,
1998, dated August 12, 1998;
4. Quarterly Report on Form 10-Q for the quarter ended September
30, 1998, dated November 12, 1998;
5. Current Report on Form 8-K dated May 26, 1998, as amended by
Form 8-K/A dated June 2, 1998;
6. Current Report on Form 8-K dated June 4, 1998;
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7. Current Report on Form 8-K dated June 17, 1998;
8. Current Report on Form 8-K dated August 5, 1998, as amended by
Form 8-K/A dated September 29, 1998;
9. Current Report on Form 8-K dated August 7, 1998;
10. Current Report on Form 8-K dated September 30, 1998, as
amended by Form 8-K/A dated November 4, 1998;
11. Current Report on Form 8-K dated October 1, 1998;
12. Current Report on Form 8-K dated October 5, 1998, as amended
by Form 8-K/A dated November 9, 1998;
13. Current Report on Form 8-K dated November 10, 1998;
14. Current Report on Form 8-K dated November 18, 1998;
15. The portions of the Company's Proxy Statement for its 1998
Annual Meeting of Stockholders that have been incorporated by reference
into the Company's Annual Report on Form 10-K;
16. The description of the Company's 7.25% Preferred Income Equity
Redeemable Stock, Series A, par value $100 per share ("PIERS"), which
is contained in the Registration Statement on Form 8-A filed by the
Company with the Commission on June 5, 1998, pursuant to Section 12(b)
of the Exchange Act;
17. The description of the Company's Common Stock which is
contained in the Registration Statement on Form 8-A filed by the
Company with the Commission on January 12, 1993, pursuant to Section
12(b) of the Exchange Act; and
18. The description of the Company's Common Stock which is
contained in the Registration Statement on Form 8-A filed by the
Company with the Commission on November 18, 1998, pursuant to Section
12(b) of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act from the date of this Prospectus and prior to
the termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference into this Prospectus. Any statement contained herein
or in any document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus, except
as so modified or superseded. The Company will provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon written or oral request of such person, a copy of any or all of
the information that has been incorporated by reference in this Prospectus
(excluding exhibits to such information which are not specifically incorporated
by reference into such information). Requests for such information should be
directed to General Growth Properties, Inc., 110 North Wacker, Chicago, IL
60606, Attention: Director of Investor Relations, Telephone (312) 960-5000.
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FORWARD LOOKING STATEMENTS
This Prospectus and those documents incorporated by reference herein
may contain certain "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act, including,
without limitation, statements with respect to anticipated future operating and
financial performance, growth and acquisition opportunities and other similar
forecasts and statements of expectation. Words such as "expects," "estimates,"
"anticipates," "predicts," "intends," "believes," "seeks," and "should" and
other similar expressions and variations thereof are intended to identify
forward-looking statements. Forward-looking statements made by the Company and
its management are based on estimates, projections, beliefs and assumptions of
management at the time of such statements and are not guarantees of future
performance. The Company disclaims any obligation to update or revise any
forward-looking statements based on the occurrence of future events, the receipt
of new information or otherwise.
Actual future performance, outcomes and results may differ materially
from those expressed in forward-looking statements made by the Company and its
management as a result of a number of risks, uncertainties and assumptions.
Representative examples of these factors include (without limitation) general
industry and economic conditions, interest rate trends, cost of capital and
capital requirements, availability of real estate properties, competition from
other companies and venues for the sale/distribution of goods and services,
shifts in customer demands, tenant bankruptcies, changes in operating expenses,
including employee wages, benefits and training, governmental and public policy
changes and the continued availability of financing in the amounts and at the
terms necessary to support the Company's future business.
THE COMPANY
All references to the "Company" in this Prospectus include the Company
and those entities owned or controlled by the Company (including GGP Limited
Partnership, a Delaware limited partnership (the "Partnership")), unless the
context indicates otherwise.
The Company is a self-administered and self-managed real estate
investment trust ("REIT") that owns, operates, acquires, develops, expands,
finances and manages enclosed mall shopping centers in major and middle markets
throughout the United States. The Company was organized in 1986 to continue and
expand the business of the Bucksbaum family, which has been engaged in the
shopping center business since 1954.
As of November 16, 1998, the Company owned or had an ownership interest
in 87 enclosed mall shopping centers located in 37 states with approximately 74
million square feet of gross retail space, including anchor stores, freestanding
stores and mall tenant areas ("GLA"). Specifically, the Company owned: (i) 100%
of 54 enclosed mall shopping centers, including two mall shopping centers
currently under construction; (ii) 51% of the outstanding common stock of
GGP/Ivanhoe, Inc., a Delaware corporation that has qualified as a REIT for
federal income tax purposes ("GGP/Ivanhoe"), which owned 100% of two enclosed
mall shopping centers; (iii) 50% of each of two enclosed mall shopping centers;
(iv) approximately 38% of the outstanding common stock of GGP/Homart, Inc., a
Delaware corporation that has qualified as a REIT for federal income tax
purposes ("GGP/Homart"), which owned interests in 23 enclosed mall shopping
centers; (v) 51% of the common stock of GGP Ivanhoe III, Inc., a Delaware
corporation that intends to elect to be taxed as a REIT ("GGP Ivanhoe III"),
which owned 100% of six enclosed mall shopping centers; and (vi) a 100%
non-voting preferred stock interest (representing 95% of the equity interest) in
General Growth Management, Inc. ("GGMI") (the voting common stock of GGMI
(representing 5% of the equity interest in GGMI) is held by certain employees of
GGMI (who are also officers of the Company)). As of the same date, the Company
owned 100% of the preferred units of limited partnership interest in the
Partnership and an approximate 61% general partnership interest in the
Partnership. The remaining approximate 39% partnership interest in the
Partnership is held by limited partners (the "Limited Partners") in the form of
common units of limited partnership interest in the Partnership. Such Limited
Partners include a partnership comprised of trusts for the benefit of certain
members of the Bucksbaum family as well as contributors of properties to the
Company.
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The Company has qualified as a REIT for federal income tax purposes. In
order to maintain such qualification, the Company is required to distribute at
least 95% of its REIT taxable income (as computed without regard to net capital
gains or the dividends-paid deduction) and its net income (after tax) from
foreclosure property each year. Dividends on preferred stock including, without
limitation, the PIERS, is included as a distribution for this purpose.
