<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1997
REGISTRATION 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
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
WEEKS CORPORATION
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:
WILLIAM H. HESS, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303
(404) 572-4600
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of the Registration Statement.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 value
per share............. 3,297,633 $31.94 $105,326,398 $31,072
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee. In
accordance with Rule 457(c) under the Securities Act, such amounts are
based on the average of the high and low prices per share of Common Stock
of Weeks Corporation on December 12, 1997 as reported on the New York
Stock Exchange.
--------------
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 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED DECEMBER 19, 1997
PROSPECTUS
3,297,633 SHARES
[LOGO OF WEEKS CORPORATION
WEEKS CORPORATION
APPEARS HERE] COMMON STOCK
----------
This Prospectus relates to (i) the possible issuance by Weeks Corporation
(the "Company") of up to 2,965,751 shares (the "Exchange Shares") of common
stock, par value $.01 per share ("Common Stock"), of the Company if, and to the
extent that, the holders of up to 1,853,749 units (the "Acquisition Units") or
holders of up to 1,112,002 Units (the "Original Units") of common limited
partnership interests ("Units") in Weeks Realty, L.P. (the "Operating
Partnership"), of which the Company's wholly owned subsidiary, Weeks GP
Holdings, Inc. ("Weeks GP" or the "General Partner"), owns the sole general
partnership interest, exercise their respective rights to exchange such
Acquisition Units or Original Units, as the case may be, for shares of Common
Stock, (ii) the offer and sale from time to time of up to 331,882 shares of
outstanding Common Stock of the Company (the "Original Shares") by the holders
thereof and (iii) the offer and sale from time to time of any Exchange Shares
that may be issued to persons who may be deemed "affiliates" of the Company
(such persons, together with the holders of the Original Shares, are
collectively referred to herein as the "Selling Shareholders"). The Original
Shares and the Original Units were issued in connection with the Formation
Transactions (as herein defined) and the Acquisition Units were issued in
connection with acquisitions of Properties (as herein defined) from NWI
Warehouse Group, L.P. ("NWI") and the operations of Buckley & Company Real
Estate, Inc. ("Buckley"). The Company is registering the Exchange Shares and
Original Shares as required under the terms of (i) that certain Registration
Rights and Lock-Up Agreement, dated as of August 24, 1994, by and among the
Company and the Company Participants and the Other Participants identified
therein (the "Formation Registration Rights Agreement") and (ii) that certain
Registration Rights and Lock-Up Agreement, dated as of November 1, 1996, by and
among the Company and NWI and the other persons identified therein (the "NWI
Registration Rights Agreement," and, together with the Formation Registration
Rights Agreement, collectively referred to herein as the "Registration Rights
Agreements"), to provide the holders thereof with freely tradeable securities,
but the registration of such shares does not necessarily mean that any of such
shares will be issued by the Company or be offered by the holders thereof. See
"The Company" and "Registration Rights."
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 will be listed on such exchange, subject to official notice of
issuance. To ensure that the Company maintains its qualification as a real
estate investment trust ("REIT"), ownership by any person is limited to 7.5% of
the outstanding shares of Common Stock, with certain exceptions. See
"Description of Capital Stock--Restrictions on Transfer."
----------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 HEREIN FOR CERTAIN FACTORS RELATING TO
AN INVESTMENT IN THE COMMON STOCK.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The Selling Shareholders from time to time may offer and sell shares of
Common Stock held by them and registered hereunder (the "Secondary Shares")
directly or through agents or broker-dealers on terms to be determined at the
time of sale. To the extent required, the names of any agent or broker-dealer
and applicable commissions or discounts and any other required information with
respect to any particular offer will be set forth in an accompanying supplement
to this Prospectus (a "Prospectus Supplement"). See "Plan of Distribution."
Each of the Selling Shareholders reserves the sole right to accept or reject,
in whole or in part, any proposed purchase of the Secondary Shares to be made
directly or through agents.
The Company will not receive any of the proceeds from the issuance of the
Exchange Shares or the sale of any Secondary Shares by the Selling Shareholders
but has agreed to bear certain expenses of registration of the Secondary Shares
under Federal and state securities laws. The Company will acquire Units in the
Operating Partnership in exchange for any Exchange Shares that the Company may
issue to Unitholders.
The Selling Shareholders and any agents or broker-dealers that participate
with the Selling Shareholders in the distribution of Secondary Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any commissions received by them and any
profit on the resale of the Secondary Shares may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Registration Rights"
for indemnification arrangements between the Company and the Selling
Shareholders.
----------
The date of this Prospectus is December , 1997.
<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
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 Common Stock offered pursuant to this Prospectus (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
Common Stock 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. 011-13254) with the
Commission are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (as amended by the Company's Annual Report on Form 10-K/A-2 for
the year ended December 31, 1996 filed with the Commission on September 26,
1997);
(ii) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(iii) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(iv) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(v) The Company's Current Report on Form 8-K dated October 7, 1997 filed
with the Commission on October 9, 1997;
(vi) The Company's Current Report on Form 8-K dated October 3, 1997 filed
with the Commission on October 6, 1997;
(vii) The Company's Current Report on Form 8-K dated May 7, 1997 filed
with the Commission on May 12, 1997;
(viii) The Company's Current Report on Form 8-K dated May 2, 1997 filed
with the Commission on May 2, 1997;
2
<PAGE>
(ix) The Company's Current Report on Form 8-K dated March 25, 1997 filed
with the Commission on March 26, 1997;
(x) The Company's Current Report on Form 8-K dated December 31, 1996
filed with the Commission on January 15, 1997 (as amended by the Company's
Current Report on Form 8-K/A dated December 31, 1996 filed with the
Commission on March 14, 1997);
(xi) The Company's Current Report on Form 8-K dated November 5, 1996
filed with the Commission on November 6, 1996;
(xii) The Company's Current Report on Form 8-K dated November 1, 1996
filed with the Commission on November 6, 1996 (as amended by the Company's
Current Report on Form 8-K/A dated November 1, 1996 filed with the
Commission on November 8, 1996); and
(xiii) The Company's Registration Statement on Form 8-A dated August 12,
1994, registering the Company's Common Stock under Section 12(b) of the
Exchange Act.
