<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1996
FILE NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
WEEKS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GEORGIA 58-1525322
(I.R.S. EMPLOYER
(STATE OR OTHER JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
4497 PARK DRIVE
NORCROSS, GEORGIA 30093
(770) 923-4076
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
A. RAY WEEKS, JR.
WEEKS CORPORATION
4497 PARK DRIVE
NORCROSS, GEORGIA 30093
(770) 923-4076
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH A COPY TO:
JOHN J. KELLEY III, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
(404) 572-4600
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) OFFERING PRICE(2) FEE(3)
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<S> <C> <C> <C>
Preferred Stock.........
Common Stock............ $300,000,000 $300,000,000 $90,910
Common Stock Warrants...
</TABLE>
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- -------------------------------------------------------------------------------
(1) The amount to be registered consists of up to $300,000,000 of an
indeterminate amount of Preferred Stock, Common Stock and/or Common Stock
Warrants. There is also being registered hereunder such currently
indeterminate number of shares of Common Stock as may be issued upon
conversion of the Preferred Stock or upon exercise of the Common Stock
Warrants registered hereby.
(2) Estimated solely for the purpose of calculating the registration fee.
Includes any consideration that will be received for Common Stock issued
upon conversion of Preferred Stock or upon exercise of the Common Stock
Warrants.
(3) The proposed maximum offering price per unit has been omitted pursuant to
Securities Act Release No. 7168. The registration fee has been calculated
in accordance with Rule 457(o) under the Securities Act.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 19, 1996
PROSPECTUS
$300,000,000
[LOGO]
WEEKS CORPORATION
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.
$300,000,000, 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, any voting or other rights, and the terms of the offering
and sale thereof; (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 COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
-----------
THE DATE OF THIS PROSPECTUS IS DECEMBER , 1996.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
<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 Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of the Commission's Web site is: http://www.sec.gov. The Common Stock
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 hereby (together with all amendments and
exhibits and schedules thereto, the "Registration Statement"). As permitted by
the rules and regulations of the Commission, this Prospectus 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 (File No. 001-13254) with the
Commission are incorporated herein by reference:
(i) Annual Report on Form 10-K for the year ended December 31, 1995;
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996;
(iii) Quarterly Report on Form 10-Q for the quarter ended June 30, 1996;
(iv) Quarterly Report on Form 10-Q for the quarter ended September 30,
1996;
(v) Current Report on Form 8-K dated August 9, 1996 and filed on August
22, 1996, as amended by Form 8-K/A dated August 9, 1996 and filed on
October 18, 1996;
(vi) Current Report on Form 8-K dated November 1, 1996 and filed on
November 6, 1996, as amended by Form 8-K/A dated November 1, 1996 and
filed on November 8, 1996;
(vii) Current Report on Form 8-K dated November 5, 1996 and filed on
November 6, 1996;
(viii) Current Report on Form 8-K, dated November 7, 1996 and filed on
November 12, 1996, as amended by Form 8-K/A dated November 7, 1996
and filed on November 13, 1996; and
(ix) Registration Statement on Form 8-A dated August 12, 1994, registering
the Company's Common Stock under Section 12(b) of the Exchange Act.
2
<PAGE>
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, including any
beneficial owner, 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.
3
<PAGE>
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 204 Properties totaling
approximately 15.6 million square feet (the "Properties"), including 30
Properties (totaling approximately 3.8 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. The Company
currently manages, or expects to manage upon completion or acquisition, all
but six of the Properties. Industrial Properties represent approximately 92%
of the square footage of all of the Properties, and suburban office Properties
represent approximately 8%. 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 Company conducts all of its business through Weeks Realty, L.P. (the
"Operating Partnership") and its subsidiaries. As of November 30, 1996, the
Company owned approximately 78.2% of the outstanding interests in the
Operating Partnership, and the remaining 21.8% 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 Company's initial public offering in August 1994 (the
"IPO"). Of the approximate 78.2% 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 77.3% 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.
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 interests in these corporations. Ninety-nine
percent of the voting common stock of Weeks Realty Services and Weeks
Construction Services is held by executive officers of the Company.
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
4
<PAGE>
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.
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's wholly owned subsidiary,
Weeks GP, is the sole general partner, in exchange for additional units
representing general and/or limited 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 nine months ended September 30, 1996, 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 YEAR ENDED NINE MONTHS
--------------------- TO TO DEC. 31, ENDED
1991 1992 1993 AUG. 24, 1994 DEC. 31, 1994 1995 SEPT. 30, 1996
------ ------- ----- ------------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges:(1)....... .90x(2) .86x(2) 1.09x 1.06x 2.69x 1.99x 1.94x
</TABLE>
- --------
(1) 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.