The Company is incorporated under the laws of the State of Delaware.
Its principal executive offices are located at 110 North Wacker, Chicago, IL
60606, its telephone number is (312) 960-5000 and its website address is
http://www.generalgrowth.com.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale by HRE
Nashland, Inc., a Delaware corporation, and/or HRE Altamonte, Inc., a Delaware
corporation (collectively, the "Selling Stockholders") of any of their shares of
Common Stock covered by this Prospectus (the "Shares").
SELLING STOCKHOLDERS
The following table sets forth (i) the name of each Selling
Stockholder, (ii) the number of Shares currently beneficially owned by each
Selling Stockholder and (iii) the number of Shares which will be beneficially
owned by each Selling Stockholder after the offering, assuming the sale of all
the Shares set forth in (ii) above:
<TABLE>
<CAPTION>
Beneficial Shares Beneficial
Ownership to Be Ownership
Selling Stockholders Prior to Offering Offered (1) After Offering (1)
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<S> <C> <C> <C>
HRE Altamonte, Inc. 2,158,013 2,158,013 ---
HRE Nashland, Inc. 940,387 940,387 ---
</TABLE>
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(1) The number of Shares to be sold by the Selling Stockholders at any time
or from time to time cannot currently be determined.
The Selling Stockholders received the Shares of the Company's Common
Stock in redemption of their common units of limited partnership interest in
the Partnership. The Partnership issued the common units of limited partnership
interest to the Selling Stockholders on July 21, 1998 in connection with a
transaction in which the Partnership and Altamonte Springs Mall, L.P., a wholly
owned affiliate of the Partnership, acquired 100%, of the partnership interests
in a general partnership that owns Altamonte Mall in Altamonte Springs, Florida.
As part of that transaction, HRE Altamonte, Inc. and a partnership in which HRE
Nashland, Inc. held a majority interest, each contributed its 50% joint venture
interest in the partnership owning Altamonte Mall.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. The Shares may be offered and sold by the Selling Stockholders, or
by purchasers, transferees, donees, pledgees or other successors in interest,
directly or through brokers, dealers, agents or underwriters who may receive
compensation in the form of discounts, commissions or similar selling expenses
paid by a Selling Stockholder or by a purchaser of the Shares on whose behalf
such broker-dealer may act as agent. Sales and transfers of the Shares may be
effected from time to time in one or more transactions, in private or public
transactions, on the NYSE, in the over-the-counter market, in negotiated
transactions or otherwise, at a fixed price or prices that may be changed, at
market prices prevailing at the time of sale, at negotiated prices, without
consideration or by any other legally available means. Any or all of the Shares
may be sold from time to time by means of (a) a block trade, in which a broker
or dealer attempts to sell the Shares as agent but may position and resell a
portion of the Shares as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and the subsequent sale by such broker or
dealer for its account pursuant to this Prospectus;
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(c) ordinary brokerage transactions (which may include long or short sales)
and transactions in which the broker solicits purchasers; (d) the writing (sale)
of put or call options on the Shares; (e) the pledging of the Shares as
collateral to secure loans, credit or other financing arrangements and
subsequent foreclosure, the disposition of the Shares by the lender thereunder;
and (f) any other legally available means.
To the extent required with respect to a particular offer or sale of
the Shares, a Prospectus Supplement will be filed pursuant to Section 424(b)(3)
of the Securities Act, and will accompany this Prospectus, to disclose (a) the
number of Shares to be sold, (b) the purchase price, (c) the name of any broker,
dealer or agent effecting the sale or transfer and the amount of any applicable
discounts, commissions or similar selling expenses, and (d) any other relevant
information.
The Selling Stockholders may transfer the Shares by means of gifts,
donations and contributions. This Prospectus may be used by the recipients of
such gifts, donations and contributions to offer and sell the Shares received by
them, directly or through brokers, dealers or agents and in private or public
transactions; however, if sales pursuant to this Prospectus by any such
recipient could exceed 500 Shares, the Company may be required to file a
Prospectus Supplement pursuant to Section 424(b)(3) of the Securities Act to
identify the recipient as a Selling Stockholder and disclose any other relevant
information. Such Prospectus Supplement will be delivered together with this
Prospectus to any purchaser of such Shares.
In connection with distributions of the Shares or otherwise, the
Selling Stockholders may enter into hedging transactions with brokers, dealers
or other financial institutions. In connection with such transactions, brokers,
dealers or other financial institutions may engage in short sales of the
Company's Common Stock in the course of hedging the positions they assume with
Selling Stockholders. To the extent permitted by applicable law, the Selling
Stockholders also may sell the Shares short and redeliver the Shares to close
out such short positions.
The Selling Stockholders and any broker-dealers who participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act and any discounts, commissions or similar
selling expenses they receive and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. As a result, the Company has informed the
Selling Stockholders that Regulation M, promulgated under the Exchange Act, may
apply to sales by the Selling Stockholders in the market. The Selling
Stockholders may agree to indemnify any broker, dealer or agent that
participates in transactions involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act.
The aggregate net proceeds to the Selling Stockholders from the sale of
the Shares will be the purchase price of such Shares less any discounts,
concessions or commissions. The Company will not receive any proceeds from the
sale of any Shares by the Selling Stockholders. The Company will pay all
expenses incurred in connection with this offering, other than underwriting
discounts and selling commissions.
Each of the Selling Stockholders is acting independently of the Company
in making decisions with respect to the timing, price, manner and size of each
sale. No broker, dealer or agent has been engaged by the Company in connection
with the distribution of the Shares. There is no assurance, therefore, that the
Selling Stockholders will sell any or all of the Shares. In connection with the
offer and sale of the Shares, the Company has agreed to make available to the
Selling Stockholders copies of this Prospectus and any applicable Prospectus
Supplement and has informed the Selling Stockholders of the need to deliver
copies of this Prospectus and any applicable Prospectus Supplement to purchasers
at or prior to the time of any sale of the Shares offered hereby.
