<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 13, 1995
2,250,000 SHARES
WEEKS CORPORATION
LOGO
COMMON STOCK
----------------
(PAR VALUE $.01 PER SHARE)
The Company is a self-administered, self-managed, geographically focused
real estate investment trust that has developed, owned, managed, constructed
and acquired primarily institutional-quality industrial and suburban office
properties in Metropolitan Atlanta and the Southeast since 1965. The Company
is one of the largest industrial real estate companies in the Southeast based
on square footage owned and managed. The Company's portfolio is comprised of
201 Properties totaling approximately 14.9 million square feet, including 27
Properties (totaling approximately 3.1 million square feet) under development
and/or under agreement to acquire. In addition, the Company has entered into a
letter of intent to acquire 25 completed Properties and 4 Properties under
development totaling approximately 2.1 million square feet.
All of the shares of Common Stock offered hereby are being sold by the
Company. After consummation of this offering, executive officers and directors
of the Company will beneficially own approximately 17.7% of the Common Stock
of the Company, assuming an exchange for Common Stock of all of the units of
limited partnership interest of its operating subsidiary, Weeks Realty, L.P.,
which are not currently held by the Company. The Common Stock is traded on the
New York Stock Exchange under the symbol "WKS". On November 6, 1996, the last
reported sale price of the Common Stock on the New York Stock Exchange was
$28.50 per share. See "Price Range of Common Stock and Distributions".
The shares of Common Stock are subject to certain restrictions on ownership
designed to preserve the Company's status as a real estate investment trust
for federal income tax purposes. See "Description of Capital Stock" in the
accompanying Prospectus.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT (1) COMPANY (2)
-------------- ------------ -----------
<S> <C> <C> <C>
Per Share............................... $28.125 $1.41 $26.715
Total(3)................................ $63,281,250 $3,172,500 $60,108,750
</TABLE>
- --------
(1) The Company and the Operating Partnership have agreed to indemnify
Goldman, Sachs & Co. against certain liabilities, including liabilities
under the Securities Act of 1933.
(2) Before deducting estimated expenses of $200,000 payable by the Company.
(3) The Company has granted Goldman, Sachs & Co. an option for 30 days to
purchase up to an additional 323,333 shares at the initial public offering
price per share, less the underwriting discount, solely to cover over-
allotments, if any. If such option is exercised in full, the total initial
public offering price, underwriting discount, and proceeds to the Company
will be $72,374,991, $3,628,400, and $68,746,591, respectively. See
"Underwriting".
----------------
The shares offered hereby are offered by Goldman, Sachs & Co., as specified
herein, subject to receipt and acceptance by Goldman, Sachs & Co. and subject
to their right to reject any order in whole or in part. It is expected that
certificates for the shares will be ready for delivery in New York, New York
on or about November 12, 1996.
GOLDMAN, SACHS & CO.
----------------
The date of this Prospectus Supplement is November 7, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-
COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
S-2
<PAGE>
The following is qualified in its entirety by the more detailed information
and financial information and statements, and the notes thereto, appearing
elsewhere in this Prospectus Supplement and the accompanying Prospectus and
incorporated herein or therein by reference. This Prospectus Supplement and
the accompanying Prospectus, including documents incorporated herein and
therein by reference, contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are inherently subject to
risks and uncertainties, many of which cannot be predicted with accuracy and
some of which might not even be anticipated. Future events and actual results,
financial and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, those discussed in "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
incorporated by reference in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, and the Company's Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1996, and June 30, 1996,
which are incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus. Unless otherwise indicated, the information contained
in this Prospectus Supplement assumes the over-allotment option granted to
Goldman, Sachs & Co. ("Goldman Sachs") is not exercised. As used herein, the
term "Company" includes Weeks Corporation and its predecessors and
subsidiaries, including Weeks Realty, L.P. (the "Operating Partnership") and
its subsidiaries, unless the context indicates otherwise. As used herein, the
term "Properties" includes the completed properties currently in the Company's
portfolio, as well as properties under development and/or under agreement to
acquire and the completed properties and properties under development that the
Company has agreed to acquire pursuant to a letter of intent. The offering of
2,250,000 shares of the common stock, par value $.01 per share, of the Company
(the "Common Stock") pursuant to this Prospectus Supplement is referred to
herein as the "Offering".
THE COMPANY
The Company is a self-administered, self-managed, geographically focused
real estate investment trust ("REIT") that was organized in 1994 to continue
and expand the fully integrated real estate business previously conducted by
Weeks Corporation and its affiliates. The Company, together with its
affiliates and predecessors, has developed, owned, managed, constructed and
acquired primarily institutional-quality industrial properties in Metropolitan
Atlanta and certain other Southeastern markets since 1965. The Company is one
of the largest industrial real estate companies in the Southeast based on
square footage owned and managed.
The Company's portfolio is comprised of 201 Properties totaling
approximately 14.9 million square feet, including 27 Properties (totaling
approximately 3.1 million square feet) under development and/or under
agreement to acquire. In addition, the Company has entered into a letter of
intent to acquire 25 completed Properties and 4 Properties under development
totalling approximately 2.1 million square feet. The Company currently
manages, or expects to manage upon completion or acquisition, all but seven of
the Properties. Industrial Properties represent approximately 91% of the
square footage of all of the Properties, and suburban office Properties
represent approximately 9%.
S-3
<PAGE>
The following table sets forth certain information concerning the Properties
and the Company's undeveloped land, and is presented on a pro forma basis for
the NWI transaction and Lichtin transaction discussed under "Recent
Developments--Acquisitions".
<TABLE>
<CAPTION>
METROPOLITAN GREENVILLE/ RESEARCH
ATLANTA, ORLANDO, SPARTANBURG, NASHVILLE, TRIANGLE,
GA FL SC TN NC(1) TOTAL
------------ -------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
COMPLETED PROPERTIES
Number................. 147 7 3 17 -- 174
Square Feet............ 9,659,545 406,822 389,200 1,401,456 -- 11,857,023
Occupancy Rate(2)...... 97.3% 94.2% 100.0% 94.8% -- 97.0%
COMPLETED PROPERTIES
UNDER LETTER OF INTENT
Number................. -- -- -- -- 25 25
Square Feet............ -- -- -- -- 1,784,977 1,784,977
Occupancy Rate(2)...... -- -- -- -- 94.8% 94.8%
PROPERTIES UNDER
DEVELOPMENT OR IN
LEASE-UP
Number................. 18(3) 2 1 6(4) -- 27
Square Feet............ 2,032,089(3) 145,000 92,400 823,140(4) -- 3,092,629
PROPERTIES UNDER
DEVELOPMENT OR IN
LEASE-UP (UNDER LETTER
OF INTENT)
Number................. -- -- -- -- 4 4
Square Feet............ -- -- -- -- 323,684 323,684
TOTAL PROPERTIES
Number................. 165 9 4 23(4) 29 230
Square Feet............ 11,691,634 551,822 481,600 2,224,596(4) 2,108,661 17,058,313
UNDEVELOPED LAND (NET
USABLE ACRES)
Owned.................. 210.9(5) 16.7 -- 147.3(4) -- 374.9
Owned in Joint Venture. 230.3 -- 442.3 -- -- 672.6
Under Letter of Intent. -- -- -- -- 97.0 97.0
Optioned (Under Letter
of Intent)............ -- -- -- -- 176.0 176.0
Marketing/Development
Rights................ 639.8 3.1 -- -- -- 642.9
---------- ------- ------- --------- --------- ----------
1,081.0 19.8 442.3 147.3(4) 273.0 1,963.4
</TABLE>
- --------
(1) Properties and undeveloped land will be acquired pursuant to the letter of
intent relating to the Lichtin transaction discussed under "Recent
Developments--Acquisitions--Lichtin Transaction".
(2) As used in this Prospectus Supplement, "Occupancy Rate" means the rate of
occupancy calculated based on leases under which tenants were paying rent
as of September 30, 1996. Occupancy Rate excludes one Property located in
Metropolitan Atlanta totaling 104,000 square feet that stabilized after
September 30, 1996. The Property is 100% occupied as of the date of this
Prospectus Supplement.
(3) Includes five Properties and one Property expansion totaling 427,650
square feet under development in joint ventures. The Company has options
or agreements to purchase 100% interests in each such Property upon its
completion and substantial lease-up.
(4) Includes six Properties totaling 823,140 square feet under development,
and 147.3 net usable acres of undeveloped land for which the Company has
acquisition agreements in connection with the NWI transaction discussed
under "Recent Developments--Acquisitions--NWI Transaction".
(5) Includes 28.7 net usable acres that the Company has agreed to acquire in
two stages, to be completed by April 1998.
S-4
<PAGE>
RECENT DEVELOPMENTS
THIRD QUARTER RESULTS
The Company's total revenues for the three month period ending September 30,
1996 increased to $13,555,000 from total revenues of $9,186,000 for the same
period in 1995. Net income was $3,033,000, or $.27 per share, for the third
quarter of 1996 compared with net income of $1,901,000, or $.25 per share, for
the third quarter of 1995.
The following table sets forth summary unaudited financial information for
the Company on a consolidated historical basis for the three month and nine
month periods ended September 30, 1996 and 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------
1996 1995 1996 1995
----------- --------------------- ----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<S> <C> <C> <C> <C>
Total revenues................ $ 13,555 $ 9,186 $ 38,063 $ 23,715
Net income.................... 3,033 1,901 9,226 6,079
Net income per share.......... $ .27 $ .25 $ .83 $ .79
Weighted average shares out-
standing..................... 11,174 7,675 11,162 7,675
Funds from Opera-
tions(1)(2)(3)............... $ 7,157 $ 4,619 $ 20,796 $ 13,449
Funds from Operations attrib-
utable to the Company's
shareholders(1)(3)(4)........ 5,819 3,452 16,907 10,053
</TABLE>
- --------
(1) The Company uses the National Association of Real Estate Investment Trusts
("NAREIT") definition of funds from operations ("FFO"), which was adopted
for periods beginning after January 1, 1996. FFO for any period means the
consolidated net income of the Company and its subsidiaries for such
period excluding gains or losses from debt restructuring and sales of
property, plus depreciation of real estate assets, and after adjustment
for unconsolidated partnerships and joint ventures, all determined on a
consistent basis in accordance with generally accepted accounting
principles ("GAAP"). FFO presented herein is not necessarily comparable to
FFO presented by other real estate companies due to the fact that not all
real estate companies use the same definition. However, the Company's FFO
is comparable to the FFO of real estate companies that use the current
NAREIT definition. FFO should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indicator of the
Company's financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it necessarily indicative of sufficient cash flow to
fund all of the Company's cash needs or ability to service indebtedness or
make distributions.
(2) Effective for periods beginning on or after January 1, 1996, the Company
implemented the new guidelines issued by NAREIT for calculating FFO. The
primary difference between the Company's FFO under the new guidelines and
prior periods is that the Company now does not add back to net income the
amortization of deferred financing costs in calculating FFO and recognizes
rental income for the purposes of computing FFO on a "straight-line"
basis. The amortization of deferred financing costs totaled $221 and $182
for the three months ended, and $642 and $508 for the nine months ended
September 30, 1996 and 1995, respectively. The "straight-line" rental
adjustment increased rental revenues by $135 and decreased rental revenues
by $38 for the three months ended, and increased rental revenues by $326
and decreased rental revenues by $114 for the nine months ended September
30, 1996 and 1995, respectively. All FFO information relating to the three
and nine months ended September 30, 1995 has been restated to reflect
these differences. Previously reported FFO attributable to the Company's
shareholders was $3,617 and $10,518 for the three and nine months ended
September 30, 1995.