All documents and reports filed pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act from the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of the filing of such reports and documents (provided, however, that
the information referred to in Item 402(a)(8) of Regulation S-K of the
Commission shall not be deemed specifically incorporated by reference herein).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus or any Prospectus Supplement is delivered, on written or oral
request of such person, a copy of any or all documents which are incorporated
herein by reference (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in the document which this
Prospectus incorporates). Requests should be directed to: Vice President-
Investor Relations, Weeks Corporation, 4497 Park Drive, Norcross, Georgia
30093, telephone number (770) 923-4076.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
descriptions and the financial information and statements appearing elsewhere
and incorporated by reference in this Prospectus. Unless the context indicates
otherwise, references to the "Company" include Weeks Corporation and its
predecessors, and Weeks Realty, L.P. and its subsidiaries.
THE COMPANY
The Company is a publicly traded REIT that focuses primarily on the
acquisition, development, ownership and operation of industrial and office
properties in select suburban markets in the southeastern United States.
The Company's portfolio is comprised of 273 properties totaling approximately
20.7 million square feet (the "Properties"), including 43 Properties and one
Property expansion (totaling approximately 5.0 million square feet) under
development and/or under agreement to acquire. The Company currently manages,
or expects to manage upon completion or acquisition, all of the Properties.
Industrial Properties represent approximately 90% of the square footage of all
of the Properties, and suburban office Properties represent approximately 10%.
The average Occupancy Rate of the Company's In-service Properties was 96.0% at
September 30, 1997. As used herein, "In-Service Properties" excludes those
Properties under development which are not yet stabilized and Properties under
agreement to acquire. "Occupancy Rate" means the rate of occupancy calculated
based on leases under which tenants are paying rent.
The Company also owns or controls (through agreements to acquire, options and
marketing and development agreements) approximately 2,233 net usable acres of
undeveloped land located primarily in existing business parks with zoning and
infrastructure in place. The Company believes the development potential of this
land may ultimately total approximately 23.3 million square feet.
With its acquisitions in Nashville and in the Raleigh-Durham-Chapel Hill area
of North Carolina (the "Research Triangle") and with the continued expansion of
its activities in Orlando, the Company has reduced its concentration of
Properties in metropolitan Atlanta to 66.0% as of September 30, 1997 (based on
square footage and pro forma to include the Properties under development and/or
under agreement to acquire) from 92.9% at December 31, 1995 (calculated on the
same basis on that date). In addition, the Company has significantly increased
its tenant base and reduced its exposure to any single tenant. At September 30,
1997, the Company's In-Service Properties were leased to 705 tenants, and the
Company's largest tenant represented 3.4% of the Company's total Annualized
Base Rent. This compares to 351 tenants at December 31, 1995, with the
Company's largest tenant representing 6.9% of the Company's total Annualized
Base Rent on that date. As used herein, "Annualized Base Rent" means annualized
current base rent assuming expiration of rental concessions, if any, for leases
under which tenants are paying rent.
The Company owns, develops and operates industrial and suburban office
Properties located primarily in landscaped business park settings. The
Company's business strategy emphasizes high quality Properties and tenant
service. The Company's approximately 400 employees have experience and are
engaged in virtually every aspect of the real estate business, including
development, construction, engineering, design, landscape, leasing, marketing
and property management. The Company's strategy for growth includes intensive
management of its Properties, developing and acquiring additional Properties
that are consistent with its existing portfolio, and owning and controlling
undeveloped land sufficient to develop new and existing business parks and to
meet the expansion
4
<PAGE>
and relocation needs of tenants. The Company concentrates its activities in a
limited number of cities in the Southeast where it believes it can sustain a
significant market presence.
RISK FACTORS
Prospective investors and Unitholders should carefully consider the matters
discussed under "Risk Factors" prior to making an investment decision regarding
the Common Stock offered hereby.
TAX STATUS OF THE COMPANY
The Company has elected to be taxed as a REIT under Sections 856 through 860
of the Internal Revenue Code of 1986, as amended (the "Code"), commencing with
its short taxable year ended December 31, 1994. As a REIT, the Company
generally will not be subject to Federal income tax on net income that it
distributes to its shareholders. REITs are subject to a number of
organizational and operational requirements, including a requirement that they
currently distribute at least 95% of their taxable income. Even if the Company
qualifies for taxation as a REIT, the Company may be subject to certain
Federal, state and local taxes on its income and property and to Federal income
and excise taxes on its undistributed income. See "Federal Income Tax
Considerations."
SECURITIES TO BE OFFERED
This Prospectus relates to (i) the possible issuance by the Company of up to
2,965,751 Exchange Shares if, and to the extent that, holders of up to
1,853,749 Acquisition Units or holders of up to 1,112,002 Original Units
exercise their respective rights to exchange such Units for cash or shares of
Common Stock (the "Exchange Rights"), (ii) the offer and sale from time to time
of up to 331,882 Original Shares by the holders thereof and (iii) the offer and
sale from time to time of any Exchange Shares that may be issued to persons who
may be deemed affiliates of the Company by such persons. (Exchange Shares held
by persons who may be affiliates of the Company and Original Shares are
referred to herein collectively as the "Secondary Shares.") The Exchange Shares
and the Original Shares are being registered by the Company as required under
the terms of the Registration Rights Agreements, and the Company will not
receive any proceeds from the sale thereof.
The Original Shares and the Original Units were issued in connection with the
Formation Transactions. At that time, the Operating Partnership issued to
participants in the Formation Transactions a total of 2,593,072 Original Units,
1,112,002 of which were issued to certain of the Selling Shareholders. The
Acquisition Units were issued in connection with the Company's acquisitions of
Properties from NWI on November 1, 1996, November 27, 1996, December 30, 1996
and March 31, 1997. The Operating Partnership issued to NWI a total of
1,080,752, 162,232, 89,277 and 501,488 Acquisition Units, respectively, on each
of the foregoing dates. An additional 20,000 Acquisition Units were issued to
Buckley on November 1, 1996 in connection with the acquisition of the real
estate operations of Buckley on that date.