The Shares covered by this Prospectus may qualify for sale pursuant to
Section 4(1) of the Securities Act or Rule 144 promulgated thereunder, and may
be sold pursuant to such provisions rather than pursuant to this Prospectus.
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FEDERAL INCOME TAX CONSIDERATIONS
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS TO HOLDERS OF CAPITAL STOCK
This section is a summary of certain federal income tax matters of
general application pertaining to REITs and their stockholders under the
Internal Revenue Code of 1986 (the "Code"). The discussion is based on current
law and does not purport to deal with all aspects of federal income taxation
that may be relevant to investors subject to special treatment under federal
income tax laws, such as investors subject to the Employee Retirement Income
Security Act of 1974, as amended, other tax exempt investors, dealers in
securities or foreign persons. The provisions of the Code pertaining to REITs
are highly technical and complex and sometimes involve mixed questions of fact
and law. In addition, this section does not discuss foreign, state or local
taxation.
In the opinion of Neal, Gerber & Eisenberg, tax counsel to the Company,
the Company has been organized and operated in a manner that has enabled it to
qualify as a REIT under Sections 856 through 859 of the Code, and its proposed
method of operation will enable it to continue to so qualify. No assurance can
be given, however, that the Company will so qualify or continue to so qualify.
The Company's ability to qualify as a REIT under the requirements of the Code
and the regulations promulgated thereunder is dependent upon actual operating
results.
To qualify as a REIT under the Code for a taxable year, the Company
must meet certain organizational and operational requirements, which generally
require it to be a passive investor in operating real estate and to avoid
excessive concentration of ownership of its stock. First, its principal
activities must be real estate related. Generally, at least 75% of the value of
the total assets of the Company at the end of each calendar quarter must consist
of real estate assets, cash or governmental securities. The Company may not own
more than 10% of the outstanding voting securities of any corporation; shares of
qualified REITs and of certain wholly owned subsidiaries are exempt from this
prohibition. For each taxable year, at least 75% of a REIT's gross income must
be derived from specified real estate sources and 95% must be derived from such
real estate sources plus certain other permitted sources. Real estate income for
purposes of these requirements includes gains from the sale of real property not
held primarily for sale to customers in the ordinary course of business,
dividends on REIT shares, interest on loans secured by mortgages on real
property, certain rents from real property and income from foreclosure property.
For rents to qualify, they may not be based on the income or profits of any
person, except that they may be based on a percentage or percentages of gross
income or receipts, and, subject to certain limited exceptions, the REIT may not
manage the property or furnish services to residents except through an
independent contractor which is paid an arm's length fee and from which the REIT
derives no income.
For the Company to remain qualified as a REIT, no more than 50% in
value of its outstanding capital stock, including in some circumstances stock
into which outstanding securities might be converted, may be owned actually or
constructively by five or fewer individuals (as defined in the Code to include
certain entities) at any time during the last half of the Company's taxable
year. Accordingly, the Certificate of Incorporation of the Company, as amended,
contains provisions restricting the acquisition of shares of the Company's
capital stock.
So long as the Company qualifies for taxation as a REIT and distributes
at least 95% of the sum of (a) its REIT taxable income (as computed without
regard to net capital gains or the dividends-paid deduction) and (b) its net
income (after tax) from foreclosure property for its taxable year to its
stockholders annually, the Company itself will not be subject to federal income
tax on that portion of such income distributed to stockholders. The Company will
be taxed at regular corporate rates on all income not distributed to
stockholders. The Company's policy is to distribute at least 95% of the sum of
its REIT taxable income and net income from foreclosure property. REITs may also
incur taxes for certain other activities or to the extent distributions do not
satisfy certain other requirements.
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In the case of a REIT which is a partner in a partnership, such as the
Company, Treasury Department regulations provide that the REIT will be deemed to
own its proportionate share of the assets of the partnership and will be deemed
to earn the income of the partnership attributable to such share. In addition,
for purposes of satisfying the asset and income tests described above, the
character of the gross income and assets in the hands of the partnership remains
the same when allocated to the REIT. Accordingly, the Company's proportionate
share of the assets, liabilities and items of income of the Partnership will be
treated as assets, liabilities, and items of income of the Company for purposes
of qualifying as a REIT.
Failure of the Company to qualify during any taxable year as a REIT
could, unless certain relief provisions were available, have a material adverse
effect upon investors. If disqualified for taxation as a REIT for a taxable
year, the Company would also be disqualified for taxation as a REIT for the next
four taxable years, unless the failure was due to reasonable cause rather than
willful neglect and certain other conditions are met. The Company would be
subject to federal income tax at corporate rates on all of its taxable income
and would not be able to deduct the dividends paid, which could result in a
discontinuation of or substantial reduction in dividends to stockholders.
Dividends would also be subject to the regular tax rules applicable to dividends
received by stockholders of corporations. Should the failure to qualify be
determined to have occurred retroactively in an earlier tax year of the Company,
the imposition of a substantial federal income tax liability on the Company
attributable to such nonqualifying tax years may adversely affect the Company's
ability to pay dividends. In the event that the Company fails to meet certain
income tests of the tax law, it may, generally, nonetheless retain its
qualification as a REIT if it pays a 100% tax on the amount by which it failed
to meet the income tests so long as its failure was due to reasonable cause and
not willful neglect. Any such taxes would adversely affect the Company's ability
to pay dividends.
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS
As used herein, the term "U.S. Stockholder" means a holder of the
Company's stock who, for United States federal income tax purposes is (i) a
citizen or resident of the United States, (ii) a corporation created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate the income of which is subject to United
States federal income taxation regardless of its source, or (iv) a trust if a
court within the United States is able to exercise primary supervision over the
administration of such trust and one or more United States persons as defined in
section 7701(a)(30) of the Code have the authority to control all the
substantial decisions of such trust.
As long as the Company qualifies as a REIT, distributions made to its
U.S. Stockholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taxable to such U.S. Stockholders
as ordinary income. Corporate U.S. Stockholders will not be entitled to the
dividends-received deduction with respect to distributions by the Company.
Distributions that are designated as capital gain dividends will be taxable to
U.S. Stockholders as long-term capital gains (to the extent they do not exceed
the Company's actual net capital gain for the taxable year) without regard to
the period for which the U.S. Stockholder has held its stock. Subject to certain
limitations, such capital gains dividends received by an individual U.S.