(2) Earnings were inadequate to cover fixed charges by $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.
5
<PAGE>
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.
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.
6
<PAGE>
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 convertible 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 limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of
the Company as a REIT;
(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;
(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 affairs of the Company;
(14) Any voting rights of such Preferred Stock; and
(15) Any other specific terms, 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.
7
<PAGE>
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 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., Chairman and Chief
Executive Officer of the Company (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.
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 a 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
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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) approving or assenting to unlawful corporate
distributions or (iv) any transaction from which the director received an
improper personal benefit. The Articles 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 if (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
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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, except for reasonable
expenses incurred in connection with the proceeding if it is determined that
the director has met the standard of conduct set forth above, or (ii) in
connection with any other proceeding in which he was adjudged liable on the
basis that personal benefit was improperly received by him, whether or not
involving action in his official capacity.
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 incurred in a proceeding in which the director was
made a party because he is or was a director of the Company, 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. If such an election is made,
the applicable Bylaw provision may only be repealed by the affirmative vote of
at least two-thirds of the continuing directors and a majority of the votes
entitled to be cast by the holders of voting shares of the Company.
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 "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.
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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 an interested
shareholder 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 (excluding any limited partner interests in the Operating
Partnership owned by the Company and its subsidiaries).
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."
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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.
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 Warrants
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.
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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.
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 years ended December 31, 1994 and 1995, 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
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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
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 owns the stock of a corporation that is a
"qualified REIT subsidiary" within the meaning of Section 856(i)(2) of the
Code, the subsidiary will not be treated as a separate corporation, and the
assets, liabilities, and items of income, deduction, and credit of the
subsidiary will be treated as assets, liabilities, and such items of the REIT.
Weeks GP and Weeks LP are "qualified REIT subsidiaries" of the Company, so the
separate existence of these corporations will be ignored for U.S. federal tax
purposes, and the Company will be treated as directly holding the assets and
liabilities and receiving the tax items of these subsidiaries. Further, 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
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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 its 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 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, except in certain circumstances that are
not believed to be material, 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.
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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 incorrect 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 "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
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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.
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
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<PAGE>
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 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
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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 Securities 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. The IRS issued
proposed regulations in April 1996 that would modify the manner in which the
Company complies with the withholding requirements.
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 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. The Small Business Job
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Protection Act of 1996 requires the Company to withhold 10% of any
distribution to a Non-U.S. Shareholder in excess of the Company's current and
accumulated earnings and profits. Accordingly, although the Company intends to
withhold at a rate of 30% on the entire amount of the distribution, to the
extent that the Company does not do so, any portion of the distribution not
subject to withholding at a rate of 30% will be subject to withholding at a
rate of 10%. The Non-U.S. Shareholder may seek a refund of such amounts from
the IRS to the extent that the amount withheld from such distribution was, in
fact, in excess of the U.S. income tax due with respect to such distribution.
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 applicable Treasury Regulations to withhold 35% of any
distribution that could be designated by the Company as a capital gain
dividend. 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
Securities 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
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interests in the Financing 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.
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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
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.
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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.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by King &
Spalding, Atlanta, Georgia. 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 of the Company included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, 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 statement of revenue and certain expenses of the Principal
Properties included in the Company's Current Report on Form 8-K dated August
9, 1996 and filed on August 22, 1996, as amended by Form 8-K/A dated August 9,
1996 and filed on October 18, 1996, incorporated by reference in this
Prospectus and the Registration Statement, 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 included in the
Company's Current Report on Form 8-K dated November 5, 1996 and filed on
November 6, 1996, incorporated by reference in this Prospectus and the
Registration Statement, 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 included in the
Company's Current Report on Form 8-K dated November 1, 1996 and filed on
November 6, 1996, as amended by Form 8-K/A dated November 1, 1996 and filed on
November 8, 1996, incorporated by reference in this Prospectus and the
Registration Statement, 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.
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN
ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information...................................................... 2
Incorporation of Certain
Documents by Reference.................................................... 2
The Company................................................................ 4
Use of Proceeds............................................................ 5
Consolidated Ratio of Earnings
to Fixed Charges and Preferred
Stock Dividends........................................................... 5
Description of Capital Stock............................................... 6
Description of Common Stock Warrants....................................... 12
Federal Income Tax Consideration........................................... 12
Plan of Distribution....................................................... 22
Legal Matters.............................................................. 23
Experts.................................................................... 23
</TABLE>
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$300,000,000
WEEKS CORPORATION
PREFERRED STOCK
COMMON STOCK
COMMON STOCK WARRANTS
-------------
PROSPECTUS
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December , 1996
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
issuance and distribution of the Securities, other than underwriting discounts
and commissions. All of the amounts shown are estimated except the Securities
and Exchange Commission registration fee and the NASD fee.