Pursuant to the Second Amended and Restated Agreement of Limited Partnership
of the Operating Partnership, as amended (the "Partnership Agreement"),
beginning on the date on which the Registration Statement of which this
Prospectus is a part is effective under the Securities Act, the Exchange Rights
may be exercised by each Limited Partner (other than certain Limited Partners
subject to contractual restrictions or their right to exercise the Exchange
Rights for a period of time). The Exchange Rights permit the holders thereof to
exchange each Acquisition Unit or Original Unit, as the case may be, for one
share of Common Stock (subject to certain adjustments). The General
5
<PAGE>
Partner may elect to pay cash for some or all of the Units with respect to
which Exchange Rights are exercised. The amount of such cash payment would be
based upon the trading price of the Common Stock that would have been issued
had the General Partner not elected to pay cash, for the ten trading days prior
to exercise. The General Partner, Weeks LP Holdings, Inc., a wholly owned
subsidiary of the Company ("Weeks LP"), or any combination thereof has the
right to elect to acquire directly any Units tendered to the Operating
Partnership for exchange, rather than causing the Operating Partnership to
exchange such Units. The Company anticipates that it generally will elect to
acquire indirectly through Weeks GP or Weeks LP Acquisition Units and Original
Units tendered for exchange and to issue shares of Common Stock in exchange
therefor rather than paying cash. As a result, the Company may from time to
time issue up to 1,853,749 Exchange Shares upon the acquisition of Acquisition
Units tendered for exchange and up to 1,112,002 Exchange Shares upon the
acquisition of Original Units tendered for exchange. With each such
acquisition, the Company's interest in the Operating Partnership will increase.
The Company will not receive any proceeds from the issuance of any Exchange
Shares or the sale of any Secondary Shares, but will indirectly acquire Units
tendered for exchange for which it elects to issue Exchange Shares. The Company
is registering the Exchange Shares and Original Shares for sale to provide the
holders thereof with freely tradeable securities, but the registration of such
shares does not necessarily mean that any of such shares will be issued by the
Company or offered or sold by the holders thereof.
6
<PAGE>
RISK FACTORS
Prospective investors and Unitholders should carefully consider, among other
factors, the matters described below prior to making an investment decision
regarding the Common Stock offered hereby.
SPECIAL CONSIDERATIONS APPLICABLE TO PARTNERS EXERCISING EXCHANGE RIGHTS
Tax Consequences of Exercise of Exchange Rights. The exercise by a Limited
Partner (as defined herein) of his Exchange Rights will be treated for tax
purposes as a sale of the Units by such Limited Partner. Such a sale will be
fully taxable to the exercising Limited Partner and such Limited Partner will
be treated as realizing for tax purposes an amount equal to the sum of the
cash or the value of the Common Stock received in the exchange plus the amount
of any Operating Partnership liabilities allocable to the exchanged Units at
the time of the exchange. It is possible that the amount of gain recognized or
even the tax liability resulting from such gain could exceed the amount of
cash and the value of other property (e.g., Exchange Shares) received upon
such disposition. See "Exercise of Exchange Rights--Tax Consequences of
Exercise of Exchange Rights." In addition, the ability of the Limited Partner
to sell a substantial number of Exchange Shares in order to raise cash to pay
tax liabilities associated with the exercise of Exchange Rights may be
restricted due to the relatively low trading volume of the Common Stock, and,
as a result of fluctuations in the stock price, the price the Limited Partner
receives for such shares may not equal the value of his Units at the time of
exchange.
Potential Change in Investment Upon Exercise of Exchange Rights. If a
Limited Partner exercises his Exchange Rights, such Limited Partner may
receive, at the option of the General Partner, cash or shares of Common Stock
in exchange for Units. If the Limited Partner receives cash, the Limited
Partner will no longer have any interest in the Company and will not benefit
from any subsequent increases in the share price and will not receive any
future distributions from the Company (unless the Limited Partner currently
owns or acquires in the future additional shares of Common Stock or Units). If
the Limited Partner receives shares of Common Stock, the Limited Partner will
become a shareholder of the Company rather than a holder of Units in the
Operating Partnership. See "Exercise of Exchange Rights--Comparison of
Ownership of Units and Shares of Common Stock."
EFFECT ON SHARE PRICE OF SHARES AVAILABLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock, or the perception
that such sales could occur, could adversely affect prevailing market prices
for such shares. At September 30, 1997, approximately 18,504,689 shares of
Common Stock (including 1,924,548 shares eligible to be sold in the public
market pursuant to the Company's 1995 shelf registration statement (File No.
33-96534) covering shares of Common Stock issued or issuable in connection
with the Formation Transactions) were eligible to be sold in the public
market. Pursuant to this Prospectus, a total of 3,297,633 additional shares of
Common Stock will be eligible to be sold in the public market. See "Plan of
Distribution." This represents an approximately 18% increase in the number of
shares of Common Stock of the Company eligible to be sold in the public
market. Additional shares of Common Stock may be available for sale in the
public markets from time to time pursuant to the following: (i) 930,579 shares
have been reserved for issuance pursuant to the Company's Incentive Stock Plan
(as of September 30, 1997, the Company had granted 38,764 shares of unvested
restricted Common Stock and had outstanding options for an aggregate of
732,950 shares of Common Stock), and (ii) the Company may offer from time to
time, pursuant to a separately filed registration statement (File No. 333-
32755) (the "Universal Shelf Registration Statement"), shares of Common Stock,
shares of the Company's preferred stock convertible into shares of Common
Stock, warrants exercisable for shares of Common Stock, or debt securities of
the Operating Partnership, together or separately, and in amounts, at prices
and on terms to be determined at the time of sale, at an aggregate initial
offering price not to exceed $600,000,000 (there presently is $450,000,000 of
available capacity under the Universal Shelf Registration Statement). No
prediction can be made about the effect that future sales of shares of Common
Stock or securities convertible into or exercisable for shares of Common Stock
or debt securities will have on the market prices for such shares.
7
<PAGE>
THE COMPANY
The Company is a publicly traded REIT that focuses primarily on the
acquisition, development, ownership and operation of industrial and office
properties in select suburban markets in the southeastern United States.
The Company's portfolio is comprised of 273 Properties totaling
approximately 20.7 million square feet, including 43 Properties and one
Property expansion (totaling approximately 5.0 million square feet) under
development and/or under agreement to acquire. The Company currently manages,
or expects to manage upon completion or acquisition, all of the Properties.