S-5
<PAGE>
(3) The Company has realized cash flows from operating, investing and
financing activities as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1996
------------------ ------------------
<S> <C> <C>
Provided by (used in):
Operating activities............... $ 9,282 $ 22,414
Investing activities............... (50,904) (84,920)
Financing activities............... 41,563 61,572
</TABLE>
(4) Represents the Company's weighted average ownership of the Operating
Partnership for the period.
ACQUISITIONS
Since June 30, 1996, the Company has acquired 29 Properties with a total of
approximately 2.0 million square feet of leasable space, and has agreed to
acquire 35 additional Properties with a total of approximately 2.9 million
square feet of leasable space, including Properties acquired or to be acquired
in connection with the NWI transaction and the Lichtin transaction discussed
below.
NWI Transaction. On November 1, 1996, the Company acquired 17 Properties and
a related third-party brokerage business in Nashville, Tennessee for aggregate
acquisition consideration of approximately $69.5 million, comprised of the
issuance of 1,100,752 units of limited partnership interest ("Units") in the
Operating Partnership and the assumption of approximately $42 million of
mortgage indebtedness. The 17 Properties total approximately 1.4 million
square feet of leasable space. The acquisition was consummated pursuant to
certain acquisition agreements by and among the Company, NWI Warehouse Group,
L.P., a Tennessee limited partnership ("NWI"), and Buckley & Company Real
Estate, Inc., a Tennessee corporation ("Buckley"). Pursuant to the acquisition
agreements, NWI combined its property portfolio, management team and business
operations with and into the Company. NWI's two principals, John W. Nelley,
Jr., 47, and Albert W. Buckley, Jr., 52, joined the Company as members of
senior management and all of NWI's other 14 employees have been employed by
the Company. Mr. Nelley also became a member of the Company's Board of
Directors. In order to maintain the independent majority on the Board of
Directors, the Company intends to add one additional independent director.
The Company has also agreed to acquire six industrial buildings currently
under development (the "Development Properties") in staged acquisitions
between November 1, 1996 and March 31, 1998, for a combination of Units and
the assumption of certain construction indebtedness, and 147.3 net usable
acres of undeveloped land (the "Undeveloped Land") from NWI in staged
acquisitions between November 1, 1996 and March 31, 2003, for Units, the
assumption of indebtedness or cash, or a combination thereof. Based upon
information currently available to the Company, the Company estimates the
aggregate acquisition consideration for the Development Properties and the
Undeveloped Land will total approximately $52.1 million. The aggregate
acquisition consideration for the Development Properties and the Undeveloped
Land is based upon a number of factors, including the outstanding balance of
assumed indebtedness and the projected net operating income of the applicable
Development Property or, in certain instances, the properties developed on
certain portions of the Undeveloped Land. One or more of these factors may
vary from the Company's current expectations prior to consummation of these
acquisitions. The Company has assumed development management responsibilities
for tenant finish improvements for each of the Development Properties.
The Company currently estimates the aggregate acquisition consideration
relating to the NWI transaction (including the Properties acquired on November
1, 1996) will be approximately $121.6 million. Closing of the acquisitions of
the Development Properties and the Undeveloped Land is subject to certain
closing conditions and there is no assurance that these transactions will be
consummated.
S-6
<PAGE>
Lichtin Transaction. On July 3, 1996, the Company entered into a letter of
intent with Lichtin Properties, Inc., a North Carolina corporation
("Lichtin"), for the acquisition of 29 Properties totaling approximately 2.1
million square feet developed, owned and managed by Lichtin, in addition to 97
net usable acres of undeveloped land and options to acquire an additional 176
net usable acres of undeveloped land. Lichtin conducts its real estate
operations, and the 29 Properties and undeveloped land are all located, in the
Raleigh-Durham-Chapel Hill area of North Carolina (popularly called the
"Research Triangle").
The Company currently anticipates that it will initially acquire 19
completed and in-service Properties totaling approximately 1.4 million square
feet and the options to acquire 176 net usable acres of undeveloped land. This
initial closing is expected to be completed in December 1996 or January 1997.
Consideration for the first phase of the Lichtin transaction is expected to
consist of a combination of cash, Units and the assumption of indebtedness. At
the closing of the first phase of the Lichtin transaction, the Company also
intends to elect Harold S. Lichtin to the Company's Board of Directors and as
an executive officer of the Company, and expects to employ all of Lichtin's
other employees. In order to maintain the independent majority on the Board of
Directors, the Company intends to add one additional independent director, in
addition to the additional independent director the Company intends to elect
to the Board of Directors in connection with the NWI transaction described
above under "--NWI Transaction".
In the second phase of the Lichtin transaction, the Company expects to
acquire six Properties totaling approximately 371,000 square feet currently
leased to Northern Telecom Ltd. ("Northern Telecom"), under leases that
contain early termination options at June 30, 1998 and June 30, 2001, in each
case subject to twelve months' advance written notice. If Northern Telecom
does not exercise the first of these early termination options, the Company
intends to acquire the six Properties on July 1, 1997, for a combination of
cash, Units and the assumption of indebtedness; otherwise the acquisition of
these Properties would be delayed until (i) they are substantially re-leased,
or (ii) June 30, 2000, whichever is earlier.
The Company also expects to acquire four Properties totaling approximately
324,000 square feet currently under development. The acquisition of each of
these four Properties is expected to be completed at the earlier of (i) the
substantial lease-up of each Property, or (ii) June 30, 1998, for a
combination of cash, Units and the assumption of construction indebtedness.
The last phase of the Lichtin transaction involves the staged acquisition by
the Company of 97 net usable acres of undeveloped land over a period of
approximately four years beginning in January 1997, which four year period may
be extended by one year if Northern Telecom exercises the first of its early
termination options discussed above. Consideration for this undeveloped land
is expected to consist of Units.
Based upon information currently available to the Company, the Company
estimates that the aggregate acquisition consideration relating to the Lichtin
transaction will be approximately $164 million. The aggregate acquisition
consideration for the completed and in-service Properties (including the
Properties leased to Northern Telecom), the 97 net usable acres of undeveloped
land and the options to acquire an additional 176 net usable acres of
undeveloped land will consist of a combination of cash, Units and the
assumption of indebtedness. The actual amount of the acquisition consideration
relating to the Properties under development and the undeveloped land will be
based upon a number of factors, including the outstanding balance of assumed
indebtedness at the time of acquisition and, with respect to properties under
development, the projected net operating income of each such property. It is
expected that the aggregate cash consideration paid in connection with the
Lichtin transaction will not exceed $11 million.
S-7
<PAGE>
Consummation of the Lichtin transaction is subject to the completion of
remaining due diligence, the execution of definitive agreements, the consent
of lenders, the final approval of the transaction by the shareholders of
Lichtin and the partners of certain affiliated partnerships, the final
approval of the transaction by the Board of Directors of the Company, and
certain other closing conditions. There can be no assurance that these
conditions will be satisfied or waived or that the Lichtin transaction will be
consummated or, if consummated, that the final terms of the transaction will
not change from those described herein.
Principal Acquisition. On August 9, 1996, the Company completed the
acquisition of twelve Properties totaling approximately 627,000 square feet
from Principal Mutual Life Insurance Company (the "Principal Properties"). All
of the Principal Properties are located in Metropolitan Atlanta. Total cash
consideration of approximately $30.9 million was funded through borrowings
under the Company's revolving line of credit.
DEVELOPMENT
Since June 30, 1996, the Company has commenced development of nine
Properties with a total of approximately 669,000 square feet and a total
estimated cost of approximately $38.4 million. Seven of these Properties are
located in Metropolitan Atlanta, and two of these Properties are located in
Orlando, Florida. In addition, since June 30, 1996, the Company has completed
the 100% leasing of five Properties under development and one Property
expansion, with a total of approximately 474,000 square feet and a total cost
of approximately $16.1 million. One of these Properties is located in
Metropolitan Atlanta, one Property and one Property expansion are located in
Greenville/Spartanburg, South Carolina, and three Properties are located in
Orlando, Florida. The Company currently has 21 Properties and two Property
expansions under development or in lease-up (including the nine Properties for
which development was commenced since June 30, 1996, but excluding Properties
under development included in the NWI and Lichtin transactions described
above), totaling approximately 2.3 million square feet, and which are on
average 52% leased or pre-leased. The total estimated cost of these projects
is approximately $102.9 million. Eighteen of these Properties and the two
Property expansions are located in Metropolitan Atlanta, two Properties are
located in Orlando, Florida and one Property is located in
Greenville/Spartanburg, South Carolina.
ACQUISITION AND DEVELOPMENT RISKS
Since the consummation of the Company's initial public offering on August
24, 1994 (the "IPO"), the Company has acquired or has agreed to acquire 116
Properties totaling approximately 7.7 million square feet, an increase of
approximately 135% compared to the total square footage of the portfolio at
the time of the IPO. Acquisitions entail risks that (i) existing agreements to
acquire Properties may fail to close, (ii) acquired Properties may not perform
in accordance with management's expectations, including projected occupancy
and rental rates, or (iii) the senior executives and employees of an acquired
business will not be successfully integrated into the Company. In addition,
the Company's ability to develop or acquire additional properties is dependent
upon its ability to obtain equity or debt financing.
The Company's expansion strategy involves both acquisitions and internal
growth. Although the Company has successfully acquired Properties and
effectively integrated their operations in the past, there can be no assurance
that the Company will be able to continue to make successful acquisitions in
the future or that any such acquisitions will be successfully integrated into
the Company's operations. Furthermore, there can be no assurance that the
Company will be able to continue to operate an acquired business in a
profitable manner, or that an acquisition will not have an adverse effect upon
the Company's operating results, particularly in the fiscal quarters
immediately following the consummation of such acquisition.
S-8
<PAGE>
Since the consummation of the IPO, the Company has commenced, and in certain
cases also completed, the development of 32 Properties and four Property
expansions totaling approximately 3.7 million square feet, an increase of
approximately 65% compared to the total square footage of the portfolio at the
IPO. New project development is subject to a number of risks, including risks
of construction delays or cost overruns that may increase project costs, risks
that the project will not achieve anticipated occupancy levels or sustain
anticipated rent levels, and new project commencement risks such as the
failure to obtain zoning, occupancy and other required governmental permits
and authorizations and the incurrence of development costs in connection with
projects that are not pursued to completion.
LINE OF CREDIT AND INTEREST RATE HEDGING
On September 25, 1996, the Company closed a $175 million corporate unsecured
revolving line of credit (the "Credit Facility") with a syndicate of four
banks including Wachovia Bank of Georgia, N.A. (as agent), First Union
National Bank of Georgia, Commerzbank A.G., and Mellon Bank, N.A. The Credit
Facility replaced the Company's existing $120 million single-bank revolving
line of credit.
