As filed with the Securities and Exchange Commission on May 21, 1996
Registration No. 333-3624
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<R/>
JP REALTY, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 87-0515088
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
35 CENTURY PARK-WAY
SALT LAKE CITY, UTAH 84115
(801) 486-3911
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
--------------------------------------
JOHN PRICE
CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
JP REALTY, INC.
35 CENTURY PARK-WAY
SALT LAKE CITY, UTAH 84115
(801) 486-3911
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies To:
ALAN L. GOSULE, ESQ.
JAY L. BERNSTEIN, ESQ.
ROGERS & WELLS
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8000
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of the 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. <square>
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. <checked-box>
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. <square> ________
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. <square> ________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. <square>
----------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================
<S> <C> | <C> | <C> | <C>
Title of Class | Amount to be | Proposed Maximum | Proposed Maximum | Amount of
of Securities | Registered | Offering Price | Aggregate | Registration Fee
Being Registered | | Per Share (a) | Offering Price |
- ---------------------------------------------------------------------------------------------------
Common Stock, | 3,626,310 | $19.31 | $70,024,047 | $24,147(b)
par value | | | |
$.0001 per share | | | |
===================================================================================================
(a) Estimated solely for the purpose of calculating the registration fee in accordance with Rule
457(c) under the Securities Act of 1933, as amended, and based on a per share price of $19.31,
the average of the high and low sale prices of the Common Stock reported on the New York Stock
Exchange on April 11, 1996.
(b) Previously paid in connection with the initial filing of this Registration Statement on April
17, 1996.
</TABLE>
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION DATED MAY 21, 1996
PROSPECTUS
3,626,310 SHARES
JP REALTY, INC.
COMMON STOCK
This Prospectus relates to the possible offer and sale from time to time of up
to 3,626,310 shares (the "Secondary Shares") of common stock, par value $.0001
per share (the "Common Stock"), of JP Realty, Inc. (the "Company") by persons
who may have received such shares without registration (the "Selling
Stockholders"). The Secondary Shares may be offered in amounts and on terms to
be set forth herein or in one or more supplements to this Prospectus (each,
a "Prospectus Supplement"). The registration of the Secondary Shares to which
this Prospectus relates does not necessarily mean that any of the Secondary
Shares will be sold by the Selling Stockholders.
The Common Stock is listed on the New York Stock Exchange under the symbol
"JPR." To ensure that the Company maintains its qualification as a real estate
investment trust (a "REIT"), ownership by any person is limited to 5% of the
outstanding shares of capital stock, with certain exceptions. See
"Restrictions on Transfer of Capital Stock."
The Selling Stockholders from time to time may offer and sell the Secondary
Shares held by them directly or through agents or broker-dealers on terms to be
determined at the time of sale. To the extent required, the names of any agent
or broker-dealer and applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution." Each of the
Selling Stockholders reserves the right to accept or reject, in whole or in
part, any proposed purchase of the Secondary Shares.
The Company will not receive any of the proceeds from the sale by the Selling
Stockholders of any of the Secondary Shares, but has agreed to bear certain
expenses of registration of the Secondary Shares under Federal and state
securities laws.
The Selling Stockholders and any agents or broker-dealers that participate with
the Selling Stockholders in the distribution of the Secondary Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any commissions received by them and any
profit on the resale of the Secondary Shares may be deemed to be underwriting
commissions or discounts under the Securities Act.
-------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
HAS NOT PASSED ON OR ENDORSED THE MERITS OF
THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
--------------------------------
THE DATE OF THIS PROSPECTUS IS __________, 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED 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 UNDERWRITERS, AGENTS OR DEALERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON 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 AND
ITS SUBSIDIARIES SINCE THE DATE HEREOF OR THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
AVAILABLE INFORMATION
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"). The Company's
Registration Statement on Form S-3 (the "Registration Statement"), the exhibits
and schedules forming a part thereof and the reports, proxy statements and
other information filed by the Company can be inspected and copied, at the
prescribed rates, at the public reference facilities of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at Seven World Trade Center, Suite 1300, New York, New York
10048, and Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. The Company's Common Stock is listed on the New York Stock
Exchange (the "NYSE") and similar information concerning the Company may be
inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
This Prospectus constitutes a part of the Registration Statement filed by
the Company with the Commission under the Securities Act. This Prospectus
omits certain of the information contained in the Registration Statement and
the exhibits and schedules thereto, in accordance with the rules and
regulations of the Commission. For further information concerning the Company
and the Common Stock offered hereby, reference is hereby made to the
Registration Statement and the exhibits and schedules filed therewith, which
may be inspected without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and copies of which may be obtained from
the Commission at prescribed rates. Any statements contained herein concerning
the provisions of any document are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been filed with the
Commission (Commission File No. 1-12560) are hereby incorporated by reference
in this Prospectus.
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
3. The Company's Current report on form 8-K, dated April 19, 1996; and
4. The Company's Registration Statement on Form 8-A, dated November
15, 1993, which contains a description of the Common Stock,
including any amendment or report filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering of Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
respective dates of filing
2
<PAGE>
such documents. Any statement of information contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
modified or superseded for the purposes of this Prospectus to the extent that
a statement contained herein or in any 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, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference herein
(not including any exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference to
the information that this Prospectus incorporates). Requests should be
directed to: JP Realty, Inc., 35 Century Park-Way, Salt Lake City, Utah 84115,
Attn.: Paul K. Mendenhall, Vice President-Finance and Secretary, telephone
number (801) 486-3911.
3
<PAGE>
THE COMPANY
The Company is a fully integrated, self-administered and self-managed
REIT primarily engaged in the ownership, leasing, management, operation,
development, redevelopment and acquisition of retail properties in Utah, Idaho,
Colorado, Arizona, Nevada, New Mexico and Wyoming (the "Intermountain Region"),
as well as in Oregon, Washington and California. The Company was formed on
September 8, 1993 to continue and expand the business, commenced in 1957, of
certain companies (the "Predecessor Companies") affiliated with John Price,
Chairman of the Board of Directors and Chief Executive Officer of the Company.
The Company's strategy is to (i) extend its dominant market position in
the Intermountain Region and (ii) achieve cash flow growth and enhance the
value of its real property portfolio by increasing rental levels and net
operating income and by selectively acquiring, expanding and developing
additional malls, community centers and other properties in underserved and/or
growing markets. In order to extend its dominant market position in the
Intermountain Region, the Company expects to continue to concentrate its
acquisition and other development activities in this region.
As of May 1, 1996, the Company's existing portfolio was comprised of 44
properties (the "Properties"), including 11 enclosed regional malls, 24
community centers and three free-standing retail properties located in ten
states and six mixed-use commercial properties located primarily in the Salt
Lake City, Utah metropolitan area. The Company's retail portfolio contains an
aggregate of approximately 8.6 million square feet of total gross leasable
area, while the Company's commercial portfolio contains approximately 1.4
million square feet of gross leasable area. The majority of the Properties
were developed or redeveloped by the Predecessor Companies. The Properties or
interests therein are owned by the Company through its 81.6% general partner
interest in Price Development Company, Limited Partnership (the "Operating
Partnership").
The Company's management has an average of 20 years of experience in the
ownership, leasing, management, operation, development, redevelopment and
acquisition of regional malls, community shopping centers and other commercial
properties. As of May 1, 1996, the Company had in excess of 330 employees,
including a corporate staff of over 53 individuals supporting senior
management, and approximately 270 property management personnel. The Company's
executive offices are located at 35 Century Park-Way, Salt Lake City, Utah
84115, and its telephone number is (801) 486-3911.