Industrial Properties represent approximately 90% of the square footage of all
of the Properties, and suburban office Properties represent approximately 10%.
The average Occupancy Rate of the Company's In-service Properties was 96.0% at
September 30, 1997.
The Company also owns or controls (through agreements to acquire, options
and marketing and development agreements) approximately 2,233 net usable acres
of undeveloped land located primarily in existing business parks with zoning
and infrastructure in place. The Company believes the development potential of
this land may ultimately total approximately 23.3 million square feet.
With its acquisitions in Nashville and the Research Triangle and with the
continued expansion of its activities in Orlando, the Company has reduced its
concentration of Properties in metropolitan Atlanta to 66.0% as of September
30, 1997 (based on square footage and pro forma to include the Properties
under development and/or under agreement to acquire) from 92.9% at December
31, 1995 (calculated on the same basis on that date). In addition, the Company
has significantly increased its tenant base and reduced its exposure to any
single tenant. At September 30, 1997, the Company's In-service Properties were
leased to 705 tenants, and the Company's largest tenant represented 3.4% of
the Company's total Annualized Base Rent. This compares to 351 tenants at
December 31, 1995, with the Company's largest tenant representing 6.9% of the
Company's total Annualized Base Rent on that date.
The Company owns, develops and operates industrial and suburban office
Properties located primarily in landscaped business park settings. The
Company's business strategy emphasizes high quality Properties and tenant
service. The Company's approximately 400 employees have experience and are
engaged in virtually every aspect of the real estate business, including
development, construction, engineering, design, landscape, leasing, marketing
and property management. The Company's strategy for growth includes intensive
management of its Properties, developing and acquiring additional Properties
that are consistent with its existing portfolio, and owning and controlling
undeveloped land sufficient to develop new and existing business parks and to
meet the expansion and relocation needs of tenants. The Company concentrates
its activities in a limited number of cities in the Southeast where it
believes it can sustain a significant market presence.
The Company conducts all of its business through the Operating Partnership
and its subsidiaries. As of September 30, 1997, the Company indirectly owned
approximately 77.5% of the outstanding interests in the Operating Partnership,
and the remaining approximately 22.5% of the partnership interests in the
Operating Partnership were owned by various individuals and entities
(including certain officers and directors of the Company) (i) 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 (the "IPO") in August 1994 (the "Formation Transactions") and
(ii) that have contributed, directly or indirectly, certain assets, Properties
and businesses to the capital of the Operating Partnership (collectively, the
"Limited Partners") subsequent to the IPO. The Company has control over the
management of the Operating Partnership and over the Properties. Of the
approximately 77.5% interest in the Operating Partnership held by the Company,
the Company
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currently owns the sole approximately 1.0% general partnership interest in the
Operating Partnership through Weeks GP, and an approximately 76.5% limited
partnership interest in the Operating Partnership through Weeks LP. Both Weeks
GP and Weeks LP are qualified REIT subsidiaries within the meaning of Section
856(i)(2) of the Code, and their existence is disregarded for federal income
tax purposes.
The Company's Common Stock is listed on the NYSE under the symbol "WKS." The
Company was incorporated in Georgia in 1983, and the Operating Partnership is
a Georgia limited partnership that was formed in June, 1994. To ensure that
the Company maintains its qualification as a REIT, ownership by any person is
limited to 7.5% of the outstanding shares of Common Stock, with certain
exceptions. See "Description of Capital Stock--Restrictions on Transfer." The
Company's principal executive offices are located at 4497 Park Drive,
Norcross, Georgia 30093, and its telephone number is (770) 923-4076.
OPERATING AND FINANCING SUBSIDIARIES
Weeks Realty Services, Inc. ("Weeks Realty Services") and Weeks Construction
Services, Inc. ("Weeks Construction Services") were organized as subsidiaries
of the Operating Partnership to provide real estate related services to third
parties. Weeks Realty Services generally provides property management, leasing
and landscaping services and Weeks Construction Services generally provides
general contracting services to third parties.
The Operating Partnership owns 1% of the voting common stock and 100% of the
nonvoting common stock of each of Weeks Realty Services and Weeks Construction
Services. The voting and nonvoting common stock of Weeks Realty Services and
Weeks Construction Services held by the Operating Partnership represents
approximately 99% of the economic interest in these corporations. Ninety-nine
percent of the voting common stock of Weeks Realty Services and Weeks
Construction Services is held by certain executive officers of the Company.
Weeks Development Partnership ("Weeks Development") is a Georgia general
partnership owned 25% by Weeks Realty Services and 75% by Weeks Construction
Services. Weeks Development holds certain development land that is or may be
used for build-to-suit for sale projects, and interests in certain joint
ventures that own interests in certain development land. The Operating
Partnership may purchase sites for development from Weeks Development.
The Operating Partnership owns five of its industrial Properties in
Metropolitan Atlanta 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.
The Operating Partnership also owns four industrial Properties in the
Research Triangle area of North Carolina through its 99% ownership of Weeks NC
Financing Limited Partnership (the "NC Financing Partnership"). The NC
Financing Partnership Properties are encumbered by mortgage indebtedness
assumed in connection with the acquisition of the Properties. The remaining 1%
ownership interest in NC Financing Partnership is held by Weeks SPV Financing,
LLC, which is indirectly wholly owned by the Operating Partnership.
THE OPERATING PARTNERSHIP
The Operating Partnership, including the operating subsidiaries described
above, is the entity through which all of the Company's operations are
conducted. At September 30, 1997, the Company controlled the Operating
Partnership as the holder of a 77.5% ownership interest in the Operating
Partnership. The remaining Units of partnership interest are held by the
Limited Partners. Each Unit may be exchanged by the holder thereof for either
one share of Common Stock or cash equal to the
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fair market value thereof at the time of such exchange, at the option of the
General Partner. The Company presently anticipates that it will elect to issue
shares of Common Stock in connection with the exercise of Exchange Rights
rather than paying cash. With each exchange of outstanding Units for Common
Stock, the Company's percentage ownership interest in the Operating
Partnership will increase. In addition, whenever the Company issues shares of
its capital stock, the Company will contribute any net proceeds therefrom to
the Operating Partnership and the Operating Partnership will issue an
equivalent number of Units to Weeks GP or Weeks LP, as appropriate.
