<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-38611
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 30, 1997)
2,000,000 SHARES
(JDN LOGO) JDN REALTY CORPORATION
9 3/8% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
(LIQUIDATION PREFERENCE $25.00 PER SHARE)
------------------------------------
The shares of 9 3/8% Series A Cumulative Redeemable Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), are being offered by JDN
Realty Corporation ("JDN" or the "Company"), a Maryland corporation that has
elected to be taxed for federal income tax purposes as a real estate investment
trust (a "REIT"). Dividends on the Series A Preferred Stock are cumulative from
the date of original issue and are payable quarterly, on or about the last day
of March, June, September and December of each year commencing on September 30,
1998, at the rate of 9 3/8% of the $25.00 liquidation preference per annum
(equivalent to a fixed annual dividend of $2.3438 per share). See "Description
of Series A Preferred Stock -- Dividends."
The Series A Preferred Stock is not redeemable prior to September 15, 2003.
On and after September 15, 2003, the Series A Preferred Stock may be redeemed
for cash at the option of JDN, in whole or from time to time in part, at a
redemption price of $25.00 per share, plus accumulated, accrued and unpaid
dividends, if any, to the redemption date solely with the proceeds from certain
sales of equity securities of the Company and from no other source. The Series A
Preferred Stock has no stated maturity, will not be subject to any sinking fund
or mandatory redemption and will not be convertible into or exchangeable for any
other securities of JDN. The Series A Preferred Stock will rank senior to JDN's
Common Stock, par value $.01 per share (the "Common Stock"), with respect to the
payment of dividends and the distribution of amounts upon liquidation,
dissolution or winding up of JDN. The Series A Preferred Stock is subject to
certain restrictions on ownership and transfer designed to assist in maintaining
JDN's qualification as a REIT for federal income tax purposes. See "Description
of Series A Preferred Stock."
Application will be made to list the Series A Preferred Stock on the New
York Stock Exchange (the "NYSE") under the symbol "JDNPrA." If approved for
listing, trading of the Series A Preferred Stock on the NYSE is expected to
commence within the 30-day period after the initial delivery of the Series A
Preferred Stock. While the Underwriters (as defined herein) have advised JDN
that they intend to make a market in the Series A Preferred Stock prior to the
commencement of trading on the NYSE, they are under no obligation to do so and
may discontinue market making at any time without notice. No assurance can be
given that a market for the Series A Preferred Stock will exist prior to
commencement of trading on the NYSE or at any other time. See "Underwriting."
SEE "RISK FACTORS" IN THE COMPANY'S CURRENT REPORT ON FORM 8-K, DATED
JANUARY 26, 1998, INCORPORATED BY REFERENCE INTO THE ACCOMPANYING PROSPECTUS,
FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE SERIES A PREFERRED STOCK.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............................................. $25.00 $.7875 $24.2125
- -------------------------------------------------------------------------------------------------------------------
Total(4).............................................. $50,000,000 $1,575,000 $48,425,000
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued dividends, if any, from the date of original issue.
(2) JDN has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(3) Before deducting estimated expenses of $200,000 payable by JDN.
(4) JDN has granted the Underwriters an option to purchase up to an additional
300,000 shares of Series A Preferred Stock to cover over-allotments, if any.
If all such shares are purchased, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $57,500,000,
$1,811,250, and $55,688,750, respectively. See "Underwriting."
------------------------------------
The shares of Series A Preferred Stock are offered by the Underwriters,
subject to prior sale, when, as and if delivered to and accepted by the
Underwriters, subject to approval of certain legal matters by counsel for the
Underwriters and to certain other conditions. The Underwriters reserve the right
to withdraw, cancel or modify such offer and to reject orders in whole or in
part. It is expected that delivery of the Series A Preferred Stock will be made
on or about September 17, 1998.
A.G. EDWARDS & SONS, INC.
J.C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE
CORPORATION
STIFEL, NICOLAUS & COMPANY
INCORPORATED
The date of this Prospectus Supplement is September 10, 1998.
<PAGE> 2
FORWARD-LOOKING STATEMENTS
The Company has included herein certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). When used, statements which are not historical in nature including the
words "anticipate," "estimate," "should," "expect," "believe," "intend" and
similar expressions are intended to identify forward-looking statements. Such
statements are, by their nature, subject to certain risks and uncertainties.
Among the factors that could cause actual results to differ materially from
those projected are the following: business conditions and the general economy,
especially as they affect interest rates and value-oriented retailers; the
federal, state and local regulatory environment; availability of debt and equity
capital with favorable terms and conditions; availability of new development and
acquisition opportunities; changes in the financial condition or corporate
strategy of the Company's primary retail tenants and in particular Wal-Mart and
Lowe's; ability to complete and lease existing development and redevelopment
projects on schedule and within budget; and inability of the Company to maintain
its qualification as a REIT. Other risks, uncertainties and factors that could
cause actual results to differ materially than those projected are detailed from
time to time in reports filed by the Company with the Securities and Exchange
Commission, including Forms 8-K, 10-Q and 10-K.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SERIES A
PREFERRED STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING THE PURCHASE OF THE
SERIES A PREFERRED STOCK TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION
OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE> 3
The following information is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in,
or incorporated by reference into, the accompanying Prospectus. Unless indicated
otherwise, the information contained in this Prospectus Supplement assumes no
exercise of the Underwriters' over-allotment option. Unless the context
otherwise requires, as used herein the terms "Company" or "JDN" include JDN
Realty Corporation, its predecessor, JDN Development Company, Inc., subsidiaries
of JDN Realty Corporation and JDN Development Company, Inc., and joint ventures
(including limited liability companies) in which JDN Realty Corporation, JDN
Development Company, Inc. or their subsidiaries own an interest.
THE COMPANY
The Company, which began operations in 1978, is a real estate development
company specializing in the development and asset management of retail shopping
centers anchored by value-oriented retailers. As of July 31, 1998, the Company
owned and operated 83 properties containing approximately 10.5 million square
feet of gross leasable area ("Company GLA") located in 13 states. The principal
tenants of the Company's properties include Wal-Mart, Lowe's and Kroger. The
Company has elected to be treated as a real estate investment trust ("REIT") for
federal income tax purposes.
The Company is one of the largest developers of Wal-Mart anchored shopping
centers in the United States. The Company and its founders have developed or
jointly developed 143 shopping center projects, 96 of which were built on
assignment from Wal-Mart, and have developed, sold or leased more than 150
outparcels.
The Company's business objective is to increase its funds from operations
per share by (i) development of new shopping centers anchored by strong
retailers, (ii) redevelopment and expansion of its existing properties, (iii)
effective leasing and management of its properties and ground leasing of
adjacent outparcels and (iv) acquisition of existing shopping centers. The
Company is a fully integrated real estate firm with in-house development,
redevelopment, expansion, leasing, property management and acquisition
expertise.
The eight members of the Company's senior management team average
approximately 11 years with the Company and each has significant experience in
the real estate industry. As of July 31, 1998, the executive officers and
directors of the Company as a group beneficially owned approximately 9.1% of the
outstanding Common Stock of the Company.
JDN Realty Corporation was incorporated under the laws of the State of
Maryland in December 1993. The Company's executive offices are located at 359
East Paces Ferry Road, Suite 400, Atlanta, Georgia 30305 and its telephone
number is (404) 262-3252.
Relationships with Shopping Center Retailers. Management believes that the
Company's relationships with national, regional and local shopping center
retailers provide it with a competitive advantage relative to other shopping
center developers. The Company's relationships include prominent retailers such
as Wal-Mart, Lowe's, Kroger, TJ Maxx, Food Lion, Kmart, Kohl's, Target and Home
Depot. The Company continuously works to improve existing relationships and to
develop new relationships with value-oriented retailers that enjoy a leading
position in their respective market segments. The Company intends to continue to
leverage these relationships in developing value-oriented shopping centers on an
assignment basis. Management believes that these relationships are the product
of the Company's historical track record of delivering development projects on
an assignment basis that are generally on time and on budget.
Management believes that the Company's relationships with a select group of
value-oriented retailers provide the Company with a superior selection of
potential anchor tenants for its shopping centers. Management believes that the
selection of the initial tenants for a shopping center project is among the most
important factors in determining the initial success and long-term viability of
a project.
S-3
<PAGE> 4
The following table sets forth, as of July 31, 1998, certain information
with respect to tenants that individually account for more than 2% of the
Company's Annualized Base Rent (as hereinafter defined):
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF ADDITIONAL COMPANY GLA ANNUALIZED PERCENTAGE OF
TENANT STORES LEASED STORES(1) (SQUARE FEET) BASE RENT COMPANY GLA
- ------ ------------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Wal-Mart................. 21 11 2,371,542 16.3% 22.5%
Lowe's................... 11 2 1,239,416 12.4 11.8
Kroger................... 9 2 502,090 4.9 4.8
TJ Maxx.................. 9 -- 403,116 3.4 3.8
Food Lion................ 10 -- 288,618 2.6 2.7
Bruno's(2)............... 5 1 269,434 2.3 2.6
Kmart.................... 4 -- 389,564 2.3 3.7
Kohl's................... 4 -- 328,092 2.2 3.1
-- -- --------- ---- ----
Total.......... 73 16 5,791,872 46.4% 55.0%
== == ========= ==== ====
</TABLE>
- ---------------
(1) Represents additional retail stores that are not owned by the Company but
are part of or adjacent to the Company's shopping center properties.
(2) As of August 24, 1998, Bruno's represented 0.34% of the Company's Annualized
Base Rent. See "Recent Developments -- Tenant Developments."
As of July 31, 1998, 46.6% of the Company's Annualized Base Rent (as
hereinafter defined) was derived from tenants whose long-term senior unsecured
debt securities are rated investment grade, which for these purposes are deemed
to be "senior unsecured debt" rated BBB- or better by Standard and Poor's
Corporation or "long-term bonds" rated Baa3 or better by Moody's Investors
Service. Security ratings are subject to revision or withdrawal at any time by
the assigning rating organization.
Wal-Mart is the Company's largest tenant in terms of both Annualized Base
Rent and Company GLA, representing approximately 16.3% of the Company's
Annualized Base Rent and approximately 22.5% of Company GLA at July 31, 1998. Of
the 21 stores that Wal-Mart leased from the Company as of July 31, 1998, 20
contained Company GLA over 60,000 square feet and seven were less than five
years old.
Lowe's is the Company's second largest tenant in terms of both Annualized
Base Rent and Company GLA, representing approximately 12.4% of the Company's
Annualized Base Rent and approximately 11.8% of Company GLA at July 31, 1998. Of
the 11 stores which Lowe's leased from the Company as of July 31, 1998, ten
contained Company GLA over 70,000 square feet and eight were less than five
years old.
S-4
<PAGE> 5
The following table sets forth, as of July 31, 1998, certain information
with respect to the type of tenant space leased by the Company.
<TABLE>
<CAPTION>
ANNUALIZED
PERCENTAGE OF BASE RENT PER
COMPANY GLA PERCENTAGE OF ANNUALIZED ANNUALIZED LEASED SQUARE
TYPE OF TENANT SPACE (SQUARE FEET) COMPANY GLA BASE RENT(1) BASE RENT FOOT
- -------------------- ------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Anchor........................ 8,104,498 76.8% $50,992,721 68.6% $ 6.29
Non-Anchor.................... 2,146,551 20.4 23,340,711 31.4 10.87
Unleased...................... 294,750 2.8 -- -- --
---------- ----- ----------- -----
Total or Weighted
Average........... 10,545,799 100.0% $74,333,432 100.0% $ 7.25
============= ============= ============ =============
National...................... 7,318,540 69.4% $48,363,005 65.1% $ 6.61
Regional...................... 1,940,993 18.4 15,062,325 20.2 7.76
Local......................... 991,516 9.4 10,908,102 14.7 11.00
Unleased...................... 294,750 2.8 -- -- --
---------- ----- ----------- -----
Total or Weighted
Average........... 10,545,799 100.0% $74,333,432 100.0% $ 7.25
============= ============= ============ =============
</TABLE>
- ---------------
(1) "Annualized Base Rent" represents the monthly base rent in effect as of July
31, 1998 (as set forth in executed leases) multiplied by 12, excluding
tenant recoveries for common area maintenance, property taxes, insurance and
percentage rent.
The following table sets forth information on lease expirations as of June
30, 1998:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
COMPANY COMPANY GLA ANNUALIZED BASE
NUMBER OF GLA UNDER ANNUALIZED BASE REPRESENTED RENT REPRESENTED
LEASE LEASES EXPIRING LEASES RENT UNDER BY EXPIRING BY EXPIRING
EXPIRATION YEAR EXPIRING (SQUARE FEET) EXPIRING LEASES(1) LEASES LEASES
--------------- --------- --------------- ------------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
1998 117 285,176 $ 2,446,222 2.8% 3.2%
1999 164 397,817 4,168,452 3.9 5.5
2000 196 540,936 5,463,480 5.3 7.2
2001 137 453,697 4,077,684 4.5 5.4
2002 92 535,281 3,862,224 5.3 5.1
2003 59 313,536 2,756,630 3.1 3.6
2004 15 477,762 2,941,811 4.7 3.9
2005 16 224,833 1,635,015 2.2 2.1
2006 26 369,586 2,754,919 3.6 3.6
2007 14 298,975 2,186,289 2.9 2.9
2008 14 327,635 2,117,137 3.2 2.8
2009 14 600,005 3,260,372 5.9 4.3
2010 17 553,084 2,832,788 5.4 3.7
2011 13 461,529 3,235,275 4.5 4.3
2012 18 585,195 5,124,791 5.7 6.7
2013 10 410,932 3,049,291 4.0 4.0
2014 4 184,451 1,257,136 1.8 1.7
2015 7 646,599 4,214,774 6.4 5.5
2016 10 634,353 4,744,180 6.2 6.2
2017 12 1,235,555 8,600,906 12.1 11.3
2018 3 377,805 3,193,932 3.7 4.2
2019 1 86,584 708,257 0.9 0.9
2020 1 126,249 918,128 1.2 1.2
Thereafter 3 74,052 515,980 0.7 0.7
--- ---------- ----------- ----- -----
Total 963 10,201,627 $76,065,673 100.0% 100.0%
=== ========== =========== ===== =====
</TABLE>
- ---------------
(1) Represents rates in effect at the time of lease expiration.
S-5
<PAGE> 6
Consistent Operating Performance. Management believes that the successful
implementation of the Company's operating strategy accounts for the Company's
consistent operating performance. The Company's relationships with shopping
center retailers, reputation for timely delivery of development projects,
financial strength, access to capital and experienced professionals are
important factors in achieving the Company's goals of increasing shareholder
value and realizing growth of funds from operations per share. Management
believes that the following indicators of the Company's operating performance
demonstrate the success of its operating strategy:
- The Company's operating portfolio of shopping center properties was
97.2%, 97.1% and 98.2% leased as of June 30, 1998, December 31, 1997 and
December 31, 1996, respectively.