<TABLE>
<S> <C>
SEC Registration Fee............................................... $ 90,910
NASD Fee........................................................... 30,500
NYSE Listing Fee................................................... 60,000
Legal fees and expenses............................................ 100,000
Accounting fees and expenses....................................... 40,000
Blue Sky Fees and Expenses (including fees of counsel)............. 20,000
Printing and distribution.......................................... 100,000
Miscellaneous...................................................... 50,000
--------
Total............................................................. $491,410
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Georgia Business Corporation Code (the "GBCC"), the
Company's Amended and Restated Articles of Incorporation (the "Articles")
provide that a director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty of care or any other duty
owed to the Company as a director, except that such provision shall not
eliminate or limit the liability of a director (a) for any appropriation, in
violation of his duties, of any business opportunity of the Company, (b) for
acts or omissions that involve intentional misconduct or a knowing violation
of law, (c) for approving or assenting to unlawful corporate distributions or
(d) for any transaction from which the director received an improper personal
benefit. The Articles further provide that if 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. The full
text of the applicable provisions of the GBCC is provided below.
Under Article VI of 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, against liability (as defined in the GBCC) incurred in the
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 a party to a proceeding in advance of
final disposition of the proceeding if:
(a) Such person furnishes the Company a written affirmation of his good
faith belief that he has met the standard of conduct set forth above;
and
(b) Such person furnishes the Company a written undertaking , executed
personally or on his behalf, to repay any advances if it is ultimately
determined that he is not entitled to indemnification.
The written undertaking required by paragraph (b) above must be an unlimited
general obligation of such person but need not be secured and may be accepted
without reference to financial ability to make repayment.
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The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
Article VI of the Company's Bylaws are not exclusive of any other right which
any person may have under any statute, provision of the Company's Articles,
provision of the Company's Bylaws, agreement, vote of shareholders or
disinterested directors or otherwise. The agreement of limited partnership of
Weeks Realty, L.P. (the "Partnership Agreement") also provides for
indemnification of the Company and its officers and directors so long as they
acted in good faith, except that Weeks Realty, L.P. (the "Operating
Partnership") shall not indemnify any such person for any intentional
misconduct or knowing violation of law or for any transaction for which such
person received a personal benefit in violation or breach of any provision of
the Partnership Agreement, and limits the liability of the Company and its
officers and directors to the Operating Partnership and its partners except
for matters for which they are not indemnified.
The Company's directors and officers are insured against losses arising from
any claim against them as such for wrongful acts or omissions, subject to
certain limitations. The Company's directors and officers are insured against
damages from actions and claims incurred in the course of their duties, and
the Company is insured against expenses incurred in defending lawsuits arising
from certain alleged acts of its directors and officers.
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 incurred in a proceeding in which the director was
made a party because he is or was a director of the Company, 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.
Part 5 of Article 8 of the Georgia Business Corporation Code states:
14-2-850. Part definitions.
As used in this part, the term:
(1) "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(2) "Director" or "officer" means an individual who is or was a director
or officer, respectively, of a corporation or who, while a director or officer
of the corporation, is or was serving at the corporation's request as a
director, officer, partner, trustee, employee, or agent of another domestic or
foreign corporation, partnership, joint venture, trust, employee benefit plan,
or other entity. A director or officer is considered to be serving an employee
benefit plan at the corporation's request if his or her duties to the
corporation also impose duties on, or otherwise involve services by, the
director or officer to the plan or to participants in or beneficiaries of the
plan. Director or officer includes, unless the context otherwise requires, the
estate or personal representative of a director or officer.
II-2
<PAGE>
(3)"Disinterested director" means a director who at the time of a vote
referred to in subsection (c) of Code Section 14-2-853 or a vote or selection
referred to in subsection (b) or (c) of Code Section 14-2-855 or subsection
(a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a familial,
financial, professional, or employment relationship with the
director whose indemnification or advance for expenses is the
subject of the decision being made with respect to the
proceeding, which relationship would, in the circumstances,
reasonably be expected to exert an influence on the director's
judgment when voting on the decision being made.
(4)"Expenses" includes counsel fees.
(5)"Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a proceeding.
(6)"Official capacity" means:
(A) When used with respect to a director, the office of director in a
corporation; and
(B) When used with respect to an officer, as contemplated in Code
Section 14-2-857, the office in a corporation held by the
officer.