DESCRIPTION OF COMMON STOCK
GENERAL
Under the Company's Amended and Restated Articles of Incorporation (the
"Charter"), the Company has authority to issue 200,000,000 shares of capital
stock, par value $.0001 per share, with 124,800,000 of such shares designated
as Common Stock. At May 1, 1996, the Company had outstanding 15,835,500 shares
of Common Stock. In addition, the Company has reserved for issuance (i)
3,692,409 shares of Common Stock upon exchange of units of limited partner
interests in the Operating Partnership (the "PDC Units"); and (ii) 1,045,000
shares of Common Stock upon exercise of stock options that have been, or are
available to be, granted under the Company's 1993 Stock Option Plan. Under
Maryland law, stockholders generally are not responsible for a corporation's
debts or obligations. The following descriptions do not purport to be complete
and are subject to, and qualified in their entirety by reference to, the more
complete descriptions thereof set forth in the following documents: (i) the
Charter and (ii) the Company's Amended and Restated By-Laws (the "By-Laws"),
which documents are exhibits to this Registration Statement.
4
<PAGE>
TERMS
Subject to the preferential rights of any other shares or series of
capital stock, including, without limitation, the Company's Price Group Stock,
par value $.0001 per share (the "Price Group Stock"), and to the provisions of
the Charter regarding excess stock, par value $.0001 per share (the "Excess
Stock"), holders of shares of Common Stock will be entitled to receive
dividends on shares of Common Stock if, as and when authorized and declared by
the Board of Directors of the Company (the "Board of Directors") out of assets
legally available therefor and to share ratably in the assets of the Company
legally available for distribution to its stockholders in the event of its
liquidation, dissolution or winding-up after payment of, or adequate provision
for, all known debts and liabilities of the Company. Under the Charter,
holders of shares of Price Group Stock are entitled to receive dividends at a
rate per share equal to 80% of any dividends declared by the Board of
Directors, out of assets legally available therefor, in respect of the Common
Stock.
Subject to the preferential rights of the Price Group Stock with respect
to the election of directors and to the provisions of the Charter regarding
Excess Stock, each outstanding share of Common Stock entitles the holder to one
vote on all matters submitted to a vote of stockholders. No cumulative voting
rights for the election of directors will attach to shares of Common Stock or
Price Group Stock. For the period that John Price, his spouse and children,
any lineal descendants of any of the foregoing, any estates of any of the
foregoing, any trusts now or hereafter established for the benefit of any of
the foregoing and any other entity now or hereafter controlled by any of the
foregoing (collectively, the "Price Group") continues to hold a combined 10% or
greater direct or indirect economic interest in the Operating Partnership, the
holders of the Price Group Stock will elect two of the seven members of the
Board of Directors and the holders of the Common Stock and Price Group Stock,
voting together as a single class, will elect the remaining five members of the
Board of Directors. After the combined direct or indirect economic interest
held by the Price Group in the Operating Partnership falls below 10%, the
holders of the Price Group Stock will not, as a class, be entitled to elect any
of the members of the Board of Directors, but will vote together with the
Common Stock, as a single class, to elect all seven members of the Board of
Directors. In addition, any change in the size of the Board of Directors must
be approved by a majority of the outstanding shares of the Price Group Stock.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm.
Pursuant to the Maryland General Corporation Law (the "MGCL"), a
corporation generally cannot dissolve, amend its charter, merge, sell all or
substantially all of its assets, engage in a share exchange or engage in
similar transactions outside the ordinary course of business unless approved by
the affirmative vote of stockholders holding at least two-thirds of the shares
entitled to vote on the matter unless a lesser percentage (but not less than a
majority of all of the votes to be cast on the matter) is set forth in the
corporation's charter. The Charter provides that such transactions, with the
exception of an amendment of the Charter (i) relating to certain changes to the
Board of Directors or the terms of the Price Group Stock or (ii) to limit
stockholder proposals and nominations, can be approved by a vote of a majority
of the shares entitled to vote on such matters. With respect to the matters set
forth in items (i) and (ii) above, the Charter provides that it may only be
amended upon the affirmative vote of not less than 80% of the aggregate votes
entitled to vote thereon and, as to item (i) above, also with the affirmative
vote of not less than a majority of the Price Group Stock.
Provisions of the Charter described below under "Restrictions on Transfer
of Capital Stock," together with other provisions of the Charter and the MGCL,
may discourage a change in control and limit the opportunity for stockholders
to receive a premium for their Common Stock.
5
<PAGE>
RESTRICTIONS ON TRANSFER AND OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
Common Stock, Preferred Stock or Price Group Stock (collectively, the "Equity
Stock") may be owned, directly or indirectly, by five or fewer individuals (as
defined in the Code to include certain entities) during the last half of a
taxable year. To assist the Company in meeting this requirement, the Charter
contains certain provisions restricting certain transfers of shares of Equity
Stock and limiting the beneficial ownership, directly or indirectly, of the
Company's outstanding Equity Stock. See "Restrictions on Transfer of Capital
Stock."
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is Chemical Mellon
Shareholder Services.
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other things,
not more than 50% in value of its outstanding Equity Stock may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities) during the last half of a taxable year (other than
the first year), and such Equity Stock must be beneficially owned by 100 or
more persons during at least 335 days of a taxable year of 12 months (other
than the first year) or during a proportionate part of a shorter taxable year.
The Charter provides that, subject to certain exceptions specified
therein, no stockholder may own, or be deemed to own by virtue of the
attribution provisions of the Code (or by virtue of being deemed part of a
"group" within the meaning of Section 13(d)(3) of the Exchange Act), more than
5% of the number or value of the issued and outstanding shares of the Company
(the "Ownership Limit"). The Board of Directors may waive the Ownership Limit
if evidence satisfactory to the Board of Directors is presented that such
Ownership Limit will not jeopardize the Company's status as a REIT. As a
condition to such waiver, the Board of Directors may require opinions of
counsel satisfactory to it and undertakings from the applicant with respect to
preserving the REIT status of the Company. The Ownership Limit will not apply
if the Board of Directors and the stockholders of the Company determine that it
is no longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT.
If shares of Equity Stock in excess of the Ownership Limit, or shares
which would cause the Company to be beneficially owned by fewer than 100
persons or cause the Company to become "closely held" under Section 856(h) of
the Code, are issued or transferred to any person, such issuance or transfer
shall be null and void and the intended transferee will acquire no rights to
the Equity Stock. Shares issued or transferred that would cause any
stockholder to own more than the Ownership Limit or cause the Company to become
"closely held" under Section 856(h) of the Code will be converted automatically
into shares of Excess Stock. All Excess Stock will be transferred, without
action by the stockholder, to the Company as trustee of a trust for the
exclusive benefit of the transferee or transferees to whom the Excess Stock is
ultimately transferred. While the Excess Stock is held in trust, it will not
be entitled to vote, it will not be considered for purposes of any stockholder
vote or the determination of a quorum for such vote and it will not be entitled
to participate in any distributions made by the Company, except upon
liquidation. The intended transferee (provided he does not make a profit from
the transfer) may, at any time the Excess Stock is held by the Company in
trust, transfer the Excess Stock to any individual whose ownership of such
Excess Stock would be permitted under the Ownership Limit provision and would
not cause the Company to be beneficially owned by fewer than 100 persons or
cause the Company to become "closely held" under Section 856(h) of the Code, at
which time the Excess Stock would automatically be converted back into Common
Stock. In addition, the Company has the right, for a period of 90 days,
beginning on the later of the date of the transfer that caused the exchange for
Excess Stock and the date the Board has knowledge of the transfer, to purchase
all or any portion of the Excess Stock from the intended transferee at the
lesser of the price paid for the Equity Stock by the intended transferee and
the closing market price for the Equity Stock on the date the Company exercises
its option to purchase.
6
<PAGE>
The Charter provides that these restrictions will not preclude the
settlement of transactions entered into through the facilities of the NYSE.