- On a same property basis, Annualized Base Rent per leased square foot
increased to $6.92 as of June 30, 1998, from $6.85 as of June 30, 1997.
- Minimum and percentage rents have increased from $15.8 million for the
six months ended June 30, 1996 to $19.2 million for the six months ended
June 30, 1997 to $32.3 million for the six months ended June 30, 1998,
increases of 22.0% and 67.9%, respectively.
- Diluted funds from operations per share increased 13.9% from the six
months ended June 30, 1997 to the six months ended June 30, 1998.
The Company believes that funds from operations ("FFO") is helpful to
investors as a measure of the performance of an equity REIT because, along
with cash provided by operating activities, investing activities and
financing activities, it provides investors with an indication of the
ability of the Company to make capital expenditures and to fund other cash
needs. FFO is defined by the National Association of Real Estate
Investment Trusts, Inc. to mean net income, computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains or
losses from debt restructuring and sales of property, plus depreciation
and amortization of real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. The Company's method of
calculating FFO may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO does not
represent cash provided by operating activities, as defined by GAAP,
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of operating performance and is not
indicative of cash available to fund all cash flow needs, including the
Company's ability to make cash distributions.
Disciplined Approach to Development. The Company's primary growth strategy
is to develop, on assignment, shopping centers anchored by value-oriented
retailers. Since 1978, the Company and its founders have developed or jointly
developed 143 shopping center projects, of which 96 have been built on
assignment from Wal-Mart. The Company's primary development relationships
continue to be with Wal-Mart and Lowe's, with additional significant
relationships with Kroger, Target and Home Depot.
The Company's assignment-based development strategy is designed to reduce
the risks associated with development by ensuring that a significant shopping
center retailer is committed before the Company spends substantial time or money
on a project. Typically, the Company has signed leases or has commitments from
shopping center retailers for 80% to 90% of the planned Total GLA prior to the
purchase of land and the commencement of construction.
After obtaining an assignment from a significant retailer in a particular
market, the Company:
- Performs preliminary demographic, traffic and economic studies that
indicate particular locations, and estimates preliminary costs associated
with those potential sites;
- Contacts other major shopping center retailers that the Company believes
would be interested in the same market to seek a development assignment;
- Obtains an option on the proposed site;
- Estimates costs by evaluating soil, water, sewer, environmental and
traffic factors, as well as any other costs associated with the
particular site;
S-6
<PAGE> 7
- Develops a site plan, taking into account the physical constraints of the
property and the physical requirements of the shopping center retailers,
that can be translated into economic terms to set rental rates for anchor
tenants;
- Reviews the local rental market to determine demand for and pricing of
local tenant space;
- Contacts potential outparcel users for the site to determine demand for
and pricing of outparcels;
- Performs financial analyses to confirm that the development meets
internal return-on-cost criteria; and
- After the Company obtains a signed lease or a commitment from a
significant shopping center retailer, the Company purchases the land and
oversees construction of the shopping center.
By adhering to a disciplined development philosophy that mitigates
development risks, the Company has generally been able to deliver projects on a
timely basis that meet budgeted returns.
The Company has historically concentrated its development activities in the
Southeast as a result of attractive shopping center development opportunities
with its major anchor tenants in this region. The Company continues to actively
pursue development opportunities within the Southeast based on assignments from
major retailers. The Company is also pursuing development opportunities outside
the Southeast as the result of (i) increased tenant interest in developments in
these areas and (ii) opportunities in these new areas with local developers in
the form of strategic alliance relationships. These strategic alliance
relationships evolve through relationships the Company has developed with local
developers who in turn have development opportunities in their local markets.
The Company typically owns these projects and compensates the strategic alliance
partners on a fee basis.
Capital Structure. Management intends to finance the Company's future
growth through the maintenance of a flexible capital structure that management
believes will allow the Company to take advantage of development and acquisition
opportunities while providing access to the public debt and equity capital
markets on favorable terms. The Company intends to maintain a strong financial
position by: (i) maintaining a low level of leverage (i.e., a ratio of
debt-to-total-market-capitalization of 50% or less); (ii) maintaining a large
pool of unencumbered properties; (iii) managing its exposure to variable
interest rates; and (iv) continuing to decrease its distribution payout ratio
(i.e., distributions paid in respect of a year as a percentage of FFO for such
year).
Operating Portfolio. The following table sets forth certain information
about the Company's operating portfolio of shopping center properties as of June
30, 1998:
<TABLE>
<CAPTION>
PERCENTAGE
COMPANY PERCENTAGE OF
NUMBER GLA OF ANNUALIZED
OF (SQUARE COMPANY ANNUALIZED BASE BASE PERCENT
LOCATION CENTERS FEET) GLA RENT RENT LEASED
-------- ------- ---------- ---------- --------------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Alabama........................... 3 514,522 4.9% $ 2,944,277 4.0% 99.2%
Florida........................... 5 347,294 3.3 2,311,261 3.1 94.5
Georgia........................... 32 4,091,995 39.0 30,725,759 41.6 98.1
Kansas............................ 1 125,657 1.2 252,420 0.3 52.4
Kentucky.......................... 1 158,042 1.5 1,013,197 1.4 100.0
Mississippi....................... 2 137,980 1.3 1,247,167 1.7 97.8
North Carolina.................... 9 1,620,358 15.4 12,854,889 17.4 97.9
Ohio.............................. 2 339,317 3.2 2,139,152 2.9 100.0
Pennsylvania...................... 1 142,514 1.4 1,102,253 1.5 94.6
South Carolina.................... 4 389,090 3.7 2,707,274 3.7 99.5
Tennessee......................... 11 887,494 8.5 6,558,237 8.9 98.2
Virginia.......................... 5 651,185 6.2 4,460,490 6.0 88.7
Wisconsin......................... 5 1,095,189 10.4 5,539,774 7.5 99.8
-- ---------- ----- ----------- -----
Total or Weighted
Average............... 81 10,500,637 100.0% $73,856,150 100.0% 97.2%
== ========== ===== =========== =====
</TABLE>
S-7
<PAGE> 8
The following table sets forth an analysis of the Company's leased and
unleased space by the categories listed as of June 30, 1998:
<TABLE>
<CAPTION>
FUTURE
COMPANY LEASED UNLEASED LEASED FUTURE
GLA GLA(1) GLA LEASED GLA(2) PERCENT
CATEGORY (SQUARE FEET) (SQUARE FEET) (SQUARE FEET) PERCENT (SQUARE FEET) LEASED(3)
-------- ------------- ------------- ------------- ------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Core Portfolio(4).......... 5,940,817 5,846,779 94,038 98.4% 4,229 98.5%
Acquisitions(5)............ 2,256,248 2,152,677 103,571 95.4 1,800 95.5
Development(6)............. 1,875,724 1,850,723 25,001 98.7 8,201 99.1
Redevelopment(7)........... 427,848 351,488 76,360 82.2 4,200 83.1
---------- ---------- ------- ------
Total or Weighted
Average........ 10,500,637 10,201,667 298,970 97.2% 18,430 97.3%
========== ========== ======= ======
</TABLE>
- ---------------
(1) Leased GLA includes space for which the Company has an executed lease and
the tenant is open and/or paying rent.
(2) Future Leased GLA includes space for which the Company has an executed lease
with a rental commencement date subsequent to June 30, 1998.
(3) Represents the sum of Leased GLA and Future Leased GLA divided by Company
GLA.
(4) Represents shopping centers which were owned by the Company as of both June
30, 1997 and June 30, 1998, excluding shopping centers classified as
"Redevelopment."
(5) Represents shopping centers which were acquired in the period from July 1,
1997 through June 30, 1998, excluding those classified as "Redevelopment."
(6) Represents shopping centers or portions of shopping centers which became
operational in the period from July 1, 1997 through June 30, 1998.
(7) Represents shopping centers undergoing redevelopment activities as of June
30, 1998.
S-8
<PAGE> 9
RECENT DEVELOPMENTS
Unsecured Line of Credit. On September 2, 1998, the Company executed a new
unsecured line of credit (the "New Line of Credit") which replaced its existing
$150.0 million unsecured line of credit (the "Unsecured Line of Credit"). The
New Line of Credit differs from the Unsecured Line of Credit as follows: (1)
increased maximum borrowings allowed to $174,750,000 (expandable to
$200,000,000); (2) extended the maturity date by one year from May 22, 2000 to
May 22, 2001; and (3) reduced the borrowing rate from LIBOR plus 1.25% to LIBOR
plus 1.00%.
Development. During the second quarter 1998, the Company began
construction on seven shopping centers bringing the total projects under
construction to 41. These 41 projects are expected to contain 4.1 million square
feet which will be owned by the Company and are expected to represent an
investment of $371.0 million.
Asset Management. The following information represents results of the
Company's leasing and management activities for the quarter ended June 30, 1998:
- On a same property basis, Annualized Base Rent per leased square foot
increased to $6.92 as of June 30, 1998, from $6.85 as of June 30, 1997.
- New leases were signed for 32,361 square feet at an average rental rate
of $12.94 per square foot.
- 96 tenants incurred contractual rental increases averaging 3.5%.
- At the end of the quarter, the Company's portfolio was 97.2% leased.
Based upon a review of shopping centers in its operating portfolio, the
Company has solicited and received offers to sell two of its shopping centers to
third-party purchasers. One of these shopping centers is a Wal-Mart and Lowe's
anchored shopping center in Cartersville, Georgia containing 375,828 square feet
of Company GLA. The other shopping center is a Wal-Mart anchored shopping center
in Cordele, Georgia containing 176,054 square feet of Company GLA. The Company
anticipates closing the sales of these two shopping centers in the fourth
quarter of 1998. As of the date hereof, the Company has not entered into
definitive sale agreements for these two centers, and there can be no assurance,
even if definitive agreements are entered into, as to whether or when these
sales will be consummated. If these sales are consummated, the Company
anticipates that it will use the proceeds to fund ongoing development and
redevelopment activities.
Operating Results. For the three months ended June 30, 1998, diluted FFO
per share increased 14.2% as compared with the three months ended June 30, 1997.
For the three months ended June 30, 1998 basic FFO per share increased 14.6% as
compared with the three months ended June 30, 1997. FFO increased 52.5% to $14.1
million for the three months ended June 30, 1998, compared with FFO of $9.2
million for the three months ended June 30, 1997. Net income increased 59.0% to
$10.1 million, or $0.32 per share on a diluted basis for the three months ended
June 30, 1998, compared with net income of $6.3 million, or $0.27 per share for
the three months ended June 30, 1997. Total revenues increased 76.0% to $19.2
million for the three months ended June 30, 1998, compared with total revenues
of $10.9 million for the three months ended June 30, 1997.
For the six months ended June 30, 1998, diluted FFO per share increased
13.9% as compared with the six months ended June 30, 1997. For the six months
ended June 30, 1998, basic FFO per share increased 14.3% as compared with the
six months ended June 30, 1997. FFO increased 56.5% to $26.8 million compared
with FFO for the six months ended June 30, 1997 of $17.1 million. Net income
increased 62.0% to $19.2 million, or $0.63 per share on a diluted basis for the
six months ended June 30, 1998, compared with net income of $11.8 million, or
$0.53 per share for the six months ended June 30, 1997. Total revenues increased
71.1% to $36.3 million for the six months ended June 30, 1998, compared with
total revenues of $21.2 million for the six months ended June 30, 1997.
Tenant Developments. On February 2, 1998, Bruno's Inc. ("Bruno's") filed
for Chapter 11 bankruptcy protection in federal bankruptcy court in Delaware. At
that time, Bruno's was a tenant in seven of the Company's shopping centers and
owned space that is part of an eighth shopping center owned by the Company. On
March 9, 1998, leases on two of the Company's Bruno's stores were assumed by
Ingles Markets, Incorporated. On August 24, 1998, Albertson's Inc. assumed
leases on four of the Company's other Bruno's stores. As of July 31, 1998,
adjusted for the Albertson's lease assumptions, Bruno's represented 0.34% of the
Company's Annualized Base Rent.
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THE OFFERING
Securities Offered......... 2,000,000 shares of Series A Preferred Stock
(2,300,000 shares if the Underwriters'
over-allotment option is exercised in full) (the
"Offering").
Dividends.................. Dividends on the Series A Preferred Stock are
cumulative from the date of original issue and are
payable quarterly on or about the last day of
March, June, September and December of each year,
when and as declared, commencing September 30,
1998, at the rate of 9 3/8% of the $25.00
liquidation preference per annum (equivalent to a
fixed annual dividend of $2.3438 per share). The
initial dividend payable on the Series A Preferred
Stock will be $.0846 per share. Dividends on the
Series A Preferred Stock will accrue whether or not
the Company has earnings, whether or not such
dividends are declared and whether or not there are
funds legally available for the payment of such
dividends.
Liquidation Preference..... $25.00 per share of Series A Preferred Stock, plus
an amount equal to accumulated, accrued and unpaid
dividends.
Redemption................. The Series A Preferred Stock is not redeemable
prior to September 15, 2003. On and after September
15, 2003, the Series A Preferred Stock will be
redeemable for cash at the option of JDN, in whole
or from time to time in part, at a redemption price
of $25.00 per share, plus accumulated, accrued and
unpaid dividends, if any, to the redemption date.
The redemption price for the Series A Preferred
Stock (other than any portion thereof consisting of
accumulated, accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by
JDN of other capital shares (which term includes
common stock, preferred stock and other ownership
interests) of JDN (whether or not such sale occurs
concurrently with such redemption) and from no
other source.
Ranking.................... The Series A Preferred Stock will rank senior to
any shares of the Common Stock, with respect to the
payment of dividends and the distribution of
amounts upon liquidation, dissolution or winding
up.
Voting Rights.............. Holders of Series A Preferred Stock will generally
have no voting rights. However, whenever dividends
on the shares of Series A Preferred Stock are in
arrears for six or more quarterly periods (whether
or not consecutive), the holders of such shares
(voting together as a single class with all other
shares of any class or series of stock ranking on a
parity with the Series A Preferred Stock which are
entitled to similar voting rights) will be entitled
to vote for the election of two additional
directors of JDN until all dividends in arrears on
outstanding shares of Series A Preferred Stock have
been paid or declared and set apart for payment. In
addition, certain changes to the terms of the
Series A Preferred Stock that would be materially
adverse to the rights of holders of Series A
Preferred Stock cannot be made without the
affirmative vote of holders of at least 66 2/3% of
the outstanding shares of Series A Preferred Stock
and shares of any class or series of stock ranking
on a parity with the Series A Preferred Stock which
are entitled to similar voting rights, voting as a
single class.