The Company recently entered into three separate interest rate swap
transactions, which fix the interest rate on a total of $50 million of
floating rate borrowings under the Credit Facility, for terms ranging from two
to five years. The weighted average fixed interest rate under the swaps is
6.65%. Adjusted for the current LIBOR spread of 1.35% on the Company's
borrowings under the Credit Facility, the total weighted average interest rate
on this $50 million of indebtedness is 8.0%
FORMATION OF WHOLLY OWNED QUALIFIED REIT SUBSIDIARIES
The Company conducts all of its business through the Operating Partnership
and its subsidiaries. As of November 1, 1996, the Company owned approximately
75.3% of the outstanding interests in the Operating Partnership, and the
remaining 24.7% partnership interests in the Operating Partnership were owned
by various individuals and entities (including certain officers and directors
of the Company) (collectively, the "Limited Partners") that previously owned
the properties, land and other assets contributed to the Operating Partnership
and its subsidiaries in connection with the IPO. Of the approximate 75.3%
interest in the Operating Partnership held by the Company, the Company
currently owns the sole .9% general partnership interest in the Operating
Partnership through Weeks GP Holdings, Inc., a wholly owned Georgia
corporation ("Weeks GP"), and a 74.4% limited partnership interest in the
Operating Partnership through Weeks LP Holdings, Inc., a wholly owned Georgia
corporation ("Weeks LP"). Both Weeks GP and Weeks LP are qualified REIT
subsidiaries within the meaning of Section 856(i)(2) of the Internal Revenue
Code of 1986, as amended (the "Code") and their existence will be disregarded
for federal income tax purposes.
S-9
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of Common Stock offered
hereby, after deducting estimated underwriting discounts and commissions and
expenses of the Offering, are expected to be approximately $59.9 million
(approximately $68.5 million if the over-allotment option granted to Goldman
Sachs is exercised in full). The Company intends to use the net proceeds of
the Offering to repay amounts outstanding under its Credit Facility, which
amounts were incurred to fund development and acquisition activities. The
borrowings under the Credit Facility that the Company intends to repay with
the net proceeds of the Offering bear interest at floating rates based on
LIBOR or the prime rate, and the weighted average rate on such borrowings as
of September 30, 1996, was 6.85% per annum. As of September 30, 1996,
outstanding borrowings under the Credit Facility, including borrowings by
subsidiaries of the Company, totaled approximately $120 million. The Credit
Facility has an initial term expiring on December 31, 1999, with optional
twelve-month extensions through December 31, 2002.
PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS
Since the IPO, the Common Stock has been listed on the NYSE under the symbol
"WKS." The following table sets forth the high and low closing sale prices for
the Common Stock for the fiscal periods indicated, as reported by the NYSE
Composite Tape, and the dividends declared by the Company with respect to each
such period. On November 6, 1996, the last reported sale price of the Common
Stock on the NYSE was $28.50 per share.
<TABLE>
<CAPTION>
QUARTERLY PERIOD HIGH LOW DIVIDENDS
- ---------------- ------- ------- ---------
<S> <C> <C> <C>
1994
Third quarter (1)................................... $20.625 $19.625 $.150
Fourth quarter...................................... $22.375 $18.500 $.375
1995
First quarter....................................... $22.875 $20.750 $.375
Second quarter...................................... $25.000 $21.500 $.375
Third quarter....................................... $25.625 $23.250 $.375
Fourth quarter...................................... $25.125 $22.500 $.400
1996
First quarter....................................... $26.750 $25.000 $.400
Second quarter...................................... $26.000 $23.625 $.400
Third quarter....................................... $29.250 $25.625 $.400
Fourth quarter (2).................................. $28.875 $28.375 --
</TABLE>
- --------
(1) For the period from August 18, 1994, through September 30, 1994.
(2) Through November 6, 1996.
Since the IPO, the Company has paid regular quarterly dividends to its
shareholders. None of the dividends paid to shareholders in 1994 or 1995
represented a return of capital for tax purposes. Federal income tax laws
require that a REIT distribute annually at least 95% of its REIT taxable
income. See "Federal Income Tax Considerations--Taxation of the Company--
Annual Distribution Requirements" in the accompanying Prospectus. Future
distributions by the Company will be at the discretion of the Board of
Directors and will depend upon the actual operating results of the Company,
its financial condition, capital requirements, the annual distribution
requirements under the REIT provisions of the Code, applicable legal
restrictions, restrictions under credit agreements and such other factors as
the Board of Directors deems relevant. Although the Company intends to
continue to make quarterly distributions to its shareholders, no assurances
can be given as to the amounts of dividends, if any, distributed in the
future.
S-10
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement and the
related Pricing Agreement among Goldman Sachs, the Company and the Operating
Partnership, Goldman Sachs have agreed to purchase from the Company, and the
Company has agreed to sell to Goldman Sachs, 2,250,000 shares of Common Stock.
Under the terms and conditions of the Underwriting Agreement and the related
Pricing Agreement, Goldman Sachs are committed to take and pay for all of the
shares of Common Stock offered hereby, if any are taken.
Goldman Sachs propose to offer the shares of Common Stock in part directly
to the public at the public offering price set forth on the cover page of this
Prospectus Supplement, and in part to certain securities dealers at such price
less a concession of $.70 per share. Goldman Sachs may allow, and such dealers
may re-allow, a concession not in excess of $.10 per share to certain brokers
and dealers. After the shares of Common Stock are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by Goldman Sachs.
The Company has granted Goldman Sachs an option exercisable for 30 days
after the date of this Prospectus Supplement to purchase up to an aggregate of
323,333 additional shares of Common Stock to cover over-allotments, if any.
The Company has agreed that during the period beginning from the date of
this Prospectus Supplement and continuing to and including the date 90 days
after the date of the Prospectus Supplement, not to offer, sell, contract to
sell or otherwise dispose of any securities of the Company (other than
pursuant to employee stock option plans existing on, restricted stock awards
granted prior to, or upon the conversion of convertible or exchangeable
securities outstanding as of, the date of the Pricing Agreement) that are
substantially similar to the shares of Common Stock or which are convertible
or exchangeable into securities that are substantially similar to the shares
of Common Stock (other than the issuance of Units (i) in private transactions,
(ii) in connection with the acquisition by the Company of properties and
related businesses and (iii) to the seller or sellers of such properties and
related businesses), without the prior written consent of Goldman Sachs,
except for the shares of Common Stock offered in connection with the Offering.
The Company and the Operating Partnership, jointly and severally, have
agreed to indemnify Goldman Sachs against certain liabilities, including
liabilities under the Securities Act of 1933.
VALIDITY OF SECURITIES
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by King & Spalding, Atlanta, Georgia, and for Goldman
Sachs by Sullivan & Cromwell, New York, New York. Sullivan & Cromwell will
rely upon the opinion of King & Spalding as to matters of Georgia law.
EXPERTS
The consolidated and combined financial statements and related financial
statement schedule of the Company incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and have been incorporated herein in reliance upon the
authority of such firm as experts in giving such reports.
S-11
<PAGE>
The combined statement of revenue and certain expenses of the Principal
Properties incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and
have been incorporated herein in reliance upon the authority of such firm as
experts in giving such report.
The combined financial statements of Lichtin Properties incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and have been incorporated
herein in reliance upon the authority of such firm as experts in giving such
report.
The combined financial statements of NWI Warehouse Group incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus have
been audited by Ernst & Young LLP, independent auditors, as indicated in their
report with respect thereto, and have been incorporated herein in reliance
upon the authority of such firm as experts in giving such report.
S-12
<PAGE>
PROSPECTUS
$150,000,000
WEEKS CORPORATION
LOGO
PREFERRED STOCK, COMMON STOCK AND COMMON
STOCK WARRANTS
----------------
Weeks Corporation (the "Company") may offer from time to time, together or
separately, in one or more series (i) shares of the Company's preferred stock,
par value $.01 per share ("Preferred Stock"), (ii) shares of the Company's
common stock, par value $.01 per share ("Common Stock") and (iii) warrants to
purchase shares of Common Stock ("Common Stock Warrants") (the Preferred
Stock, Common Stock and Common Stock Warrants are collectively referred to as
the "Securities"), at an aggregate initial offering price not to exceed U.S.
$150,000,000, in amounts, at prices and on terms to be determined at the time
of sale.
The specific terms of any Securities offered pursuant to this Prospectus
will be set forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement"), together with the terms of the offering of such
Securities and the initial price and the net proceeds to the Company from the
sale thereof. The Prospectus Supplement will include, with regard to the
particular Securities, where applicable, the following information: (i) in the
case of Preferred Stock, the designation, number of shares, liquidation
preference per share, initial offering price, dividend rate (or method of
calculation thereof), dates on which dividends shall be payable and dates from
which dividends shall accrue, any redemption or sinking fund provision, any
conversion rights, and any voting or other rights; (ii) in the case of Common
Stock, the number of shares and the terms of the offering and sale thereof;
(iii) in the case of Common Stock Warrants, the designation and aggregate
number thereof, the number of shares of Common Stock purchasable upon
exercise, the exercise price, the terms of the offering and sale thereof, and
where applicable, the duration and detachability thereof; and (iv) in the case
of all Securities, whether such Securities will be offered separately or as a
unit with other Securities. The Company's Common Stock is subject to certain
restrictions on ownership designed to preserve the Company's status as a real
estate investment trust for federal income tax purposes. See "Description of
Capital Stock."
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "WKS." Any Common Stock offered pursuant to a
Prospectus Supplement will be listed on such exchange, subject to official
notice of issuance.
The Company may sell the Securities in or outside the United States through
underwriters or dealers, directly to one or more purchasers, or through
agents. If any agents, underwriters or dealers are involved in the sale of the
Securities, the names of such agents, underwriters or dealers and any
applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
----------------
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 COM- MISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
----------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 13, 1995.
<PAGE>
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"), pursuant to the Exchange
Act. Such reports, proxy statements and other information filed by the Company
may be examined without charge at, or copies obtained upon payment of
prescribed fees from, the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and are also
available for inspection and copying at the regional offices of the Commission
located at Seven World Trade Center, New York, New York 10048 and at 500 West
Madison Street, Chicago, Illinois 60661. The Common Stock of the Company is
listed on the NYSE, and such material can also be inspected and copied 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 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered pursuant to this Prospectus (together with
all amendments and exhibits and schedules thereto, the "Registration
Statement"). This Prospectus, which is part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement. For
further information concerning the Company and the Securities offered hereby,
reference is made to the Registration Statement, which may be examined without
charge at, or copies obtained upon payment of prescribed fees from, the
Commission and its regional offices at the locations listed above. Any
statements contained herein concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i)Annual Report on Form 10-K for the year ended December 31, 1994 as amended
by Form 10-K/A for the year ended December 31, 1994 filed on October 5, 1995;
(ii)Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
(iii)Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 as
amended by Form 10-Q/A for the quarter ended June 30, 1995 filed on October 5,
1995;
(iv)Current Report on Form 8-K dated June 30, 1995 and filed on July 13, 1995
as amended by Form 8-K/A dated June 30, 1995 and filed on September 1, 1995;
(v)Current Report on Form 8-K dated August 31, 1995 and filed on September 1,
1995; and
(vi) Registration Statement on Form 8-A dated August 12, 1994, registering
the Company's Common Stock under Section 12(b) of the Exchange Act.