Each stockholder who owns, directly or by virtue of the attribution
provisions of the Code, more than 5% of the outstanding Equity Stock (or 1% if
there are fewer than 2,000 stockholders) must give written notice to the
Company containing the information specified in the Charter within 30 days
after January 1 of each year. In addition, each stockholder shall, upon
demand, be required to disclose to the Company in writing such information with
respect to the direct, indirect and constructive ownership of beneficial
interests as the Board of Directors deems necessary to comply with the
provisions of the Code applicable to REITs, to comply with the requirements of
any taxing authority or governmental agency or to determine any such
compliance.
The Charter excludes from the Ownership Limit the Price Group, which
would exceed the Ownership Limit as a result of the exchange of its PDC Units
for Common Stock. Some members of the Price Group may also acquire additional
shares of Common Stock through the Company's 1993 Stock Option Plan, but in no
event will such persons be entitled to acquire additional shares such that the
five largest beneficial owners of the Company's shares of Equity Stock hold
more than 50% of the total outstanding shares of Equity Stock.
In addition to preserving the Company's status as a REIT, the Ownership
Limit may have the effect of precluding an acquisition of control of the
Company without the approval of the Board of Directors.
SELLING STOCKHOLDERS
The Secondary Shares offered by this Prospectus may be offered from time
to time by the Selling Stockholders named below. The following table sets
forth the names of and the number and percentage of shares of Common Stock
beneficially owned by each Selling Stockholder and the number and percentage
of shares of Common Stock beneficially owned by each Selling Stockholder upon
completion of the offering of the Secondary Shares, assuming that each Selling
Stockholder exchanges all of its PDC Units for shares of Common Stock.
Since the Selling Stockholders may sell all, some or none of their Secondary
Shares, no estimate can be made of the actual aggregate number of Secondary
Shares that will be offered hereby. The number and percentage of shares
of Common Stock provided in the following table represent the number and
percentage of shares of Common Stock the Selling Stockholders hold plus the
number of shares of Common Stock into which PDC Units held by the Selling
Stockholders may be exchanged, the number of shares of Common Stock into
which shares of Price Group Stock held by the Selling Stockholders may be
converted (if the Company elects to convert such shares in the event that the
combined direct and indirect economic interest held by the Price Group in the
Operating Partnership falls below 10%) and the number of shares of Common Stock
the Selling Stockholders have the right to acquire within 60 days from the date
of this Prospectus by exercise of outstanding stock options. For the purpose of
determining the percentage of shares of Common Stock beneficially owned by each
Selling Stockholder, PDC Units, shares of Price Group Stock and outstanding
stock options held by each Selling Stockholder are deemed to have been
exchanged, converted or exercised by or on behalf of such Selling Stockholder,
but shall not be deemed to have been exchanged, converted or exercised for the
purpose of determining the percentage of shares of Common Stock beneficially
owned by any other Selling Stockholder.
The Secondary Shares offered by this Prospectus may be offered from time
to time by the Selling Stockholders named below:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NUMBER PERCENT NUMBER PERCENT
John Price(1)(2) 3,061,868 16.0% 2,754,868 307,000 1.7%
JCP Realty, Inc.(2) 350,460 2.2% 350,460 0 -
Warren P. King(2)(3) 150,297 * 126,297 24,000 *
R M C Mall(2) 41,518 * 41,518 0 -
Taycor Ltd.(2) 35,462 * 35,462 0 -
Burke Cloward(2) 35,460 * 35,460 0 -
Keith Whatcott(2) 35,460 * 35,460 0 -
G. Rex Frazier(2)(4) 53,365 * 31,831 21,534 *
7
<PAGE>
Hall Investment(2) 24,935 * 24,935 0 -
Sam W. Souvall(2)(5) 32,061 * 23,371 8,690 *
Martin G. Peterson(2)(6) 32,134 * 20,134 12,000 *
Y S P(2)(7) 16,787 * 16,787 0 -
Mike Frei(2)(8)(9) 15,632 * 15,632 0 -
Corporation of the President of 15,306 * 15,306 0 -
the Church Jesus Christ of
Latter Day Saints
North Plains Development Company, 14,498 * 14,498 0 -
Ltd.(2)
Mike King(2) 12,685 * 12,685 0 -
Lena Wilcher, Trustee(2) 10,000 * 10,000 0 -
Paul K. Mendenhall(2)(10) 19,437 * 7,187 12,250 *
KFC Advertising(2) 5,487 * 5,487 0 -
Alan Frank(2) 5,486 * 5,486 0 -
Abrasha Wilcher, Trustee(2) 5,306 * 5,306 0 -
Ken Hansen(2) 5,102 * 5,102 0 -
Gary Watkins(2) 5,102 * 5,102 0 -
Merv Torian(2) 4,264 * 4,264 0 -
Carl Olson(2)(8)(11) 4,222 * 4,222 0 -
Thomas L. Mulkey(2)(12) 15,291 * 3,291 12,000 *
Steven Price(2)(8)(13) 8,272 * 2,772 5,500 *
Greg Curtis(2)(14) 10,625 * 2,625 8,000 *
Paul D. Kelley(2)(15) 7,620 * 1,620 6,000 *
David R. Sabey(2)(16) 9,861 * 1,595 8,266 *
Jim Cordano(2) 1,531 * 1,531 0 -
Dave Fairbourn(8)(17) 5,300 * 1,300 4,000 *
Alan Cordano(2) 765 * 765 0 -
Dierdra Price(2)(18) 1,433 * 433 1,000 *
Jennifer Price-Wallin(2)(19) 1,933 * 433 1,500 *
Terry Bybee(8)(20) 2,320 * 320 2,000 *
Mike Enslow(8)(21) 2,320 * 320 2,000 *
Kent Johnson(8)(22) 2,200 * 200 2,000 *
Kevin Korthius(8) 160 * 160 0 -
Phil Vise(8)(23) 2,160 * 160 2,000 *
Helen Buchanan(8) 150 * 150 0 -
Jodi Butterworth(8) 150 * 150 0 -
Mike Brown(8) 125 * 125 0 -
Byron Orton(8) 125 * 125 0 -
Vardell Curtis(8) 125 * 125 0 -
Lowell Koplin(8) 125 * 125 0 -
Chad Kelley(24) 125 * 125 0 -
Harry Chandler(8) 100 * 100 0 -
Nettie Priet(8) 101 * 100 1 *
East Ridge Partnership(2) 100 * 100 0 -
Marc Smith(8) 100 * 100 0 -
Kurt Lundgren(8) 100 * 100 0 -
Pat Clauson(8) 100 * 100 0 -
Leah Jackson(8) 100 * 100 0 -
Emily Apking(8) 100 * 100 0 -
Jim Dalton(8) 100 * 100 0 -
Jerry Gillette(8) 100 * 100 0 -
--------- --------- -------
4,066,051 3,626,310 439,741
</TABLE>
8
<PAGE>
* An asterisk indicates ownership of less than 1%.
(1) Mr. Price is Chairman of the Board of Directors and Chief Executive Officer
of the Company. Mr. Price beneficially owns (i) 159,809 PDC Units, (ii)
231,171 PDC Units held by Fairfax Realty, Inc., a Utah corporation in which
Mr. Price holds a 100% direct interest ("Fairfax"), (iii) 2,356,823 PDC
Units, 54,000 shares of Common Stock and 200,000 shares of Price Group
Stock held by Fairfax Holding, L.L.C., a limited liability company in
which Mr. Price holds an approximate 82.6% direct and indirect
interest ("Holding"), (iv) 3,100 PDC Units held by JPET II Company, Ltd., a
limited partnership in which Mr. Price is the sole general partner
("JPET"), (v) 3,965 PDC Units held by North Plains Development Company, Ltd.
("North Plains") and (vi) options to purchase 53,000 shares of Common
Stock. Mr. Price, through his control of Fairfax, Holding and JPET,
exercises sole investment and voting power over the PDC Units, shares of
Common Stock and shares of Price Group Stock held by such entities and
disclaims beneficial ownership of the PDC Units, shares of Common Stock
and shares of Price Group Stock held by Holding and JPET, as the case may
be, except to the extent of his approximate 82.6% interest in Holding and
his approximate 6.1% interest in JPET.