Ownership Limit............ Ownership of shares of Series A Preferred Stock by
any person is limited such that the aggregate value
of all Preferred Stock (as defined herein) owned,
directly or indirectly, by such person, does not,
subject to certain
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exceptions, exceed 8.0% either in number of shares
or value of the outstanding shares of the Preferred
Stock (as defined herein).
Listing.................... Application will be made to list the Series A
Preferred Stock on the NYSE under the symbol
"JDNPrA." If approved for listing, trading of the
Series A Preferred Stock on the NYSE is expected to
commence within the 30-day period after the initial
delivery of the Series A Preferred Stock. While the
Underwriters have advised JDN that they intend to
make a market in the Series A Preferred Stock prior
to the commencement of trading on the NYSE, they
are under no obligation to do so and may
discontinue market making at any time without
notice.
Conversion................. The Series A Preferred Stock is not convertible
into or exchangeable for any other securities or
property of JDN.
Maturity................... The Series A Preferred Stock has no stated maturity
and will not be subject to any sinking fund or
mandatory redemption.
Use of Proceeds............ JDN intends to use the net proceeds from the sale
of the Series A Preferred Stock (estimated to be
$48.2 million ($55.5 million if the Underwriters'
over-allotment option is exercised in full)) to
reduce the outstanding balance under the New Line
of Credit.
For additional information regarding the terms of the Series A Preferred
Stock, see "Description of Series A Preferred Stock."
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of the Series A
Preferred Stock offered hereby, after deducting the underwriting discount and
estimated expenses of the Offering, are estimated to be approximately $48.2
million ($55.5 million if the Underwriters' over-allotment option is exercised
in full).
The Company intends to use all of the net proceeds from the Offering to
reduce the outstanding balance under the New Line of Credit. Borrowings
outstanding under the New Line of Credit were approximately $139.5 million at
September 2, 1998. The New Line of Credit bears interest at LIBOR plus 1.00%
(6.625% at September 2, 1998) and matures in May 2001.
DESCRIPTION OF SERIES A PREFERRED STOCK
The following summary of the terms and provisions of the Series A Preferred
Stock does not purport to be complete and is qualified in its entirety by
reference to the pertinent sections of the JDN Charter and the Articles
Supplementary to the JDN Charter establishing the Series A Preferred Stock (the
"Articles Supplementary"), each of which is available from the Company. This
description of the particular terms of the Series A Preferred Stock supplements,
and to the extent inconsistent therewith, replaces, the description of the
general terms and provisions of JDN's Preferred Stock, par value $.01 per share
("Preferred Stock"), set forth in the accompanying Prospectus.
GENERAL
Under the Charter, JDN is authorized to issue up to 170,000,000 shares of
its capital stock, including Common Stock and Preferred Stock. See "Description
of Capital Stock" set forth in the accompanying Prospectus. JDN is authorized to
issue shares of Preferred Stock in one or more series or subseries, with such
designations, preferences, conversion and other rights, voting powers,
restriction, limitations as to dividends, qualifications and terms and
conditions of redemption, in each case, if any, as are permitted by Maryland law
and as the JDN Board of Directors may determine by resolution. See "Description
of Preferred Stock" in the accompanying Prospectus. The Series A Preferred Stock
will be a class of JDN's Preferred Stock. There are
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<PAGE> 12
currently no other classes or series of outstanding Preferred Stock. The Series
A Preferred Stock will not be convertible into or exchangeable for any other
securities of JDN.
RANKING
The Series A Preferred Stock will, with respect to dividend rights and
rights upon liquidation, dissolution or winding up of JDN, rank (a) prior or
senior to the common stock of JDN and any other class or series of capital stock
of JDN if the holders of Series A Preferred Stock are entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up in preference or priority to the holders of shares of such class or series
("Series A Junior Stock"), (b) on a parity with any other class or series of
capital stock of JDN if the holders of such class or series of stock and the
Series A Preferred Stock are entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority of one over the other ("Series A
Parity Stock") and (c) junior to any class or series of capital stock of JDN if
the holders of such class or series are entitled to the receipt of dividends and
amounts distributable upon liquidation, dissolution or winding up in preference
or priority to the holders of the Series A Preferred Stock ("Series A Senior
Stock"). The Company currently has no equity securities outstanding on a parity
with or senior to the Series A Preferred Stock.
DIVIDENDS
Holders of Series A Preferred Stock shall be entitled to receive, when and
as declared by the JDN Board of Directors, out of funds of JDN legally available
for payment thereof, cash dividends at the rate of $2.3438 per annum per share.
Such dividends shall be cumulative from the date of original issue, whether or
not in any dividend period or periods such dividends shall be declared or there
shall be funds of JDN legally available for the payment of such dividends, and
shall be payable quarterly on or about the last day of March, June, September
and December of each year (or, if not a business day, the next succeeding
business day) (each a "Dividend Payment Date"), commencing September 30, 1998.
Any dividend payable on the Series A Preferred Stock for any partial dividend
period will be computed ratably on the basis of twelve 30-day months and a
360-day year. The initial dividend payable on the Series A Preferred Stock will
be for less than a full quarter and will be $.0846 per share. Dividends will be
payable in arrears to holders of record as they appear on the stock records of
JDN at the close of business on the fifteenth day of the calendar month in which
the applicable Dividend Payment Date falls or on such other date designated by
the Company's Board of Directors for the payment of dividends that is not more
than 45 nor less than 10 days prior to such Dividend Payment Date. Holders of
Series A Preferred Stock shall not be entitled to receive any dividends in
excess of cumulative dividends on the Series A Preferred Stock. No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series A Preferred Stock that may be in arrears.
If, for any taxable year, the Company elects to designate as "capital gain
dividends" (as defined in Section 857 of the Code) any portion (the "Capital
Gains Amount") of the total dividends (within the meaning of the Code) paid or
made available for the year to holders of all classes of capital stock (the
"Total Dividends"), then the portion of the Capital Gains Amount that shall be
allocable to holders of Series A Preferred Stock shall be in the same proportion
that Total Dividends paid or made available to the holders of Series A Preferred
Stock for the year bears to the Total Dividends. If, for any taxable year, the
Company elects, as provided in Section 857(b)(3)(D) of the Code, to designate as
"undistributed capital gains" any portion of the Company's total net capital
gains for the taxable year, then such undistributed capital gains shall be
allocated between the holders of the Series A Preferred Stock and the holders of
other classes or series of capital stock of the Company in a manner that is
consistent with such allocations being considered other than a "preferential
dividend" within the meaning of Section 562(c) of the Code.
When dividends are not paid in full upon the Series A Preferred Stock or
any other class or series of Series A Parity Stock, or a sum sufficient for such
payment is not set apart, all dividends declared upon the Series A Preferred
Stock and any shares of Series A Parity Stock shall be declared ratably in
proportion to the respective amounts of dividends accumulated, accrued and
unpaid on the Series A Preferred Stock and
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accumulated, accrued and unpaid on such Series A Parity Stock. Except as set
forth in the preceding sentence, unless dividends on the Series A Preferred
Stock equal to the full amount of accumulated, accrued and unpaid dividends have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof has been or contemporaneously is set apart for such
payment for all past dividend periods, no dividends shall be declared or paid or
set apart for payment by JDN and no other distribution of cash or other property
may be declared or made, directly or indirectly, by JDN with respect to any
shares of Series A Parity Stock. Unless dividends equal to the full amount of
all accumulated, accrued and unpaid dividends on the Series A Preferred Stock
have been paid, or declared and set apart for payment, for all past dividend
periods, no dividends (other than dividends or distributions paid in shares of
Series A Junior Stock or options, warrants or rights to subscribe for or
purchase shares of Series A Junior Stock) may be declared or paid or set apart
for payment by JDN and no other distribution of cash or other property may be
declared or made, directly or indirectly, by JDN with respect to any shares of
Series A Junior Stock, nor shall any shares of Series A Junior Stock be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or
other acquisition of Common Stock made for purposes of an employee incentive,
benefit or stock purchase plan of JDN or any subsidiary) for any consideration
(or any monies be paid to or made available for a sinking fund for the
redemption of any shares of any such stock), directly or indirectly, by JDN
(except by conversion into or exchange for shares of Series A Junior Stock, or
options, warrants or rights to subscribe for or purchase shares of Series A
Junior Stock), nor shall any other cash or other property be paid or distributed
to or for the benefit of holders of shares of Series A Junior Stock.
Notwithstanding the foregoing provisions of this paragraph, JDN shall not be
prohibited from (i) declaring or paying or setting apart for payment any
dividend or distribution on any shares of Series A Parity Stock or Series A
Junior Stock or (ii) redeeming, purchasing or otherwise acquiring any Series A
Parity Stock or Series A Junior Stock, in each case, if such declaration,
payment, purchase or other acquisition is made pursuant to certain provisions of
the JDN charter which are designed to assist in maintaining JDN's qualification
as a REIT. See "Description of Capital Stock -- Restrictions on Ownership" in
the accompanying Prospectus.
No dividends on the Series A Preferred Stock shall be authorized by the
Board of Directors of the Company or be paid or set apart for payment by the
Company at such time as any agreement of the Company, including any agreement
relating to its indebtedness, prohibits such authorization, payment or setting
apart for payment or provides that such authorization, payment or setting apart
for payment would constitute a breach thereof or a default thereunder, or if
such authorization or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, dividends on the Series A Preferred Stock
will accrue whether or not the Company has earnings, whether or not there are
funds legally available for the payment of such dividends and whether or not
such dividends are authorized. Accrued but unpaid dividends on the Series A
Preferred Stock will not bear interest and holders of the Series A Preferred
Stock will not be entitled to any dividends in excess of full cumulative
dividends as described above.
Any dividend payment made on shares of the Series A Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to such shares which remains payable.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
JDN, before any payment or distribution by JDN shall be made to or set apart for
the holders of any shares of Series A Junior Stock, the holders of shares of
Series A Preferred Stock shall be entitled to receive a liquidation preference
of $25.00 per share (the "Series A Liquidation Preference"), plus an amount
equal to all accumulated, accrued and unpaid dividends (whether or not earned or
declared) to the date of final distribution to such holders; but such holders
shall not be entitled to any further payment. Until the holders of the Series A
Preferred Stock have been paid the Series A Liquidation Preference in full, plus
an amount equal to all accumulated, accrued and unpaid dividends (whether or not
earned or declared) to the date of final distribution to such holders, no
payment shall be made to any holder of Series A Junior Stock upon the
liquidation, dissolution or winding up of JDN. If upon any liquidation,
dissolution or winding up of JDN, the assets of JDN, or proceeds thereof,
distributable among the holders of Series A Preferred Stock shall be
insufficient to pay in full the above described preferential amount and
liquidating payments on any other shares of any class or series of Series A
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<PAGE> 14
Parity Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series A Preferred Stock and any such other Series A Parity
Stock ratably in the same proportion as the respective amounts that would be
payable on such Series A Preferred Stock and any such other Series A Parity
Stock if all amounts payable thereon were paid in full. The consolidation or
merger of the Company with or into any other entity or the sale, lease, transfer
or conveyance of all or substantially all of the assets of the Company or a
statutory share exchange shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Company.
Upon any liquidation, dissolution or winding up of JDN, after payment shall
have been made in full to the holders of Series A Preferred Stock and any Series
A Parity Stock, any other series or class or classes of Series A Junior Stock
shall be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Stock and any Series A
Parity Stock shall not be entitled to share therein.
REDEMPTION
Shares of Series A Preferred Stock shall not be redeemable by JDN prior to
September 15, 2003. On and after September 15, 2003, JDN may, at its option,
redeem shares of Series A Preferred Stock, in whole or from time to time in
part, at a cash redemption price equal to $25.00 per share of Series A Preferred
Stock plus all accumulated, accrued and unpaid dividends to the date fixed for
redemption (the "Redemption Date"); provided, however, that in the event of a
redemption of any shares of Series A Preferred Stock, if the Redemption Date
occurs after a dividend record date and on or prior to the related Dividend
Payment Date, the dividend payable on such Dividend Payment Date in respect of
such shares called for redemption shall be payable on such Dividend Payment Date
to the holders of record at the close of business on such dividend record date,
and shall not be payable as part of the redemption price for such shares. The
Redemption Date shall be selected by JDN and shall not be less than 30 days nor
more than 60 days after the date notice of redemption is sent by JDN. If full
cumulative dividends on all outstanding shares of Series A Preferred Stock have
not been paid or declared and set apart for payment, (i) no shares of Series A
Preferred Stock may be redeemed unless all outstanding shares of Series A
Preferred Stock are simultaneously redeemed and (ii) neither JDN nor any of its
affiliates may purchase or acquire shares of Series A Preferred Stock other than
pursuant to a purchase or exchange offer made on the same terms to all holders
of Series A Preferred Stock. The redemption price for the Series A Preferred
Stock (other than any portion thereof consisting of accumulated, accrued and
unpaid dividends) shall be payable solely with the proceeds from the sale by JDN
of other capital shares of JDN (whether or not such sale occurs concurrently
with such redemption) and from no other source. For purposes of the preceding
sentence, "capital shares" means any common stock, preferred stock, depositary
shares, partnership or other interests, participations or other ownership
interests (however designated) and any rights (other than debt securities
convertible into or exchangeable at the option of the holder for equity
securities (unless and to the extent such debt securities are subsequently
converted into capital shares)) or options to purchase any of the foregoing of
or in JDN.
Notice of redemption of the Series A Preferred Stock shall be mailed by JDN
to each holder of record of the shares to be redeemed by first class mail,
postage prepaid at such holder's address as the same appears on the stock
records of JDN. Any notice which was mailed as described above shall be
conclusively presumed to have been duly given on the date mailed whether or not
the holder receives the notice. Each notice shall state: (i) the Redemption
Date; (ii) the number of shares of Series A Preferred Stock to be redeemed;
(iii) the place or places where certificates for such shares of Series A
Preferred Stock are to be surrendered for cash; and (iv) the redemption price
payable on such Redemption Date, including, without limitation, a statement as
to whether or not accumulated, accrued and unpaid dividends will be (x) payable
as part of the redemption price or (y) payable on the next Dividend Payment Date
to the record holder at the close of business on the relevant record date as
described above. From and after the Redemption Date, dividends on the shares of
Series A Preferred Stock to be redeemed will cease to accrue, such shares shall
no longer be deemed to be outstanding and all rights of the holders thereof
shall cease (except (a) the right to receive the cash payable upon such
redemption without interest thereon and (b) if the Redemption Date occurs after
a dividend record date and on or prior to the related Dividend Payment Date, the
right of record holders at the close of business on such record date to receive
the dividend payable on such Dividend Payment Date).
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The Series A Preferred Stock will have no stated maturity and will not be
subject to any sinking fund or mandatory redemption provisions (except as
provided under "-- Restrictions on Ownership and Transfer").