Official capacity does not include service for any other domestic or foreign
corporation or any partnership, joint venture, trust, employee benefit plan,
or other entity.
(7)"Party" means an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(8)"Proceeding" means any threatened, pending or completed action, suit,
or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative and whether formal or informal.
14-2-851. Authority to indemnify.
(a)Except as otherwise provided in this Code section, a corporation may
indemnify an individual who is a party to a proceeding because he or she is or
was a director against liability incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that such
conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed to
the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual had
no reasonable cause to believe such conduct was unlawful.
(b)A director's conduct with respect to an employee benefit plan for a
purpose he or she believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subparagraph (a) (1) (B) of this Code section.
II-3
<PAGE>
(c)The termination of a proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this Code section.
(d)A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in connection
with the proceeding if it is determined that the director has met
the relevant standard of conduct under this Code section; or
(2) In connection with any proceeding with respect to conduct for which
he was adjudged liable on the basis that personal benefit was
improperly received by him, whether or not involving action in his
official capacity.
14-2-852. Mandatory indemnification.
A corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he or she was a
party because he or she was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding.
14-2-853. Advance for expenses.
(a)A corporation may, before final disposition of a proceeding, advance
funds to pay for or reimburse the reasonable expenses incurred by a director
who is a party to a proceeding because he or she is a director if he or she
delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or she
has met the relevant standard of conduct described in Code Section
14-2-851 or that the proceeding involves conduct for which liability
has been eliminated under a provision of the articles of
incorporation as authorized by paragraph (4) of subsection (b) of
Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it is
ultimately determined that the director is not entitled to
indemnification under this part.
(b)The undertaking required by paragraph (2) of subsection (a) of this Code
section must be an unlimited general obligation of the director but need not
be secured and may be accepted without reference to the financial ability of
the director to make repayment.
(c)Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a majority
vote of all the disinterested directors (a majority of whom shall
for such purpose constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors
appointed by such a vote; or
(B) When there are fewer than two disinterested directors, by the
vote necessary for action by the board in accordance with
subsection (c) of Code Section 14-2-824, in which authorization
directors who do not qualify as disinterested directors may
participate; or
(2) By the shareholders, but shares owned or voted under the control of
a director who at the time does not qualify as a disinterested
director with respect to the proceeding may not be voted on the
authorization.
II-4
<PAGE>
14-2-854. Court-ordered indemnification and advances for expenses.
(a)A director who is a party to a proceeding because he or she is a director
may apply for indemnification or advance for expenses to the court conducting
the proceeding or to another court of competent jurisdiction. After receipt of
an application and after giving any notice it considers necessary, the court
shall:
(1) Order indemnification or advance for expenses if it determines that
the director is entitled to indemnification under this part; or
(2) Order indemnification or advance for expenses if it determines, in
view of all the relevant circumstances, that it is fair and
reasonable to indemnify the director or to advance expenses to the
director, even if the director has not met the relevant standard of
conduct set forth in subsections (a) and (b) of Code Section 14-2-
851, failed to comply with Code Section 14-2-853, or was adjudged
liable in a proceeding referred to in paragraph (1) or (2) of
subsection (d) of Code Section 14-2-851, but if the director was
adjudged so liable, the indemnification shall be limited to
reasonable expenses incurred in connection with the proceeding.
(b)If the court determines that the director is entitled to indemnification
or advance for expenses under this part, it may also order the corporation to
pay the director's reasonable expenses to obtain court-ordered indemnification
or advance for expenses.
14-2-855. Determination and authorization of indemnification.
(a)A corporation may not indemnify a director under Code Section 14-2-851
unless authorized thereunder and a determination has been made for a specific
proceeding that indemnification of the director is permissible in the
circumstances because he or she has met the relevant standard of conduct set
forth in Code Section 14-2-851.
(b)The determination shall be made:
(1) If there are two or more disinterested directors, by the board of
directors by a majority vote of all the disinterested directors (a
majority of whom shall for such purpose constitute a quorum) or by a
majority of the members of a committee of two or more disinterested
directors appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors, selected by
the board of directors (in which selection directors who wish do
not qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the control
of a director who at the time does not qualify as a disinterested
director may not be voted on the determination.
(c)Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the same manner
as the determination that indemnification is permissible, except that if there
are fewer than two disinterested directors or if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subparagraph
(b)(2)(B) of this Code section to select special legal counsel.
14-2-856. Shareholder approved indemnification.