(2) Partner in the Predecessor Companies or an affiliate of the Predecessor
Companies.
(3) Mr. King is a member of the Board of Directors of the Company. Mr. King
beneficially owns (i) 80,890 PDC Units, (ii) 16,008 PDC Units held by Mr.
King's wife, Florence K. King, (iii) 29,337 PDC Units held by W.P. King &
Co., a partnership in which Mr. King holds an approximate 5.8% interest,
(iv) 62 PDC Units held by North Plains and (v) options to purchase 24,000
shares of Common Stock.
(4) Mr. Frazier is President, Chief Operating Officer and a member of the Board
of Directors of the Company. Mr. Frazier beneficially owns (i) 31,756 PDC
Units, (ii) 75 PDC Units held by North Plains, (iii) 1,534 shares of Common
Stock and (iv) options to purchase 20,000 shares of Common Stock.
(5) Mr. Souvall is a member of the Board of Directors of the Company. Mr.
Souvall beneficially owns (i) 23,371 PDC Units, (ii) 690 shares of Common
Stock and (iii) options to purchase 8,000 shares of Common Stock.
(6) Mr. Peterson is Vice President-Administration of the Company. Mr.
Peterson beneficially owns (i) 19,978 PDC Units, (ii) 156 PDC Units held by
North Plains and (iii) options to purchase 12,000 shares of Common Stock.
(7) Y S P is a partnership with the general partner being George Souvall.
Mr. Souvall is the brother of Sam W. Souvall.
(8) Current employee of the Company, excluding officers and directors, or past
officer, director or employee of the Company and/or the Predecessor
Companies.
(9) Mr. Frei beneficially owns (i) 15,411 PDC Units and (ii) 221 PDC Units held
by North Plains.
(10) Mr. Mendenhall is Vice President-Finance and Secretary of the Company.
Mr. Mendenhall beneficially owns (i) 7,187 PDC Units, (ii) 250 shares of
Common Stock and (iii) options to purchase 12,000 shares of Common Stock.
(11) Mr. Olson beneficially owns (i) 4,166 PDC Units and (ii) 56 PDC Units held
by North Plains.
(12) Mr. Mulkey is Vice President-Leasing and Development of the Company.
Mr. Mulkey beneficially owns (i) 3,291 PDC Units and (ii) options to
purchase 12,000 shares of Common Stock.
(13) Mr. Steven Price beneficially owns (i) 2,772 PDC Units and (ii) 5,500
shares of Common Stock. Mr. Steven Price is the son of John Price.
(14) Mr. Curtis is Vice President-Management of the Company. Mr. Curtis
beneficially owns (i) 2,625 PDC Units and (ii) options to purchase 8,000
shares of Common Stock.
(15) Mr. Kelley is Vice President-Accounting and Treasurer of the Company.
Mr. Kelley beneficially owns (i) 1,620 PDC Units and (ii) options to
purchase 6,000 shares of Common Stock.
(16) Mr. Sabey is Vice President and General Counsel of the Company. Mr. Sabey
beneficially owns (i) 1,595 PDC Units, (ii) 266 shares of Common Stock and
(iii) options to purchase 8,000 shares of Common Stock.
(17) Mr. Fairbourn beneficially owns (i) 1,300 PDC Units and (ii) options to
purchase 4,000 shares of Common Stock.
(18) Ms. Price beneficially owns (i) 433 PDC Units and (ii) 1,000 shares of
Common Stock. Ms. Price is the daughter of John Price.
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<PAGE>
(19) Ms. Price-Wallin beneficially owns (i) 433 PDC Units and (ii) 1,500
shares of Common Stock. Ms. Price-Wallin is the daughter of John Price.
(20) Mr. Bybee beneficially owns (i) 320 PDC Units and (ii) options to purchase
2,000 shares of Common Stock.
(21) Mr. Enslow beneficially owns (i) 320 PDC Units and (ii) options to
purchase 2,000 shares of Common Stock.
(22) Mr. Johnson beneficially owns (i) 200 PDC Units and (ii) options to
purchase 2,000 shares of Common Stock.
(23) Mr. Vise beneficially owns (i) 160 PDC Units and (ii) options to purchase
2,000 shares of Common Stock.
(24) Mr. Chad Kelley is the minor son of Paul D. Kelley.
FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following discussion summarizes certain federal income tax
considerations that may be relevant to a prospective holder of shares of Common
Stock. The following discussion, which is not exhaustive of all possible tax
considerations, does not include a detailed discussion of any state, local or
foreign tax considerations. Nor does it discuss all of the aspects of federal
income taxation that may be relevant to a prospective stockholder in light of
his or her particular circumstances or to certain types of stockholders
(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) who are subject to special treatment under
the federal income tax laws.
EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS ADVISED TO CONSULT WITH HIS OR
HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF
THE PURCHASE, OWNERSHIP AND SALE OF COMMON STOCK IN AN ENTITY ELECTING TO BE
TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION, AND OF POTENTIAL
CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF THE COMPANY
GENERAL. The Company elected to be taxed as a REIT under Sections 856
through 860 of the Code, effective for its taxable year ended December 31,
1994. The Company believes that it was organized and has operated in such a
manner so as to qualify for taxation as a REIT under the Code, and the Company
intends to continue to operate in such a manner. No assurance, however, can be
given that the Company has operated in a manner so as to qualify or will
operate in a manner so as to continue to qualify as a REIT. Qualification and
taxation as a REIT depend upon the Company's ability to meet, on a continuing
basis, through actual annual operating results, distribution levels and
diversity of stock ownership, the various qualification tests imposed under the
Code on REITs, some of which are summarized below. While the Company intends
to operate so that it will qualify as a REIT, given the highly complex nature
of the rules governing REITs, the ongoing importance of factual determinations
and the possibility of future changes in circumstances of the Company, no
assurance can be given that the Company has qualified or will so qualify for
any particular year. See "--Failure to Qualify."
Rogers & Wells, counsel to the Company ("Counsel"), has rendered an opinion
that commencing with its taxable year ended December 31, 1994, the Company was
organized in conformity with the requirements for qualification as a REIT under
the Code, and the proposed method of operation of the Company, the Operating
Partnership and its financing subsidiary, Price Financing Partnership, L.P.
(the "Financing Partnership"), will enable the Company to continue to so
qualify. It must be emphasized that Counsel's opinion is based on various
assumptions and is conditioned upon certain representations made by the
Company, the Operating Partnership and the Financing Partnership as to factual
matters. In addition, Counsel's opinion is based upon factual representations
of the Company concerning its business and properties, and the business and
properties of the Operating Partnership and the Financing Partnership.
Moreover, such qualification and taxation as a REIT depend upon the Company's
ability to meet, through actual annual operating results, distribution levels,
diversity of stock ownership and various other qualification tests imposed
under the Code discussed below, the results of which will not be reviewed by
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<PAGE>
Counsel. Accordingly, no assurance can be given that the actual results of the
Company's operation for any one taxable year will satisfy such requirements.
See "--Failure to Qualify."
As a REIT, the Company generally is not subject to federal corporate income
taxes on net income that it distributes currently to stockholders. However,
the Company is subject to federal income tax on any income that it does not
distribute and is also subject to federal income or excise tax in certain
circumstances on certain types of income even though that income is
distributed.
The following is a general summary of the Code provisions that govern the
federal income tax treatment of a REIT and its stockholders. These provisions
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 thereof.