All documents and reports filed pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act from the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of the filing of such reports and documents (provided, however, that
the information referred to in Item 402(a)(8) of Regulation S-K of the
Commission shall not be deemed specifically incorporated by reference herein).
Any statement contained 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 any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus or any Prospectus Supplement is delivered, on written or oral
request of such person, a copy of any or all documents which are incorporated
herein by reference (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in the document which this
Prospectus incorporates). Requests should be directed to: Vice President-
Investor Relations, Weeks Corporation, 4497 Park Drive, Norcross, Georgia
30093, telephone number (770) 923-4076.
2
<PAGE>
THE COMPANY
The Company is one of the largest developers and owners of high-quality
industrial buildings and business parks in metropolitan Atlanta. The Company
is a self-administered, self-managed, geographically focused equity real
estate investment trust (a "REIT") that was formed to continue and to expand
the fully integrated real estate business previously conducted by Weeks
Corporation and its affiliates and predecessors. As of June 30, 1995, the
Company owned and operated 103 income-producing properties, including 6
industrial properties under development (collectively, the "Properties"),
aggregating approximately 6.9 million rentable square feet and comprised of 92
industrial Properties, 8 office Properties and 3 retail Properties. All but 7
of the Properties are located in metropolitan Atlanta, and all of the
Properties are located in the Southeastern United States. As of June 30, 1995,
the occupancy rate of the Properties, excluding the 6 Properties under
development, was approximately 97%.
The Company conducts all of its business through Weeks Realty, L.P. (the
"Operating Partnership"). As of June 30, 1995, the Company owned an
approximate 74.75% general partnership interest in the Operating Partnership,
and the remaining approximate 25.25% limited partnership interest in the
Operating Partnership was owned by various individuals and entities (including
certain officers and directors of the Company) (collectively, the "Limited
Partners") that previously owned the properties, land and other assets
contributed to the Operating Partnership and its subsidiaries in connection
with the Company's initial public offering in August 1994 (the "IPO"). As the
sole general partner of the Operating Partnership, the Company has control
over the management of the Operating Partnership and over the Properties.
Unless the context indicates otherwise, references to the "Company" include
Weeks Corporation and its predecessors, and the Operating Partnership and its
subsidiaries.
Weeks Realty Services, Inc. ("Weeks Realty Services") and Weeks Construction
Services, Inc. ("Weeks Construction Services") were organized as subsidiaries
of the Operating Partnership to provide real estate related services to third
parties. Weeks Realty Services generally provides property management, leasing
and landscaping services and Weeks Construction Services generally provides
general contracting services to third parties.
The Operating Partnership owns 1% of the voting common stock and 100% of the
nonvoting common stock of each of Weeks Realty Services and Weeks Construction
Services. The voting and nonvoting common stock of Weeks Realty Services and
Weeks Construction Services held by the Operating Partnership represents
approximately 99% of the economic interest in these corporations. Ninety-nine
percent of the voting common stock of Weeks Realty Services and Weeks
Construction Services is held by certain executive officers of the Company and
is subject to agreements that are designed to ensure that the stock is held
only by officers of these corporations.
Weeks Development Partnership ("Weeks Development") is a Georgia general
partnership owned 40% by Weeks Realty Services and 60% by Weeks Construction
Services. Weeks Development holds certain development land that is or may be
used for build-to-suit for sale projects, and interests in certain joint
ventures that own interests in certain development land. The Operating
Partnership may purchase sites for development from Weeks Development.
The Operating Partnership owns five of its industrial Properties in Atlanta,
Georgia through its 99% ownership of Weeks Financing Limited Partnership (the
"Financing Partnership"). The Financing Partnership Properties are encumbered
by mortgage indebtedness assumed in connection with the IPO. The remaining 1%
ownership interest in the Financing Partnership is held by Weeks Realty
Services.
In order to maintain its qualification as a REIT for Federal income tax
purposes, the Company is required to distribute at least 95% of its taxable
income each year. Dividends on any Preferred Stock offered pursuant to a
Prospectus Supplement would be included as distributions for this purpose.
The Common Stock is listed on the NYSE under the symbol "WKS." The Company
was incorporated in Georgia in 1983. The Company's principal executive offices
are located at 4497 Park Drive, Norcross, Georgia 30093, and its telephone
number is (770) 923-4076.
3
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company intends to contribute the proceeds from the sale of the Securities to
the Operating Partnership, of which the Company is the sole general partner,
in exchange for additional units representing general partnership interests in
the Operating Partnership. The Operating Partnership will use the proceeds for
general corporate purposes including, without limitation, the acquisition and
development of industrial and office properties and the repayment of
outstanding indebtedness.
CONSOLIDATED RATIO OF
EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges for the six months ended June 30, 1995, and for each of the
last five fiscal years. With respect to periods prior to August 24, 1994, the
Company's consolidated ratios of earnings to fixed charges reflect the
operating results from the businesses previously conducted by Weeks
Corporation and its affiliates and predecessors. There was no preferred stock
outstanding for any of the periods shown below. Accordingly, the ratio of
earnings to fixed charges and preferred stock dividends is identical to the
ratio of earnings to fixed charges.
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, JAN. 1, 1994 AUG. 24, 1994 SIX MONTHS
----------------------------- TO TO ENDED
1990 1991 1992 1993 AUG. 23, 1994 DEC. 31, 1994 JUNE 30, 1995
------ ------ ------ ----- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges:(2)...... .72x(1) .90x(1) .86x(1) 1.09x 1.06x 2.69x 2.38x
</TABLE>
- --------
(1) Earnings were inadequate to cover fixed charges by $2,835,000 in 1990,
$1,078,000 in 1991 and $1,551,000 in 1992. These deficiencies occurred in
years prior to the Company's business combination in August, 1994.
(2) For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income (loss)
before minority interest and extraordinary items. Fixed charges consist of
interest costs, whether expensed or capitalized, and amortization of debt
discounts and issue costs, whether expensed or capitalized.
DESCRIPTION OF CAPITAL STOCK
GENERAL
Under the Company's Amended and Restated Articles of Incorporation (the
"Articles"), the authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, par value $.01 per share, and 20,000,000
shares of Preferred Stock, par value $.01 per share.
COMMON STOCK
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 Preferred Stock or upon the exercise of Common
Stock Warrants issued by the Company. This description is in all respects
subject to and qualified in its entirety by reference to the applicable
provisions of the Articles and the Company's Bylaws.
The holders of Common Stock are entitled to one vote per share on all
matters voted on by shareholders, including elections of directors. The
Articles do not provide for cumulative voting in the election of directors.
The shares of Common Stock offered hereby will, when issued, be fully paid
and nonassessable and will not be subject to preemptive or similar rights.
Subject to such preferential rights as may be granted by the Board of
Directors in connection with the future issuance of Preferred Stock, the
holders of Common Stock are entitled to such distributions as may be declared
from time to time by the Board of Directors from assets available for
distribution to such holders.
4
<PAGE>
In the event of a liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to receive ratably the assets remaining
after satisfaction of all liabilities and payment of liquidation preferences
and accrued dividends, if any, on Preferred Stock. The rights of holders of
Common Stock are subject to the rights and preferences established by the
Board of Directors for any class or series of Preferred Stock that may
subsequently be issued by the Company.
The Common Stock is listed on the NYSE under the symbol "WKS." Wachovia Bank
of North Carolina, N.A. is the Company's transfer agent and registrar.
PREFERRED STOCK
Subject to limitations prescribed by Georgia law and the Articles, the Board
of Directors is authorized to designate and issue, from the authorized but
unissued capital stock of the Company, one or more classes or series of
Preferred Stock without shareholder approval. The Board of Directors may affix
and determine the preferences, limitations and relative rights of each class
or series of Preferred Stock so issued. Because the Board of Directors has the
power to establish the preferences, limitations and relative rights of each
class or series of Preferred Stock, it may afford the holders in any class or
series of Preferred Stock preferences and relative rights, voting or
otherwise, senior to the rights of holders of Common Stock. The issuance of
Preferred Stock could have the effect of delaying, deferring or preventing a
change in control of the Company.
Preferred Stock offered hereby will, when issued, be fully paid and
nonassessable and will not be subject to preemptive or similar rights. The
specific terms of a particular class or series of Preferred Stock will be
described in the Prospectus Supplement relating to that class or series. The
description of Preferred Stock set forth below and the description of the
terms of a particular class or series of Preferred Stock set forth in a
Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the articles of amendment relating to such class or
series.
The preferences, limitations and relative rights of each class or series of
Preferred Stock will be fixed by the articles of amendment relating to such
class or series. The applicable Prospectus Supplement will describe the terms
of the Preferred Stock in respect of which this Prospectus is being delivered,
including, where applicable, the following:
(1) The designation of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the liquidation
preferences per share and the initial offering price of such Preferred
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) Whether dividends on such Preferred Stock are cumulative or not and,
if cumulative, the date from which dividends on such Preferred Stock shall
accumulate;
(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 provision 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 converted into Common Stock or other securities of the
Company, including the conversion price (or manner of calculation thereof);
(10) A discussion of the material Federal income tax considerations
applicable to such Preferred Stock;
(11) Any limitation 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;
(12) The relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the Company;
5
<PAGE>
(13) Any limitations on issuance of any class or series of preferred
stock ranking senior to or on a parity with such class or series of
Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the Company;
(14) Any voting rights of such Preferred Stock; and
(15) Any other specific preferences, limitations or relative rights of
such Preferred Stock.
Unless otherwise specified in the 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 Common Stock and to all other
equity securities 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 securities issued by the Company the
terms of which specifically provide that such equity 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 securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding
up of the Company.
The terms and conditions, if any, upon which shares of any class or series
of Preferred Stock are convertible into Common Stock or other securities of
the Company will be set forth in the applicable Prospectus Supplement relating
thereto. Such terms will include the number of shares of Common Stock or other
securities of the Company 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 TRANSFER
The Articles contain certain restrictions on the number of shares of capital
stock that individual shareholders may own. For the Company to qualify as a
REIT under the Internal Revenue Code of 1986, as amended (the "Code"), no more
than 50% in value of its outstanding shares of capital stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code
to include certain entities) during the last half of a taxable year (other
than the first taxable year) or during a proportionate part of a shorter
taxable year. The capital stock must also be beneficially owned by 100 or more
persons during at least 335 days of a taxable year (other than the first
taxable year) or during a proportionate part of a shorter taxable year. To
enable the Company to continue to qualify as a REIT, the Articles contain
restrictions on the acquisition of capital stock intended to ensure compliance
with these requirements (collectively, the "Ownership Limit").