(a)If authorized by the articles of incorporation or a bylaw, contract, or
resolution approved or ratified by the shareholders by a majority of the votes
entitled to be cast, a corporation may indemnify
II-5
<PAGE>
or obligate itself to indemnify a director made a party to a proceeding
including a proceeding brought by or in the right of the corporation, without
regard to the limitations in other Code sections of this part, but shares
owned or voted under the control of a director who at the time does not
qualify as a disinterested director with respect to any existing or threatened
proceeding that would be covered by the authorization may not be voted on the
authorization.
(b)The corporation shall not indemnify a director under this Code section
for any liability incurred in a proceeding in which the director is adjudged
liable to the corporation or is subjected to injunctive relief in favor of the
corporation:
(1) For any appropriation, in violation of the director's duties, of any
business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
(3) For the types of liability set forth in Code Section 14-2-832; or
(4) For any transaction from which he received an improper personal
benefit.
(c)Where approved or authorized in the manner described in subsection (a) of
this Code section, a corporation may advance or reimburse expenses incurred in
advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of his
or her good faith belief that his or her conduct does not constitute
behavior of the kind described in subsection (b) of this Code
section; and
(2) The director furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay any advances
if it is ultimately determined that the director is not entitled to
indemnification under this Code section.
14-2-857. Indemnification of officers, employees, and agents.
(a)A corporation may indemnify and advance expenses under this part to an
officer of the corporation who is a party to a proceeding because he or she is
an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a resolution
of the board of directors, or contract except for liability arising
out of conduct that constitutes:
(A) Appropriation, in violation of his or her duties, of any business
opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b)The provisions of paragraph (2) of subsection (a) of this Code section
shall apply to an officer who is also a director if the sole basis on which he
or she is made a party to the proceeding is an act or omission solely as an
officer.
(c)An officer of a corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may apply to a
court under Code Section 14-2-854 for indemnification or advances for
expenses, in each case to the same extent to which a director may be entitled
to indemnification or advances for expenses under those provisions.
II-6
<PAGE>
(d) A corporation may also indemnify and advance expenses to an employee or
agent who is not a director to the extent, consistent with public policy, that
may be provided by its articles of incorporation, bylaws, general or specific
action of its board of directors, or contract.
14-2-858. Insurance.
A corporation may purchase and maintain insurance on behalf of an individual
who is a director, officer, employee, or agent of the corporation or who,
while a director, officer, employee, or agent of the corporation, serves at
the corporation's request as a director, officer, partner, trustee, employee,
or agent of another domestic or foreign corporation, partnership, joint
venture, trust, employee benefit plan, or other entity against liability
asserted against or incurred by him or her in that capacity or arising from
his or her status as director, officer, employee, or agent, whether or not the
corporation would have power to indemnify or advance expenses to him or her
against the same liability under this part.
14-2-859. Application of part.
(a) A corporation may, by a provision in its articles of incorporation or
bylaws or in a resolution adopted or a contract approved by its board of
directors or shareholders, obligate itself in advance of the act or omission
giving rise to a proceeding to provide indemnification or advance funds to pay
for or reimburse expenses consistent with this part. Any such obligatory
provision shall be deemed to satisfy the requirements for authorization
referred to in subsection (c) of Code Section 14-2-853 or subsection (c) of
Code Section 14-2-855. Any such provision that obligates the corporation to
provide indemnification to the fullest extent permitted by law shall be deemed
to obligate the corporation to advance funds to pay for or reimburse expenses
in accordance with Code Section 14-2-853 to the fullest extent permitted by
law, unless the provision specifically provides otherwise.
(b) Any provision pursuant to subsection (a) of this Code section shall not
obligate the corporation to indemnify or advance expenses to a director of a
predecessor of the corporation, pertaining to conduct with respect to the
predecessor, unless otherwise specifically provided. Any provision for
indemnification or advance for expenses in the articles of incorporation,
bylaws, or a resolution of the board of directors or shareholders, partners,
or, in the case of limited liability companies, members or managers of a
predecessor of the corporation or other entity in a merger or in a contract to
which the predecessor is a party, existing at the time the merger takes
effect, shall be governed by paragraph (3) of subsection (a) of Code Section
14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation,
limit any of the rights to indemnification or advance for expenses created by
or pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director or an officer in connection with his or her
appearance as a witness in a proceeding at a time when he or she is not a
party.
(e) Except as expressly provided in Code Section 14-2-857, this part does
not limit a corporation's power to indemnify, advance expenses to, or provide
or maintain insurance on behalf of an employee or agent.