REQUIREMENTS FOR QUALIFICATION. The Code defines a REIT as a corporation,
trust or association (1) that is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable common
stock, or by transferable certificates of beneficial interest; (3) that would
be taxable as a domestic corporation but for Sections 856 through 859 of the
Code; (4) that is neither a financial institution nor an insurance company
subject to certain provisions of the Code; (5) that 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) that meets certain other tests, described below, regarding the nature
of its income and assets. The Company believes that it currently satisfies
requirements (1) through (7). In addition, the Charter includes restrictions
regarding the transfer of the Company's Common Stock that are intended to
assist the Company in continuing to satisfy the share ownership requirements
described in (6) and (7) above. See "Restrictions on Transfer of Capital
Stock."
The Company currently has two "qualified REIT subsidiaries," Price GP Corp.
and Price Capital Corp. A corporation that is a "qualified REIT subsidiary" is
not treated as a separate corporation for federal income tax purposes, and all
assets, liabilities and items of income, deduction and credit of a "qualified
REIT subsidiary" are treated as assets, liabilities and items of the REIT. In
applying the requirements described herein, the Company's "qualified REIT
subsidiaries" will be ignored, and all assets, liabilities and items of income,
deduction and credit of such subsidiaries will be treated as assets,
liabilities and items of the Company. The Company's "qualified REIT
subsidiaries" will therefore not be subject to federal corporate income
taxation, although they may be subject to state or local taxation.
In the case of a REIT that is a partner in a partnership, the REIT is deemed
to own its proportionate share of the assets of the partnership and is deemed
to receive the income of the partnership attributable to such share. In
addition, the character of the assets and gross income of the partnership shall
retain the same character in the hands of the REIT. Thus, the Company's
proportionate share of the assets, liabilities and items of income of the
Operating Partnership and the Financing Partnership are treated as assets,
liabilities and items of income of the Company for purposes of applying the
requirements described herein, provided that the Operating Partnership and the
Financing Partnership are treated as partnerships for federal income tax
purposes. See "--Other Tax Considerations--Effect of Tax Status of the
Operating Partnership and the Financing Partnership on REIT Qualification."
INCOME TESTS. In order to qualify as a REIT, there are three gross income
requirements that must be satisfied annually. First, at least 75% of the
REIT's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types
of temporary investments. Second, at least 95% of the REIT's gross income
(excluding gross income from prohibited transactions) for each taxable year
must be derived from the same items which qualify under the 75% gross income
test, and from dividends, interest and gain from the sale or disposition of
stock or securities, or from any combination of the foregoing. Third, short-
term gain from the sale or other disposition of stock or securities, gain from
prohibited transactions and gain on the sale or other disposition of real
property held for less than four
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<PAGE>
years (apart from involuntary conversions and sales of foreclosure property)
must represent less than 30% of the REIT's gross income (including gross
income from prohibited transactions) for each taxable year.
Rents received by the Company will qualify as "rents from real property" in
satisfying the gross income requirements for a REIT described above, only if
several conditions (related to the identity of the tenant, the computation of
the rent payable and the nature of the property leased) are met. The Company
does not anticipate receiving rents in excess of a de minimis amount of gross
annual revenue that fail to meet these conditions. Finally, for rents received
to qualify as "rents from real property," the Company generally must not
operate or manage the property or furnish or render services to tenants, other
than through an "independent contractor" from whom the Company derives no
revenue. The "independent contractor" requirement, however, does not apply to
the extent the services provided by the Company are "usually or customarily
rendered" in connection with the rental of space for occupancy only and are not
otherwise considered "rendered to the occupant." The Company provides certain
services with respect to the Properties through the Operating Partnership,
which is not an "independent contractor." However, all of the services
provided by the Company through the Operating Partnership are considered
"usually or customarily rendered" in connection with the rental of retail and
other space for occupancy. If the Company contemplates providing services in
the future that reasonably might be expected not to meet the "usual or
customary" standard, it will arrange to have such services provided by an
independent contractor from which the Company and the Operating Partnership
will receive no income.
The Company will receive some income that is not qualifying income for
purposes of the 75% and 95% gross income tests. Such income includes
management and leasing fee income from the management by the Operating
Partnership of retail properties not wholly owned by the Operating Partnership
and certain parking income. Such income is not expected to exceed 2% to 3% of
the Operating Partnership's gross income and, therefore, is not expected to
cause the Company to fail to satisfy the 75% or 95% gross income test.
If the Company fails to satisfy one or both of the 75% or the 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code. It
is not possible, however, to state whether in all circumstances the Company
would be entitled to the benefit of these relief provisions. Even if these
relief provisions were to apply, a tax would be imposed on certain excess net
income.
ASSET TESTS. The Company, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets: (i) at
least 75% of the value of the Company's total assets must be represented by
"real estate assets," cash, cash items and government securities; (ii) not more
than 25% of the Company's total assets may be represented by securities other
than those in the 75% asset class; and (iii) of the investments included in the
25% asset class, the value of any one issuer's securities (other than an
interest in a partnership or shares of a "qualified REIT subsidiary" or another
REIT) owned by the Company may not exceed 5% of the value of the Company's
total assets, and the Company may not own more than 10% of any one issuer's
outstanding voting securities (other than an interest in a partnership or
securities of a "qualified REIT subsidiary" or another REIT).
After initially meeting the asset tests at the close of any quarter, the
Company will not lose its status as a REIT for failure to satisfy the asset
tests at the end of a later quarter solely by reason of changes in asset
values. If the failure to satisfy the asset tests results from an acquisition
of securities or other property during a quarter, the failure can be cured by
disposition of sufficient nonqualifying assets within 30 days after the close
of that quarter. The Company maintains adequate records of the value of its
assets to ensure compliance with the asset tests and to take such other action
within 30 days after the close of any quarter as may be required to cure any
noncompliance. However, there can be no assurance that such other action will
always be successful.
ANNUAL DISTRIBUTION REQUIREMENTS. To qualify as a REIT, the Company
generally must distribute to its stockholders at least 95% of its income each
year. In addition, the Company 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. The Company
believes that it has made, and intends to continue to make, timely
distributions sufficient to satisfy the annual distribution requirements. It
is possible, however, that the Company, from time to time, may not have
sufficient cash or other liquid assets to meet the distribution
12
<PAGE>
requirements. In that event, the Company may cause the Operating Partnership
to arrange for short-term, or possibly long-term, borrowing to permit the
payments of required dividends.
FAILURE TO QUALIFY. If the Company fails to qualify for taxation as a REIT
in any taxable year, the Company will be subject to tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates. Unless entitled to relief under specific statutory provisions, the
Company 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 the Company would be entitled to
such statutory relief.
TAXATION OF STOCKHOLDERS
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS. As long as the Company qualifies
as a REIT, distributions made to the Company's taxable domestic stockholders
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 corporate stockholders will not be eligible for the dividends received
deduction as to such amounts. Distributions that are designated as capital
gain dividends will be taxed 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 stockholder has held its stock. However,
corporate stockholders may be required to treat up to 20% of certain capital
gain dividends as ordinary income. Distributions in excess of current and
accumulated earnings and profits will not be taxable to a stockholder to the
extent that they do not exceed the adjusted basis of the stockholder's Common
Stock, but rather will reduce the adjusted basis of such Common Stock. To
the extent that such distributions exceed the adjusted basis of a stockholder's
Common Stock, they will be included in income as long-term capital gain
(or short-term capital gain if the Common Stock has been held for one year or
less), assuming the Common Stock is a capital asset in the hands of the
stockholder.
In general, a domestic stockholder 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 stockholder's adjusted basis of such Common Stock. Such gain or loss
generally will constitute long-term capital gain or loss if the stockholder has
held such shares for more than one year. Loss upon a sale or exchange of
Common Stock by a stockholder 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 the Company required to
be treated by such stockholder as long-term capital gain.
Under certain circumstances, domestic stockholders may be subject to backup
withholding at the rate of 31% with respect to dividends paid.