As sole general partner, the Company (through Weeks GP) has the exclusive
power under the Partnership Agreement to manage and conduct the business of
the Operating Partnership, subject to the consent of a majority in interest of
the Limited Partners (other than Weeks LP) in connection with (i) the sale of
all or substantially all of the assets of the Operating Partnership, (ii) the
merger of the Operating Partnership into another entity if the Operating
Partnership is not the surviving entity, (iii) the dissolution of the
Operating Partnership or (iv) the acquisition of any personal or real property
other than in the name of the Operating Partnership or of certain other
entities in which the Operating Partnership has an interest. The board of
directors of the Company manages the affairs of the Company, which directs the
affairs of the Operating Partnership through Weeks GP. The Operating
Partnership cannot be terminated, except in connection with a sale of all or
substantially all of the assets of the Operating Partnership or a decree of
judicial dissolution of the Operating Partnership pursuant to the provisions
of Georgia law, prior to December 31, 2093, without a vote of the Limited
Partners. The Company's limited and general partnership interests in the
Operating Partnership entitle it to share in cash distributions from, and in
profits and losses of, the Operating Partnership in proportion to the
Company's percentage interest therein (through Weeks GP and Weeks LP) and
entitle the Company to vote (through Weeks LP) on all matters requiring a vote
of the Limited Partners (other than the matters set forth in subsections (i)
through (iv) of this paragraph).
The Operating Partnership will continue in full force and effect until the
earlier of (i) the bankruptcy, incapacity or other event that causes the last
general partner of the Operating Partnership to cease to be a general partner
unless, within 90 days after such event, a majority-in-interest of the Limited
Partners agrees in writing to continue the business of the Operating
Partnership and to the appointment of a successor general partner, (ii) the
election to dissolve the Operating Partnership made in writing by the General
Partner with the consent of a majority-in-interest of the Limited Partners
(other than Weeks LP), (iii) the sale or other disposition of all or
substantially all of the assets of the Operating Partnership, (iv) the entry
of a decree of judicial dissolution of the Operating Partnership pursuant to
Georgia law or (v) December 31, 2093, unless the General Partner, in its sole
and absolute discretion, extends such date by written notice to the Limited
Partners given prior to such date. Upon dissolution, the General Partner or
any liquidator will proceed to liquidate the assets of the Operating
Partnership and apply the proceeds therefrom in the order of priority set
forth in the Partnership Agreement.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
Under the Company's Restated Articles of Incorporation, as amended (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 ("Preferred Stock").
COMMON STOCK
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock. 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 Third Amended and Restated Bylaws
(the "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 are, with respect to the Original
Shares, and will be when issued, with respect to the Exchange Shares, fully
paid and nonassessable and are not, with respect to the Original Shares, and
will not be, with respect to the Exchange Shares, subject to preemptive or
similar rights. Subject to such preferential rights as may be granted by the
Board of Directors in connection with the past or 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 described below
or that may subsequently be issued by the Company.
The Common Stock is listed on the NYSE under the symbol "WKS." Wachovia
Bank, N.A. is the Company's transfer agent and registrar.
PREFERRED STOCK
General. 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, up to 20,000,000 shares
of 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. Except for the Series A Preferred Shares described below, no shares
of Preferred Stock currently are issued and outstanding.
Series A Preferred Shares. The following summary sets forth the material
terms and provisions of the Company's 8.00% Series A Cumulative Redeemable
Preferred Stock, par value $.01 per share
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(the "Series A Preferred Shares"), and is qualified in its entirety by
reference to the applicable provisions of the Articles and the Bylaws. The
Company issued 6,000,000 Series A Preferred Shares in October 1997.
General. The holders of the Series A Preferred Shares have no preemptive
rights with respect to any shares of the capital stock of the Company or any
other securities of the Company convertible into or carrying rights or options
to purchase any such shares. The Series A Preferred Shares are not subject to
any sinking fund or other obligation of the Company to redeem or retire the
Series A Preferred Shares.
The transfer agent, registrar and dividend disbursing agent for the Series A
Preferred Shares is Wachovia Bank, N.A.
Ranking. With respect to payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series A Preferred Shares rank senior to the
Common Stock.
While any Series A Preferred Shares are outstanding, the Company may not
authorize, create or increase the authorized amount of any class of security
that ranks senior to the Series A Preferred Shares with respect to the payment
of dividends or amounts payable upon liquidation, dissolution or winding up,
or any class of security convertible into shares of such a class, without the
consent of the holders of two-thirds of the outstanding Series A Preferred
Shares and Parity Shares (as defined below), voting as a single class.
However, the Company may create additional classes of other stock, increase
the authorized number of shares of Preferred Stock or issue series of
Preferred Stock ranking on a parity with the Series A Preferred Shares with
respect, in each case, to the payment of dividends and amounts upon
liquidation, dissolution and winding up (a "Parity Share") without the consent
of any holder of Series A Preferred Shares. See "--Voting Rights" below.
Dividends. Holders of the Series A Preferred Shares are entitled to receive,
when and a as declared by the Board of Directors, out of funds legally
available for the payment of dividends, cumulative preferential cash dividends
at the rate of 8.00% of the liquidation preference per annum (equivalent to
$2.00 per share per annum). Such dividends are cumulative from the date of
original issue and are payable quarterly in arrears on the last calendar day
(or, if such day is not a business day, the next business day) of each
January, April, July and October (each, a "Quarterly Dividend Date"). Any
dividends payable on the Series A Preferred Shares for any partial dividend
period will be computed on the basis of the actual number of days in such
period. Dividends are payable to holders of record as they appear in the
records of the Company at the close of business on the applicable record date,
which is the 15th day of the calendar month in which the Quarterly Dividend
Date falls or such other date designated as such by the Board of Directors of
the Company that is not more than 50 nor less than 10 days prior to such
Quarterly Dividend Date (each, a "Record Date"). Accrued and unpaid dividends
for any past dividend periods may be declared and paid at any time and for
such interim periods to holders of record on the applicable Record Date. Any
dividend payment made on the Series A Preferred Shares is credited against the
earliest accrued but unpaid dividend due with respect to the Series A
Preferred Shares that remains payable.