Subject to applicable law and the limitation on purchases when dividends on
the Series A Preferred Stock are in arrears, the Company may, at any time and
from time to time, purchase any shares of Series A Preferred Stock in the open
market, by tender or by private agreement. Any shares of Series A Preferred
Stock that have been reacquired in such manner will be returned to the status of
authorized but unissued shares of Series A Preferred Stock.
VOTING RIGHTS
Holders of shares of Series A Preferred Stock will not have any voting
rights, except as set forth below and except as otherwise required by applicable
law.
If and whenever dividends on any shares of Series A Preferred Stock or any
series or class of Series A Parity Stock shall be in arrears for six or more
quarterly periods (whether or not consecutive), the number of directors then
constituting the JDN Board of Directors shall be increased by two (if not
already increased by reason of similar types of provisions with respect to
shares of Series A Parity Stock of any other class or Series which is entitled
to similar voting rights (the "Voting Preferred Stock")), and the holders of
shares of Series A Preferred Stock, together with the holders of shares of all
other Voting Preferred Stock then entitled to exercise similar voting rights,
voting as a single class regardless of series, will be entitled to vote for the
election of the two additional directors of JDN at any annual meeting of
stockholders or at a special meeting of the holders of the Series A Preferred
Stock and of the Voting Preferred Stock called for that purpose. JDN must call
such special meeting upon the request of any holder of at least ten percent
(10%) of any class or series of Preferred Stock so in arrears. Whenever
dividends in arrears on outstanding shares of the Series A Preferred Stock and
the Voting Preferred Stock shall have been paid and dividends thereon for the
current quarterly dividend period shall have been paid or declared and set apart
for payment, then the right of the holders of the Series A Preferred Stock and
of the Voting Preferred Stock to elect such additional two directors shall cease
and the terms of office of such directors shall terminate and the number of
directors constituting the JDN Board of Directors shall be reduced accordingly.
The affirmative vote or consent of at least 66 2/3% of the votes entitled
to be cast by the holders of the outstanding shares of Series A Preferred Stock
and the holders of all other classes or series of Series A Parity Stock entitled
to vote on such matters, voting as a single class, will be required to (i)
authorize, create, increase the authorized amount of or issue any shares of any
class of Series A Senior Stock or any security convertible into shares of any
class of Series A Senior Stock, or (ii) amend, alter or repeal any provision of,
or add any provision to, the JDN Charter, including the Articles Supplementary,
or the Amended and Restated Bylaws of JDN whether by merger, consolidation or
otherwise (an "Event"), if such action would materially adversely affect the
voting powers, rights or preferences of the holders of Series A Preferred Stock;
provided, however, with respect to the occurrence of any of the Events set forth
in (ii) above, as long as the Series A Preferred Stock remains outstanding with
the terms thereof materially unchanged, taking into account that upon the
occurrence of an Event, the Company may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such voting powers, rights or preferences of the holders of Series A
Preferred Stock, provided, further, that no such vote of the holders of Series A
Preferred Stock shall be required if, at or prior to the time such amendment,
alteration or repeal is to take effect or the issuance of any such Series A
Senior Stock or convertible security is to be made, as the case may be,
provisions are made for the redemption of all outstanding shares of Series A
Preferred Stock. An amendment of the JDN Charter to authorize, create, increase
the authorized amount of or issue Series A Junior Stock or any shares of any
class of Series A Parity Stock shall not, by itself, be deemed to materially
adversely affect the voting powers, rights or preferences of the holders of
Series A Preferred Stock.
With respect to the exercise of the above described voting rights, each
share of Series A Preferred Stock shall have one (1) vote per share, except that
when any other class or series of Preferred Stock shall have the right to vote
with the Series A Preferred Stock as a single class, then the Series A Preferred
Stock and such other class or series shall have one quarter of one (0.25) vote
per $25.00 of stated Series A Liquidation Preference.
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TRANSFER AGENT
The registrar, transfer agent and dividend disbursing agent for the Series
A Preferred Stock will be First Union National Bank (the "Transfer Agent").
BOOK ENTRY DELIVERY AND FORM
The shares of Series A Preferred Stock initially will be evidenced by one
or more global certificates (the "Global Preferred Securities"), which will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), and registered in the name of its nominee Cede & Co. ("Cede"). No
person that acquires an interest in such Series A Preferred Stock will be
entitled to receive a certificate representing such person's interest in such
Series A Preferred Stock except as set forth herein. Unless and until definitive
certificates representing Series A Preferred Stock are issued under the limited
circumstances described herein, all references to actions by holders of Series A
Preferred Stock issued in global form shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to payments and notices to such holders shall refer to payments and notices to
DTC or Cede, as the registered holder of such Series A Preferred Stock.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act and was created to hold
securities for its participating organizations ("Participants") and to
facilitate the clearance and settlement of securities transactions among
Participants through electronic book entry, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations, and may include
certain other organizations. Indirect access to the DTC system also is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Holders that are not Participants or Indirect Participants but that desire
to purchase, sell or otherwise transfer ownership of, or other interests in,
Series A Preferred Stock may do so only through Participants and Indirect
Participants. Under a book-entry format, holders may experience some delay in
their receipt of payments, as such payments will be forwarded by the agent
designated by the Transfer Agent to Cede, as nominee for DTC. DTC will forward
such payments to its Participants, which thereafter will forward them to
Indirect Participants or holders. Holders will not be recognized by the Company
as registered holders of the Series A Preferred Stock entitled to the benefits
of the terms of the Series A Preferred Stock. Holders that are not Participants
will be permitted to exercise their rights as such only indirectly through and
subject to the procedures of Participants and, if applicable, Indirect
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations as currently in effect (the "Rules"), DTC will be required to
make book-entry transfers of Series A Preferred Stock among Participants and to
receive and transmit payments to Participants. Participants and Indirect
Participants with which holders have accounts with respect to the Series A
Preferred Stock similarly are required by the Rules to make book-entry transfers
and receive and transmit such payments on behalf of their respective holders.
Because DTC can act only on behalf of Participants, who in turn act only on
behalf of holders or Indirect Participants, and on behalf of certain banks,
trust companies and other persons approved by it, the ability of a holder to
pledge Series A Preferred Stock to persons or entities that do not participate
in the DTC system, or otherwise to act with respect to such Series A Preferred
Stock, may be limited due to the absence of physical certificates for such
Series A Preferred Stock.
DTC will take any action permitted to be taken by a registered holder of
any Series A Preferred Stock under the terms of the Series A Preferred Stock
only at the direction of one or more Participants to whose accounts with DTC
shares of such Series A Preferred Stock are credited.
S-16
<PAGE> 17
GLOBAL PREFERRED SECURITIES; CERTIFICATED SECURITIES
Global Preferred Securities will be exchangeable for the relevant
definitive certificates representing Series A Preferred Stock registered in the
names of persons other than DTC or its nominee only if (i) any person having a
beneficial interest in the Global Preferred Securities requests that the
transfer and dividend disbursing agent exchange such beneficial interest for a
definitive certificate representing Series A Preferred Stock, (ii) DTC notifies
the Company that it is unwilling or unable to continue as depository for such
Global Preferred Securities or if at any time DTC ceases to be a clearing agency
registered under the Exchange Act at a time when DTC is required to be so
registered in order to act as such depository or (iii) the Company in its sole
discretion determines that the Global Preferred Securities will be so
exchangeable. Any Global Preferred Security that is exchangeable pursuant to the
preceding sentence will be exchangeable for definitive certificates registered
in such names as DTC directs.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC is generally required to notify all Participants of the
availability through DTC of definitive certificates representing Series A
Preferred Stock. Upon surrender by DTC of the Global Preferred Securities
representing the Series A Preferred Stock and delivery of instructions for
re-registration, the Transfer Agent will issue definitive certificates
representing the Series A Preferred Stock, and thereafter the Company will
recognize the holders of such definitive certificates as registered holders of
Series A Preferred Stock entitled to the benefits of the terms of the Series A
Preferred Stock.
The Company may determine to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
definitive certificates representing the Series A Preferred Stock will be
printed and delivered.
Except as described above, Global Preferred Securities may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or to a successor depository appointed by the
Company.
Neither DTC nor Cede will consent or vote with respect to the Series A
Preferred Stock.
The information in this Prospectus Supplement concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
RESTRICTIONS ON OWNERSHIP AND TRANSFER
Ownership of shares of Preferred Stock by any person will be limited such
that the aggregate value of all Preferred Stock (including the Series A
Preferred Stock and any other Preferred Stock issued by the Company) owned
directly or indirectly by such person may not exceed 8.0% either in number of
shares or value of the outstanding shares of Preferred Stock (the "Ownership
Limit"). The JDN Board of Directors may upon appropriate evidence waive the
Ownership Limit. Further, certain transfers which may have the effect of causing
JDN to lose its status as a REIT are void ab initio. See "Description of Capital
Stock -- Restrictions on Ownership" in the accompanying Prospectus.
S-17
<PAGE> 18
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain federal income tax considerations is based
on current law, is for general information only and is not tax advice. This
discussion supplements the discussion of the federal tax treatment of
stockholders contained in the Company's Current Report on Form 8-K, dated
January 26, 1998, and incorporated by reference into the accompanying Prospectus
and does not purport to deal with all aspects of taxation that may be relevant
to particular stockholders in light of their personal investment or tax
circumstances, or to certain types of stockholders (including insurance
companies, tax-exempt organizations, financial institutions or broker-dealers,
foreign corporations and persons who are not citizens or residents of the United
States) subject to special treatment under the federal income tax laws. As used
in the following summary, the terms "JDN" and the "Company" shall mean JDN
Realty Corporation unless otherwise indicated. All references herein to the Code
are to the Internal Revenue Code of 1986, as amended (the "Code").
This Prospectus Supplement also does not address the taxation of the
Company or the impact on the Company of its election to be taxed as a REIT. The
federal income tax treatment of the Company is set forth in the Company's
Current Report on Form 8-K, dated January 26, 1998, and incorporated by
reference into the accompanying Prospectus. The discussion set forth below
assumes that the Company qualifies as a REIT under the Code. If in any taxable
year the Company were to fail to qualify as a REIT, and the relief provisions do
not apply, the Company will be subject to tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate rates.
Distributions to shareholders in any year in which the Company fails to qualify
will not be deductible by the Company nor will they be required to be made. In
such event, to the extent of current and accumulated earnings and profits, all
distributions to shareholders will be taxable as ordinary income, and, subject
to certain limitations of the Code, corporate distributes may be eligible for
the dividends received deduction. Unless entitled to relief under specific
statutory provisions, the Company will also be disqualified from taxation as a
REIT for the four taxable years following the year during which qualification
was lost.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE, OWNERSHIP
AND SALE OF SERIES A PREFERRED STOCK AND OF THE COMPANY'S ELECTION TO BE TAXED
AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN INCOME AND OTHER TAX
CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION, AND OF POTENTIAL
CHANGES IN APPLICABLE TAX LAWS.
DIVIDENDS AND OTHER DISTRIBUTIONS
As long as the Company qualifies as a REIT, distributions made to the
Company's taxable domestic stockholders (including holders of Series A Preferred
Stock) 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.
Corporate stockholders will not be entitled to the dividends received deduction.
For purposes of determining whether distributions on the shares are out of
current or accumulated earnings and profits, the earnings and profits of the
Company will be allocated first to the Company's Preferred Stock, and then
allocated to the Company's Common Stock. 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 holder has held its shares. A taxable
domestic shareholder's share of such capital gain dividend would be an amount
which bears the same ratio to the total amount of dividends paid to such
shareholder for the year as the aggregate amount designated as a capital gain
dividend bears to the aggregate amount of all dividends paid on all classes of
shares for the year. Corporate holders may, however, 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
holder to the extent that they do not exceed the adjusted tax basis of the
holder's shares, but rather will reduce the adjusted basis of such shares. To
the extent that such distributions exceed the adjusted basis of a holder's
shares, they will be included in income as capital gain assuming the shares are
a capital asset in the hands of the holder.
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<PAGE> 19
The Company may designate (by written notice to shareholders) its retained
net capital gain (i.e., net capital gain that is not actually distributed as
capital gain dividends, as described above) as undistributed capital gains in
respect of a shareholder's shares. Pursuant to such a designation by the Company
with respect to retained net capital gains, a taxable domestic shareholder would
include its proportionate share of such gain in income as capital gain, and
would be treated as having paid its proportionate share of the tax paid by the
Company with respect to the gain. The taxable domestic shareholder's basis in
its shares would be increased by its share of such gain and decreased by its
share of such tax.
SALE OF COMPANY SHARES
On the sale of Company shares by taxable domestic stockholders (including
holders of Series A Preferred Stock), gain or loss will be recognized by the
holder in an amount equal to the difference between (i) the amount of cash and
the fair market value of any property received on such sale (less any portion
thereof attributable to accumulated and declared but unpaid dividends, which
will be taxable as described above) and (ii) the holder's adjusted basis in the
shares. Such gain or loss will be capital gain or loss if the shares are held as
capital assets, and will be long-term gain or loss if such shares are held for
more than one year and as short-term capital gain or loss if such shares have
been held for one year or less. In general, any loss upon a sale or exchange of
shares by a holder who has held such shares 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 holder as long-term capital gain.
The Internal Revenue Service Restructuring and Reform Act of 1998, which
was signed into law on July 22, 1998, reduced the required holding period for
the application of the 20% and 25% capital gain tax rates from more than 18
months to more than 12 months for sales of capital gain assets in tax years
ending after December 31, 1997.
REDEMPTION OF SERIES A PREFERRED STOCK
A redemption of Series A Preferred Stock will be treated under Section 302
of the Code as a distribution that is taxable at ordinary income tax rates as a
dividend (to the extent of the Company's current or accumulated earnings and
profits), unless the redemption satisfies certain tests set forth in Section
302(b) of the Code enabling the redemption to be treated as a sale or exchange
of the Series A Preferred Stock. The redemption will have satisfied such tests
if it (i) is "substantially disproportionate" with respect to the holder, (ii)
results in a "complete termination" of the holder's equity interest in the
Company or (iii) is "not essentially equivalent to a dividend" with respect to
the holder, all within the meaning of Section 302(b) of the Code. In determining
whether any of these tests has been met, shares considered to be owned by the
holder by reason of certain constructive ownership rules set forth in the Code,
as well as shares actually owned, must generally be taken into account. Because
the determination as to whether any of the alternative tests of Section 302(b)
of the Code will be satisfied with respect to any particular holder of Series A
Preferred Stock depends upon the facts and circumstances at the time that the
determination must be made, prospective purchasers are advised to consult their
own tax advisors to determine such tax treatment.
If redemption of the Series A Preferred Stock is treated as a distribution
that is taxable as a dividend, the amount of the distribution will be measured
by the amount of cash and the fair market value of any property received by the
stockholder. For a discussion of the taxation of Company dividends, see
"Dividends and Other Distributions." The stockholder's adjusted tax basis in the
redeemed Series A Preferred Stock will be transferred to any of the holder's
remaining holdings in the Company. If, however, the stockholder has no remaining
holdings in the Company, such basis could be transferred to a related person or
it may be lost.