Stockholder may be eligible for the 20% or 25% capital gains rates of tax.
However, corporate U.S. Stockholders may be required to treat up to 20% of
certain capital gain dividends as ordinary income. Distributions by the Company
in excess of its current and accumulated earnings and profits will not be
taxable to a U.S. Stockholder to the extent that such distributions do not
exceed the adjusted basis of the U.S. Stockholder's shares, but rather, will be
a nontaxable reduction in a U.S. Stockholder's adjusted basis in such shares to
the extent thereof and thereafter will be taxed as capital gain.
Any dividend declared by the Company in October, November or December
of any year payable to a U.S. Stockholder of record on a specified date in any
such month will be treated as both paid by the Company and received by the U.S.
Stockholder on December 31, of such year, provided that the dividend is actually
paid by the Company during January of the following calendar year.
8
<PAGE> 10
U.S. Stockholders holding capital stock at the close of the Company's
taxable year will be required to include, in computing their long-term capital
gains for the taxable year in which the last day of the Company's taxable year
falls, such amount as the Company may designate in a written notice mailed to
its stockholders. The Company may not designate amounts in excess of the
Company's undistributed net capital gain for the taxable year. Each U.S.
Stockholder required to include such a designated amount in determining such
stockholder's long-term capital gains will be deemed to have paid, in the
taxable year of the inclusion, the tax paid by the Company in respect of such
undistributed net capital gains. U.S. Stockholders subject to these rules will
be allowed a credit or a refund, as the case may be, for the tax deemed to have
been paid by such stockholders. U.S. Stockholders will increase their basis in
their capital stock by the difference between the amount of such includible
gains and the tax deemed paid by the U.S. Stockholder in respect of such gains.
U.S. Stockholders may not include in their individual income tax
returns any net operating losses or capital losses of the Company. Instead, such
losses would be carried over by the Company for potential offset against its
future income (subject to certain limitations). Taxable distributions from the
Company and gain from the disposition of the capital stock will not be treated
as passive activity income and, therefore, U.S. Stockholders generally will not
be able to apply any "passive activity losses" (such as losses from certain
types of limited partnerships in which the stockholder is a limited partner)
against such income. In addition, taxable distributions from the Company and
gain from the disposition of capital stock generally will be treated as
investment income for purposes of the investment interest limitations. The
Company will notify the stockholders after the close of the Company's taxable
year as to the portions of the distributions attributable to that year that
constitute ordinary income, return of capital, and capital gain. In general, any
gain or loss realized upon a taxable disposition of the capital stock by a U.S.
Stockholder who is not a dealer in securities will be treated as long-term
capital gain if held for more than 12 months and otherwise as short-term capital
gain or loss. Long-term capital gain of an individual U.S. Stockholder with
respect to the sale of stock is generally subject to a maximum tax rate of 20%
in respect of property held in excess of 12 months. However, any loss upon a
sale or exchange of capital stock by a U.S. Stockholder who has held such stock
for six months or less (after applying certain holding period rules) will be
treated as long-term capital loss to the extent of distributions from the
Company required to be treated by such stockholder as long-term capital gain.
All or a portion of any loss realized upon a taxable disposition of the capital
stock may be disallowed if other shares of the capital stock are purchased
within 30 days before or after the disposition.
BACKUP WITHHOLDING
The Company will report to its U.S. Stockholders and to the Internal
Revenue Service ("IRS") the amount of dividends paid during each calendar year,
and the amount of tax withheld, if any. Under the backup withholding rules, a
U.S. Stockholder may be subject to backup withholding at the rate of 31% with
respect to dividends paid unless such holder: (a) is a corporation or comes
within certain other exempt categories and when required demonstrates this fact,
or (b) 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 U.S. Stockholder that does not
provide the Company with a correct taxpayer identification number may also be
subject to penalties imposed by the IRS. Any amount paid as backup withholding
will be creditable against the U.S. Stockholder's income tax liability. In
addition, the Company may be required to withhold a portion of capital gain
distributions to any U.S. Stockholders that fail to certify their non-foreign
status to the Company. See "-Taxation of Non-U.S. Stockholders of the Company."
TAXATION OF PENSION TRUSTS
One of the requirements for the Company to qualify as a REIT for
federal income tax purposes is that, during the last half of each taxable year,
not more than 50% in value of the Company's capital stock can be owned by five
or fewer individuals (as defined in the Code to include certain entities). For
purposes of the "five or fewer" test described above, beneficiaries of a
domestic pension trust that owns shares in the Company
9
<PAGE> 11
generally will be treated as owning such shares in proportion to their actuarial
interests in the trust. In addition, amounts distributed by the Company to a
tax-exempt pension trust generally do not constitute "unrelated business taxable
income" ("UBTI") to such trust unless the trust owns more than ten percent of
the capital stock, in which case a portion of such amounts distributed may be
treated as UBTI.
TAXATION OF NON-U.S. STOCKHOLDERS OF THE COMPANY
The rules governing United States federal income taxation of the
ownership and disposition of capital stock by persons that are, for purposes of
such taxation, nonresident alien individuals, foreign corporations, foreign
partnerships or foreign estates or trusts (collectively, "Non-U.S.
Stockholders") are complex, and no attempt is made herein to provide more than a
brief summary of such rules. Accordingly, the discussion does not address all
aspects of United States federal income tax and does not address state, local or
foreign tax consequences that may be relevant to a Non-U.S. Stockholder in light
of its particular circumstances. In addition, this discussion is based on
current law, which is subject to change, and assumes that the Company qualifies
for taxation as a REIT. Prospective Non-U.S. Stockholders should consult with
their own tax advisers to determine the impact of federal, state, local and
foreign income tax laws with regard to an investment in capital stock, including
any reporting requirements.