No dividends may be authorized by the Board of Directors or paid or set
aside for payment if any agreement of the Company prohibits such
authorization, payment or setting apart for payment or provides that such
authorization, payment or setting aside would constitute a breach thereof or a
default thereunder, or if such authorization or payment is restricted or
prohibited by law. Dividends on Series A Preferred Shares accrue whether or
not the Company has earnings, whether or not there are funds legally available
for the payment of such dividends and whether or not such dividends are
declared. No interest, or sum of money in lieu of interest, is payable in
respect of any dividend payment or payments on the Series A Preferred Shares
that is in arrears. Holders of Series A Preferred Shares are not entitled to
any dividends, whether payable in cash, property or shares of stock, in excess
of the full cumulative dividends, as described herein, on the Series A
Preferred Shares.
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If, for any taxable year, the Company elects to designate as "capital gain
dividends" (as defined in Section 857 of the Code) any portion (the "Capital
Gains Amount") of the dividends (within the meaning of the Code) paid or made
available for the year to holders of all classes of capital stock (the "Total
Dividends"), then the portion of the Capital Gains Amount that will be
allocable to holders of Series A Preferred Shares will be in the same portion
that the Total Dividends paid or made available to the holders of Series A
Preferred Shares for the year bears to the Total Dividends.
Except as provided in the next sentence, no dividends may be declared or
paid on any Parity Shares unless full cumulative dividends have been declared
and paid or are contemporaneously declared and funds sufficient for the
payment thereof set aside for such payment on the Series A Preferred Shares
for all prior dividend periods. If accrued dividends on the Series A Preferred
Shares for all prior dividend periods have not been paid in full, then any
dividend declared on the Series A Preferred Shares and on any Parity Shares
for any dividend period will be declared ratably in proportion to accrued and
unpaid dividends on the Series A Preferred Shares and such Parity Shares.
The Company may not (i) declare, pay or set apart funds for the payment of
any dividend or other distribution with respect to any Junior Shares (as
defined below) or (ii) redeem, purchase or otherwise acquire for consideration
any Junior Shares through a sinking fund or otherwise (other than a redemption
or purchase or other acquisition of Common Stock made for purposes of any
employee incentive or benefit plan of the Company or any subsidiary), unless
(A) all cumulative dividends with respect to the Series A Preferred Shares and
any Parity Shares at the time such dividends are payable have been paid or
declared and funds have been set apart for payment of such dividends and
(B) sufficient funds have been paid or declared and set apart for the payment
of the dividend for the current dividend period with respect to the Series A
Preferred Shares and any Parity Shares.
As used herein, (i) the term "dividend" does not include dividends or other
distributions payable solely in Fully Junior Shares (as defined below), or in
options, warrants or rights to subscribe for or purchase any Fully Junior
Shares, (ii) the term "Junior Shares" means the Common Stock and any other
class or series of shares of capital stock of the Company now or hereafter
issued and outstanding that ranks junior to the Series A Preferred Shares as
to the payment of dividends or in the distribution of assets or amounts upon
liquidation, dissolution and winding up and (iii) the term "Fully Junior
Shares" means Junior Shares (including the Common Stock) that rank junior to
the Series A Preferred Shares both as to the payment of dividends and
distribution of assets upon liquidation, dissolution and winding up.
Liquidation Rights. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of Series A Preferred
Shares will be entitled to receive out of assets of the Company legally
available for distribution to shareholders a liquidation preference of $25.00
per Series A Preferred Share, plus an amount per Series A Preferred Share
equal to all dividends (whether or not earned or declared) accrued and unpaid
thereon to the date of final distribution to such holders, and no more.
Until the holders of Series A Preferred Shares and Parity Shares have been
paid their liquidation preference in full, no payment will be made to any
holder of Junior Shares upon the liquidation, dissolution or winding up of the
Company. If upon any liquidation, dissolution or winding up of the Company,
the assets of the Company, or proceeds thereof, distributable among the
holders of the Series A Preferred Shares are insufficient to pay in full the
amount payable upon liquidation with respect to the Series A Preferred Shares
and any other Parity Shares, then such assets, or the proceeds thereof, will
be distributed among the holders of Series A Preferred Shares and any such
Parity Shares ratably in accordance with the respective amounts which would be
payable thereon were paid in full. Neither a consolidation nor a merger of the
Company with another entity, a statutory share exchange by the Company or a
sale, lease or transfer of all or substantially all of the Company's
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assets will be considered a liquidation, dissolution or winding up, voluntary
or involuntary, of the Company.
Redemption. The Series A Preferred Shares are not redeemable by the Company
prior to October 10, 2002. On and after October 10, 2002, the Company, at its
option, upon publication in a newspaper of general circulation in New York,
New York at least once a week for two successive weeks and written notice to
the holders of Series A Preferred Shares, may redeem the Series A Preferred
Shares, in whole or in part, at any time or from time to time, for cash at a
redemption price of $25.00 per share, plus accumulated, accrued and unpaid
dividends thereon to the date fixed for redemption, without interest. The
redemption price of the Series A Preferred Shares (other than the portion
thereof consisting of accrued and unpaid dividends) is payable solely out of
proceeds form the sale of other capital stock of the Company, which may
include Common Stock, Preferred Stock, depositary shares, interests,
participations or other ownership interests in the Company however designated
(other than debt securities convertible into or exchangeable for equity
securities), and any rights, warrants or options to purchase any thereof. If
fewer than all of the outstanding Series A Preferred Shares are to be
redeemed, the number of shares to be redeemed will be determined by the
Company and such shares may be redeemed pro rata from the holders of record of
such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares), by lot or by any
other method determined by the Company in its sole discretion to be equitable.
Unless full cumulative dividends on all Series A Preferred Shares and any
Parity Shares have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all
past dividend periods and the then-current dividend period, no Series A
Preferred Shares or Parity Shares may be redeemed or purchased by the Company
except pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Series A Preferred Shares or Parity Shares, as the
case may be.