The Ownership Limit provides that, subject to certain exceptions specified
in the Articles, no person (excluding the Weeks Family and the Weeks Siblings,
as defined below) may own, actually and constructively under the applicable
attribution provisions of the Code, more than 7.5% of the outstanding shares
of any class of capital stock of the Company. The Ownership Limit also
provides that the sisters and brother of A. Ray Weeks, Jr. (the "Weeks
Family"), as well as all individuals (other than A. Ray Weeks, Jr.) from whom
shares of capital stock would be attributed to such persons under the
applicable attribution provisions of the Code, may not actually and
constructively own, in the aggregate, more than 10% of the outstanding shares
of any class of capital stock of the Company. The Ownership Limit further
provides that A. Ray Weeks, Jr. and the Weeks Family (collectively, the "Weeks
Siblings"), as well as all individuals from whom shares of capital stock would
be attributed to such persons under the applicable attribution provisions of
the Code, may not actually and constructively own, in the aggregate, more than
19% of the outstanding shares of any class of capital stock of the Company.
The Board of Directors may (but in no event will be required to) waive the
Ownership Limit with respect to a holder if it determines that such holder's
ownership will not then or in the future jeopardize the Company's status as a
REIT. The Board of Directors has granted waivers with respect to the Ownership
Limit after making such a determination. As a condition to the grant of any
such waiver, the Board of Directors may require opinions of counsel
satisfactory to it and/or an undertaking or other information from the
applicant with respect to preserving the REIT status of the Company.
6
<PAGE>
If any purported transfer of capital stock of the Company or any other event
would otherwise result in any person or entity holding shares of capital stock
of the Company in excess of the applicable Ownership Limit, then any such
purported transfer will be null and void as to that number of shares in excess
of such Ownership Limit and the purported transferee (the "Prohibited
Transferee") shall acquire no right or interest (or, in the case of any event
other than a purported transfer, the person or entity holding record title to
any such shares in excess of the Ownership Limit (the "Prohibited Owner")
shall cease to own any right or interest) in such excess shares. In addition,
if any purported transfer of capital stock or any other event would result in
the Company's failing to qualify as REIT under the Code (other than as a
result of a violation of the requirement that a REIT have at least 100
shareholders), then any such purported transfer will be null and void as to
that number of shares in excess of the number that could have been transferred
without such result, and the Prohibited Transferee shall acquire no right or
interest (or, in the case of any event other than a transfer, the Prohibited
Owner shall cease to own any right or interest) in such excess shares.
Any such excess shares described above will be transferred automatically, by
operation of law, to a trust, the beneficiary of which will be a qualified
charitable organization selected by the Company (the "Beneficiary"). The
trustee of the trust will be empowered to sell such excess shares to a
qualified person or entity and distribute to a Prohibited Transferee an amount
equal to the lesser of the price paid by the Prohibited Transferee for such
excess shares or the sales proceeds received by the trust for such excess
shares. In the case of any excess shares resulting from any event other than a
transfer, or from a transfer for no consideration, the trustee will be
empowered to sell such excess shares to a qualified person or entity and
distribute to the Prohibited Owner an amount equal to the lesser of the fair
market value of such excess shares on the date of such event or the sales
proceeds received by the trust for such excess shares. Prior to a sale of any
such excess shares by the trust, the trustee will be entitled to receive, in
trust for the benefit of the Beneficiary, all dividends and other
distributions paid by the Company with respect to such excess shares, and also
will be entitled to exercise all voting rights with respect to such excess
shares. Any sales proceeds received by the trust in excess of the amount that
must be distributed to a Prohibited Transferee or Prohibited Owner, as the
case may be, will be distributed to the Beneficiary.
Any purported transfer of capital stock of the Company that would otherwise
cause the Company to be beneficially owned by fewer than 100 persons will be
null and void in its entirety, and the intended transferee will acquire no
rights in such stock.
All certificates representing shares of capital stock will bear a legend
referring to the restrictions described above.
Every owner of more than 1% (or such lower percentage as may be required by
the Code or regulations promulgated thereunder) of the outstanding shares of
capital stock of the Company must file a written notice with the Company
containing the information specified in the Articles within 30 days after
December 31 and June 30 of each year. In addition, each shareholder shall upon
demand be required to disclose to the Company in writing such information as
the Company may request in order to determine the effect, if any, of such
shareholder's actual and constructive ownership on the Company's status as a
REIT and to ensure compliance with the Ownership Limit.
The Ownership Limit may have the effect of precluding an acquisition of
control of the Company without the approval of the Board of Directors.
LIMITATION OF DIRECTORS' LIABILITY
The Articles eliminate, subject to certain exceptions, the personal
liability of a director to the Company or its shareholders for monetary
damages for breaches of such director's duty of care or other duties as a
director. The Articles do not provide for the elimination of, or any
limitation on, the personal liability of a director for (i) any appropriation,
in violation of the director's duties, of any business opportunity of the
Company, (ii) acts or omissions which involve intentional misconduct or a
knowing violation of law, (iii) unlawful corporate distributions or (iv) any
transaction from which the director received an improper personal benefit. The
Articles
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further provide that if the Georgia Business Corporation Code (the "GBCC") is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Company shall be eliminated or limited to the fullest extent permitted by the
GBCC, as amended. These provisions of the Articles will limit the remedies
available to a shareholder in the event of breaches of any director's duties
to such shareholder or the Company.
Under the Company's Bylaws, the Company is required to indemnify to the
fullest extent permitted by the GBCC any individual made a party to a
proceeding (as defined in the GBCC) because he is or was a director or officer
of the Company against liability (as defined in the GBCC) incurred in such
proceeding, if he acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The Company is required to pay for or reimburse the reasonable expenses
incurred by a director or officer who is party to a proceeding in advance of
final disposition thereof (i) such director or officer furnishes the Company a
written affirmation of his good faith belief that he has met the standard of
conduct set forth above, and (ii) such director or officer furnishes the
Company a written undertaking, executed personally or in his behalf, to repay
any advances if it is ultimately determined that he is not entitled to
indemnification. The Company may not indemnify a director (i) in connection
with a proceeding by or in the right of the Company in which the director was
adjudged liable to the Company, (ii) in connection with any other proceeding
in which he was adjudged liable on the basis that personal benefit was
improperly received by him.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of the
Company's directors. The indemnification agreements require, among other
things, that the Company indemnify its directors to the fullest extent
permitted by applicable law as enacted or amended, and advance to directors
all reasonable expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The Company also must
indemnify and advance all reasonable expenses incurred by directors seeking to
enforce their rights under the indemnification agreements, and cover directors
under the Company's directors' and officers' liability insurance. Although the
indemnification agreements offer substantially the same scope of coverage
afforded by provisions in the Company's Bylaws, they provide greater assurance
to directors that indemnification will be available, because, as contracts,
they cannot be modified unilaterally in the future by the Board of Directors
or by the shareholders to eliminate the rights provided thereunder.
GEORGIA ANTI-TAKEOVER STATUTES
The GBCC restricts certain business combinations with "interested
shareholders" (as defined below) (the "Business Combination Statute"), and
contains fair price requirements applicable to certain mergers with certain
interested shareholders (the "Fair Price Statute"). In accordance with the
provisions of these statutes, the Company must elect in its Articles or Bylaws
to be covered by the restrictions imposed by these statutes. The Company has
not elected to be covered by such restrictions; however, the Company, by
action of its Board of Directors without shareholder approval, may in the
future amend its Bylaws to make such an election. Furthermore, shareholders
may amend or repeal the Company's Bylaws or adopt new Bylaws (even though the
Bylaws may also be amended or repealed by the Board of Directors) and may also
expressly provide that any Bylaw so amended or repealed by them may not be
amended or repealed by the Board of Directors.
The Business Combination Statute regulates business combinations such as
mergers, consolidations, share exchanges and asset purchases where the
acquired business has at least 100 shareholders residing in Georgia and has
its principal office in Georgia, as the Company does, and where the acquiror
became an interested shareholder of the corporation, unless either (i) the
transaction resulting in such acquiror becoming an interested shareholder or
the business combination received the approval of the corporation's board of
directors prior to the date on which the acquiror became an interested
shareholder, or (ii) the acquiror became the owner of at least 90% of the
outstanding voting shares of the corporation (excluding shares held by
directors, officers and affiliates of the corporation and shares held by
certain other persons) in the same transaction in which the acquiror became an
interested shareholder. For purposes of the Business Combination Statute and
the Fair Price Statute, an
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"interested shareholder" generally is any person who directly or indirectly,
alone or in concert with others, beneficially owns or controls 10% or more of
the voting power of the outstanding voting shares of the corporation. The
Business Combination Statute prohibits business combinations with an
unapproved interested shareholder for a period of five years after the date on
which such person became an interested shareholder. The Business Combination
Statute is broad in its scope and is designed to inhibit unfriendly
acquisitions.
The Fair Price Statute prohibits certain business combinations between a
Georgia business corporation and an interested shareholder. The Fair Price
Statute would permit the business combination to be effected if (i) certain
"fair price" criteria are satisfied, (ii) the business combination is
unanimously approved by the continuing directors, (iii) the business
combination is recommended by at least two-thirds of the continuing directors
and approved by a majority of the votes entitled to be cast by holders of
voting shares, other than voting shares beneficially owned by the interested
shareholder, or (iv) the interested shareholder has been such for at least
three years and has not increased his ownership position in such three-year
period by more than one percent in any twelve month period. The Fair Price
Statute is designed to inhibit unfriendly acquisitions that do not satisfy the
specified "fair price" requirements.
Pursuant to the GBCC, the Company cannot, subject to certain exceptions,
merge with or sell all or substantially all of the assets of the Company,
except pursuant to a resolution approved by shareholders holding a majority of
the shares entitled to vote on the resolution. In addition, the agreement of
limited partnership of the Operating Partnership (the "Partnership Agreement")
requires that any merger of the Operating Partnership into another entity if
the Operating Partnership is not the surviving entity or any sale of all or
substantially all of the assets of the Operating Partnership to the Company or
an affiliate of the Company be approved by a majority in interest of the
Limited Partners.
CERTAIN OTHER PROVISIONS OF THE COMPANY'S ARTICLES AND BYLAWS
Certain provisions of the Company's Articles and Bylaws might discourage
certain types of transactions that involve an actual or threatened change in
control of the Company. The Ownership Limit may delay or impede a transaction
or a change in control of the Company that might involve a premium price for
the Company's capital stock or otherwise be in the best interest of the
shareholders. See "--Restrictions on Transfer." Pursuant to the Articles, the
Company's Board of Directors is divided into three classes of directors, each
class serving staggered three-year terms. The staggered terms of directors may
reduce the possibility of a tender offer or an attempt to change control of
the Company. Under the GBCC, unless otherwise set forth in the articles of
incorporation or in a bylaw adopted by the shareholders, directors serving on
a classified board may only be removed by the shareholders for cause. In
addition, the Bylaws of the Company provide that, subject to the right of the
holders of any Preferred Stock then outstanding to elect additional directors
under specified circumstances, directors may be removed only for cause upon
the affirmative vote of holders of a majority of the shares present and
voting. These provisions may render more difficult a change in control of the
Company or removal of incumbent management. The issuance of Preferred Stock by
the Board of Directors also may have the effect of delaying, deferring or
preventing a change in control of the Company. See "--Preferred Stock."
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants, which may be issued
independently or together with any other Securities and may be attached to or
separate from any such Securities. Each series of Common Stock Warrants will
be issued under a separate warrant agreement (a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent 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. The following summary of certain provisions of the Common Stock
Warrants does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the applicable Prospectus Supplement and the
provisions of the Warrant Agreement that will be filed with the Commission in
connection with the offering of such Common Stock Warrants.