Distributions by the Company. Distributions by the Company to a
Non-U.S. Stockholder that are neither attributable to gain from sales or
exchanges by the Company of United States real property interests nor designated
by the Company as capital gains dividends will be treated as dividends of
ordinary income to the extent that they are made out of current or accumulated
earnings and profits of the Company. Such distributions ordinarily will be
subject to withholding of United States federal income tax on a gross basis
(that is, without allowance of deductions) at a 30% rate or such lower rate as
may be specified by an applicable income tax treaty, unless the dividends are
treated as effectively connected with the conduct by the Non-U.S. Stockholder of
a United States trade or business. Dividends that are effectively connected with
such a trade or business will be subject to tax on a net basis (that is, after
allowance of deductions) at graduated rates, in the same manner as domestic
stockholders are taxed with respect to such dividends, and are generally not
subject to withholding. Any such dividends received by a Non-U.S. Stockholder
that is a corporation may also be subject to an additional branch profits tax at
a 30% rate or such lower rate as may be specified by an applicable income tax
treaty. The Company expects to withhold United States income tax at the rate of
30% on the gross amount of any such distributions made to a Non-U.S. Stockholder
unless (i) a lower treaty rate applies and any required form or certification
evidencing eligibility for that reduced rate is filed with the Company or (ii)
the Non- U.S. Stockholder files an IRS Form 4224 with the Company claiming that
the distribution is effectively connected income.
Distributions in excess of current or accumulated earnings and profits
of the Company will not be taxable to a Non-U.S. Stockholder to the extent that
they do not exceed the adjusted basis of the stockholder's capital stock, but
rather will reduce the adjusted basis of such capital stock. To the extent that
such distributions exceed the adjusted basis of a Non-U.S. Stockholder's capital
stock, they will give rise to gain from the sale or exchange of its capital
stock, the tax treatment of which is described below. As a result of a
legislative change made by the Small Business Job Protection Act of 1996, it
appears that the Company will be required to withhold 10% of any distribution in
excess of the Company's current and accumulated earnings and profits.
Consequently, although the Company intends to withhold at a rate of 30% on the
entire amount of any distribution (or a lower applicable treaty rate), to the
extent that the Company does not do so, any portion of a distribution not
subject to withholding at a rate of 30% (or a lower applicable treaty rate) will
be subject to withholding at a rate of 10%. However, the Non-U.S. Stockholder
may seek a refund of such amounts from the IRS if it subsequently determined
that such distribution was, in fact, in excess of current or accumulated
earnings and profits of the Company, and the amount withheld exceeded the
Non-U.S. Stockholder's United States tax liability, if any, with respect to the
distribution.
10
<PAGE> 12
Distributions to a Non-U.S. Stockholder that are designated by the
Company at the time of distribution as capital gains dividends (other than those
arising from the disposition of a United States real property interest)
generally will not be subject to United States federal income taxation, unless
(i) the investment in the capital stock is effectively connected with the
Non-U.S. Stockholder's United States trade or business, in which case the
Non-U.S. Stockholder will be subject to the same treatment as U.S. Stockholders
with respect to such gain (except that a stockholder that is a foreign
corporation may also be subject to the 30% branch profits tax, as discussed
above), or (ii) the Non-U.S. Stockholder is a nonresident alien individual who
is present in the United States for 183 days or more during the taxable year and
has a "tax home" in the United States, in which case the nonresident alien
individual will be subject to a 30% tax on the individual's capital gains.
Under the Foreign Investment in Real Property Tax Act ("FIRPTA"),
distributions to a Non-U.S. Stockholder that are attributable to gain from sales
or exchanges by the Company of United States real property interests (whether or
not designated as a capital gain dividend) will cause the Non-U.S. Stockholder
to be treated as recognizing such gain as income effectively connected with a
United States trade or business. Non-U.S. Stockholders would thus generally be
taxed at the same rates applicable to U.S. Stockholders (subject to a special
alternative minimum tax in the case of nonresident alien individuals). Also,
such gain may be subject to a 30% branch profits tax in the hands of a Non-U.S.
Stockholder that is a corporation, as discussed above. The Company is required
to withhold 35% of any such distribution. That amount is creditable against the
Non-U.S. Stockholder's United States federal income tax liability.
Although the law is not entirely clear on the matter, it appears that
amounts designated by the Company as undistributed capital gains in respect of
stockholders' shares would be treated with respect to Non-U.S. Stockholders in
the manner outlined in the preceding two paragraphs for actual distributions by
the Company of capital gain dividends. Under that approach, the Non-U.S.
Stockholders would be able to offset as a credit against their United States
federal income tax liability resulting therefrom their proportionate share of
the tax paid by the Company on such undistributed capital gains (and to receive
from the IRS a refund to the extent their proportionate share of such tax paid
by the Company were to exceed their actual United States federal income tax
liability).
Sale of capital stock. Gain recognized by a Non-U.S. Stockholder upon
the sale or exchange of capital stock generally will not be subject to United
States taxation unless such shares constitute a "United States real property
interest" within the meaning of FIRPTA. The capital stock will not constitute a
"United States real property interest" so long as the Company is a "domestically
controlled REIT." A "domestically controlled REIT" is a REIT in which at all
times during the specified testing period less than 50% in value of its stock is
held directly or indirectly by Non-U.S. Stockholders. Notwithstanding the
foregoing, gain from the sale or exchange of capital stock not otherwise subject
to FIRPTA will be taxable to a Non-U.S. Stockholder if the Non-U.S. Stockholder
is a nonresident alien individual who is present in the United States for 183
days or more during the taxable year and has a "tax home" in the United States.
In such case, the nonresident alien individual will be subject to a 30% United
States withholding tax on the amount of such individual's gain.
The Company believes that it will continue to be a "domestically
controlled REIT," and therefore that the sale of capital stock will not be
subject to taxation under FIRPTA. However, because the capital stock is publicly
traded, no assurance can be given that the Company will continue to be a
"domestically controlled REIT." If the Company fails to qualify as a
"domestically controlled REIT," gain arising from the sale or exchange by a
Non-U.S. Stockholder of capital stock still would not be subject to United
States taxation under FIRPTA as a sale of a "United States real property
interest," if (i) the capital stock (as applicable) is "regularly traded" (as
defined by applicable treasury regulations) on an established securities market
(e.g., the NYSE) and (ii) the selling Non-U.S. Stockholder held 5% or less of
the value of the outstanding class or series of shares being sold at all times
during a specified testing period. If gain on the sale or exchange of Capital
Stock were subject to taxation under FIRPTA, the Non-U.S. Stockholder would be
subject to regular
11
<PAGE> 13
United States income tax with respect to such gain in the same manner as a U.S.