TAXATION OF TAX-EXEMPT STOCKHOLDERS. The Company does not expect that
distributions by the Company to a stockholder that is a tax-exempt entity will
constitute "unrelated business taxable income" ("UBTI"), provided that the tax-
exempt entity has not financed the acquisition of its Common Stock with
"acquisition indebtedness" within the meaning of the Code and the Common Stock
is not otherwise used in an unrelated trade or business of the tax-exempt
entity.
TAXATION OF NON-U.S. STOCKHOLDERS. The rules governing U.S. federal income
taxation of Non-U.S. Stockholders (persons other than (i) citizens or residents
of the United States; (ii) corporations, partnerships or other entities created
or organized in the United States or any political subdivisions thereof; or
(iii) estates or trusts the income of which is subject to U.S. federal income
taxation regardless of its source) are complex, and no attempt will be made
herein to provide more than a very limited summary of such rules. Prospective
Non-U.S. Stockholders should consult with their own tax advisors to determine
the impact of U.S. federal, state and local income tax laws with regard to an
investment in Common Stock, including any reporting requirements.
In general, a Non-U.S. Stockholder will be subject to regular U.S. federal
income tax with respect to an investment in Common Stock if such investment is
"effectively connected" with the Non-U.S. Stockholder's conduct of a trade or
business in the United States. A corporate Non-U.S. Stockholder that receives
income that is, or is treated as, effectively connected with a trade or
business in the United States may also be subject to the branch
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<PAGE>
profits tax under Section 884 of the Code, which is payable in addition to
regular U.S. corporate income tax. The following discussion will apply to
Non-U.S. Stockholders whose investment in Common Stock is not so effectively
connected.
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company
as capital gain 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 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 current and
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 Non-U.S. Stockholder's Common Stock, but rather will reduce the adjusted
basis of such Common Stock. To the extent that such distributions exceed the
adjusted basis of a Non-U.S. Stockholder's Common Stock, they will give rise to
tax liability if the Non-U.S. Stockholder otherwise would be subject to tax on
any gain from the sale or disposition of his Common Stock as described below
(in which case they also may be subject to a 30% branch profits tax if the
stockholder is a foreign corporation). If it cannot be determined at the time
a distribution is made whether or not such distribution will be in excess of
current and accumulated earnings and profits, the distribution will be subject
to withholding at the rate applicable to dividends. However, the Non-U.S.
Stockholder may seek a refund of such amounts from the Internal Revenue Service
(the "IRS") if it is subsequently determined that such distribution was, in
fact, in excess of current and accumulated earnings and profits of the Company.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Stockholder under the provisions
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") at the
normal capital gain rates applicable to domestic stockholders (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 corporate Non-U.S.
Stockholder not entitled to treaty relief or exemption. The Company is
required by the Code to withhold 35% of any distribution that could be
designated by the Company as a capital gain dividend. This amount is
creditable against the Non-U.S. Stockholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Stockholder upon a sale of Common Stock
generally will not be taxed under FIRPTA if the Company is 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. The Company believes that it is 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. Stockholder
would be subject to the same treatment as domestic stockholders with respect to
such gain (subject to applicable alternative minimum tax, possible withholding
tax and a special alternative minimum tax in the case of nonresident alien
individuals), and the purchaser of the Common Shares would be required to
withhold and remit to the IRS 10% of the purchase price.
OTHER TAX CONSIDERATIONS
EFFECT OF TAX STATUS OF THE OPERATING PARTNERSHIP AND THE FINANCING
PARTNERSHIP ON REIT QUALIFICATION. All of the Company's investments are through
the Operating Partnership and the Financing Partnership. The Company believes
that the Operating Partnership and the Financing Partnership are properly
treated as partnerships for tax purposes (and not as associations taxable as a
corporations). If, however, the Operating Partnership or the Financing
Partnership were treated as an association taxable as a corporation, the
Company would cease to qualify as a REIT. Furthermore, in such a situation,
any partnership treated as a corporation would be subject to corporate income
taxes. Also, in such a situation, the Company would not be able to deduct its
share of any losses generated by any such partnership in computing its taxable
income.
TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. The Operating Partnership
was formed by way of contributions of appreciated property (including certain
of the Properties). 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
14
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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 a "Book-Tax
Difference"). The partnership agreement of the Operating Partnership and the
Financing Partnership require allocations of income, gain, loss and deduction
with respect to contributed Property to be made in a manner consistent with the
special rules in Section 704(c) of the Code and the regulations thereunder,
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 Difference 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 Company (i) to be allocated lower amounts
of depreciation and other deductions for tax purposes than would be allocated
to the Company if all Properties were to have a tax basis equal to their fair
market value at the time of acquisition; and (ii) possibly to be allocated
taxable gain in the event of a sale of such contributed Properties in excess
of the economic or book income allocated to the Company as a result of such
sale. The foregoing principles also apply in determining the earnings and
profits of the Company 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 the Company purchased its interests in the Properties at their
agreed value.
STATE AND LOCAL TAXES. The Company and its stockholders may be subject to
state or local taxation in various state or local jurisdictions, including
those in which it or they transact business or reside. The state and local tax
treatment of the Company and its stockholders may not conform to the federal
income tax consequences discussed above. Consequently, prospective
stockholders should consult with their own tax advisors regarding the effect of
state, local and other tax laws of any investment in the Common Stock of the
Company.
PLAN OF DISTRIBUTION
This Prospectus relates to the possible offer and sale from time to time of
any Secondary Shares by the Selling Stockholders. The Company has registered
the Secondary Shares for sale to provide the holders thereof with freely
tradeable securities, but registration of such shares does not necessarily mean
that any of such shares will be offered or sold by the Selling Stockholders.
The Company will not receive any proceeds from the offering or sale of
Secondary Shares by the Selling Stockholders.
The Selling Stockholders may from time to time offer the Secondary Shares
in one or more transactions (which may involve block transactions) on the NYSE
or otherwise, in special offerings, exchange distributions or secondary
distributions pursuant to and in accordance with the rules of the NYSE, in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Secondary Shares (whether such options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
To the extent required at the time a particular offer of Secondary Shares
is made, a Prospectus Supplement will be distributed that will set forth the
names of any Selling Stockholders, underwriters, dealers or agents and any
commissions and other terms constituting compensation from such Selling
Stockholders and any other required information.
The Selling Stockholders may effect such transactions by selling Secondary
Shares to or through broker-dealers or through other agents, and such broker-
dealers or agents may receive compensation in the form of commissions from the
Selling Stockholders, which will not exceed those customary in the types of
transactions involved, and/or the purchasers of Secondary Shares for whom they
may act as agent. The Selling Stockholders and any dealers or agents that
participate in the distribution of Secondary Shares may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of Secondary Shares by them and any commissions received by any such
dealers or agents might be deemed to be underwriting commissions under the
Securities Act.
In the event of a "distribution" of the shares, the Selling Stockholders,
any selling broker-dealer or agent and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act, which would prohibit, with
15
<PAGE>
certain exceptions, any such person from bidding for or purchasing any security
which is the subject of such distribution until his participation in that
distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of Common Stock in connection with
this offering.
In order to comply with the securities laws of certain states, if
applicable, the Secondary Shares may be sold only through registered or
licensed brokers or dealers. In addition, in certain states, the Secondary
Shares may not be sold unless they have been registered or qualified for sale
in such state or an exemption from such registration or qualification
requirement is available and is complied with.
LEGAL MATTERS
The validity of the Secondary Securities issued hereunder, as well as legal
matters described under "Federal Income Tax Considerations," will be passed
upon for the Company by Rogers & Wells, New York, New York. Rogers & Wells
will rely as to certain matters of Maryland law on the opinion of Piper &
Marbury, L.L.P., Baltimore, Maryland.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1995, have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
16
<PAGE>
NO DEALER, SALESPERSON OR OTHER
INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR 3,626,310 SHARES
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR JP REALTY, INC.