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The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following:
(1) The designation 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 number of shares of Common Stock purchasable upon exercise of a
Common Stock Warrant and the price at which such shares may be purchased
upon exercise (which price may be payable in cash, securities or other
property);
(5) If applicable, the designation and terms of the Securities with
which such Common Stock Warrants are issued and the number of such Common
Stock Warrants issued with each such Security;
(6) The date, if any, from and after which such Common Stock Warrants
and any Securities issued therewith will be separately transferable;
(7) The date on which the right to exercise such Common Stock Warrant
shall commence and the date on which such right shall expire;
(8) The minimum or maximum amount of such Common Stock Warrants which
may be exercised at any one time;
(9) The antidilution provisions of such Common Stock Warrants, if any;
(10) A discussion of the material Federal income tax considerations
applicable to such Common Stock Warrants; and
(11) Any other specific terms of such Common Stock Warrants, including
terms, procedures and limitations relating to the exercise of such Common
Stock Warrants.
Reference is made to the section captioned "Description of Capital Stock"
for a general description of the Common Stock to be acquired upon the exercise
of the Common Stock Warrants, including a description of certain restrictions
on the ownership of Common Stock.
FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTORY NOTES
The following discussion summarizes the United States federal income tax
considerations material to a prospective holder of Common Stock. The Company
has received a legal opinion from King & Spalding, which has acted as tax
counsel to the Company, to the effect that the following discussion fairly
summarizes the United States federal income tax considerations that are
material to a holder of Common Stock.
This discussion is based on current law. It is not exhaustive of all
possible tax considerations and does not give a detailed discussion of any
state, local or foreign tax considerations. Nor does it discuss all of the
aspects of federal income taxation that may be relevant to a prospective
shareholder in light of his or her particular circumstances or to certain
types of shareholders (including insurance companies, tax-exempt entities,
financial institutions or broker-dealers, foreign corporations, and persons
who are not citizens or residents of the United States) who are subject to
special treatment under the federal income tax laws. As used in this section,
the term "Company" refers solely to Weeks Corporation and the term
"Subsidiaries" refers to Weeks Realty Services and Weeks Construction
Services.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE,
OWNERSHIP, AND SALE OF SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL,
FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE, AND
ELECTION AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
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TAXATION OF THE COMPANY
General. The Company has made an election to be taxed as a REIT under
Sections 856 and 860 of the Code commencing with its taxable year that ended
on December 31, 1994. The Company has received a legal opinion from King &
Spalding to the effect that the Company was organized and has operated in
conformity with the requirements for qualification and taxation as a REIT for
its taxable year ended December 31, 1994, and that its current organization
and method of operation should enable it to continue to qualify as a REIT.
Investors should be aware, however, that opinions of counsel are not binding
upon the Internal Revenue Service ("IRS") or any court. Further, King &
Spalding's opinion is based on various assumptions and is conditioned upon
certain representations made by the Company as to certain relevant factual
matters relating to the organization and the past, current and expected future
manner of operation of the Company, the Operating Partnership and the
Financing Partnership. Moreover, the Company's continued qualification and
taxation as a REIT depends upon the Company's ability to meet on a continuing
basis, through actual annual operating results, distribution levels and
diversity of stock ownership, the various qualification tests imposed by the
Code and discussed below. King & Spalding will not review compliance with
these tests on a continuing basis. No assurance can be given that the Company
will satisfy such tests on a continuing basis. See "Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
U.S. federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and
judicial interpretations thereof.
As a REIT, the Company generally is not subject to U.S. federal corporate
income tax on net income that it currently distributes to shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that generally results from investment in a corporation.
Notwithstanding its REIT election, however, the Company is still subject to
U.S. federal income tax in the following circumstances. First, the Company is
taxed at regular corporate rates on any undistributed taxable income,
including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the "alternative minimum tax" on
its items of tax preference. Third, if the Company has (i) net income from the
sale or other disposition of "foreclosure property" (which is, in general,
property acquired by foreclosure or otherwise on default of a loan or lease
secured by the property) which is held primarily for sale to clients in the
ordinary course of business or (ii) other non-qualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate
on such income. Fourth, if the Company has net income from prohibited
transactions (which are, in general, certain sales or other dispositions of
property (other than foreclosure property) held primarily for sale to clients
in the ordinary course of business), such income will be subject to a 100%
tax. Fifth, if the Company should fail to satisfy the 75% gross income test or
the 95% gross income test (as discussed below), and has nonetheless maintained
its qualification as a REIT because certain other requirements have been met,
it will be subject to a 100% tax on the net income attributable to the greater
of the amount by which the Company fails the 75% or 95% test. Sixth, if the
Company should fail to distribute during each calendar year at least the sum
of (i) 85% of its REIT ordinary income for such year, (ii) 95% of its REIT
capital gain net income for such year, and (iii) any undistributed taxable
income from prior years, the Company would be subject to a 4% excise tax on
the excess of such required distribution over the amounts actually
distributed. Seventh, if the Company acquires any asset from a C corporation
(i.e., a corporation generally subject to full corporate level tax) in a
transaction in which the basis of the asset in the Company's hands is
determined by reference to the basis of the asset (or any other property) in
the hands of the C corporation, and the Company recognizes gain on the
disposition of such asset during the 10-year period beginning on the date on
which such asset was acquired by the Company, then, to the extent of such
property's "built-in" gain (the excess of the fair market value of such
property at the time of acquisition by the Company over the adjusted basis of
such property at such time), and assuming the Company will make an election
pursuant to Notice 88-19, such gain will be subject to tax at the highest
regular corporate rate applicable (as provided in IRS regulations that have
not yet been promulgated).
Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) which is managed by one or more trustees or
directors; (2) the beneficial ownership of which is evidenced by transferable
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shares or by transferable certificates of beneficial interest; (3) which would
be taxable as a domestic corporation but for Sections 856 through 859 of the
Code; (4) which is neither a financial institution nor an insurance company
subject to certain provisions of the Code; (5) the beneficial ownership of
which is held by 100 or more persons; (6) during the last half of each taxable
year not more than 50% in value of the outstanding stock of which is owned,
directly or indirectly, by five or fewer individuals (as defined in the Code
to include certain entities); and (7) which meets certain other tests,
described below, regarding the nature of its income and assets. The Code
provides that conditions (1) through (4), inclusive, must be met during the
entire taxable year and that condition (5) must be met during at least 335
days of a taxable year of twelve months, or during a proportionate part of a
taxable year of less than twelve months. The Company has issued sufficient
shares of Common Stock with sufficient diversity of ownership to allow the
Company to satisfy requirements (5) and (6). In addition, the Company's
Articles provide restrictions regarding the transfer of its shares that are
intended to assist the Company in continuing to satisfy the share ownership
requirements described in (5) and (6) above. See "Capital Stock of the
Company--Restrictions on Transfer". In addition, a corporation may not elect
to become a REIT unless its taxable year is the calendar year. The Company's
taxable year is a calendar year.
In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate
share of the assets of the partnership and will be deemed to be entitled to
the income of the partnership attributable to such share. In addition, the
character of the assets and gross income of the partnership will retain the
same character in the hands of the REIT for purposes of Section 856 of the
Code, including satisfying the gross income tests and asset tests (as
discussed below). Thus, the Company's proportionate share of the assets,
liabilities, and items of income of the Operating Partnership and the
Financing Partnership will be treated as assets, liabilities, and items of
income of the Company for purposes of applying the requirements described
herein.
Income Tests. In order to maintain qualification as a REIT, three gross
income requirements must be satisfied annually. First, at least 75% of the
REIT's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types
of temporary investments. Second, at least 95% of the REIT's gross income
(excluding gross income from prohibited transactions) for each taxable year
must be derived from such real property investments described above, and from
dividends, interest, and gain from the sale or disposition of stock or
securities, or from any combination of the foregoing. Third, short-term gain
from the sale or other disposition of stock or securities, gain from
prohibited transactions, and gain on the sale or other disposition of real
property held for less than four years (apart from involuntary conversions and
sales of foreclosure property) must represent less than 30% of the REIT's
gross income (including gross income from prohibited transactions) for each
taxable year. Under the 30% gross income test, where a REIT holds an interest
in a partnership that sells real property or where the REIT sells its interest
in a partnership that holds real property, the gross income derived from such
sale, to the extent attributable to real property, is deemed to be derived
from the sale of real property held for the shorter of the period the
partnership held the property or the REIT held is partnership interest.
Therefore, for purposes of applying the 30% gross income test, the holding
period of Properties held by the Operating Partnership on the closing date of
the IPO will be deemed to have commenced on such date so that if the Operating
Partnership sells one or more of the Properties prior to the expiration of
four years after such closing date, income from the sale of those Properties
will not qualify under the 30% gross income test even though the Operating
Partnership has held such Properties for more than four years.
Rents received by the Company will qualify as "rents from real property" in
satisfying the above gross income tests only if several conditions are met.
First, the amount of rent must not be based in whole or in part on the income
or profits of any person. However, an amount received or accrued generally
will not be excluded from "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts or sales. Second, rents
received from a tenant will not qualify as "rents from real property" if the
Company, or an owner of 10% or more of the Company, directly or constructively
owns 10% or more of such tenant (a "Related Party Tenant"). Third, if rent
attributable to personal property that is leased in connection with a lease of
real property is greater than 15% of the total rent received under the lease,
then the portion of rent attributable
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to such personal property will not qualify as "rents from real property".
Finally, for rents received to qualify as "rents from real property," the
Company generally must not operate or manage the property or furnish or render
services to tenants, other than through an "independent contractor" from whom
the Company derives no revenue. The "independent contractor" requirement,
however, does not apply to the extent the services provided by the Company are
"usually or customarily rendered" in the relevant geographic region in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant". The Company believes that it provides
only usual and customary services to the tenants of the Properties and that
any noncustomary services are provided by independent contractors.
The Operating Partnership receives rents from a company controlled by Ray
Weeks' spouse that may under certain circumstances qualify as a Related Party
Tenant. The Company also receives certain other types of non-rent income,
including its allocable share of any dividends and interest paid by the
Subsidiaries to the Operating Partnership (which will qualify under the 95%
gross income test but not under the 75% gross income test). The Company
believes, however, that the aggregate amount of such income and other non-
qualifying income in any taxable year will not cause the Company to exceed the
limits on non-qualifying income under the 75% and 95% gross income tests.
Any gross income derived from a prohibited transaction is taken into account
in applying the 30% income test necessary to qualify as a REIT (and the net
income from the transaction is subject to 100% tax). The term "prohibited
transaction" generally includes a sale or other disposition of property (other
than foreclosure property) that is held primarily for sale to customers in the
ordinary course of a trade or business. The Company believes that no asset
owned by the Operating Partnership or the Financing Partnership is held for
sale to customers and that the sale of any Property or Development Land by
such partnerships is not in its ordinary course of business. Whether property
is held "primarily for sale to customers in the ordinary course of a trade or
business" depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular property. Nevertheless, the
Company and such partnerships will attempt to comply with the terms of safe-
harbor provisions in the Code prescribing when assets sales will not be
characterized as prohibited transactions. Complete assurance cannot be given,
however, that the Company or such partnerships will comply with the safe-
harbor provisions of the Code or avoid owning property that may be
characterized as property "primarily for sale to customers in the ordinary
course of business".
