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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-38611
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 30, 1997)
900,000 SHARES
[LOGO] JDN JDN REALTY CORPORATION
COMMON STOCK
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JDN Realty Corporation (the "Company" or "JDN") is a real estate
development company specializing in the development and asset management of
retail shopping centers anchored by value-oriented retailers. As of January 31,
1998, the Company owned and operated, either directly or through affiliated
entities or joint ventures, 70 properties containing approximately 8.4 million
square feet of gross leasable area located in 12 states, primarily in the
Southeast.
All of the shares of common stock of the Company, par value $.01 per share
(the "Common Stock"), offered hereby are being sold by the Company (the
"Offering"). To assist the Company in maintaining its qualification as a REIT,
ownership by any person is limited to 8% of the Common Stock, with certain
exceptions.
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "JDN." On February 10, 1998, the last reported sale price of
the Common Stock on the NYSE was $33.50. The Company pays regular quarterly
distributions. See "Price Range of Common Stock and Distributions."
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 COMMON STOCK.
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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. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share......................... $33.25 $1.00 $32.25
- -------------------------------------------------------------------------------------------------------------
Total(3).......................... $29,925,000 $900,000 $29,025,000
=============================================================================================================
</TABLE>
(1) See "Underwriting" for a description of the indemnification arrangements
with the Underwriter.
(2) Before deducting expenses of the Offering payable by the Company estimated
at $200,000.
(3) The Company has granted the Underwriter a 30-day option to purchase up to an
additional 135,000 shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If the option
is exercised in full, the total "Price to Public," "Underwriting Discount"
and "Proceeds to Company" will be $34,413,750, $1,035,000 and $33,378,750,
respectively. See "Underwriting."
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The Common Stock is offered by the Underwriter named herein, subject to
prior sale, when, as and if delivered to and accepted by it and subject to
approval of certain legal matters by counsel for the Underwriter. The
Underwriter reserves the right to reject orders in whole or in part and to
withdraw, cancel or modify the offer without notice. It is expected that
delivery of certificates representing the Common Stock will be made on or about
February 17, 1998.
SUNTRUST EQUITABLE SECURITIES
February 10, 1998
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THE UNDERWRITER MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR
OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING OVER-ALLOTMENT,
STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING TRANSACTIONS AND PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
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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. Except as
otherwise noted, all information in this Prospectus Supplement assumes that the
over-allotment option granted to the Underwriter will not be exercised. 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 January 31, 1998, the
Company owned and operated 70 properties containing approximately 8.4 million
square feet of gross leasable area ("Company GLA") located in 12 states,
primarily in the Southeast. The principal tenants of the Company's properties
include Wal-Mart, Lowe's and Kroger. The Company also owns 103 undeveloped
parcels of land containing a total of 282 acres which are available for ground
leasing, tenant expansion, future retail development or exchange. 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 141 shopping center projects, 95 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 shopping
center 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.
RECENT DEVELOPMENTS
Operating Results and Distributions. Funds from operations ("FFO")
increased 10.1% on a per share basis between the years ended December 31, 1997
and 1996 and 12.5% on a per share basis between the three months ended December
31, 1997 and 1996. The Company generally considers FFO a widely used and
appropriate measure of performance for an equity REIT which provides a relevant
basis for comparison among REITs. 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.
The Company's payout ratio, based on FFO, decreased from 82.0% for the
three months ended December 31, 1996 to 76.8% for the three months ended
December 31, 1997.
Medium Term Note Program. On February 5, 1998, the Company entered into a
Distribution Agreement with Merrill Lynch, Pierce, Fenner & Smith, Incorporated,
BT Alex. Brown Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc relating to the proposed issue and sale from time to time of up to
$505.5 million of the Company's Medium-Term Notes (the "Notes") Due Nine Months
or More From the Date of Issue (the "Medium-Term Note Program"), as more fully
described in the
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Company's Prospectus Supplement, dated February 5, 1998, to the Prospectus. The
aggregate offering price under the Medium-Term Note Program is subject to
reduction as a result of the sale by the Company of other Securities described
in the accompanying Prospectus, including the Common Stock offered hereby. The
Company intends to use any proceeds from the issuance and sale of the Notes to
fund future development, redevelopment and acquisition opportunities, to repay
indebtedness incurred in connection with such opportunities, for working capital
or for general corporate purposes.