A SOLICITATION OF AN OFFER TO BUY,
THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON
TO WHOM, IT IS UNLAWFUL TO MAKE AN COMMON STOCK
OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE _______________
IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE PROSPECTUS
INFORMATION CONTAINED HEREIN IS _______________
CORRECT OR COMPLETE AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
_______________
TABLE OF CONTENTS
PAGE ___________, 1996
Available Information................2
Incorporation of Certain Documents
by Reference.........................2
The Company..........................4
Description of Common Stock..........4
Restrictions on Transfer of Capital
Stock................................6
Selling Stockholders.................7
Federal Income Tax Considerations...10
Plan of Distribution................15
Legal Matters.......................16
Experts.............................16
_______________
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses to be paid by the Company
in connection with the registration of the Secondary Shares. Except for the
Securities and Exchange Commission registration fee, all amounts are estimates.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission
Registration Fee......................................................$24,147
Blue Sky Fees and Expenses.............................................. 2,000
NYSE Filing Fees........................................................ 12,600
Attorneys' Fees and Expenses............................................ 22,000
Accounting Fees and Expenses............................................ 4,000
Miscellaneous Expenses.................................................. 5,000
------
Total..............................................................$69,747
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Maryland General Corporation Law (the "MGCL"), the
Company's Charter obligates the Company to indemnify its present and former
directors and officers and to pay or reimburse expenses for these individuals
in advance of the final disposition of a proceeding to the maximum extent
permitted from time to time by Maryland law. The Company's By-Laws obligate
the Company to indemnify and advance expenses to present and former directors
and officers to the maximum extent permitted by Maryland law. The MGCL permits
a corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service in those or other
capacities, unless it is established that (i) the act or omission of the
director or officer was material to the matter giving rise to the proceeding
and (a) was committed in bad faith, or (b) was the result of active and
deliberate dishonesty, (ii) the director or officer actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful.
The MGCL permits the Articles of Incorporation of a Maryland corporation
to include a provision limiting the liability of its directors and officers to
the corporation and its stockholders for money damages, except to the extent
that (i) it is provided that the person actually received an improper benefit
or profit in money, property or services, or (ii) a judgment or other final
adjudication is entered in a proceeding based on a finding that the person's
action, or failure to act, was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding. The
Company's Charter contains a provision providing for elimination of the
liability of its directors or officers to the Company or its stockholders for
money damages to the maximum extent permitted by Maryland law from time to
time.
ITEM 16. EXHIBITS.
4.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) to the Company's
Registration Statement on Form S-11 (File No. 33-68844))
4.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3(b) to the Company's Registration Statement
on Form S-11 (File No. 33-68844))
4.3 Specimen of Common Stock Certificate (incorporated by reference to
Exhibit 4 to the Company's Registration Statement on Form S-11
(File No. 33-68844))
5.1 Opinion of Rogers & Wells
II-1
<PAGE>
5.2 Opinion of Piper & Marbury, L.L.P.
8.1 Opinion of Rogers & Wells regarding certain federal tax matters
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Rogers & Wells (contained in its opinions filed as
Exhibits 5.1 and 8.1)
23.3 Consent of Piper & Marbury, L.L.P. (contained in its opinion filed
as Exhibit 5.2)
24 Powers of Attorney (included on page II-4)*
_____________________________
* Previously filed with the Company's Registration Statement on Form
S-3 filed on April 17, 1996.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(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 and of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided however, that subparagraphs (i) and (ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means
of a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus
II-2
<PAGE>
is at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration statements on
Form F-3, a post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statements and information are contained in
periodic reports filed with or furnished to the Commission 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 Form F-3.
(b) The undersigned registrant hereby 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 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 the time
shall be deemed to be the initial bona fide offering thereof.
(c) 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 under 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 Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<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
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Salt Lake City, State of
Utah, on May 21, 1996.
JP REALTY, INC.
By:/s/ JOHN PRICE
--------------
John Price
Chairman of the Board of Directors
and 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 date indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
<S> <C> <C>
/s/ JOHN PRICE Chairman of the Board of May 21, 1996
Directors and Chief Executive
Officer (Principal Executive
Officer)
/s/ G. REX FRAZIER* President and Chief Operating May 21, 1996
Officer and Director
/s/ PAUL K. MENDENHALL* Vice President - Finance and May 21, 1996
Secretary (Chief Financial
Officer)
/s/ PAUL D. KELLEY Vice President - Accounting and May 21, 1996
Treasurer (Principal Accounting
Officer)
/s/ WARREN P. KING* Director May 21, 1996
/s/ ALLEN P. MARTINDALE* Director May 21, 1996
/s/ JAMES A. ANDERSON* Director May 21, 1996
/s/ SAM W. SOUVALL* Director May 21, 1996
/s/ ALBERT SUSSMAN* Director May 21, 1996
</TABLE>
* By: /s/ PAUL D. KELLEY
---------------
Attorney-In-Fact
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS NO. DESCRIPTION
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) to the Company's
Registration Statement on Form S-11 (File No. 33-68844))
4.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3(b) to the Company's Registration Statement
on Form S-11 (File No. 33-68844))
4.3 Specimen of Common Stock Certificate (incorporated by reference to
Exhibit 4 to the Company's Registration Statement on Form S-11
(File No. 33-68844))
5.1 Opinion of Rogers & Wells
5.2 Opinion of Piper & Marbury, L.L.P.
8.1 Opinion of Rogers & Wells regarding certain federal tax matters
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Rogers & Wells (contained in its opinions filed as
Exhibits 5.1 and 8.1)
23.2 Consent of Piper & Marbury, L.L.P. (contained in its opinion filed
as Exhibit 5.2)
24 Powers of Attorney (included on page II-4)*
_____________________________
* Previously filed with the Company's Registration Statement on Form S-3 filed
on April 17, 1996.
</TABLE>
II-5
<PAGE>
ROGERS & WELLS
200 Park Avenue
New York, New York 10166
(212) 878-8000
FAX (212) 878 8375
WASHINGTON, D.C. LONDON
LOS ANGELES FRANKFFURT
PARIS HONG KONG
May 20, 1996
JP Realty, Inc.
35 Century Park-Way
Salt Lake City, Utah 84115
Ladies and Gentlemen:
We are acting as special counsel to JP Realty, Inc., a
Maryland corporation (the "Company"), in connection with the
preparation and the filing of the Company's Registration Statement
on Form S-3 (as the same may be amended or supplemented from time
to time, the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended, covering 3,626,310 shares of common stock, par
value $.0001 per share (the "Shares"), reserved by the Company for
issuance to, and to be sold by, certain stockholders in connection
with the exchange of units of limited partner interest in Price
Development Company, Limited Partnership, a Delaware limited
partnership (the "Operating Partnership").
In rendering the opinion expressed herein, we have
examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records and other
instruments, including the Exchange Agreement (the "Exchange
Agreement") among the Company and the limited partners
of the Operating Partnership, as we have deemed necessary or
appropriate, and the corporate proceedings of the Company relating
to the authorization, offering and issuance of the Shares and the
performance by the Company of its obligations under the Exchange
Agreement. In addition, we have examined the Registration Statement
in the form to be filed with the Commission on or about the date hereof.
In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of documents
submitted to us as certified or photostatic copies, the
authenticity of originals of such latter documents and the absence
of any amendments or modifications to those items reviewed by us.
Based upon the foregoing and subject to the assumptions,
qualifications, limitations and exceptions set forth herein, we are
of the opinion that, upon issuance and delivery of the Shares upon
the terms set forth in the corporate proceedings of the Company and
in conformity with the provisions of the Exchange Agreement and the
Registration Statement, such Shares will have been duly authorized
and will be validly issued, fully paid and nonassessable.