If redemption of the Series A Preferred Stock is not treated as a
distribution taxable as a dividend to a particular stockholder, it will be
treated, as to that stockholder, as a taxable exchange under Section 302(a) of
the Code, the tax consequences of which are the same as a sale, as described
above.
S-19
<PAGE> 20
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company will report to its domestic stockholders (including holders of
Series A Preferred Stock) and to the Internal Revenue Service (the "IRS") the
amount of dividends paid for each calendar year, and the amount of tax withheld,
if any, with respect thereto. Under the backup withholding rules, a stockholder
may be subject to backup withholding at the rate of 31% with respect to
dividends paid unless such stockholder (i) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact or
(ii) provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding, and otherwise complies with applicable
requirements of the backup withholding rules. A stockholder that does not
provide the Company with its correct taxpayer identification number may also be
subject to penalties imposed by the IRS. Any amount paid as backup withholding
is available as a credit against the stockholder's income tax liability. In
addition, the Company may be required to withhold a portion of capital gain
distributions made to any stockholders who fail to certify their non-foreign
status to the Company.
STATE AND LOCAL CONSEQUENCES
The Company and its stockholders (including holders of Series A Preferred
Stock) may be subject to state or local taxation in various 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. Prospective purchasers should
consult their own tax advisors regarding the effect of state and local tax laws
on an investment in the Company.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. STOCKHOLDERS
The following is a discussion of certain anticipated U.S. federal income
tax considerations of the ownership and disposition of the Company's shares
applicable to Non-U.S. Stockholders (including Non-U.S. holders of Series A
Preferred Stock). A "Non-U.S. Stockholder" is (i) any individual who is neither
a citizen nor resident of the United States, (ii) any corporation or partnership
other than a corporation or partnership created or organized in the United
States or under the laws of the United States or any state thereof or under the
laws of the District of Columbia unless, in the case of a partnership, Treasury
Regulations provide otherwise, (iii) an estate whose non-U.S. source income
which is not effectively connected to a U.S. trade or business is not includable
in U.S. federal gross income or (iv) a trust that is not a "U.S. Trust." A U.S.
Trust is (i) for taxable years beginning after December 31, 1996, or if the
trustee of a trust elects to apply the following definition to an earlier
taxable year ending after August 20, 1996, a trust if, and only if, (a) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more U.S. persons has the authority
to control all substantial decisions of the trust and (ii) for all other taxable
years, any trust the income of which is subject to U.S. federal income taxation
regardless of its source. The discussion is based on current law and is for
general information only. The discussion does not consider any specific facts or
circumstances that may apply to a particular Non-U.S. stockholder.
The rules governing U.S. federal income taxation of the ownership and
disposition of shares of Series A Preferred Stock by persons that are Non-U.S.
Stockholders are complex and no attempt will be made herein to provide more than
a limited summary of such rules.
EACH PROSPECTIVE NON-U.S. STOCKHOLDER PURCHASER IS ADVISED TO CONSULT HIS
OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF
THE PURCHASE, OWNERSHIP AND SALE OF SERIES A PREFERRED STOCK AND OF THE
COMPANY'S ELECTION TO BE TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL,
FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND
ELECTION, AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
S-20
<PAGE> 21
Dividends and Other Distributions
Ordinary Dividends. The portion of dividends received by Non-U.S.
Stockholders (including Non-U.S. holders of Series A Preferred Stock) payable
out of the Company's current and accumulated earnings and profits that are not
attributable to capital gains of the Company and that are not effectively
connected with a U.S. trade or business of the Non-U.S. Stockholders will be
subject to U.S. withholding tax at the rate of 30% of the gross amount of the
distribution (unless reduced by treaty or the Non-U.S. Stockholder files Form
4224 with the Company certifying that the investment to which the distribution
relates is effectively connected to a United States trade or business of such
Non-U.S. Stockholder). For purposes of determining whether distributions on the
shares are out of current or accumulated earnings and profits, the earnings and
profits of the Company will be allocated first to the Company's Preferred Stock,
and then allocated to the Company's Common Stock. Under certain limited
circumstances, the amount of tax withheld may be refundable, in whole or in
part, because of the tax status of certain partners or beneficiaries of Non-U.S.
Stockholders that are either foreign partnerships or foreign estates or trusts.
In general, Non-U.S. Stockholders will not be considered engaged in a U.S. trade
or business solely as a result of their ownership of shares of the Company's
Stock. In cases where the dividend income from a Non-U.S. Stockholder's
investment in Company shares is (or is treated as) effectively connected with
the Non-U.S. Stockholder's conduct of a U.S. trade or business, the Non-U.S.
Stockholder generally will be subject to U.S. tax at graduated rates in the same
manner as U.S. Stockholders are taxed with respect to such dividends (and may
also be subject to the 30% branch profits tax (unless reduced by treaty) in the
case of a Non-U.S. Stockholder that is a foreign corporation).
Under currently applicable Treasury Regulations, withholding agents are
required to determine the applicable withholding rate pursuant to the
appropriate tax treaty and withhold the appropriate amount. New Treasury
Regulations (the "New Treasury Regulations") published in the Federal Register
on October 14, 1997, which have been adopted and (as modified by a Notice
published by the IRS) generally will be effective with respect to payments made
after December 31, 1999, subject to certain transition rules. Valid withholding
certificates that are held on December 31, 1999 will remain valid until the
earlier of December 31, 2000 or the date of expiration of the certificate under
rules currently in effect (unless otherwise invalidated due to changes in the
circumstances of the person who is named on such certificate). The New Treasury
Regulations will require Non-U.S. Stockholders to file a Form W-8 to obtain the
benefit of any applicable tax treaty providing for a lower rate of withholding
tax on dividends paid after December 31, 1999. Such form will require a
representation by the holder as to foreign status, the holder's name and
permanent residence address, the basis for a reduced withholding rate (e.g., the
relevant tax treaty) and other pertinent information, to be certified by such
holder under penalties of perjury. Such information is subject to being reported
to the IRS. A permanent resident address for this purpose generally is the
address in the country where the person claims to be a resident for the purpose
of the country's income tax. If the beneficial holder is a corporation, then the
address is where the corporation maintains its principal office in its country
of incorporation. The New Treasury Regulations also provide special rules to
determine whether, for purposes of determining the applicability of a tax treaty
and for purposes of the 30% withholding tax described above, dividends paid to a
Non-U.S. Stockholder that is an entity should be treated as paid to the entity
or those holding an interest in that entity. In particular, in the case of a
foreign partnership, the certification requirement will generally be applied to
the partners of the partnership. In addition, the New Treasury Regulations will
also require the partnership to provide certain information, including a United
States taxpayer identification number, and will provide look-through rules for
tiered partnerships. A Non-U.S. Stockholder that is eligible for a reduced rate
of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amount withheld by filing an appropriate claim for refund with the
IRS. The New Treasury Regulations contain detailed rules governing tax
certifications during the transition period prior to and immediately following
the effectiveness of the New Treasury Regulations. The discussion under this
heading and under "Information Reporting and Backup Withholding" below is not
intended to be a complete discussion of the provisions of the New Treasury
Regulations, and prospective purchasers are urged to consult their tax advisors
concerning the tax consequences of their acquiring, holding and disposing of the
Company shares in light of the New Treasury Regulations.
S-21
<PAGE> 22
Capital Gain Dividends. Under the Foreign Investment in Real Property Tax
Act of 1980 ("FIRPTA"), any distribution made by the Company to a Non-U.S.
Stockholder (including Non-U.S. holders of Series A Preferred Stock), to the
extent attributable to gains from dispositions of United States Real Property
Interests ("USRPIs") by the Company ("USRPI Capital Gains"), will be considered
effectively connected with a U.S. trade or business of the Non-U.S. Stockholder
and subject to U.S. income tax at the rates applicable to U.S. individuals or
corporations, without regard to whether such distribution is designated as a
capital gain dividend. Such distribution may also be subject to the 30% branch
profits tax (unless reduced by treaty) in the case of a Non-U.S. Stockholder
that is a foreign corporation. The Company will be required to withhold tax
equal to 35% of the amount of such distribution to the extent it constitutes
USRPI Capital Gains.
Non-Dividend Distributions. Any distributions by the Company that exceed
both current and accumulated earnings and profits of the Company will not be
taxed as either ordinary dividends or capital gain dividends to the extent that
they do not exceed the adjusted basis in the Non-U.S. Stockholder's Company
shares, but rather will reduce the adjusted basis of such shares. If it cannot
be determined at the time a distribution is made, however, whether or not such
distribution will be in excess of current and accumulated earnings and profits,
the distribution will be subject to withholding. Should this occur, the Non-U.S.
Stockholder may seek a refund of over-withholding from the IRS once it is
subsequently determined that such distribution was, in fact, in excess of
current and accumulated earnings and profits of the Company.
Sale of Company Shares
The sale or exchange of Company shares by a Non-U.S. Stockholder
stockholders (including Non-U.S. holders of Series A Preferred Stock) generally
will not be subject to U.S. income taxation under FIRPTA, unless the shares
constitute USRPIs. Such shares will not constitute USRPIs if the Company is a
"domestically controlled REIT." A domestically controlled REIT is a REIT in
which, at all times during a specified testing period, less than 50% in value of
its shares is held directly or indirectly by Non-U.S. Stockholders. It is
currently believed that the Company is a domestically controlled REIT and,
therefore, the sale of Company shares will not be subject to taxation under
FIRPTA. No assurance can be given that the Company will continue to be a
domestically controlled REIT, or that the current belief is correct.
If the Company does not constitute a domestically controlled REIT, a
Non-U.S. Stockholder's sale or exchange of Company shares generally will still
not be subject to tax under FIRPTA as a sale of USRPIs provided that (i) the
shares are "regularly traded" (as defined by applicable Treasury Regulations) on
an established securities market and (ii) the selling Non-U.S. Stockholder held
5% or less of the Company's outstanding shares at all times during a specified
testing period.
If gain on the sale or exchange of Company shares were subject to taxation
under FIRPTA, the Non-U.S. Stockholder would be subject to U.S. income tax at
the rates applicable to U.S. individuals or corporations, and the purchaser of
such shares could be required to withhold 10% of the purchase price and remit
such amount to the IRS. The branch profits tax would not apply to such sales or
exchanges.
Capital gains not subject to FIRPTA will nonetheless be taxable in the
United States to a Non-U.S. Stockholder in two cases: (i) if the Non-U.S.
Stockholders investment in Company shares is effectively connected with a U.S.
trade or business conducted by such Non-U.S. Stockholder, the Non-U.S.
Stockholder will be subject to the same treatment as U.S. Stockholders with
respect to such gain; or (ii) if the Non-U.S. Stockholder is a nonresident alien
individual who was present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, the nonresident alien
individual will be subject to 30% tax on the individual's capital gain (unless
reduced or eliminated by treaty).
Information Reporting and Backup Withholding
The Company must report annually to the IRS and to each Non-U.S.
Stockholder the amount of dividends (including any capital gain dividends) paid
to, and the tax withheld with respect to, each Non-U.S. Stockholder. These
reporting requirements apply regardless of whether withholding was reduced or
eliminated
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<PAGE> 23
by an applicable tax treaty. Copies of these returns may also be made available
under the provisions of a specific treaty or agreement with the tax authorities
in the country in which the Non-US. Stockholder resides.
U.S. backup withholding (which generally is imposed at the rate of 31% on
certain payments to persons that fail to furnish the information required under
the U.S. information reporting requirements) and information reporting will
generally not apply to dividends (including any capital gain dividends) paid on
Company shares to Non-U.S. Stockholders (including Non-U.S. holders of Series A
Preferred Stock) at an address outside the United States. The New Treasury
Regulations would similarly require a Non-U.S. Stockholder to provide the Form
W-8 previously referred to in order for dividends paid after December 31, 1999
to be exempt from backup withholding and information reporting.
The payment of the proceeds from the disposition of Company shares to or
through a U.S. office of a broker will be subject to information reporting and
backup withholding unless the owner, under penalties of perjury, certifies,
among other things, its status as a Non-U.S. Stockholder, or otherwise
establishes an exemption. The payment of the proceeds from the disposition of
such shares to or through a non-U.S. office of a Non-U.S. office of a broker
which is (i) a U.S. person, (ii) a "controlled foreign corporation" for U.S.
federal income tax purposes or (iii) a foreign person 50% or more of whose gross
income for certain periods is derived from a U.S. trade or business, information
reporting (but not backup withholding) will apply unless the broker has
documentary evidence in its files that the holder is a Non-U.S. Stockholder (and
the broker has no actual knowledge to the contrary) and certain other conditions
are met, or the holder otherwise establishes an exemption. Under the New
Treasury Regulations, a payment of the proceeds from the disposition of Company
shares to or through such broker will be subject to backup withholding if such
broker has actual knowledge that the holder is a U.S. person.
Any amounts withheld under the backup withholding rules will be refunded or
credited against the Non-U.S. Stockholder's U.S. federal income tax liability,
provided that required information is furnished to the IRS. Generally, the New
Treasury Regulations do not significantly alter the substantive backup
withholding and information reporting requirements described above.
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<PAGE> 24
UNDERWRITING
Pursuant to the terms and subject to the conditions of a terms agreement
(the "Terms Agreement"), the Company has agreed to sell to the Underwriters
named below (the "Underwriters"), and each of the Underwriters has severally
agreed to purchase from the Company, the number of shares of Series A Preferred
Stock set forth opposite their respective names below. The Terms Agreement
provides that the obligations of the Underwriters are subject to certain
conditions precedent, and that the Underwriters will be obligated to purchase
all of the Series A Preferred Stock if any are purchased.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF SERIES A
UNDERWRITERS PREFERRED STOCK
- ------------ ----------------
<S> <C>
A.G. Edwards & Sons, Inc.................................... 845,000
J.C. Bradford & Co., LLC.................................... 327,500
Interstate/Johnson Lane Corporation......................... 327,500
Stifel, Nicolaus & Company, Incorporated.................... 500,000
---------
Total............................................. 2,000,000
=========
</TABLE>
The Underwriters have advised the Company that the Underwriters propose
initially to offer the Series A Preferred Stock to the public at the public
offering price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of $.50 per share.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of $.25 per share on sales to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus Supplement, to purchase up
to 300,000 additional shares of Series A Preferred Stock at the price to the
public set forth on the cover page of this Prospectus Supplement, less the
underwriting discount. If the Underwriters exercise this option, each of the
Underwriters will have a firm commitment, subject to certain conditions, to
purchase approximately the same percentage thereof which the number of shares of
Series A Preferred Stock to be purchased by it shown in the foregoing table
bears to the 2,000,000 shares of Series A Preferred Stock offered hereby.