II-7
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of King & Spalding regarding the validity of the securities being registered
8.1 Opinion of King & Spalding regarding tax matters
12.1 Calculation of ratio of earnings to fixed charges
23.1 Consent of King & Spalding (included as part of Exhibits 5.1 and 8.1 hereto)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on the signature page hereof)
</TABLE>
ITEM 17. UNDERTAKINGS.
(a)The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b)The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-8
<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(d) The undersigned registrant further undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Atlanta, Georgia on the 19th day of December, 1996.
WEEKS CORPORATION
By: /s/ David P. Stockert
----------------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
We, the undersigned directors and officers of Weeks Corporation, do hereby
constitute and appoint A. Ray Weeks, Jr., Thomas D. Senkbeil, Forrest W.
Robinson and David P. Stockert, and each and any of them, our true and lawful
attorneys-in-fact and agents, to do any and all acts and things in our names
and on our behalf in our capacities as directors and officers and to execute
any and all instruments for us and in our name in the capacities indicated
below, which said attorneys and agents, or any of them, may deem necessary or
advisable to enable said Corporation to comply with the Securities Act of 1933
and any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this registration statement, or any
registration statement for this offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, including
specifically, but without limitation, power and authority to sign for us or
any of us in our names in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and we do hereby
ratify and confirm all that said attorneys and agents, or any of them, shall
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities indicated below as of the 19th day of December, 1996.
SIGNATURES TITLE
/s/ A. Ray Weeks, Jr. Chairman of the
- ------------------------------------- Board and Chief
A. RAY WEEKS, JR. Executive Officer
and a Director
(Principal
Executive Officer)
/s/ Thomas D. Senkbeil Vice Chairman of the
- ------------------------------------- Board and Chief
THOMAS D. SENKBEIL Investment Officer
and a Director
/s/ Forrest W. Robinson President and a
- ------------------------------------- Director
FORREST W. ROBINSON
II-10
<PAGE>
/s/ John W. Nelley, Jr. Executive Vice
- ------------------------------------- President and a
JOHN W. NELLEY, JR. Director
/s/ David P. Stockert Senior Vice
- ------------------------------------- President and Chief
DAVID P. STOCKERT Financial Officer
(Principal
Financial Officer)
/s/ Arthur J. Quirk Vice President and
- ------------------------------------- Controller
ARTHUR J. QUIRK (Principal
Accounting Officer)
/s/ Barrington H. Branch Director
- -------------------------------------
BARRINGTON H. BRANCH
/s/ George D. Busbee Director
- -------------------------------------
GEORGE D. BUSBEE
/s/ Charles R. Eitel Director
- -------------------------------------
CHARLES R. EITEL
/s/ William O. McCoy Director
- -------------------------------------
WILLIAM O. MCCOY
II-11
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<S> <C> <C>
5.1 Opinion of King & Spalding regarding the validity of the securities being registered
8.1 Opinion of King & Spalding regarding tax matters
12.1 Calculation of ratio of earnings to fixed charges
23.1 Consent of King & Spalding (included as part of Exhibits 5.1 and 8.1 hereto)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on the signature page hereof)
</TABLE>
<PAGE>
[LETTERHEAD OF KING & SPALDING APPEARS HERE]
December 19, 1996
Weeks Corporation
4497 Park Drive
Atlanta, Georgia 30093
Re: Form S-3 Registration Statement relating to up to an aggregate
of $300,000,000 of Common Stock, Preferred Stock and
Warrants to Purchase Common Stock of Weeks Corporation
---------------------------------------------------------
Gentlemen:
We have acted as counsel for Weeks Corporation, a Georgia corporation (the
"Company"), in connection with the preparation of the Registration Statement on
Form S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the
offering from time to time, as set forth in the prospectus contained in the
Registration Statement (the "Prospectus") and as to be set forth in one or more
supplements to the Prospectus (each such supplement, a "Prospectus Supplement"),
of the Company's common stock, par value $.01 per share ("Common Stock"),
preferred stock, par value $.01 per share ("Preferred Stock"), and warrants to
purchase Common Stock ("Warrants") in an aggregate principal amount of
$300,000,000. The Warrants are to be issued from time to time pursuant to
warrant agreements between the Company and warrant agents (each, a "Warrant
Agent"), in the form to be filed with the Commission (the "Warrant Agreement").
As such counsel, we have examined and relied upon such records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to form the basis for the opinions hereinafter set forth. In all
such examinations, we have assumed the genuineness of signatures on original
documents and the conformity to such original documents of all copies submitted
to us as certified, conformed or photographic copies, and as to certificates of
public officials, we have assumed the same to have been properly given and to be
accurate.