Stockholder (subject to any applicable alternative minimum tax and a special
alterative minimum tax in the case of nonresident alien individuals), and the
purchaser of the capital stock would be required to withhold and remit to the
IRS 10% of the purchase price.
Backup Withholding Tax and Information Reporting. Backup withholding
tax and information reporting will generally not apply to distributions paid to
Non-U.S. Stockholders outside the United States that are treated as (i)
dividends subject to the 30% (or lower treaty rate) withholding tax discussed
above, (ii) capital gains dividends or (iii) distributions attributable to gain
from the sale or exchange by the Company of United States real property
interests. As a general matter, backup withholding and information reporting
will not apply to a payment of the proceeds of a sale of capital stock by or
through a foreign office of a foreign broker. Information reporting (but not
backup withholding) will apply, however, to a payment of the proceeds of sale of
capital stock by a foreign office of a broker that (a) is a United States
person, (b) derives 50% or more of its gross income for certain periods from the
conduct of a trade or business in the United States or (c) is a "controlled
foreign corporation" (generally, a foreign corporation controlled by United
States stockholders) for United States tax purposes, unless the broker has
documentary evidence in its records that the holder is a Non-U.S. Stockholder
and certain other conditions are met, or the stockholder otherwise establishes
an exemption. Payment to or through a United States office of a broker of the
proceeds of a sale of capital stock is subject to both backup withholding and
information reporting unless the stockholder certifies under penalty of perjury
that the stockholder is a Non-U.S. Stockholder, or otherwise establishes an
exemption. A Non-U.S. Stockholder may obtain a refund of any amounts withheld
under the backup withholding rules by filing the appropriate claim for refund
with the IRS.
The United States Treasury Department has recently finalized
regulations regarding the withholding and information reporting rules discussed
above. In general, these regulations do not alter the substantive withholding
and information reporting requirements but unify certification procedures and
forms and clarify and modify reliance standards. These regulations generally are
effective for payments made after December 31, 1999, subject to certain
transition rules. A Non-U.S. Stockholder should consult its own advisor
regarding the effect of the new Treasury Regulations.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Neal, Gerber & Eisenberg.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997 and the consolidated financial statement schedule as of December 31, 1997
have been incorporated by reference herein from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, and the Statement of Revenues
and Certain Expenses of Northbrook Court for the year ended December 31, 1997
has been incorporated by reference herein from the Company's Current Report on
Form 8-K/A dated June 2, 1998, all in reliance upon the reports of
PricewaterhouseCoopers LLP, independent certified public accountants, and upon
the authority of said firm as experts in accounting and auditing. The combined
statement of revenues and certain expenses for certain retail properties of MEPC
American Holdings Inc., U.K.-American Properties, Inc. and Caledonian Holding
Company, Inc., wholly owned subsidiaries of MEPC plc, a United Kingdom company
(the "MEPC American Group"), for the year ended September 30, 1997 has been
incorporated by reference herein from the Company's Current Report on Form 8-K/A
dated June 2, 1998 in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing. The report contains an explanatory paragraph
indicating that the combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Commission as described in note B to the combined statement of revenues and
certain expenses and is not intended to be a complete presentation of the MEPC
American Group's revenues and expenses. The combined statement of revenues and
certain expenses of the Landmark Mall,
12
<PAGE> 14
Mayfair Complex, The Meadows, Northgate Mall, Oglethorpe Mall and Park City
Center for the year ended December 31, 1997 has been incorporated by reference
herein from the Company's Current Report on Form 8-K/A dated June 2, 1998 in
reliance upon the report of Deloitte & Touche LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing. The statement of excess revenues over specific operating expenses for
Altamonte Mall for the year ended December 31, 1997 has been incorporated by
reference herein from the Company's Current Report on Form 8-K/A dated September
29, 1998 in reliance upon the report of Arthur Andersen LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The statement of revenues and certain expenses of
Spring Hill Mall for the year ended December 31, 1997 has been incorporated by
reference herein from the Company's Current Report on Form 8-K/A dated November
4, 1998 in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. Such report contains an explanatory paragraph
indicating that the statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Commission as
described in note 1 to the statements of revenues and certain expenses and is
not intended to be a complete presentation of Spring Hill Mall's revenues and
expenses. The statement of revenue and certain expenses of Coastland Center for
the year ended December 31, 1997, incorporated by reference herein from the
Company's Current Report on Form 8-K/A dated November 9, 1998, has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference herein. Such statement of revenue and certain
expenses is incorporated herein by reference in reliance upon such report given
upon the authority of said firm as experts in accounting and auditing.
13
<PAGE> 15
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY BROKER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION..................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE............................................................ 2
FORWARD LOOKING STATEMENTS................................................ 4
THE COMPANY............................................................... 4
USE OF PROCEEDS........................................................... 5
SELLING STOCKHOLDERS...................................................... 5
PLAN OF DISTRIBUTION...................................................... 5
FEDERAL INCOME TAX CONSIDERATIONS......................................... 7
LEGAL MATTERS.............................................................12
EXPERTS...................................................................12
================================================================================
================================================================================
3,098,400 Shares
GENERAL GROWTH
PROPERTIES, INC.
COMMON STOCK
-----------------
PROSPECTUS
-----------------
December , 1998
-----
================================================================================
<PAGE> 16
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 sale and distribution of securities being registered, other than discounts,
concessions and brokerage commissions.