Common Stock Offering. On November 12, 1997, the Company issued three
million shares of its Common Stock in a public offering (the "Common Stock
Offering"), at a price to the public of $31.50 per share. The Company used the
approximately $89.2 million of net proceeds from the Common Stock Offering to
repay indebtedness outstanding under the Company's $150 million unsecured credit
facility (the "Unsecured Line of Credit") led by Wachovia Bank of Georgia, N.A.,
as agent.
Proposed Common Stock Offerings. The Company is currently considering
offerings of up to $45 million of Common Stock to institutional buyers at the
prevailing market price of the Common Stock. There can be no assurance that
these offerings will be consummated.
Acquisitions. During the quarter ended December 31, 1997, the Company
purchased a 125,657 square foot shopping center in Topeka, Kansas for a purchase
price of approximately $1.9 million. On February 4, 1998, the Company purchased
a portfolio of five shopping center properties in Milwaukee, Wisconsin
aggregating 1,115,189 square feet for a purchase price of approximately $58.4
million.
Proposed Acquisition. The Company has entered into a contract to purchase
a 204,291 square foot shopping center in Fayetteville, North Carolina for $12.9
million which is expected to close no later than February 28, 1998. There can be
no assurance, however, that this transaction will be consummated. The Company
holds a $10.5 million mortgage loan with the seller which bears interest at
11.0% and is secured by the Fayetteville shopping center. Management expects
that this loan will be satisfied by the seller from the proceeds of the sale of
the shopping center to the Company.
Tenant Developments. On February 2, 1998, Bruno's Inc. ("Bruno's") filed
for Chapter 11 bankruptcy protection in federal bankruptcy court in Delaware. At
January 31, 1998, 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. As of January 31, 1998, Bruno's represented 3.6% of the Company's
annualized base rent. Management of the Company does not believe that the
bankruptcy of Bruno's will have a material adverse effect on the results of
operations or financial condition of the Company. There can be no assurance,
however, that such an adverse effect will not occur.
Legal Proceedings. The Company is, from time to time, a party to legal
proceedings which arise in the ordinary course of its business. The Company is
not currently involved in any litigation nor, to management's knowledge, is any
litigation threatened against the Company, the outcome of which would, in
management's judgment based on information currently available, have a material
adverse effect on the results of operations or financial condition of the
Company.
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THE OFFERING
<TABLE>
<S> <C>
Common Stock offered hereby........................... 900,000 shares
Common Stock to be outstanding after the Offering..... 19,398,527 shares (1)
Use of proceeds....................................... To repay borrowings outstanding under the
Unsecured Line of Credit.
NYSE symbol........................................... JDN
</TABLE>
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(1) Excludes 1,822,093 shares of Common Stock reserved for issuance under the
Company's 1993 Incentive Stock Plan (the "Incentive Plan"), 300,000 shares
of Common Stock reserved for issuance under the Company's 1993 Non-Employee
Director Stock Option Plan, 491,049 shares of Common Stock reserved for
issuance under the Company's Dividend Reinvestment and Stock Purchase Plan,
and 99,168 shares of Common Stock reserved for issuance under the Company's
1995 Employee Stock Purchase Plan. In July 1997, the Company's Board of
Directors authorized an amendment to the Incentive Plan, subject to
shareholder approval, increasing the number of shares of Common Stock
reserved for issuance to 1,855,393, of which 33,300 shares have been issued
upon exercise of stock options under the Incentive Plan.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of the Common
Stock offered hereby, after deducting underwriting discounts and commissions and
estimated expenses of this Offering, are approximately $28.8 million ($33.2
million if the Underwriter's over-allotment option is exercised in full).
The Company intends to use all of the net proceeds to repay amounts
outstanding under the Unsecured Line of Credit. Borrowings outstanding under the
Unsecured Line of Credit were $53.0 million at January 31, 1998, bearing
interest at LIBOR plus 1.25% (7.08% at January 31, 1998) and maturing in May
2000.
PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS
The Common Stock is listed on the NYSE under the symbol "JDN." The
following table sets forth the range of high and low sale prices on the NYSE and
the distributions per share declared by the Company for the periods indicated.
<TABLE>
<CAPTION>
DISTRIBUTIONS
HIGH LOW PER SHARE
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<S> <C> <C> <C>
1996
First Quarter............................................... $24.2500 $20.6250 $.4550
Second Quarter.............................................. 22.8750 20.3750 .4750(1)
Third Quarter............................................... 24.5000 20.8750 .4750
Fourth Quarter.............................................. 27.6250 23.7500 .4750
1997
First Quarter............................................... 29.1250 25.2500 .4750
Second Quarter.............................................. 31.3750 26.2500 .5000(2)
Third Quarter............................................... 34.0625 30.3750 .5000
Fourth Quarter.............................................. 35.0000 30.0000 .5000
1998
First Quarter (through February 10, 1998)................... 33.5000 30.6250 (3)
</TABLE>
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(1) On June 11, 1996, the Company increased its quarterly distribution from
$.4550 to $.4750 per share.