Based on the foregoing, we are of the opinion that:
(i) The Company is a corporation validly existing and, based solely on a
certificate of the Secretary of State of the State of Georgia, in good
standing under the laws of the State of Georgia;
<PAGE>
Weeks Corporation
December 19, 1996
Page 2
- -----------------
(ii) Upon the due authorization of the issuance of shares of Common Stock
and the issuance and sale thereof as described in the Prospectus (together
with any applicable Prospectus Supplement), such shares will be validly
issued, fully paid and nonassessable;
(iii) Upon the due authorization of the issuance of shares of
Preferred Stock and the issuance and sale thereof as described in the
Prospectus (together with any applicable Prospectus Supplement), such shares
will be validly issued, fully paid and nonassessable;
(iv) Upon the due authorization of the Warrant Agreements and, when the
final terms thereof have been duly established and approved and when duly
executed and delivered by the Company, and assuming due authorization,
execution and delivery thereof by the applicable Warrant Agent, the Warrant
Agreements will constitute valid and legally binding instruments of the
Company enforceable against the Company in accordance with their respective
terms; and
(v) Upon the due authorization of the Warrants and, when the final terms
thereof have been duly established and approved and when duly executed by the
Company, and countersigned by the applicable Warrant Agent in accordance with
the applicable Warrant Agreement and delivered to and paid for by the
purchasers thereof, the Warrants will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their respective terms.
The opinions set forth above are subject, as to enforcement, to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights generally, and
(ii) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the reference to us under the caption "Legal Matters" in the
Prospectus that is included in the Registration Statement.
Very truly yours,
/s/ King & Spalding
<PAGE>
[LETTERHEAD OF KING & SPALDING APPEARS HERE]
December 19, 1996
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Re: Weeks Corporation -- Shelf Registration
Gentlemen:
We have acted as counsel to Weeks Corporation (the "Company") in connection
with that certain Registration Statement on Form S-3 filed with the Securities
and Exchange Commission with respect to $300 million of an indeterminate amount
of Preferred Stock, Common Stock, and Common Stock Warrants (the "Registration
Statement"). In connection therewith, you have requested our opinion with
respect to the following matters:
(i) the qualification of the Company as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code");
(ii) the status of the Operating Partnership and the Financing
Partnership as partnerships for federal income tax purposes; and
(iii) the accuracy of the discussion included in the Registration
Statement under the heading "Federal Income Tax Considerations."
All defined terms used herein shall have the same meaning as in the
Registration Statement.
FACTS AND ASSUMPTIONS RELIED UPON
In rendering the opinions expressed herein, we have examined such documents
as we have deemed appropriate, including (but not limited to) the following:
(1) the Registration Statement (including all Exhibits thereto); (2) the Second
Amended and Restated Agreement of Limited Partnership of Weeks Realty, L.P.; (3)
the respective Articles of Incorporation of Weeks Corporation, Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP Holdings, Inc., and
Weeks LP Holdings, Inc., and bylaws of Weeks Corporation such corporations; (4)
the Limited
<PAGE>
Weeks Corporation
December 19, 1996
Page 2
Partnership Agreement of Weeks Financing Limited Partnership; (5) the Employee
Sharing, Occupancy, and Administrative Services Agreement entered into by Weeks
Realty, L.P., Weeks Realty Services, Inc. and Weeks Construction Services, Inc.;
and (6) the Company's analyses relating to the Company's compliance with the
REIT gross income and asset tests.
In our examination of documents, we have assumed, with your consent, that
all documents submitted to us are authentic originals, or if submitted as
photocopies, that they faithfully reproduce the originals thereof, that all such
documents have been or will be duly executed to the extent required, that all
representations and statements set forth in such documents are true and correct,
and that all obligations imposed by any such documents on the parties thereto
have been or will be performed or satisfied in accordance with their terms. We
have also obtained such additional information and representations as we have
deemed relevant and necessary through consultation with the officers of the
Company and with the Company's advisors.
OPINIONS
Based upon and subject to the foregoing, we are of the following opinions.
(1) The Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under Sections 856-860 of
the Code for its initial taxable year beginning August 23, 1994 and ending
December 31, 1994 as well as its taxable year ending December 31, 1995, and its
current organization and method of operation should allow it to continue to
qualify as a REIT.
(2) The statements made under the heading "Federal Income Tax
Considerations" in the Registration Statement, to the extent they constitute
matters of law or legal conclusions, or constitute summaries of documents
described therein, are true and accurate in all material respects, and fairly
present the material tax consequences to an investor in the Securities of the
Company.