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such
year if it is entitled to relief under certain provisions of the Code. These
relief provisions generally are available if the Company's failure to meet
such tests was due to reasonable cause and not due to willful neglect, the
Company attaches a schedule of the sources of its income to its return, and
any income information on the schedules was not due to fraud with intent to
evade tax. It is not possible, however, to state whether in all circumstances
the Company would be entitled to the benefit of these relief provisions. As
discussed above in "General," even if these relief provisions were to apply, a
tax would be imposed with respect to the Company's excess net income. The
foregoing relief provisions do not apply in the case of a failure to satisfy
the 30% gross income test.
Asset Tests. At the close of each quarter of its taxable year, the Company
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of the Company's total assets must be represented by
real estate assets (including (i) its allocable share of real estate assets
held by the Operating Partnership and the Financing Partnership and (ii) stock
or debt instruments held for not more than one year purchased with the
proceeds of a stock offering or long-term (at least five years) debt offering
of the Company), cash, cash items, and government securities. Second, not more
than 25% of the Company's total assets may be represented by securities other
than those in the 75% asset class. Third, of the investments included in the
25% asset class, the value of any one issuer's debt and equity securities
owned by the Company may not exceed 5% of the value of the Company's total
assets, and the Company may not own more than 10% of any one issuer's
outstanding voting securities. Debt of an issuer that is secured by real
estate assets does not constitute a
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"security" for purposes of the 5% asset test. The 5% asset test must generally
be met for any quarter in which a REIT acquires securities of an issuer or
other property. Thus, this requirement must be satisfied not only on the date
that the Company initially acquires securities in a Subsidiary, but also each
time the Company increases its ownership of securities of a Subsidiary
(including as a result of increasing its interest in the Operating Partnership
as limited partners exercise their Exchange Rights).
As described above, the Operating Partnership owns 100% of the nonvoting
stock and 1% of the voting stock of Weeks Realty Services, Inc. and Weeks
Construction Services, Inc. (the "Subsidiaries"). The Operating Partnership
does not own more than 10% of the voting securities of the Subsidiaries. In
addition, based upon its analysis of the estimated value of the debt and
equity securities of the Subsidiaries owned by the Operating Partnership
relative to the estimated value of the other assets owned by the Operating
Partnership, the Company believes that its pro rata share of the debt and
equity securities of each Subsidiary held by the Operating Partnership does
not exceed 5% of the total value of the Company's assets, although no
independent appraisals have been obtained to support this conclusion. Although
the Company plans to take steps to ensure that it satisfies the 5% value test
for any quarter in which it acquires securities of the Subsidiaries or other
property, there can be no assurance that such steps will always be successful
or will not require a reduction in the Operating Partnership's overall
interest in the Subsidiaries.
Annual Distribution Requirements. As a REIT, the Company is required to
distribute dividends (other than capital gain dividends) to its shareholders
in an amount at least equal to (A) the sum of (i) 95% of the Company's "REIT
taxable income" (computed without regard to the dividends paid deduction and
the REIT's net capital gain) and (ii) 95% of the net income (after tax), if
any, from "foreclosure property" (as defined above under""--Taxation of the
Company (General)"), minus (B) the sum of certain items of noncash income.
Such distributions must be paid in the taxable year to which they relate, or
in the following taxable year if declared before the Company timely files its
tax return for such year and if paid on or before the first regular dividend
payment after such declaration. To the extent that the Company does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "REIT taxable income," as adjusted, it will be subject to
tax on the undistributed amount at regular capital gains and ordinary
corporate tax rates. Furthermore, if the Company should fail to distribute
during each calendar year at least the sum of (i) 85% of its REIT ordinary
income for such year, (ii) 95% of its REIT capital gain income for such year,
and (iii) any undistributed taxable income from prior periods, the Company
will be subject to a 4% excise tax on the excess of such required distribution
over the amounts actually distributed.
The Company intends to make timely distributions sufficient to satisfy the
annual distribution requirements. In this regard, the Partnership Agreement
authorizes the Company, as general partner, to take such steps as may be
necessary to cause the Operating Partnership to distribute to its partners an
amount sufficient to permit the Company to meet these distribution
requirements. It is possible, however, that the Company, from time to time,
may not have sufficient cash or other liquid assets to meet the distribution
requirements due to timing differences between the actual receipt of income
and actual payment of deductible expenses and the inclusion of such income and
deduction of such expenses in arriving at taxable income of the Company, or if
the amount of nondeductible expenses (such as principal amortization or
capital expenditures) exceed the amount of noncash deductions. In the event
that such timing differences occur, in order to meet the distribution
requirements, the Company may cause the Operating Partnership to arrange for
short-term, or possibly long-term, borrowing to permit the payment of required
dividends. If the amount of nondeductible expenses exceeds noncash deductions,
the Operating Partnership may refinance its indebtedness to reduce principal
payments and borrow funds for capital expenditures.
Under certain circumstances, the Company may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends"
to shareholders in a later year that may be included in the Company's
deduction for dividends paid for the earlier year. Thus, the Company may be
able to avoid paying income tax (but not excise tax) on amounts distributed as
deficiency dividends; however, the Company will be required to pay interest to
the IRS based upon the amount of any deduction taken for deficiency dividends.
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INFORMATION REGARDING STOCK OWNERSHIP. Pursuant to applicable Treasury
Regulations, in order to maintain its qualification as a REIT, the Company
must maintain certain records and request certain information from its
shareholders designed to disclose the actual ownership of its stock. The
Company intends to comply with such requirements.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year
and no relief provisions apply, the Company will be subject to tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. Any distributions made by the Company to shareholders in any
year in which the Company fails to qualify will not be deductible by the
Company. In such event, to the extent of the Company's current and accumulated
earnings and profits, all distributions to shareholders will be taxable as
ordinary income, and, subject to certain limitations in the Code, corporate
distributees may be eligible for the dividends received deduction. Unless
entitled to relief under specific statutory provisions, the Company also would
be disqualified from taxation as a REIT for the four taxable years following
the year during which qualification was lost. It is not possible to state
whether in all circumstances the Company would be entitled to such statutory
relief.
TAXATION OF SHAREHOLDERS
Taxation of Taxable Domestic Shareholders. As long as the Company continues
to qualify as a REIT, distributions made to the Company's taxable domestic
shareholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) are taken into account by them as
ordinary income, and corporate shareholders are not eligible for the dividends
received deduction as to such amounts. Distributions that are designated as
capital gain dividends are taxed as long-term capital gains (to the extent
they do not exceed the Company's actual net capital gain for the taxable year)
without regard to the period for which the shareholder has held his shares.
However, corporate shareholders are required to treat up to 20% of certain
capital gain dividends as ordinary income.
Distributions in excess of current and accumulated earnings and profits are
not taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholder's Securities, but rather reduce the adjusted
basis of such shares. To the extent that such distributions exceed the
adjusted basis of a shareholder's Securities, they are included in income as
long-term capital gain (or short-term capital gain if the shares have been
held for one year or less), assuming the shares are a capital asset in the
hands of the shareholder.
Any dividend declared by the Company in October, November, or December of
any year payable to a shareholder of record on a specific date in any such
month are treated as both paid by the Company and received by the shareholder
on December 31 of such year, provided that the dividend is actually paid by
the Company during January of the following calendar year. Shareholders do not
include in their individual income tax returns any net operating losses or
capital losses of the Company.
In general, any loss upon a sale or exchange of Securities by a shareholder
who has held such shares for six months or less (after applying certain
holding period rules) are treated as a long-term capital loss to the extent of
distributions from the Company required to be treated by such shareholder as
long-term capital gain.
Backup Withholding. The Company reports to its domestic shareholders and the
IRS the amount of dividends paid during each calendar year, and the amount of
tax withheld, if any, with respect thereto. Under the backup withholding
rules, a shareholder may be subject to backup withholding at the rate of 31%
with respect to dividends paid unless such holder (a) is a corporation or
comes within certain other exempt categories and, when required, demonstrates
this fact, or (b) provides a taxpayer identification number, certifies as to
no loss of exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules. A shareholder who
does not provide the Company with its correct taxpayer identification number
may also be subject to penalties imposed by the IRS. Any amount paid as backup
withholding will be
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creditable against the shareholder's income tax liability. In addition, the
Company may be required to withhold a portion of capital gain distributions
made to any shareholders who fail to certify their non-foreign status to the
Company. See "Taxation of Foreign Shareholders" below.
Taxation of Tax-Exempt Shareholders. The IRS has ruled that amounts
distributed by a REIT to a tax-exempt employees' pension trust do not
constitute "unrelated business taxable income" ("UBTI"). The Revenue
Reconciliation Act of 1993 (the "1993 Act") has partially preempted this
revenue ruling (as discussed below). In those circumstances in which the
ruling still applies, distributions by the Company to a shareholder that is a
tax-exempt entity should not constitute UBTI, provided that the tax-exempt
entity has not financed the acquisition of its shares with "acquisition
indebtedness" within the meaning of the Code and the shares of Common Stock
are not otherwise used in an unrelated trade or business of the tax-exempt
entity. Revenue rulings are interpretative in nature and subject to revocation
or modification by the IRS.
In applying the stock ownership test of Section 856(h) of the Code, the 1993
Act treats beneficiaries of certain pension trusts as holding the shares of a
REIT in proportion to their actuarial interests in such trust, thus permitting
affected pension trusts to acquire more concentrated ownership of a REIT.
However, a pension trust that owns more than 10% of a REIT must now treat a
percentage of the dividends as UBTI (the "UBTI Percentage") under certain
circumstances. The UBTI Percentage is determined by dividing (i) the gross
income of a REIT, less related direct expenses, that would be considered to be
derived from an unrelated trade or business if the REIT were a pension trust
by (ii) the gross income of the REIT, less related direct expenses, for the
year in which the dividends are paid. The UBTI rule would apply to a pension
trust that owns more than 10% of the value of the REIT's stock only if (a) the
UBTI Percentage is at least 5%, (b) the REIT qualifies as a REIT by reason of
the above modification of the stock ownership test, and (c) either one pension
trust owns more than 25% of the value of the REIT's stock or a group of
pension trusts individually owning more than 10% of the value of the REIT's
stock collectively own more than 50% of the value of the REIT's stock.
Taxation of Foreign Shareholders. The rules governing U.S. federal income
taxation of nonresident alien individuals, foreign corporations, foreign
partnerships, and other foreign shareholders (collectively, "Non-U.S.
Shareholders") are complex, and no attempt is made herein to provide more than
a limited summary of such rules. Prospective Non-U.S. Shareholders should
consult with their own tax advisors to determine the impact of U.S. federal,
state, and local income tax laws with regard to an investment in Securities,
including any reporting requirements.
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company
as capital gain dividends are treated as dividends of ordinary income to the
extent that they are made out of current or accumulated earnings and profits
of the Company. Such distributions, ordinarily, are subject to a withholding
tax equal to 30% of the gross amount of the distribution unless an applicable
tax treaty reduces that tax. However, if income from the investment in the
shares of capital stock is treated as effectively connected with the Non-U.S.