The Company has agreed not to offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any Series A Preferred Stock or any
securities convertible or exercisable or exchangeable for any Series A Preferred
Stock or other securities of the Company which are substantially similar to the
Series A Preferred Stock, for a period of 30 days from the date of this
Prospectus Supplement, in each case without the prior written consent of A.G.
Edwards & Sons, Inc., on behalf of the Underwriters, subject to certain limited
exceptions. A.G. Edwards & Sons, Inc. may, at any time and without notice, waive
the foregoing lock-up agreement.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
The Series A Preferred Stock is a new issue of securities with no
established trading market. Application will be made to list the Series A
Preferred Stock on the NYSE under the symbol "JDNPrA." Trading of the Series A
Preferred Stock on the NYSE is expected to commence within a 30-day period after
the initial delivery of the Series A Preferred Stock. The Underwriters have
advised the Company that they intend to make a market in the Series A Preferred
Stock prior to the commencement of trading on the NYSE. The Underwriters will
have no obligation to make a market in the Series A Preferred Stock, however,
and may cease market making activities, if commenced, at any time.
Until the distribution of the Series A Preferred Stock is completed, rules
of the Securities and Exchange Commission may limit the ability of the
Underwriters and certain selling group members to bid for and
S-24
<PAGE> 25
purchase the Series A Preferred Stock. As an exception to these rules, the
Underwriters are permitted to engage in certain transactions that stabilize the
price of the Series A Preferred Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Series A Preferred Stock.
If the Underwriters create a short position in the Series A Preferred Stock
in connection with the offering, i.e., they sell more shares of Series A
Preferred Stock than are set forth on the cover page of this Prospectus
Supplement, the Underwriters may reduce that short position by purchasing shares
of Series A Preferred Stock in the open market. The Underwriters may also elect
to reduce any short position by exercising all or part of the over-allotment
option described above.
The Underwriters may also impose a penalty bid on certain selling group
members. This means that if the Underwriters purchase shares of Series A
Preferred Stock in the open market to reduce the Underwriters' short position or
to stabilize the price of the Series A Preferred Stock, they may reclaim the
amount of the selling concession from the selling group members who sold those
shares as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Series A Preferred Stock. In
addition, neither the Company nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discounted without notice.
Certain of the Underwriters and their affiliates, from time to time, have
provided investment banking and financial advisory services to the Company, for
which customary compensation has been received, and may continue to perform such
services in the future.
EXPERTS
The consolidated financial statements and schedules of JDN Realty
Corporation included in JDN Realty Corporation's Annual Report (Form 10-K) for
the year ended December 31, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedules are incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered hereby, as well as certain legal
matters relating to the Company, will be passed upon for the Company by Waller
Lansden Dortch & Davis, A Professional Limited Liability Company, Nashville,
Tennessee. Certain legal matters related to the Offering will be passed upon for
the Underwriters by Hogan & Hartson L.L.P., Washington, D.C. Waller Lansden
Dortch & Davis, A Professional Limited Liability Company, will rely on the
opinion of Brown & Wood LLP, Washington, D.C., as to certain matters of Maryland
law.
S-25
<PAGE> 26
PROSPECTUS
JDN REALTY CORPORATION
$600,000,000
COMMON STOCK, COMMON STOCK WARRANTS, PREFERRED STOCK AND DEBT SECURITIES
JDN Realty Corporation (the "Company") operates as a real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended, and may from
time to time offer in one or more series (i) shares of common stock, par value
$.01 per share (the "Common Stock"), (ii) warrants to purchase Common Stock (the
"Common Stock Warrants"), (iii) shares of preferred stock, par value $.01 per
share (the "Preferred Stock"), or (iv) debt securities (the "Debt Securities"),
with an aggregate public offering price of up to $600,000,000 (or the equivalent
thereof in foreign currencies or currency units) in amounts, at prices and on
terms to be determined at the time of any such offering. The Company may offer
the Common Stock, Common Stock Warrants, Preferred Stock, and Debt Securities
(collectively, the "Securities") from time to time, separately or together, in
separate series, in amounts, at prices and on terms to be set forth in
supplements to this Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Common Stock, the specific
number of shares and issuance price per share; (ii) in the case of Common Stock
Warrants, the duration, offering price, exercise price and detachability; (iii)
in the case of Preferred Stock, the specific number of shares, designation, any
dividend, liquidation, redemption, conversion, voting and other rights, and any
initial public offering price; and (iv) in the case of Debt Securities, the
specific title, aggregate principal amount, currency of denomination and
payment, form (which may be registered or bearer, or certificated or global),
authorized denominations, maturity, rate (or manner of calculation thereof) and
time of payment of interest, terms for redemption at the option of the Company
or repayment at the option of the holder, terms for any sinking fund payments,
terms for conversion into Common Stock, Preferred Stock or Debt Securities of
another series, and any initial public offering price. In addition, such
specific terms may include limitations on direct or beneficial ownership and
restrictions on transfer of the Securities, in each case as may be appropriate
to preserve the status of the Company as a REIT for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain federal income tax considerations relating to, and any
listing on a securities exchange of, the Securities covered by such Prospectus
Supplement.
The Securities may be offered by the Company directly, through agents
designated from time to time by the Company, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of the applicable Prospectus Supplement describing the method and terms
of the offering of such series of Securities.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
---------------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 30, 1997
<PAGE> 27
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"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material may be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's Web site is: http://www.sec.gov. The Common Stock is listed
on the NYSE and such reports, proxy statements and other information concerning
the Company can be inspected at the offices of the NYSE, 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities. The Prospectus and any
accompanying Prospectus Supplement do not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Securities, reference is hereby
made to the Registration Statement, including the exhibits and schedules
thereto. Statements contained in this Prospectus and any accompanying Prospectus
Supplement concerning the provisions or contents of any contract, agreement or
any other document referred to herein are not necessarily complete. With respect
to each such contract, agreement or document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a more complete
description of the matters involved, and each such statement shall be deemed
qualified in its entirety by such reference to the copy of the applicable
document filed with the Commission. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge at the
Commission's principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and copies of it or any part thereof may be obtained from
such office, upon payment of the fees prescribed by the Commission.
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have previously been filed by the Company
with the Commission under the Exchange Act (File No. 1-12844) are incorporated
herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1996;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
1997;
(b) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
(c) Quarterly Report on Form 10-Q for the quarter ended September 30,
1997;
(d) Current Report on Form 8-K, dated March 3, 1997;
(e) Current Report on Form 8-K, dated March 12, 1997;
(f) Current Report on Form 8-K, dated March 25, 1997;
(g) Current Report on Form 8-K, dated May 30, 1997;
(h) Current Report on Form 8-K, dated August 1, 1997;
(i) Current Report on Form 8-K, dated September 26, 1997;
2
<PAGE> 28
(j) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the Company's fiscal year ended December 31,
1996; and
(k) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission on February
23, 1994, and the information therein incorporated by reference contained
in the Company's Registration Statement on Form S-11 (File No. 33-73710).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities made hereby shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein, or in a
document incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein (or in an applicable Prospectus
Supplement) 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 or any
Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, except the exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Requests for such
copies should be directed to the Company, at 3340 Peachtree Road, Suite 1530,
Atlanta, Georgia 30326, Attention: Investor Relations, (404) 262-3252.
Unless the context otherwise requires, as used herein the terms "Company"
or "JDN" include JDN Realty Corporation, its predecessor, JDN Development
Company, Inc., subsidiaries of JDN Realty Corporation and JDN Development
Company, Inc., and joint ventures (including limited liability companies) in
which JDN Realty Corporation, JDN Development Company, Inc. or their
subsidiaries own an interest.
THE COMPANY
JDN Realty Corporation (the "Company"), which began operations in 1978, is
a real estate development company operating as a REIT and specializing in the
development and asset management of retail shopping centers anchored by
value-oriented retailers. As of September 30, 1997, the Company owned and
operated, either directly or through affiliated entities or joint ventures, 61
shopping center properties containing approximately 7.3 million square feet of
gross leasable area, located in eleven states, primarily in the Southeast.
The Company is one of the largest developers of Wal-Mart anchored shopping
centers in the United States. The Company credits much of its success to its
strong relationships with national, regional and local tenants which it has
developed during its years of operations. The Company continuously works to
improve existing tenant relationships and to develop new tenant relationships.
The Company's business objective is to increase its funds from operations
by (i) development of new shopping centers anchored by strong retail tenants
with high credit quality, (ii) redevelopment and expansion of its existing
properties, (iii) effective leasing and management of its properties and ground
leasing of adjacent outparcels, and (iv) acquisition of existing shopping
centers. The Company is a fully integrated real estate firm with in-house
development, redevelopment, expansion, leasing, property management and
acquisition expertise.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement
accompanying this Prospectus, the Company intends to use the net proceeds from
the sale of the Securities for general corporate purposes, which may include the
development, redevelopment and acquisition of shopping center properties as
suitable opportunities arise, the expansion and improvement of certain
properties in the Company's portfolio and the repayment of outstanding
indebtedness.
3
<PAGE> 29
Pending such uses, net proceeds of any offering of Securities will be
invested in short-term, investment grade instruments, interest-bearing bank
accounts or certificates of deposit, consistent with the Company's qualification
as a REIT, the Company's Charter, as amended (the "Charter") and the Company's
agreements with its lenders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the years indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------- ------------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges........................ 2.81x 2.28x 2.29x 1.90x 1.64x * *
</TABLE>
- ---------------
* Prior to completion of the Company's initial public offering of its common
stock on March 29, 1994, the Company and its predecessor businesses were
privately held and operated in a manner to minimize net taxable income and to
fund any operating cash flow deficits through the sale of shopping center
properties. As a result, although the Company historically generated positive
cash flow, it had net losses for the years ended December 31, 1993 and 1992.
Consequently, the computation of the ratio of earnings to fixed charges for
such years indicates that earnings were inadequate to cover fixed charges by
approximately $1.2 million and $1.8 million for the years ended December 31,
1993 and 1992, respectively.
For purposes of calculating the ratio of earnings to fixed charges,
earnings have been calculated by adding fixed charges (excluding capitalized
interest) to income (loss) before income tax benefits, net gain (loss) on real
estate sales, extraordinary items and cumulative effect of changes in accounting
principles. Fixed charges consist of interest costs, whether expensed or
capitalized, and amortization of deferred debt costs. To date, the Company has
not issued any Preferred Stock; therefore, the ratios of earnings to fixed
charges and Preferred Stock dividend requirements are the same as the ratios of
earnings to fixed charges presented above.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue an aggregate of 170,000,000 shares of
capital stock, which includes 150,000,000 shares of Common Stock and 20,000,000
shares of Preferred Stock. On the date hereof, 15,493,501 shares of Common Stock
were outstanding and no shares of Preferred Stock were outstanding.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code in any taxable year,
(i) not more than 50% in value of its outstanding capital stock may be owned,
directly or indirectly (after application of certain complex attribution rules),
by five or fewer individuals (as defined in the Code) at any time during the
last half of its taxable year, and (ii) its stock must be beneficially owned by
100 or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. In order to ensure that
requirement (i) above is satisfied, the Board of Directors shall refuse to
transfer shares of the Common Stock to any person whose acquisition of such
shares would result in the direct or indirect ownership of more than 8% either
in number or value of the outstanding Common Stock and to transfer shares of
Preferred Stock to any person whose acquisition of such shares would result in
the direct or indirect ownership of more than 8% either in number or value.
In connection with the foregoing, if the Board of Directors shall, at any
time and in good faith, believe that direct or indirect ownership (as determined
under applicable federal tax attribution rules) of at least 8% or more either in
number or value of the outstanding capital stock has or may become concentrated
in the hands of one beneficial owner (other than the Nichols, their family and
certain affiliates), the Board of Directors shall refuse to transfer or issue
capital stock to a person whose acquisition of such capital stock
4
<PAGE> 30
would cause a beneficial holder to hold in excess of 8% in value of the
outstanding capital stock, subject to certain exceptions specified in the
Charter. Further, any transfer of capital stock that would create a beneficial
owner of more than 8% of the outstanding capital stock (other than to the
Nichols, their family and certain affiliates, and certain exceptions specified
in the Charter) shall be deemed void and the intended transferee shall be deemed
never to have had an interest therein. As of December 31, 1996, the Nichols,
members of their family and certain affiliates beneficially owned in excess of
8% in value of the outstanding Common Stock of the Company and may continue to
do so. The Nichols, members of their family and certain affiliates may acquire
additional shares of Common Stock but not such that any five individuals (as
defined in the Code), taking into account the 8% limit, would beneficially own
more than 49.9% of the Company's outstanding Common Stock.
The Board of Directors is entitled to waive the ownership limit with
respect to a particular stockholder if evidence satisfactory to the Board of
Directors and the Company's tax counsel is presented that such ownership will
not then or in the future jeopardize the Company's status as a REIT. As a
condition of such waiver, the Board of Directors may require opinions of counsel
satisfactory to it and/or an undertaking from the stockholder with respect to
preserving the REIT status of the Company.
If at any time there is a transfer in violation of such restrictions, those
shares of outstanding capital stock in excess of 8% either in number or value of
the Company's outstanding Common Stock, and those shares of outstanding
Preferred Stock in excess of 8% either in number or value of the Company's
outstanding Preferred Stock, subject to the foregoing exceptions ("Excess
Shares"), shall be deemed to have been transferred to the Company, as trustee
for the benefit of such persons to whom the Excess Shares are later transferred.
Subject to the Company's right to purchase the Excess Shares, the interest in
the trust representing the Excess Shares shall be freely transferable by the
intended transferee at a price that does not exceed the price paid by the
intended transferee for the Excess Shares. Excess Shares shall have no voting
rights, and shall not be considered for the purpose of any shareholder vote or
determining a quorum, but shall continue to be reflected as issued and
outstanding stock. No dividends shall be paid with respect to Excess Shares. The
Company shall have the right to purchase Excess Shares for the lesser of the
amount paid by the intended transferee for the Excess Shares or the market
price. The market price for any capital stock so purchased, shall be equal to
the fair market value of such Excess Shares reflected in (i) the closing sales
price for the capital stock, if then listed on only one national securities
exchange, or (ii) the average closing sales price of such capital stock if then
listed on more than one national securities exchange, or (iii) if the capital
stock is not then listed on a national securities exchange, the latest bid
quotation for the capital stock if then traded over-the-counter, as of the day
immediately preceding the date on which notices of such purchase are sent by the
Company. If no such closing sales prices or quotations are available, the
purchase price shall equal the net asset value of such capital stock as
determined by the Board of Directors in good faith.
All persons who own a specified percentage (or more) of the outstanding
capital stock of the Company must file a certificate with the Company containing
information regarding their ownership of stock as set forth in the Treasury
Regulations. Under current Treasury Regulations, the percentage is set between
one-half of one percent and five percent, depending on the number of record
holders of stock. 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 shares of stock of the Company
as the Board of Directors deems necessary to comply with the provisions of the
Code applicable to a REIT or to comply with the requirements of any taxing
authority or governmental agency.