(2) On May 22, 1997, the Company increased its quarterly distribution from
$.4750 to $.5000 per share.
(3) The Company's Board of Directors has not yet declared a distribution for the
first quarter of 1998.
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On February 10, 1998, the last reported sale price of the Common Stock on
the NYSE was $33.50 per share. As of February 4, 1998, there were approximately
433 holders of record of the Company's Common Stock. The Company's current
indicated annualized distribution is $2.00 per share. For the year ended
December 31, 1997, 27% of the Company's declared distributions were a return of
capital for federal income tax purposes and management believes that a portion
of the Company's distributions declared in 1998 to shareholders will be a return
of capital for federal income tax purposes.
The Company currently has a Dividend Reinvestment and Stock Purchase Plan
(the "Plan") which permits shareholders to acquire additional shares of Common
Stock by automatically reinvesting cash distributions and making optional cash
purchases without payment of any brokerage commissions or service charges.
Shareholders who do not participate in the Plan continue to receive cash
distributions as paid.
The Company intends to continue to pay regular quarterly distributions to
shareholders. Future distributions will be declared and paid at the discretion
of the Board of Directors and will depend upon cash generated by operating
activities, the Company's financial condition, capital requirements, annual
distribution requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), and such other factors as the Board of
Directors deems relevant.
The Company anticipates that cash available for distribution will be
greater than earnings and profits, as a result of non-cash expenses, comprised
primarily of depreciation and amortization, to be incurred by the Company.
Distributions by the Company to the extent of its current accumulated earnings
and profits for federal income tax purposes will be taxable to shareholders as
ordinary dividend income. Distributions in excess of earnings and profits
generally will be treated as non-taxable return of capital. Such distributions
have the effect of deferring taxation until the sale of a shareholder's Common
Stock. In order to maintain its qualification as a REIT, the Company must make
annual distributions to shareholders of at least 95% of its taxable income.
Under certain circumstances, which management of the Company does not expect to
occur, the Company could be required to make distributions in excess of cash
available for distribution in order to meet such requirements.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Recently Announced Proposals. On February 2, 1998, the Clinton
Administration announced its revenue proposals for the 1998/1999 Federal budget.
These proposals contain certain provisions that, if enacted, would significantly
modify the REIT-related Code provisions. The following list sets forth the major
changes that have been proposed: (i) limit the grandfathered status of existing
stapled, or paired-share, REITs by treating the stapled entities as one entity
with respect to properties acquired and activities or services performed
relating to such properties after the effective date; (ii) restrict
impermissible businesses indirectly conducted by REITs by prohibiting REITs from
acquiring stock that represents more than 10% of the vote or 10% of the value of
all classes of stock of a corporation after the effective date (subject to
certain grandfather provisions); and (iii) modify the treatment of closely held
REITs by imposing as an additional requirement for initial REIT qualification
that no person can own stock of a REIT possessing more than 50% of the total
combined voting power of all classes of voting stock or more than 50% of the
total value of shares of all classes of stock. The proposal would also repeal
Code Section 1374, thereby effectively eliminating the tax-free conversions of
large C corporations to REITs; any such conversion would be treated as a
liquidation of the C corporation followed by a contribution of the assets to a
REIT. If enacted, the effective date of each of these provisions will generally
be the first date of committee action.
Of these proposed changes, only the restriction on holding stock of
entities conducting impermissible businesses could directly affect the Company.
If such provision is enacted, there could be a material change in the way the
Company conducts its business. These provisions represent only the Clinton
Administration's proposals; no action has been initiated in Congress. At this
time, it is uncertain whether any or all of these provisions, or additional
provisions, will be enacted.
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UNDERWRITING
Subject to the terms and conditions of a terms agreement (the "Terms
Agreement") and a related underwriting agreement (collectively with the Terms
Agreement, the "Underwriting Agreement"), the Company has agreed to sell to
SunTrust Equitable Securities Corporation (the "Underwriter"), and the
Underwriter has agreed to purchase from the Company, 900,000 shares of Common
Stock.