Notice of redemption will be mailed at least 30 days but not more than 90
days before the redemption date by the registrar to each holder of record of
Series A Preferred Shares to be redeemed at the address shown on the stock
transfer books of the Company. Each notice shall state: (i) the redemption
date; (ii) the number of Series A Preferred Shares to be redeemed; (iii) the
redemption price per share; (iv) the place or places where certificates for
Series A Preferred Shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the Series A Preferred Shares will cease to
accrue on such redemption date. If fewer than all Series A Preferred Shares
are to be redeemed, the notice mailed to each such holder thereof shall also
specify the number of Series A Preferred Shares to be redeemed from such
holder. If notice of redemption of any Series A Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
the Company in trust for the benefit of the holders of Series A Preferred
Shares so called for redemption, then from and after the redemption date,
dividends will cease to accrue on the Series A Preferred Shares, such Series A
Preferred Shares shall no longer be deemed outstanding and all rights of the
holders of such shares will terminate, except the right to receive the
redemption price.
The holders of Series A Preferred Shares at the close of business on a
Record Date are entitled to receive the dividends payable with respect to such
Series A Preferred Shares on the corresponding Quarterly Dividend Date
notwithstanding the redemption thereof between such Record Date and the
corresponding Quarterly Dividend Date or the Company's default in the payment
of the dividend due. The Company will make no payment or allowance for unpaid
dividends, whether or not in arrears, on Series A Preferred Shares which have
been called for redemption, except as otherwise provided in the preceding
sentence or to the extent that such unpaid dividends are included in the
redemption price.
The Series A Preferred Shares have no stated maturity and are not subject to
any sinking fund or mandatory redemption.
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Voting Rights. Except as indicated below, or except as otherwise from time
to time required by applicable law, the holders of Series A Preferred Shares
have no voting rights.
If six consecutive quarterly dividends payable on the Series A Preferred
Shares or any Parity Shares are in arrears, whether or not earned or declared,
the number of directors then constituting the Board of Directors of the
Company will be increased by two, and the holders of Series A Preferred
Shares, voting together as a class with the holders of any other series of
Parity Shares, will have the right to elect two additional directors to serve
on the Company's Board of Directors at any annual meeting of shareholders or a
properly called special meeting of the holders of the voting Parity Shares
until all such dividends and dividends for the current quarterly period on the
Series A Preferred Shares and such other voting Parity Shares have been
declared and paid or set aside for payment. Such voting rights will terminate
when all such accrued and unpaid dividends have been declared and paid or set
aside for payment. The term of office of all directors so elected will
terminate with the termination of such voting rights.
The approval of two-thirds of the outstanding Series A Preferred Shares and
all other Parity Shares similarly affected, voting as a single class, is
required in order to (i) amend the Articles to affect materially and adversely
the rights, preferences or voting power of the holders of the Series A
Preferred Shares or the Parity Shares (except that if such amendment would
materially and adversely affect any right, preference, privilege or voting
power of the Series A Preferred Shares or another series of Parity Shares that
is not enjoyed by the other, then the approval of two-thirds of the holders of
all series similarly affected shall be required); (ii) enter into a share
exchange that affects the Series A Preferred Shares, or consolidate the
Company with or merge the Company with another entity, unless in each such
case each Series A Preferred Share remains outstanding without a material
adverse change to its terms and rights or is converted into or exchanged for
preferred stock of the surviving entity having preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption thereof identical to
that of the Series A Preferred Shares (except for changes that do not
materially and adversely affect the holders of Series A Preferred Shares); or
(iii) authorize, reclassify, create or increase the authorized or issued
amount of any shares of any class, or any security convertible into shares of
any class, having rights senior to the Series A Preferred Shares with respect
to the payment of dividends or the distribution of assets or amounts upon
liquidation, dissolution or winding up of the Company. However, the Company
may create additional classes of Parity Shares and Junior Shares, increase the
authorized number of Parity Shares and Junior Shares and issue additional
series of Parity Shares and Junior Shares without the consent of any holder of
Series A Preferred Shares.
Except as provided above and as required by applicable law, the holders of
Series A Preferred Shares are not entitled to vote on any merger or
consolidation involving the Company, on any share exchange or on a sale of all
or substantially all of the assets of the Company.
Retirement. Except as otherwise provided in the Articles, all Series A
Preferred Shares issued and reacquired by the Company shall be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to class or series.
Conversion. The Series A Preferred Shares are not convertible into or
exchangeable for any other property or securities of the Company at the option
of the holder.
Record Holders. The Company and its transfer agent may deem and treat the
record holder of any Series A Preferred Shares as the true and lawful owner
thereof for all purposes, and neither the Company nor its transfer agent shall
be affected by any notice to the contrary.
Restrictions on Transfer. For information regarding restrictions on
ownership of the Series A Preferred Shares, see "Description of Capital
Stock--Restrictions on Transfer."
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CERTAIN CHARTER AND BYLAW PROVISIONS
Shareholders' rights and related matters are governed by the Georgia
Business Corporation Code (the "GBCC") and the Articles and the Bylaws.
Certain provisions of the Articles and the Bylaws, which are summarized below,
may make it more difficult to change the composition of the Company's Board of
Directors and may discourage or make more difficult any attempt by a person or
group to obtain control of the Company.
Ownership Limit. The Ownership Limit (as defined herein) may have the effect
of precluding acquisition of control of the Company by a third party without
the consent of the Board of Directors. See "--Restrictions on Transfer."
Special Meetings. Under the Bylaws, special meetings of the shareholders may
be called by shareholders only if such shareholders hold outstanding shares
representing more than 50% of all votes entitled to be cast on any issue
proposed to be considered at any special meeting.
Staggered Board of Directors. The Articles provide that the Board of
Directors is divided into three classes of directors serving staggered terms.
Each class holds office until the third annual meeting for election of
directors following the election of such class. The staggered terms for
directors may affect the shareholders' ability to change control of the
Company.
Removal of Directors. Under the GBCC, unless otherwise set forth in a
corporation's articles of incorporation or in a bylaw adopted by its
shareholders, directors serving on a classified board may only be removed by
the shareholders for cause. In addition, the Bylaws 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.