The opinions stated herein are limited to the laws of the
United States and the laws of the State of New York. To the extent
that any opinions stated herein are dependent on the laws of the
State of Maryland, we have relied on the opinion of Piper & Marbury
L.L.P., dated May 15, 1996, a copy of which has been delivered to you.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and the reference to this
firm under the caption "Legal Matters" in the Registration
Statement.
Very truly yours,
\s\ ROGERS & WELLS
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH WASHINGTON
36 SOUTH CHARLES STREET NEW YORK
BALTIMORE, MARYLAND 21201-3018 PHILADELPHIA
410-539-2530 EASTON
FAX: 410-539-0489 LONDON
May 15, 1996
JP Realty, Inc.
35 Century Park-Way
Salt Lake City, Utah 84115
Ladies and Gentlemen:
We have acted as special Maryland counsel to JP Realty, Inc., a Maryland
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), pursuant to a Registration
Statement on Form S-3 (the "Registration Statement") of the Company to be filed
with the Securities and Exchange Commission (the "Commission") on May 16, 1996,
for offering by certain selling shareholders from time to time of up to
3,626,310 shares (the "Shares") of common stock, par value $0.0001 per share
(the "Common Stock"). The Shares are issuable by the Company in exchange for
units representing limited partnership interests in Price Development Company,
Limited Partnership, a Maryland limited partnership, pursuant to an Exchange
Agreement dated January 21, 1994, among the Company and the holders of such
units (together with any amendments thereto, the "Exchange Agreement"). This
opinion is being provided at your request in connection with the filing of the
Registration Statement.
In our capacity as special Maryland counsel, we have reviewed the
following:
(a) The Registration Statement;
(b) The Amended and Restated Articles of Incorporation of the Company
(the "Charter"), incorporated by reference as Exhibit 4.1 to the
Registration Statement;
(c) A copy of the Amended and Restated By-Laws of the Company as in
effect on the date hereof (the "By-Laws"), incorporated by reference as
Exhibit 4.2 to the Registration Statement;
(d) The Exchange Agreement;
(e) The Preliminary Prospectus dated May 16, 1996 (the "Preliminary
Prospectus") relating to the sale of the Shares, which forms part of the
Registration Statement;
(f) Certified resolutions of the Board of Directors of the Company
relating to the Company's organization, authorizing the filing of the
Registration Statement and authorizing the issuance of the Shares pursuant
to the Exchange Agreement;
(g) A Secretary's Certificate of the Company, dated the date hereof
(the "Secretary's Certificate"), as to certain factual matters; and
(h) Such other documents as we have considered necessary to the
rendering of the opinions expressed below.
In our examination of the aforesaid documents, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, and the conformity
with originals of all documents submitted to us as copies (and the authenticity
of the originals of such copies), and that all public records reviewed are
accurate and complete. In making our examination of documents executed by
parties other than the Company, we have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder, and we
have also assumed the due authorization by all requisite action, corporate or
other, and the valid execution and delivery by such parties of such documents
and the validity, binding effect and enforceability thereof with respect to such
parties. As to any facts material to this opinion which we did not independently
establish or verify, we have relied solely upon the Secretary's Certificate.
We assume that prior to the issuance of any Shares there will exist, under
the Charter of the Company, the requisite number of authorized but unissued
shares of Common Stock.
Based upon and subject to the foregoing, we are of the opinion that, the
Shares, when issued pursuant to the Exchange Agreement, will be duly authorized,
validly issued, fully paid and non-assessable by the Company.
The opinion expressed above is limited to the laws of the State of
Maryland, exclusive of the securities or "blue sky" laws of the State of
Maryland. The foregoing opinion is rendered as of the date hereof. We assume no
obligation to update such opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in the law which may hereafter
occur. To the extent that any documents referred to herein are governed by the
law of a jurisdiction other than Maryland, we have assumed that the laws of such
jurisdiction are the same as the law of Maryland.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to our firm and to
our opinion in the Registration Statement. In giving our consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ Piper & Marbury L.L.P.
ROGERS & WELLS
200 Park Avenue
New York, New York 10166
(212) 878-8000
FAX (212) 878-8375
WASHINGTON, D.C. LONDON
LOS ANGELES FRANKFURT
PARIS HONG KONG
May 20, 1996
JP Realty, Inc.
35 Century Park-Way
Salt Lake City, Utah 84115
Re: JP Realty, Inc. - Registration Statement
on Form S-3
----------------------------------------
Gentlemen:
You have requested our opinion with respect to certain
federal income tax matters in connection with the Registration
Statement on Form S-3, filed with the Securities and Exchange
Commission (the "Registration Statement"), relating to JP Realty,
Inc. (the "Company"). All capitalized terms used herein have their
respective meanings set forth in the Registration Statement unless
otherwise stated.
In rendering the opinion stated below, we have examined and
relied, with your consent, upon the following:
(i) The Registration Statement;
(ii) The Initial Prospectus of the Company, dated
January 13, 1994 (the "Initial Prospectus");
(iii) The prior registration statement on Form S-3
filed with the Securities and Exchange
Commission dated August 1, 1995 (the "Shelf
Prospectus");
(iv) The Amended and Restated Agreement of Limited
Partnership of Price Development Company,
Limited Partnership (the "Operating Partner-
ship");
<PAGE>
(v) The Agreement of Limited Partnership of Price
Financing Partnership, L.P. (the "Financing
Partnership");
(vi) The Closing Agreement On Final Determination
Covering Specific Matters between the Company
and the Commissioner of Internal Revenue, dated
July 17, 1995 (the "Closing Agreement"); and
(vii) 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 of 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 Financing Partnership at all times have been
and will continue to 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 Financing Partnership's intended activities
as described in the Registration Statement, the Initial Prospectus
and the Shelf Prospectus and that the Company, the Operating
Partnership and the Financing Partnership have operated and will
continue to operate in accordance with the method of operation
described in the Registration Statement, the Initial Prospectus and
the Shelf Prospectus.
For purposes of rendering the opinion stated below, we have
also assumed, with your consent, the accuracy of the
representations contained in the Certificate of Representations
dated May 20, 1996 provided to us by the Company, the Operating
Partnership and the Financing 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 Financing Partnership.
<PAGE> 2
Based upon and subject to the foregoing, we are of the
opinion that commencing with its taxable year ended December 31,
1994, the Company was organized in conformity with the requirements
for qualification as a REIT under the Code and that the proposed
method of operation of the Company, the Operating Partnership and
the Financing Partnership, as described in the Registration
Statement, the Initial Prospectus and the Shelf Prospectus and as
represented by the Company, the Operating Partnership and the
Financing Partnership, will permit the Company to continue to so
qualify.
The opinion stated above represents our conclusions as to the
application of federal income tax laws existing as of the date of
this letter to the transactions contemplated in the Registration
Statement and we can give no assurance that legislative enactments,
administrative changes or court decisions may not be forthcoming
that would modify or supersede our opinion. Moreover, there can be
no assurance that positions contrary to our opinion will not be
taken by the Internal Revenue Service, or that a court considering
the issues would not hold contrary to such opinion. Further, the
opinion set forth above represents our conclusions 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
opinion referred to herein. Moreover, the Company's qualification
and taxation as a REIT depend upon the Company's ability to meet,
through actual annual operating results, requirements under the
Code regarding income, assets, distributions and diversity of stock
ownership. Because the Company's satisfaction of these
requirements will depend on future events, no assurance can be
given that the actual results of the Company's operation for any
one taxable year will satisfy the tests necessary to qualify as or
be taxed as a REIT under the Code. 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 all of the
facts referred to in this letter.
This opinion is furnished to you solely for use in connection
with the Registration Statement. We hereby consent to the filing
of this opinion as an Exhibit to the Registration Statement and to
the use of our name under the caption "Federal Income Tax
Considerations" in the Registration Statement.
<PAGE> 3
We express no opinion as to any federal income tax issue or
other matter except those set forth above.
Very truly yours,
/s/ROGERS & WELLS
<PAGE> 4