The Company is obligated to sell and the Underwriter is obligated to
purchase all of the shares of Common Stock offered hereby (other than those
shares covered by the over-allotment option described herein) if any are
purchased. The Common Stock is offered subject to receipt and acceptance by the
Underwriter and to certain other conditions, including the right to reject
orders in whole or in part.
The Underwriter has advised the Company that the Underwriter proposes to
offer the shares of Common Stock to the public initially at the public offering
price set forth on the cover page of this Prospectus Supplement and to selected
dealers at such public offering price less a concession not to exceed $.60 per
share. The selected dealers may reallow a concession to certain other dealers
not to exceed $.10 per share. After the initial offering to the public, the
public offering price, the concession to selected dealers and the reallowance to
other dealers may be changed by the Underwriter.
The Company has granted the Underwriter an option, exercisable for 30 days
from the date of this Prospectus Supplement, to purchase at the public offering
price less the underwriting discount as set forth on the cover page of this
Prospectus Supplement, up to 135,000 additional shares of Common Stock. If the
Underwriter exercises its option to purchase any of the additional shares of
Common Stock, the Underwriter will have a firm commitment, subject to certain
conditions, to purchase all of such shares. The Underwriter may exercise such
option solely to cover over-allotments, if any, in connection with the sale of
the Common Stock offered hereby.
The Company and certain of its executive officers and directors have
agreed, subject to certain exceptions, that they will not directly or indirectly
offer, pledge, sell, offer to sell, contract to sell or grant any option to
purchase or otherwise sell or dispose (or announce any offer, pledge, offer of
sale, contract of sale, grant of any option or other sale or disposition), of
any shares of Common Stock or other capital stock for a period of 30 days from
the date of this Prospectus Supplement, without the prior written consent of the
Underwriter, which consent shall not be unreasonably withheld.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, or will contribute to payments that the Underwriter may be required to
make in respect thereof.
In order to facilitate the Offering, the Underwriter may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock during and after the Offering. Specifically, the Underwriter may
over-allot or otherwise create a short position in the Common Stock for its own
account by selling more shares of Common Stock than have been sold to it by the
Company. The Underwriter may elect to cover any such short position by
purchasing shares of Common Stock in the open market or by exercising the over-
allotment option granted to the Underwriter. In addition, the Underwriter may
stabilize or maintain the price of the Common Stock by bidding for or purchasing
shares of Common Stock in the open market and may impose penalty bids under
which selling concessions allowed to syndicate members or other broker-dealers
participating in the Offering are reclaimed if shares of Common Stock previously
distributed in the Offering are repurchased in connection with stabilization
transactions or otherwise. The effect of these transactions may be to stabilize
or maintain the market price of the Common Stock at a level above that which
might otherwise prevail in the open market. The imposition of a penalty bid may
also affect the price of the Common Stock to the extent that it discourages
resales thereof. No representation is made as to the magnitude or effect of any
such stabilization or other transactions. Such transactions may be effected on
the NYSE or otherwise and, if commenced, may be discontinued at any time.
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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. In addition, the description of federal income tax consequences
contained in the section of this Prospectus Supplement entitled "Certain Federal
Income Tax Considerations" is based upon the opinion of Waller Lansden Dortch &
Davis, A Professional Limited Liability Company. Certain legal matters related
to the Offering will be passed upon for the Underwriter by Stroock & Stroock &
Lavan LLP, New York, New York. Waller Lansden Dortch & Davis, A Professional
Limited Liability Company, and Stroock & Stroock & Lavan LLP will rely on the
opinion of Brown & Wood LLP, Washington, D.C., as to certain matters of Maryland
law.
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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.
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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> 10
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.
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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> 11
(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.
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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
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<PAGE> 13
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
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<PAGE> 14
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> 15
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> 16
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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<PAGE> 17
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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<PAGE> 18
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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<PAGE> 19
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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<PAGE> 24
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> 26
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 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 REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
UNDERWRITER. 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.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company........................... S-3
Recent Developments................... S-3
The Offering.......................... S-5
Use of Proceeds....................... S-5
Price Range of Common Stock and
Distributions....................... S-5
Certain Federal Income Tax
Considerations...................... S-6
Underwriting.......................... S-7
Legal Matters......................... S-8
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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900,000 SHARES
(LOGO) JDN
JDN REALTY CORPORATION
COMMON STOCK
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PROSPECTUS SUPPLEMENT
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SUNTRUST EQUITABLE SECURITIES
February 10, 1998
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