All certificates representing shares of capital stock bear a legend
referring to the restrictions described above.
BUSINESS COMBINATIONS
Under the Maryland General Corporation Law, certain "business combinations"
(including a merger, consolidation, share exchange, or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities) between a Maryland corporation and any person who beneficially owns
10% or more of the corporation's stock (an "Interested Shareholder") must be:
(a) recommended by the corporation's board of
5
<PAGE> 31
directors; and (b) approved by the affirmative vote of at least (i) 80% of the
corporation's outstanding shares entitled to vote and (ii) two-thirds of the
outstanding shares entitled to vote which are not held by the Interested
Shareholder with whom the business combination is to be effected, unless, among
other things, the corporation's holders of capital stock receive a minimum price
(as defined in the statute) for their shares and the consideration is received
in cash or in the same form as previously paid by the Interested Shareholder for
his shares. In addition, an Interested Shareholder or affiliate thereof may not
engage in a business combination with the corporation for a period of five years
following the most recent date the person became an Interested Shareholder.
These provisions of Maryland law do not apply, however, to business combinations
that are approved by the board of directors of a Maryland corporation prior to a
person's becoming an Interested Shareholder.
CONTROL SHARE ACQUISITIONS
The Maryland General Corporation Law provides that "control shares" of a
Maryland corporation acquired in a "control share acquisition" may not be voted
except to the extent approved by a vote of two-thirds of all the corporation's
shares entitled to vote on the matter, excluding all interested shares. "Control
shares" are shares which, if aggregated with all other shares owned by the
person or in respect of which that person is entitled to exercise or direct the
exercise of voting power, except solely by virtue of a revocable proxy, would
entitle the acquirer to vote (i) 20% or more but less than one-third, (ii)
one-third or more but less than a majority, or (iii) a majority or more of the
outstanding shares entitled to vote. Control shares do not include shares which
the acquiring person is entitled to vote as a result of having previously
obtained the required shareholder approval. A "control share acquisition" means
the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition and
who has undertaken to reimburse certain expenses of the corporation and has
obtained a definitive financing agreement with a responsible financial
institution providing for any amount of financing not to be provided by the
acquiring person may compel the corporation's board of directors to call a
special meeting of shareholders to be held within 50 days of demand to consider
the voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any shareholders meeting.
Subject to certain conditions and limitations, if the voting rights of the
control shares were considered and not approved, the corporation may redeem any
or all of the control shares, except those for which voting rights have
previously been approved, for fair value determined, without regard to absence
of voting rights, as of the date of the last control share acquisition by the
acquirer or as of the date of any meeting of shareholders at which the voting
rights of such shares are considered and not approved. If voting rights for
control shares are approved at a shareholders meeting and the acquirer is
entitled to vote a majority of the shares entitled to vote, prior to the control
share acquisition all other shareholders may exercise appraisal rights, unless
the charter or bylaws of the corporation provide otherwise. The fair value of
the shares as determined for purposes of such appraisal rights may not be less
than the highest price per share paid by the acquiring person in the control
share acquisition. Certain limitations and restrictions otherwise applicable to
the exercise of dissenters' rights do not apply in the context of a control
share acquisition.
The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction, or to the acquisitions approved or exempted by the charter or
bylaws of the corporation prior to a control share acquisition.
The limitation on ownership of the Company's Stock set forth in the
Charter, as well as the provisions of Maryland law described above, could have
the effect of discouraging offers to acquire the Company and of increasing the
difficulty of consummating any such offer.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 150,000,000 shares of Common Stock. On
the date hereof, 15,493,501 shares of Common Stock were outstanding, held by
approximately 416 record holders.
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<PAGE> 32
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement may
relate, including a Prospectus Supplement providing that Common Stock will be
issuable upon conversion of Debt Securities or Preferred Stock of the Company or
upon the exercise of Common Stock Warrants issued by the Company. The statements
below describing the Common Stock are in all respects subject to and qualified
in their entirety by reference to the applicable provisions of the Charter.
Holders of shares of Common Stock are entitled to receive such dividends as
the Board of Directors may declare out of funds legally available for the
payment of dividends. Upon issuance, the shares of Common Stock will be fully
paid and nonassessable and have no preferences or conversion, exchange or
preemptive rights. In the event of any liquidation, dissolution or winding-up of
the Company, the holders of shares of Common Stock are entitled to share ratably
in any of the Company's assets remaining after the satisfaction of all
obligations and liabilities of the Company and after required distributions to
holders of Preferred Stock, if any. Each share is entitled to one vote on all
matters voted upon by the holders of Common Stock. Holders of shares of Common
Stock have no cumulative voting rights.
EXCHANGE LISTING
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol JDN.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company initially reserved 500,000 shares of Common Stock for issuance
under its Dividend Reinvestment and Stock Purchase Plan (the "Plan") to provide
record owners of the Company's Common Stock with a method of investing dividends
and other distributions paid in cash in additional shares of the Company's
Common Stock. The Company may issue original issue shares under the Plan or,
from time to time, direct First Union National Bank of North Carolina, as the
Company's agent under the Plan, to repurchase shares of the Company's Common
Stock in the open market for sale under the Plan. To the extent shares of Common
Stock purchased under the Plan are purchased from the Company, the Company will
receive additional funds to be used for its general corporate purposes. On the
date hereof, 492,775 shares of Common Stock are reserved for issuance under this
plan.
EMPLOYEE STOCK PURCHASE PLAN
The Company initially reserved 100,000 shares of Common Stock for issuance
under the JDN Corporation 1995 Employee Stock Purchase Plan, which provides an
opportunity for eligible employees of JDN Realty Corporation and its
subsidiaries to acquire an interest in the Company through acquisitions of
shares of the Company's Common Stock at a discount. The proceeds of shares
purchased under this plan will be used for the Company's general corporate
purposes. On the date hereof, 99,168 shares of Common Stock are reserved for
issuance under this plan.
RESTRICTIONS ON OWNERSHIP
The Common Stock is subject to certain restrictions on ownership described
above under "Description of Capital Stock -- Restrictions on Ownership".
TRANSFER AGENT
The transfer agent and registrar for the Company's Common Stock is First
Union National Bank of North Carolina ("First Union").
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with any
other Securities offered pursuant to any Prospectus Supplement and may be
attached to or separate from such Securities. Each series of Common
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<PAGE> 33
Stock Warrants will be issued under a separate warrant agreement (each, a
"Warrant Agreement") to be entered into between the Company and the warrant
recipient or, if the recipients are numerous, a warrant agent identified in the
applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent, if
engaged, will act solely as an agent of the Company in connection with the
Common Stock Warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Common Stock Warrants. Further terms of the Common Stock Warrants and the
applicable Warrant Agreements will be set forth in the applicable Prospectus
Supplement.
The applicable Prospectus Supplement will describe the terms of any Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following: (1) the title of such Common Stock
Warrants; (2) the aggregate number of such Common Stock Warrants; (3) the price
or prices at which such Common Stock Warrants will be issued; (4) the
designation, number and terms of the shares of Common Stock purchasable upon
exercise of such Common Stock Warrants; (5) the designation and terms of the
other Securities with which such Common Stock Warrants are issued and the number
of such Common Stock Warrants issued with such offered Securities; (6) the date,
if any, on and after which such Common Stock Warrants and the related Common
Stock will be separately transferable; (7) the price at which each share of
Common Stock purchasable upon exercise of such Common Stock Warrants may be
purchased; (8) the date on which the right to exercise such Common Stock
Warrants shall commence and the date on which such right shall expire; (9) the
minimum or maximum amount of such Common Stock Warrants which may be exercised
at any one time; (10) information with respect to book-entry procedures, if any;
(11) a discussion of certain federal income tax considerations relevant to a
holder of such Common Stock Warrants; and (12) any other terms of such Common
Stock Warrants, including terms, procedures and limitations relating to the
exchange and exercise of such Common Stock Warrants.
Reference is made to the section captioned "Description of Common Stock"
for a general description of the Common Stock to be acquired upon the exercise
of the Common Stock Warrants. Additionally, the section captioned "Description
of Capital Stock" includes a description of certain restrictions on transfer of
the Common Stock.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The Company is authorized to issue 20,000,000 shares of Preferred Stock,
par value $.01 per share, none of which were outstanding on the date hereof.
The following description of the Preferred Stock sets forth certain
anticipated general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of Preferred
Stock (which terms may be different than those stated below) will be described
in the Prospectus Supplement to which such series relates. The statements below
describing the Preferred Stock are in all respects subject to and qualified in
their entirety by reference to the applicable provisions of the applicable
Prospectus Supplement and Charter (including the amendment describing the
designations, rights, and preferences of each series of Preferred Stock) and
Bylaws.
Subject to limitations prescribed by Maryland law and the Charter, the
Company's Board of Directors is authorized to fix the number of shares
constituting each series of Preferred Stock and the designations and powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including such provisions
as may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board of Directors or the duly
authorized committee thereof. The Preferred Stock will, when issued, be fully
paid and nonassessable and will have no preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including: (1) the title and stated
value of such Preferred Stock; (2) the number of shares of such Preferred Stock
offered, the liquidation preference per share and the offering price of such
Preferred
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Stock; (3) the dividend rate(s), period(s) and or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Stock; (4) the date from
which dividends on such Preferred Stock shall accumulate, if applicable; (5) the
procedures for any auction and remarketing, if any, for such Preferred Stock;
(6) the provision for a sinking fund, if any, for such Preferred Stock; (7) the
provisions for redemption, if applicable, of such Preferred Stock; (8) any
listing of such Preferred Stock on any securities exchange; (9) the terms and
conditions, if applicable, upon which such Preferred Stock will be convertible
into Common Stock, including the conversion price (or manner of calculation
thereof); (10) a discussion of certain federal income tax considerations
relevant to a holder of such Preferred Stock; (11) the relative ranking and
preferences of such Preferred Stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company; (12) any
limitations on issuance of any series of Preferred Stock ranking senior to or on
a parity with such series of Preferred Stock as to dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of the Company; (13)
any limitations on direct or beneficial ownership and restrictions on transfer,
in each case as may be appropriate to preserve the status of the Company as a
REIT and (14) any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
RANK
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of Common Stock of the Company, and to all equity and debt
securities which are specifically designated as ranking junior to such Preferred
Stock with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the Company; (ii) on a parity with all equity and debt securities
issued by the Company the terms of which specifically provide that such equity
and debt securities rank on a parity with the Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company; and (iii) junior to all equity and debt securities issued by the
Company the terms of which specifically provide that such equity and debt
securities rank senior to the Preferred Stock with respect to dividend rights or
rights upon liquidation, dissolution or winding up of the Company.
DIVIDENDS
Holders of shares of the Preferred Stock of each series shall be entitled
to receive, when, as and if declared by the Board of Directors of the Company,
out of assets of the Company legally available for payment, cash dividends (or
dividends in kind or in other property if expressly permitted and described in
the applicable Prospectus Supplement) at such rates and on such dates as will be
set forth in the applicable Prospectus Supplement. Each such dividend shall be
payable to holders of record as they appear on the stock transfer books of the
Company on such record dates as shall be fixed by the Board of Directors of the
Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are noncumulative, then the holders of such
series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
Unless otherwise specified in the applicable Prospectus Supplement, if any
shares of the Preferred Stock of any series are outstanding, no full dividends
shall be declared or paid or set apart for payment on the Preferred Stock of the
Company of any other series ranking, as to dividends, on a parity with or junior
to the Preferred Stock of such series for any period unless full dividends
(which include all unpaid dividends in the case of cumulative dividend Preferred
Stock) have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on the
Preferred Stock of such series.
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When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of Preferred Stock of any series
and the shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Preferred Stock of such series, all dividends declared upon
shares of Preferred Stock of such series and any other series of Preferred Stock
ranking on a parity as to dividends with such Preferred Stock shall be declared
pro rata among the holders of such series. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
Preferred Stock of such series which may be in arrears.
Until required dividends are paid, no dividends (other than in Common Stock
or other capital stock ranking junior to the Preferred Stock of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common Stock or
any other capital stock of the Company ranking junior to or on a parity with the
Preferred Stock of such series as to dividends or upon liquidation, nor shall
any Common Stock or any other capital stock of the Company ranking junior to or
on a parity with the Preferred Stock of such series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Company (except by conversion
into or exchange for other capital stock of the Company ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of Preferred Stock of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
option of the Company, as a whole or in part, in each case upon the terms, at
the times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable capital
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
So long as any dividends on shares of any series of the Preferred Stock of
the Company ranking on a parity as to dividends and distributions of assets with
such series of the Preferred Stock are in arrears, no shares of any such series
of the Preferred Stock of the Company will be redeemed (whether by mandatory or
optional redemption) unless all such shares are simultaneously redeemed, and the
Company will not purchase or otherwise acquire any such shares; provided,
however, that the foregoing will not prevent the purchase or acquisition of such
shares of Preferred Stock to preserve the REIT status of the Company or pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Preferred Stock of such series and, unless the full
cumulative dividends on all outstanding shares of any cumulative Preferred Stock
of such series and any other stock of the Company ranking on a parity with such
series as to dividends and upon liquidation shall have been paid or
contemporaneously are declared and paid for all past dividend periods, the
Company shall not purchase or otherwise acquire directly or indirectly any
shares of Preferred Stock of such series (except by conversion into or exchange
for stock of the Company ranking junior to the Preferred Stock of such series as
to dividends and upon liquidation); provided, however, that the foregoing will
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not prevent the purchase or acquisition of such shares of Preferred Stock to
preserve the REIT status of the Company or pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Preferred
Stock of such series.
If fewer than all of the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares) or
any other equitable method determined by the Company that will not result in the
issuance of any Excess Shares.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of a share of Preferred
Stock of any series to be redeemed at the address shown on the stock transfer
books of the Company. If notice of redemption of any shares of Preferred Stock
has been given and if the funds necessary for such redemption have been set
aside by the Company in trust for the benefit of the holders of any shares of
Preferred Stock so called for redemption, then from and after the redemption
date dividends will cease to accrue on such shares of Preferred Stock, such
shares of Preferred Stock shall no longer be deemed outstanding and all rights
of the holders of such shares will terminate, except the right to receive the
redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of Common Stock, or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the Company, the
holders of each series of Preferred Stock shall be entitled to receive out of
assets of the Company legally available for distribution to shareholders
liquidating distributions in the amount of the liquidation preference per share
(set forth in the applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any accumulation
in respect of unpaid dividends for prior dividend periods if such Preferred
Stock does not have a cumulative dividend). After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of shares
of Preferred Stock will have no right or claim to any of the remaining assets of
the Company. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the legally available assets of the
Company are insufficient to pay the amount of the liquidating distributions on
all outstanding shares of Preferred Stock and the corresponding amounts payable
on all shares of other classes or series of capital stock of the Company ranking
on a parity with the Preferred Stock in the distribution of assets upon
liquidation, dissolution or winding up, then the holders of the Preferred Stock
and all other such classes or series of capital stock shall share ratably in any
such distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders of
shares of Preferred Stock, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital stock
ranking junior to the Preferred Stock upon liquidation, dissolution or winding
up, according to their respective rights and preferences and in each case
according to their respective number of shares.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Any series of Preferred Stock may provide that, so long as any shares of
such series of Preferred Stock remain outstanding, the holders of such series
may vote as a separate class on certain specified matters, which may include
changes in the Company's capitalization, amendments to the Charter, and mergers
and dispositions.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred
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Stock shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been irrevocably deposited in trust to effect such
redemption.