<TABLE>
<S> <C>
SEC registration fee..................................................................... $ 32,274
Blue sky fees and expenses............................................................... 250*
Legal fees and expenses.................................................................. 5,000*
Accounting fees and expenses............................................................. 2,500*
Miscellaneous (including NYSE listing fees).............................................. 4,976*
----------
Total.............................................................................. $ 45,000*
</TABLE>
- ----------------
* Estimated
The Company will bear all of the foregoing expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation. In its Certificate of
Incorporation, as amended, the Company has adopted (a) the provisions of Section
102(b)(7) of the Delaware General Corporation Law ("DGCL"), which enables a
corporation in its certificate of incorporation or an amendment thereto to
eliminate or limit the personal liability of a director for monetary damages for
breach of the director's fiduciary duty, except (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions) or (iv) for any transaction from which a director
derived an improper personal benefit and (b) the provisions of Section 145 of
the DGCL, which provide that a corporation may indemnify any persons, including
officers and directors, who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that such person was an
officer, director, employee or agent of the corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, with respect to criminal proceedings, had no
reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify officers or directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against expenses (including attorneys' fees) that
such officer or director actually and reasonably incurred.
The Company has entered into indemnification agreements with each of
its officers and directors. The indemnification agreements, among other things,
require the indemnification of the Company's officers and directors to the
fullest extent permitted by law, and require that the Company advance to the
officers and directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not
II-1
<PAGE> 17
permitted. Such indemnification agreements also provide for the indemnification
and advance of all expenses incurred by officers and directors seeking to
enforce their rights under the indemnification agreements, and require the
Company to cover officers and directors under the Company's directors' and
officers' liability insurance. Although the indemnification agreements offer
substantially the same scope of coverage afforded by provisions in the
Certificate and the Bylaws, such agreements provide greater assurance to
directors and officers that indemnification will be available, because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or by the stockholders to eliminate the rights they provide.
ITEM 16. EXHIBITS.
4.1 Specimen certificate representing Common Stock (incorporated by
reference to the Company's Registration Statement on Form S-11
(File No. 33-56640), filed on April 6, 1993).
5.1 Opinion of Neal, Gerber & Eisenberg, counsel for the Company.
8.1 Tax Opinion of Neal, Gerber & Eisenberg, counsel for the Company.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Deloitte & Touche LLP
23.4 Consent of Arthur Andersen LLP
23.5 Consent of KPMG Peat Marwick LLP
23.6 Consent of Ernst & Young LLP
23.7 Consent of Neal, Gerber & Eisenberg (included in Exhibit 5.1
and Exhibit 8.1).
24.1 Powers of Attorney of certain officers and directors of the
Company (included on signature page).
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:
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.
(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> 18
(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 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 insurance payments and 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 of 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> 19
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 Chicago, State of Illinois, on December 4, 1998.
GENERAL GROWTH PROPERTIES, INC.
(Registrant)
By: /S/ MATTHEW BUCKSBAUM
------------------------------------------
Matthew Bucksbaum
Chairman of the Board and Chief Executive
Officer
We, the undersigned officers and directors of General Growth
Properties, Inc., hereby severally constitute Matthew Bucksbaum, Robert Michaels
and Bernard Freibaum, and each of them singly, our true and lawful attorneys
with full power to them, and each of them singly, to sign for us and in our
names in the capacities indicated below, any and all amendments, including
post-effective amendments, to this registration statement, and generally to do
all such things in our name and behalf in such capacities to enable General
Growth Properties, Inc. to comply with the applicable provisions of the
Securities Act of 1933 and all requirements of the Securities and Exchange
Commission, and we hereby ratify and confirm our signatures as they may be
signed by our said attorneys above, or any of them, to any and all such
amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on December 4, 1998, by the
following persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/S/ MATTHEW BUCKSBAUM Chairman of the Board, Chief Executive Officer
- -------------------------- and Director (Principal Executive Officer)
Matthew Bucksbaum
/S/ ROBERT MICHAELS President and Director
- --------------------------
Robert Michaels
/S/ JOHN BUCKSBAUM Executive Vice President and Director
- --------------------------
John Bucksbaum
/S/ BERNARD FREIBAUM Executive Vice President and Chief Financial Officer
- -------------------------- (Principal Financial and Accounting Officer)
Bernard Freibaum
/S/ ANTHONY DOWNS
- -------------------------- Director
Anthony Downs
</TABLE>
II-4
<PAGE> 20
/S/ MORRIS MARK Director
----------------------------------
Morris Mark
/S/ BETH STEWART Director
----------------------------------
Beth Stewart
/S/ A. LORNE WEIL Director
----------------------------------
A. Lorne Weil
II-5
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ -----------
<S> <C>
4.1 Specimen certificate representing Common Stock (incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 33-56640), filed on
April 6, 1993).
5.1 Opinion of Neal, Gerber & Eisenberg, counsel for the Company.
8.1 Tax Opinion of Neal, Gerber & Eisenberg, counsel for the Company.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Deloitte & Touche LLP
23.4 Consent of Arthur Andersen LLP
23.5 Consent of KPMG Peat Marwick LLP
23.6 Consent of Ernst & Young LLP
23.7 Consent of Neal, Gerber & Eisenberg (included in Exhibit 5.1 and Exhibit 8.1).
24.1 Powers of Attorney of certain officers and directors of the Company (included on
signature page).
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5.1
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
SUITE 2200
CHICAGO, IL 60602
(312) 269-8000
December 4, 1998
General Growth Properties, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to General Growth Properties, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 3,098,400 shares of its common stock, par
value $.10 per share (the "Shares"), which may be sold from time to time by the
selling stockholders identified in the Company's Registration Statement on Form
S-3 (the "Registration Statement") to be filed with the Securities and Exchange
Commission on or about December 7, 1998.
As such counsel, we have examined such documents and certificates of
officers of the Company as we deemed relevant and necessary as the basis for the
opinion hereafter expressed. In such examinations, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as conformed or photostatic copies.
Based upon the foregoing, we are of the opinion that the Shares which
are the subject of the Registration Statement have been duly and validly issued
and are fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus comprising a part of the Registration Statement.
Please be advised that Marshall E. Eisenberg, a partner of our firm, is
the Secretary of the Company and certain of its affiliates. In addition, certain
partners of our firm and attorneys associated with our firm own equity
securities of the Company or are trustees, stockholders, officers and/or
directors of trusts or other entities that own equity securities of the Company
or its affiliates.