Shareholder's conduct of a U.S. trade or business, the Non-U.S. Shareholder
generally is subject to a tax at graduated rates, in the same manner as U.S.
shareholders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax if the shareholder is a foreign corporation).
The Company withholds U.S. income tax at the rate of 30% on the gross amount
of any dividends paid to a Non-U.S. Shareholder that are not designated as
capital gain dividends unless (i) a lower treaty rate applies and the required
form evidencing eligibility for that reduced rate is filed with the Company or
(ii) the Non-U.S. Shareholder files an IRS Form 4224 with the Company claiming
that the distribution is "effectively connected" income.
Distributions in excess of current and accumulated earnings and profits of
the Company are not taxable to a shareholder to the extent that they do not
exceed the adjusted basis of the shareholder's shares of capital stock, but
rather will reduce the adjusted basis of such shares. To the extent that such
distributions exceed the adjusted basis of a Non-U.S. Shareholder's shares,
they give rise to tax liability if the Non-U.S. Shareholder is otherwise
subject to tax on any gain from the sale or disposition of his shares of
capital stock as described below. If it
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cannot be determined at the time a distribution is made whether or not such
distribution is in excess of current and accumulated earnings and profits, the
distribution is subject to withholding at the rate applicable to dividends.
However, the Non-U.S. Shareholder may seek a refund of such amounts from the
IRS if it is subsequently determined that such distribution was, in fact, in
excess of current and accumulated earnings and profits of the Company.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the FIRPTA
provisions as if such gain were effectively connected with a U.S. business.
Thus, Non-U.S. Shareholders will be taxed on such distributions at the normal
capital gain rates applicable to U.S. shareholders (subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals). Also, distributions that are attributable to
gain from sales or exchanges by the Company of U.S. real property interests
may be subject to a 30% branch profits tax in the hands of a corporate Non-
U.S. Shareholder not entitled to treaty relief or exemption. The Company is
required by currently applicable Treasury Regulations to withhold 34% of any
distribution that could be designated by the Company as a capital gain
dividend. However, because the Omnibus Budget Reconciliation Act of 1993
provided for an increase in the rate of withholding for distributions made by
certain domestic entities to 35%, it is likely that the Treasury Regulations
will be amended to impose a similar withholding rate on REIT capital gain
dividends. The amount withheld is creditable against the Non-U.S.
Shareholder's U.S. federal income tax liability.
Gain recognized by a Non-U.S. Shareholder upon the sale or exchange of
Common Stock generally will not be subject to U.S. tax unless the capital
stock constitutes a "United States real property interest" within the meaning
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). The
capital stock will not constitute a "United States real property interest" so
long as the Company qualifies as a "domestically controlled REIT." A
"domestically controlled REIT" is a REIT in which at all times during a
specified testing period less than 50% in value of its stock is held, directly
or indirectly, by Non-U.S. Shareholders. Because the Company is publicly
traded, there can be no assurance that the Company will qualify as a
domestically controlled REIT. If the Company does not qualify (or ceases to
qualify) as a "domestically controlled REIT," whether gain arising from the
sale or exchange of capital stock by a Non-U.S. Shareholder would be subject
to U.S. tax under FIRPTA will depend on whether the capital stock is
"regularly traded" (as defined by applicable Treasury Regulations) on an
established securities market (e.g., the New York Stock Exchange) and on the
size of the selling Non-U.S. Shareholders interest in the Company.
If gain on the sale or exchange of capital stock were subject to tax under
FIRPTA, then (i) the Non-U.S. Shareholder would be subject to regular U.S.
income tax with respect to such gain in the same manner as a U.S. shareholder
(subject to any applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals), and (ii) the
purchaser of the capital stock would be required to withhold and remit to the
IRS 10% of the purchase price unless the purchased capital stock was
"regularly traded" on an established securities market.
Notwithstanding the foregoing, gain from the sale or exchange of capital
stock not otherwise taxable under FIRPTA will be subject to U.S. tax if (i)
the investment in capital stock is treated as effectively connected with a
U.S. trade or business of a Non-U.S. Shareholder, in which case the Non-U.S.
Shareholder will be subject to the same treatment as U.S. shareholders with
respect to such gain, or (ii) the Non-U.S. Shareholder is a nonresident alien
individual who is present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, in which case the
individual will be subject to a 30% tax on the individual's capital gains.
OTHER TAX CONSIDERATIONS
Tax Status of Operating Partnership; Effect on REIT Qualification. All of
the Company's investments are made through the Operating Partnership, which in
turn owns substantially all of the interests in the Financing
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Partnership. These partnerships may involve special tax risks. Such risks
include possible challenge by the IRS of (a) allocations of income and expense
items, which could affect the computation of taxable income of the Company,
(b) the status of the partnerships as partnerships for federal income tax
purposes (as opposed to associations taxable as corporations), and (c) the
taking of actions by the partnerships that could adversely affect the
Company's qualification as a REIT. The Company has received a legal opinion
from King & Spalding to the effect that the Operating Partnership and the
Financing Partnership will be treated for U.S. federal income tax purposes as
partnerships (and not as associations taxable as a corporation). If the
Operating Partnership were treated as an association taxable as a corporation,
the Company would fail the 75% asset test (in addition to the 5% asset test
and, likely, the 10% voting securities test). Further, if the Financing
Partnership were treated as a taxable corporation, then the Company would
likely fail to qualify as a REIT under the 10% voting securities test, and
would also fail to qualify under the 5% test if the value of the Company's
interest in the Financing Partnership (through the Operating Partnership)
exceeded 5% of the value of the Company's assets. Furthermore, in such a
situation, distributions from such partnerships would be treated as dividends,
which are not taken into account in satisfying the 75% gross income test
described above and which could therefore make it more difficult for the
Company to meet such test, and the Company would not be able to deduct its
share of any losses generated by such partnerships in computing its taxable
income. See "--Failure to Qualify" above for a discussion of the effect of the
Company's failure to meet such tests for a taxable year.
Depreciation. The Partnership's initial income tax basis in the Properties
acquired in exchange for Units generally is the same as the transferor's basis
in such Property on the date of acquisition by the Partnership, except to the
extent that gain is recognized by the transferor in connection with the
transfer. The Partnership generally depreciates such Properties under the
alternative depreciation system of depreciation ("ADS"), using a 40-year
recovery period and the straight-line method with respect to the building and
structural components of such Properties. The Partnership's tax depreciation
deductions will be allocated among the Partners in accordance with their
respective percentage interests in the Partnership, except as otherwise
required pursuant to Section 704(c) of the Code.
State and Local Taxes. The Company and its shareholders may be subject to
state or local taxation in various state or local jurisdictions, including
those in which it or they transact business or reside. The state and local tax
treatment of the Company and its shareholders may not conform to the Federal
income tax consequences discussed above. Consequently, prospective
shareholders should consult their own tax advisors regarding the effect of
state and local tax laws on an investment in the Securities.
PLAN OF DISTRIBUTION
The Company may sell the Securities in or outside the United States through
underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Securities will set
forth the terms of the offering of the Securities, including the name or names
of any underwriters, dealers or agents, the initial public offering price, any
delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters compensation, any discounts or concessions allowed
or reallowed or paid to dealers, and any securities exchanges on which the
Securities may be listed.
If underwriters are used in the sale of the Securities, the Securities may
be acquired by the underwriters for their own accounts and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. The Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Securities
will be named in the Prospectus Supplement relating to such offering, and if
an underwriting syndicate is used, the managing underwriter or underwriters
will be set forth on the cover of such Prospectus Supplement. Unless otherwise
set forth in the Prospectus Supplement relating thereto, the obligations of
the underwriters or agents to purchase the Securities will be subject to
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<PAGE>
conditions precedent and the underwriters will be obligated to purchase all
the Securities if any are purchased. The initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers are used in the sale of the Securities, the Company will sell
such Securities to the dealers as principals. The dealers may then resell such
Securities to the public at varying prices to be determined by such dealers at
the time of resale. The names of the dealers and the terms of the transaction
will be set forth in the Prospectus Supplement relating thereto.
Securities may be sold directly by the Company through agents designated by
the Company from time to time at fixed prices, which may be changed, or at
varying prices determined at the time of sale. Any agent involved in the offer
or sale of the Securities will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its
appointment.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, dealers and agents participating in
the distribution of the Securities may be deemed to be underwriters and any
discounts or commissions received by them from the Company and any profit on
the resale of the Securities by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or agents to solicit offers from certain types of institutions to
purchase Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the Prospectus Supplement, and
the Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers or
underwriters may be required to make with respect thereto. Underwriters,
agents and dealers may engage in transactions with, or perform services for,
the Company in the ordinary course of business.
The Preferred Stock and the Common Stock Warrants may or may not be listed
on a national securities exchange. The Common Stock currently trades on the
NYSE, and any Common Stock offered hereby will be listed on the NYSE, subject
to an official notice of issuance. No assurances can be given that there will
be a market for the Securities.
Promptly after the date hereof and subject to equity market conditions, the
Company intends to commence an offering of approximately 3,450,000 shares of
the Common Stock (including 450,000 shares subject to an underwriters' over-
allotment option) registered hereunder pursuant to an underwritten public
offering. The Company currently believes that the net proceeds of any such
offering would be used to repay amounts outstanding under the Company's
revolving credit facility, which amounts were incurred to fund development and
acquisition activities. There can be no assurance that the proposed offering
will be commenced, or if commenced that such offering will be completed.
Further information regarding any such offering will be contained in a
Prospectus Supplement.
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LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by King &
Spalding, Atlanta, Georgia, and for any underwriters or agents by Sullivan &
Cromwell, New York, New York. George D. Busbee, a director of the Company, is
of counsel to King & Spalding.
EXPERTS
The consolidated and combined financial statements and related financial
statement schedule incorporated by reference in this Prospectus and the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
have been incorporated herein in reliance upon the authority of such firm as
experts in giving such reports.
The combined statements of revenue and certain expenses for 33 acquired
properties incorporated by reference in this Prospectus and the Registration
Statement have been audited by Habif, Arogeti and Wynne, P.C., independent
public accountants, as indicated in their reports with respect thereto, and
have been incorporated herein in reliance upon the authority of such firm as
experts in giving such reports.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTA-
TIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPEC-
TUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURI-
TIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEI-
THER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company............................................................... S-3
Recent Developments....................................................... S-5
Use of Proceeds........................................................... S-10
Price Range of Common Stock and
Distributions............................................................ S-10
Underwriting.............................................................. S-11
Validity of Securities.................................................... S-11
Experts................................................................... S-11
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
Use of Proceeds........................................................... 4
Consolidated Ratio of Earnings to Fixed Charges and Preferred Stock Divi-
dends.................................................................... 4
Description of Capital Stock.............................................. 4
Description of Common Stock Warrants...................................... 9
Federal Income Tax Considerations......................................... 10
Plan of Distribution...................................................... 18
Legal Matters............................................................. 20
Experts................................................................... 20
</TABLE>
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2,250,000 SHARES
WEEKS CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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LOGO
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GOLDMAN, SACHS & CO.
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