The provisions of a series of Preferred Stock may provide for additional
rights, remedies, and privileges if dividends on such series are in arrears for
specified periods, which rights and privileges will be described in the
applicable Prospectus Supplement.
Under Maryland law, notwithstanding anything to the contrary set forth
above, holders of each series of Preferred Stock will be entitled to vote upon a
proposed amendment to the Charter, whether or not entitled to vote thereon by
the Charter, if the amendment would alter the contract rights, as set forth in
the Charter, of their shares of stock.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Common Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of shares of Common Stock into which the Preferred Stock is convertible,
the conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Preferred Stock.
RESTRICTIONS ON OWNERSHIP
The Preferred Stock is subject to certain restrictions on ownership
described above under "Description of Capital Stock -- Restrictions on
Ownership".
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities under one or more trust indentures
(each an "Indenture") to be executed by the Company and one or more trustees
(each a "Trustee") meeting the requirements of a trustee under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indentures will be qualified
under the TIA.
The following description sets forth certain anticipated general terms and
provisions of the Debt Securities to which any Prospectus Supplement may relate.
The particular terms of the Debt Securities offered by any Prospectus Supplement
(which terms may be different than those stated below) and the extent, if any,
to which such general provisions may apply to the Debt Securities so offered
will be described in the Prospectus Supplement relating to such Debt Securities.
Accordingly, for a description of the terms of a particular issue of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and the following description. Forms of the Senior Indenture (as defined
herein) and the Subordinated Indenture (as defined herein) have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.
GENERAL
The Debt Securities will be direct obligations of the Company and may be
either senior Debt Securities ("Senior Securities") or subordinated Debt
Securities ("Subordinated Securities"). The indebtedness represented by
Subordinated Securities will be subordinated in right of payment to the prior
payment in full of the Senior Debt (as defined in the applicable Indenture) of
the Company. Senior Securities and Subordinated Securities will be issued
pursuant to separate indentures (respectively, a "Senior Indenture" and a
"Subordinated Indenture"), in each case between the Company and a Trustee.
Except as set forth in the applicable Indenture and described in a
Prospectus Supplement relating thereto, the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, secured
or unsecured, in each case as established from time to time in or pursuant to
authority granted by a resolution of the Board of Directors of the Company or as
established in the applicable Indenture. All
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Debt Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series.
The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the applicable terms thereof, including, for example:
(1) the title of such Debt Securities and whether such Debt Securities
are Senior Securities or Subordinated Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the portion of the
principal amount of such Debt Securities which is convertible into Common
Stock or Preferred Stock, or the method by which any such portion shall be
determined;
(4) if convertible, any applicable limitations on the ownership or
transferability of the Common Stock or Preferred Stock into which such Debt
Securities are convertible;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method
by which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates for such
interest payment dates, or the method by which any such date shall be
determined, the person to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any)
and interest, if any, on such Debt Securities will be payable, such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and notices or demands to or upon the Company in respect of such
Debt Securities and the applicable Indenture may be served;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(10) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the terms and conditions
upon which such Debt Securities will be redeemed, repaid or purchased, as a
whole or in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(13) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or covenants set
forth in the Indenture;
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(14) any provisions for collateral security for repayment of such Debt
Securities;
(15) whether such Debt Securities will be issued in certificated
and/or book-entry form;
(16) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(17) the applicability, if any, of defeasance and covenant defeasance
provisions of the applicable Indenture;
(18) the terms, if any, upon which such Debt Securities may be
convertible into Common Stock or Preferred Stock of the Company and the
terms and conditions upon which such conversion will be effected,
including, without limitation, the initial conversion price or rate and the
conversion period;
(19) whether and under what circumstances the Company will pay
additional amounts as contemplated in the Indenture on such Debt Securities
in respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt Securities in
lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
Except as set forth in the applicable Indenture, the applicable Indenture
will not contain any provisions that would limit the ability of the Company to
incur indebtedness or that would afford Holders of Debt Securities protection in
the event of a highly leveraged or similar transaction involving the Company or
in the event of a change of control. Restrictions on ownership and transfers of
the Company's Common Stock and Preferred Stock are designed to preserve its
status as a REIT and, therefore, may act to prevent or hinder a change of
control. See "Description of Capital Stock -- Restrictions on Ownership."
Reference is made to the applicable Prospectus Supplement for information with
respect to any deletions from, modifications of or additions to the Events of
Default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
MERGER, CONSOLIDATION OR SALE
It is expected that the Indenture will provide that the Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other corporation, provided that (a)
either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall expressly assume payment of the principal of (and premium, if any), and
interest on, all of the applicable Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the applicable Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company or any subsidiary as a result thereof as having been incurred by the
Company or such subsidiary at the time of such transaction, no Event of Default
under the applicable Indenture, and no event which, after notice or the lapse of
time, or both, would become such an Event of Default, shall have occurred and be
continuing; and (c) an officer's certificate and legal opinion covering such
conditions shall be delivered to the Trustee.
COVENANTS
The Indenture will contain covenants requiring the Company to take certain
actions and prohibiting the Company from taking certain actions. The covenants
with respect to any series of Debt Securities will be described in the
Prospectus Supplement relating thereto.
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EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will describe specific "Events of Default" with respect to
any series of Debt Securities issued thereunder. Such "Events of Default" are
likely to include (with grace and cure periods): (i) default in the payment of
any installment of interest on any Debt Security of such series; (ii) default in
the payment of principal of (or premium, if any, on) any Debt Security of such
series at its maturity; (iii) default in making any required sinking fund
payment for any Debt Security of such series; (iv) default in the performance or
breach of any other covenant or warranty of the Company contained in the
applicable Indenture (other than a covenant added to the Indenture solely for
the benefit of a series of Debt Securities issued thereunder other than such
series), continued for a specified period of days after written notice as
provided in the applicable Indenture; (v) default in the payment of specified
amounts of indebtedness of the Company or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such indebtedness
is secured, such default having occurred after the expiration of any applicable
grace period and having resulted in the acceleration of the maturity of such
indebtedness, but only if such indebtedness is not discharged or such
acceleration is not rescinded or annulled and (vi) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or
trustee of the Company or any Significant Subsidiary or either of its property.
If an Event of Default under any Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% of the
principal amount of the outstanding Debt Securities of that series will have the
right to declare the principal amount (or, if the Debt Securities of that series
are Original Issue Discount Securities or indexed securities, such portion of
the principal amounts may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Trustee if given by the holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then outstanding under
any Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable Trustee,
the holders of not less than a majority in principal amount of outstanding Debt
Securities of such series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) may rescind and annul such declaration
and its consequences if (a) the Company shall have deposited with the applicable
Trustee all required payments of the principal of (and premium, if any) and
interest on the Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be), plus certain
fees, expenses, disbursements and advances of the applicable Trustee and (b) all
events of default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under the applicable Indenture, as the
case may be) have been cured or waived as provided in such Indenture. Each
Indenture also will provide that the holders of not less than a majority in
principal amount of the outstanding Debt Securities of any series (or of all
Debt Securities then outstanding under the applicable Indenture, as the case may
be) may waive any past default with respect to such series and its consequences,
except a default (x) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or (y) in respect of a covenant or
provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default shall have been cured or waived; provided, however, that such
Trustee may withhold notice to the holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if specified responsible officers of such Trustee
consider such withholding to be in the interest of such holders.
Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the cases of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of a Event of Default from the
holders of not less than 25% in principal amount of the
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outstanding Debt Securities of such series, as well as an offer of indemnity
reasonably satisfactory to it. This provision will not prevent, however, any
holder of Debt Securities from instituting suit for the enforcement of payment
of the principal of (and premium, if any) and interest on such Debt Securities
at the respective due dates thereof.
Subject to provisions in each Indenture relating to its duties in case of
default, no Trustee will be under any obligation to exercise any of its rights
or powers under an Indenture at the request or direction of any holders of any
series of Debt Securities then outstanding under such Indenture, unless such
holders shall have offered to the Trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under an Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee, or of exercising any trust or power
conferred upon such Trustee. However, a Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the applicable Indenture and, if so, specifying each such default
and the nature and status thereof.
MODIFICATION OF THE INDENTURES
It is anticipated that modifications and amendments of an Indenture may be
made by the Company and the Trustee, with the consent of the holders of not less
than a majority in aggregate principal amount of each series of the outstanding
Debt Securities issued under the Indenture which are affected by the
modification or amendment, provided that no such modification or amendment may,
without a consent of each holder of such Debt Securities affected thereby: (1)
change the stated maturity date of the principal of (or premium, if any) or any
installment of interest, if any, on any such Debt Security; (2) reduce the
principal amount of (or premium, if any) or the interest, if any, on any such
Debt Security or the principal amount due upon acceleration of an Original Issue
Discount Security; (3) change the place or currency of payment of principal of
(or premium, if any) or interest, if any, on any such Debt Security; (4) impair
the right to institute suit for the enforcement of any such payment on or with
respect to any such Debt Security; (5) reduce the above-stated percentage of
holders of Debt Securities necessary to modify or amend the Indenture; or (6)
modify the foregoing requirements or reduce the percentage of outstanding Debt
Securities necessary to waive compliance with certain provisions of the
Indenture or for waiver of certain defaults. A record date may be set for any
act of the holders with respect to consenting to any amendment.
The holders of not less than a majority in principal amount of outstanding
Debt Securities of each series affected thereby will have the right to waive
compliance by the Company with certain covenants in such Indenture.
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series to take permitted action.
REDEMPTION OF SECURITIES
The Indenture will provide that the Debt Securities may be redeemed at any
time at the option of the Company, in whole or in part, for certain reasons
intended to protect the Company's status as a REIT. Debt Securities may also be
subject to optional or mandatory redemption on terms and conditions described in
the applicable Prospectus Supplement.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the holders of the Debt Securities will be to receive payment of
the Redemption Price.
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CONVERSION OF SECURITIES
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Company's REIT status.
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Securities. No payment of principal or interest will be permitted to be
made on Subordinated Securities at any time if a default in Senior Securities
exists that permits the Holders of such Senior Securities to accelerate their
maturity and the default is the subject of judicial proceedings or the Company
receives notice of the default. After all Senior Securities are paid in full and
until the Subordinated Securities are paid in full, Holders of Subordinated
Securities will be subrogated to the right of Holders of Senior Securities to
the extent that distributions otherwise payable to Holders of Subordinated
Securities have been applied to the payment of Senior Securities. By reason of
such subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of the Company may recover more, ratably, than Holders
of Subordinated Securities. If this Prospectus is being delivered in connection
with a series of Subordinated Securities, the accompanying Prospectus Supplement
or the information incorporated herein by reference will contain the approximate
amount of Senior Securities outstanding as of the end of the Company's most
recent fiscal quarter.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters for public offer and
sale by them, and also may sell Securities offered hereby to investors directly
or through agents. Any such underwriter or agent involved in the offer and sale
of the Securities will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at prices related to the prevailing market prices at the
time of sale or at negotiated prices. The Company also may, from time to time,
authorize underwriters acting as the Company's agents to offer and sell
Securities upon terms and conditions set forth in the applicable Prospectus
Supplement. In connection with the sale of the Securities, underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriters or agents in connection with an offering of the
Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters, dealers and agents may be
entitled, under agreements to be entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant to
delayed
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<PAGE> 43
delivery contracts providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each delayed delivery contract will be for
an amount not less than, and the aggregate principal amount of Securities sold
pursuant to delayed delivery contracts shall be not less nor more than, the
respective amounts stated in the applicable Prospectus Supplement. Institutions
with whom delayed delivery contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
will in all cases be subject to the approval of the Company. Delayed delivery
contracts will not be subject to any conditions except (i) the purchase by an
institution of the Securities covered by its delayed delivery contracts shall
not at the time of delivery be prohibited under the laws of any jurisdiction in
the United States to which such institution is subject, and (ii) if the
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of the Securities less the principal
amount thereof covered by delayed delivery contracts.
EXPERTS
The consolidated financial statements and schedules of JDN Realty
Corporation included in JDN Realty Corporation's Annual Report (Form 10-K) for
the year ended December 31, 1996 and the statements of revenue and certain
expenses of The Junction Shopping Center for the period from March 25, 1996
(date of commencement of operations) to December 31, 1996, the River Hills
Shopping Center for the period from September 13, 1996 (date of commencement of
operations) to December 31, 1996, the Midway Plaza Shopping Center for the
period from November 2, 1995 (date of commencement of operations) to December
31, 1995 and the year ended December 31, 1996, and the Bermuda Square Shopping
Center for the year ended December 31, 1996, respectively, included in the
Current Report on Form 8-K of JDN Realty Corporation dated September 26, 1997
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon included therein and incorporated herein by reference.
Such consolidated financial statements, schedules and statements of revenue and
certain expenses are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Waller Lansden Dortch & Davis, A Professional Limited Liability Company,
Nashville, Tennessee.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SHARES OFFERED HEREBY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO DO
SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Forward-Looking Statements............ S-2
The Company........................... S-3
Recent Developments................... S-9
The Offering.......................... S-10
Use of Proceeds....................... S-11
Description of Series A Preferred
Stock............................... S-11
Certain Federal Income Tax
Considerations...................... S-18
Underwriting.......................... S-24
Experts............................... S-25
Legal Matters......................... S-25
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 4
Description of Capital Stock.......... 4
Description of Common Stock........... 6
Description of Common Stock
Warrants............................ 7
Description of Preferred Stock........ 8
Description of Debt Securities........ 12
Plan of Distribution.................. 17
Experts............................... 18
Legal Matters......................... 18
</TABLE>
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2,000,000 SHARES
(JDN LOGO)
JDN REALTY CORPORATION
9 3/8% SERIES A
CUMULATIVE REDEEMABLE PREFERRED STOCK
(LIQUIDATION PREFERENCE
$25.00 PER SHARE)
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PROSPECTUS SUPPLEMENT
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A.G. EDWARDS & SONS, INC.
J.C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE
CORPORATION
STIFEL, NICOLAUS & COMPANY
INCORPORATED
SEPTEMBER 10, 1998
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