Very truly yours,
/s/ NEAL, GERBER & EISENBERG
<PAGE> 1
EXHIBIT 8.1
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
SUITE 2200
CHICAGO, IL 60602
(312) 269-8000
December 4, 1998
General Growth Properties, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Gentlemen:
We are rendering the opinions contained herein in our capacity as tax
counsel to General Growth Properties, Inc., a Delaware corporation (the
"Company"). In so acting and in rendering the opinions expressed below, we have
examined and relied upon the originals, or copies certified or otherwise
identified to our satisfaction of such records, documents, agreements and
instruments as we have deemed necessary to the rendering of these opinions.
Based upon and subject to the assumptions noted below, we are of the
opinion that for federal income tax purposes under current law, (1) for the
period beginning April 15, 1993 and ending December 31, 1997, the Company has
been organized and operated in a manner that has enabled it to qualify as a real
estate investment trust under Sections 856 through 859 of the Internal Revenue
Code of 1986, as amended (the "Code"), and (2) based on representation letters
from the Company, the Company's proposed method of operations will enable it to
qualify as a real estate investment trust for the period ending December 31,
1998, and enable it to continue to so qualify in the future.
The opinions expressed herein are subject to the following
qualifications and assumptions:
1. We have relied upon certain representations from the management of
the Company as to certain matters of fact upon which the foregoing opinions are
based, and we have no reason to believe that such reliance is not justified.
2. The Company will, in the future, operate and remain organized in
the same manner that it has operated and been organized for the period from
April 15, 1993 through December 31, 1997.
<PAGE> 2
General Growth Properties, Inc.
December 4, 1998
Page 2
3. All documents submitted to us as originals and the originals of
all documents submitted to us as certified or photostatic copies are authentic,
all documents submitted to us as certified or photostatic copies conform to the
original documents and all signatures are genuine.
The opinions herein are given as of the date hereof, are based upon the
Code, regulations of the Department of the Treasury, published rulings and
procedures of the Internal Revenue Service, and judicial decisions, all as in
effect on the date hereof. These opinions are limited to the matters expressly
set forth herein and no opinions are to be implied or may be inferred beyond the
matters expressly so stated. We disclaim any obligation to update this letter
for events, whether legal or factual, occurring after the date hereof.
This letter is given solely for your benefit in connection with the
Company's Registration Statement on Form S-3 relating to the registration for
resale under the Securities Act of 1933 of 3,098,400 shares of the Company's
common stock, par value $.10 per share. Without our prior written consent, this
letter may not be used or relied upon by any other person or for any other
purpose.
Please be advised that Marshall E. Eisenberg, a partner of our firm, is
the Secretary of the Company and certain of its affiliates. In addition, certain
partners of our firm and attorneys associated with our firm own equity
securities of the Company or are trustees, stockholders, officers and/or
directors of trusts or other entities that own equity securities of the Company
or its affiliates.
Very truly yours,
/s/ NEAL, GERBER & EISENBERG
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
General Growth Properties, Inc. on Form S-3 of our report dated February 9,
1998, on our audits of the consolidated financial statements of General Growth
Properties, Inc. as of December 31, 1997 and 1996, and for each of the three
years in the period ended December 31, 1997, and the financial statement
schedule as of December 31, 1997, included in Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, and of our report dated February 6, 1998,
except as to Note 1 of which the date is May 28, 1998, on our audit of the
statement of revenues and certain expenses of Northbrook Court for the year
ended December 31, 1997 which is included in Form 8-K/A of General Growth
Properties, Inc. dated June 2, 1998. We also consent to the reference to our
firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
December 4, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
General Growth Properties, Inc.:
We consent to the incorporation by reference herein of our report dated May 8,
1998, with respect to the combined statement of revenues and certain expenses
for certain retail properties of MEPC American Holdings Inc., U.K. - American
Properties, Inc. and Caledonian Holding Company, Inc., wholly owned subsidiaries
of MEPC plc, a United Kingdom company (the "MEPC American Group"), for the year
ended September 30, 1997, which report appears in the Form 8-K/A dated June 2,
1998 of General Growth Properties, Inc., and to the reference to our firm under
the heading "Experts" in the Registration Statement. Our independent auditors'
report contains an explanatory paragraph indicating that the combined statement
of revenues and certain expenses was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission as described
in Note B to the combined statement of revenues and certain expenses and is not
intended to be a complete presentation of the MEPC American Group's revenues and
expenses.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
December 4, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of
General Growth Properties, Inc. on Form S-3 of our report dated May 14, 1998,
relating to our audit of the combined statement of revenues and certain expenses
of the Landmark Mall, Mayfair Complex, The Meadows, Northgate Mall, Oglethorpe
Mall and Park City Center for the year ended December 31, 1997, included in the
Form 8-K/A dated June 2, 1998 of General Growth Properties, Inc., and to the
reference to us as experts in such Registration Statements.
/s/ DELOITTE & TOUCHE LLP
Atlanta, Georgia
December 4, 1998
<PAGE> 1
EXHIBIT 23.4
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 September 21, 1998
on the statement of excess of revenues over specific operating expenses for
Altamonte Mall for the year ended December 31, 1997 included in General Growth
Properties, Inc. Form 8-K/A dated September 29, 1998 and to all references to
our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
New York, New York
December 7, 1998
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
To Board of Directors
General Growth Properties, Inc.:
We consent to the incorporation by reference herein of our report dated October
22, 1998, with respect to the statement of revenues and certain expenses of
Spring Hill Mall for the year ended December 31, 1997, which report appears in
the Form 8-K/A dated November 4, 1998 of General Growth Properties, Inc., and to
the reference to our firm under the heading "Experts" in the Registration
Statement.
Our independent auditor's report contains an explanatory paragraph indicating
that the statement of revenue and certain expenses was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission as described in note 1 to the statements of revenues and certain
expenses and is not intended to be a complete presentation of Spring Hill Mall's
revenues and expenses.
/s/ KPMG PEAT MARWICK LLP
Los Angeles, California
December 4, 1998
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference in this Registration Statement (Form S-3) of General
Growth Properties, Inc. of our report dated October 22, 1998 with respect to the
Statement of Revenue and Certain Expenses of Coastland Center for the year ended
December 31, 1997, included in the Current Report on Form 8-K/A of General
Growth Properties, Inc. dated November 9, 1998, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Chicago, Illinois
December 3, 1998