(3) The Operating Partnership and the Financing Partnership each have
qualified as a partnership for federal income tax purposes and not as a
"publicly traded partnership" under Section 7704 of the Code.
The opinions expressed herein are based upon the Code, the U.S. Treasury
Regulations promulgated thereunder, current administrative positions of the U.S.
Internal Revenue Service, and existing judicial decisions, any of which could be
changed at any time, possibly on a retroactive basis. Any such changes could
adversely affect the opinions rendered herein and the tax consequences to the
Company. In addition, as noted above, our opinions are based solely on the
documents that we have examined, the additional information that we have
obtained, and the
<PAGE>
Weeks Corporation
December 19, 1996
Page 3
representations that have been made to us, and cannot be relied upon if any of
the facts contained in such documents or in such additional information is, or
later becomes, inaccurate or if any of the representations made to us is, or
later becomes, inaccurate. We are not, however, aware of any facts or
circumstances contrary to or inconsistent with the information, assumptions, and
representations upon which we have relied for purposes of this opinion. To the
extent that such representations and information set forth legal conclusions
with respect to factual matters relevant to the qualification of the Company as
a REIT, we have reviewed with the individuals making such representations or
providing such information the relevant provisions of the Code, applicable
Treasury Regulations and published administrative interpretations thereof.
Finally, our opinion is limited to the tax matters specifically covered
thereby, and we have not been asked to address, nor have we addressed, any other
tax consequences of an investment in the Securities of the Company.
Very truly yours,
/s/ KING & SPALDING
KING & SPALDING
<PAGE>
EXHIBIT 12.1
Weeks Corporation
Ratio Of Earnings To Fixed Charges
(in thousands)
<TABLE>
<CAPTION>
Weeks Group Weeks Corporation
------------------------------------------------ ------------------------------------------------
Year Ended Dec. 31, Jan. 1, 1994 Aug. 24, 1994 Nine Months
-------------------------------- to to Year Ended Ended
1991 1992 1993 Aug. 23, 1994 Dec. 31, 1994 Dec. 31, 1995 Sept. 30, 1996
--------- -------- --------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS COMPUTATION
Net Income (Loss) $(1,039) $(1,394) $ 998 $ 516 $ 798 $ 8,426 $ 9,226
Extraordinary Loss -- -- -- -- 1,993 -- --
Minority Interests -- -- -- -- 943 2,681 2,124
------- ------- ------- ------ ------ ------- -------
Income (Loss) Before
Minority Interests (1,039) (1,394) 998 516 3,734 11,107 11,350
Add:
Interest Expense 10,351 10,635 10,254 6,682 1,958 8,106 8,157
Amortization Of Deferred
Financing Costs 292 363 372 322 252 691 642
------- ------- ------- ------ ------ ------- -------
EARNINGS FOR PURPOSES OF
COMPUTATION $ 9,604 $ 9,604 $11,624 $7,520 $5,944 $19,904 $20,149
------- ------- ------- ------ ------ ------- -------
FIXED CHARGES COMPUTATION
Interest Expense $10,351 $10,635 $10,254 $6,682 $1,958 $ 8,106 $ 8,157
Capitalized Interest 39 157 70 89 -- 1,198 1,563
Amortization Of Deferred
Financing Costs 292 363 372 322 252 691 642
Preferred Stock Dividends -- -- -- -- -- -- --
------- ------- ------- ------ ------ ------- -------
FIXED CHARGES FOR PURPOSES
OF COMPUTATION $10,682 $11,155 $10,696 $7,093 $2,210 $ 9,995 $10,362
------- ------- ------- ------ ------ ------- -------
RATIO OF EARNINGS TO
FIXED CHARGES 0.90 0.86 1.09 1.06 2.69 1.99 1.94
======= ======= ======= ====== ====== ======= =======
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 19,
1996 included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, our report dated September 27, 1996 included in the
Company's Current Report on Form 8-K dated August 9, 1996 and filed on August
22, 1996, as amended by Form 8-K/A dated August 9, 1996 and filed on October
18, 1996, our report dated September 24, 1996 included in the Company's
Current Report on Form 8-K dated November 5, 1996 and filed on November 6,
1996, and to all references to our firm included in this registration
statement.
Arthur Andersen LLP
Atlanta, Georgia
December 18, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Weeks Corporation
for the registration of $300,000,000 of its preferred stock, common stock, and
common stock warrants and to the incorporation by reference therein of our
report dated September 27, 1996, with respect to the combined financial
statements of NWI Warehouse Group included in the Form 8-K of Weeks
Corporation dated November 1, 1996, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Atlanta, Georgia
December 18, 1996