Advance Notice of Director Nominations and New Business. The Bylaws provide
that with respect to an annual meeting of shareholders, the proposal of
business to be considered by shareholders may be made only (i) by or at the
direction of the Board of Directors or (ii) by a shareholder who has complied
with the advance notice procedures set forth in the Bylaws. In addition, with
respect to any meeting of shareholders, nominations of persons for election to
the Board of Directors may be made only (i) by or at the direction of the
Board of Directors or (ii) by any shareholder of the Company who is entitled
to vote at the meeting and has complied with the advance notice provisions set
forth in the Bylaws.
The advance notice provisions of the Bylaws could have the effect of
discouraging a takeover or other transaction in which holders of some, or a
majority, of the shares of Common Stock might receive a premium for their
shares over the then prevailing market price or which such holders might
believe to be otherwise in their best interests.
Relevant Factors to be Considered by the Board of Directors. The Articles
provide that in discharging the duties of their respective positions and in
determining what is believed to be in the best interests of the Company, the
Board of Directors, committees of the Board of Directors, and individual
directors, in addition to considering the effects of any action on the Company
or its shareholders, may consider the interests of the employees, customers,
suppliers and creditors of the Company and its subsidiaries are located, and
all other factors such directors consider pertinent; provided, however, that
this provision solely grants discretionary authority to the directors and no
constituency shall be deemed to have been given any right to consideration
hereby.
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LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY
The Articles eliminate, subject to certain exceptions, the personal
liability of a director to the Company or its shareholders for monetary
damages for breaches of such director's duty of care or other duties as a
director. The Articles do not provide for the elimination of, or any
limitation on, the personal liability of a director for (i) any appropriation,
in violation of the director's duties, of any business opportunity of the
Company, (ii) acts or omissions which involve intentional misconduct or a
knowing violation of law, (iii) unlawful corporate distributions or (iv) any
transaction from which the director received an improper personal benefit. The
Articles 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. 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 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 a 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
Company a written undertaking, executed personally or in his behalf, to repay
any advances if it is ultimately determined that he is not entitled to
indemnification. The Company may not indemnify a director (i) in connection
with a proceeding by or in the right of the Company in which the director was
adjudged liable to the Company, 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.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of the
Company's directors. The indemnification agreements require, among other
things, that the Company indemnify its directors to the fullest extent
permitted by applicable law as enacted or amended, and advance to directors
all reasonable expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The Company also must
indemnify and advance all reasonable expenses incurred by directors seeking to
enforce their rights under the indemnification agreements, and cover directors
under the Company's directors' and officers' liability insurance. Although the
indemnification agreements offer substantially the same scope of coverage
afforded by provisions in the Bylaws, they provide greater assurance to
directors that indemnification will be available, because, as contracts, they
cannot be modified unilaterally in the future by the Board of Directors or by
the shareholders to eliminate the rights provided thereunder.
GEORGIA ANTI-TAKEOVER STATUTES
The GBCC restricts certain business combinations with "interested
shareholders" (as defined below) (the "Business Combination Statute") and
contains fair price requirements applicable to certain mergers with certain
interested shareholders (the "Fair Price Statute"). In accordance with the
provisions of these statutes, the Company must elect in its Articles or Bylaws
to be covered by the restrictions imposed by these statutes. The Company has
not elected to be covered by such restrictions; however, the Company, by
action of its Board of Directors without shareholder approval, may in the
future amend its Bylaws to make such an election. Furthermore, shareholders
may amend or repeal the Bylaws or adopt new Bylaws (even though the Bylaws may
also be amended or repealed
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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.
The Fair Price Statute prohibits certain business combinations between a
Georgia business corporation and an interested shareholder. The Fair Price
Statute would permit the business combination to be effected if (i) certain
"fair price" criteria are satisfied, (ii) the business combination is
unanimously approved by the continuing directors, (iii) the business
combination is recommended by at least two-thirds of the continuing directors
and approved by a majority of the votes entitled to be cast by holders of
voting shares, other than voting shares beneficially owned by the interested
shareholder, or (iv) the interested shareholder has been such for at least
three years and has not increased his ownership position in such three-year
period by more than one percent in any twelve month period. The Fair Price
Statute is designed to inhibit unfriendly acquisitions that do not satisfy the
specified "fair price" requirements.
Pursuant to the GBCC, the Company cannot, subject to certain exceptions,
merge with or sell all or substantially all of the assets of the Company,
except pursuant to a resolution approved by shareholders holding a majority of
the shares entitled to vote on the resolution. In addition, the 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 (other than Weeks LP).
CERTAIN OTHER PROVISIONS OF THE COMPANY'S ARTICLES AND BYLAWS
Certain provisions of the Articles and the 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 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.
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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--
General."
RESTRICTIONS ON TRANSFER
The Articles contain certain restrictions on the number of shares of Common
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 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 applicable
attribution provisions of the Code, more than 7.5% of the outstanding shares
of any class of capital stock of the Company. The Ownership Limit also
provides that the sisters and brother of A. Ray Weeks, Jr. (the "Weeks
Family"), as well as all individuals (other than A. Ray Weeks, Jr.) from whom
shares of capital stock would be attributed to such persons under the
applicable attribution provisions of the Code, may not actually and
constructively own, in the aggregate, more than 10% of the outstanding shares
of any class of capital stock of the Company. The Ownership Limit further
provides that A. Ray Weeks, Jr. and the Weeks Family (collectively, the "Weeks
Siblings"), as well as all individuals from whom shares of capital stock would
be attributed to such persons under the applicable attribution provisions of
the Code, may not actually and constructively own, in the aggregate, more than
19% of the outstanding shares of any class of capital stock of the Company.
The Board of Directors may (but in no event will be required to) waive the
Ownership Limit with respect to a holder it if 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 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.
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Any such excess shares described above will be transferred automatically, by
operation of law, to a trust, the beneficiary of which will be a qualified
charitable organization selected by the Company (the "Beneficiary"). The
trustee of the trust will be empowered to sell such excess shares to a
qualified person or entity and distribute to a Prohibited Transferee an amount
equal to the lesser of the price paid by the Prohibited Transferee for such
excess shares or the sales proceeds received by the trust for such excess
shares. In the case of any excess shares resulting from any event other than a
transfer, or from a transfer for no consideration, the trustee will be
empowered to sell such excess shares to a qualified person or entity and
distribute to the Prohibited Owner an amount equal to the lesser of the fair
market value of such excess shares on the date of such event or the sales
proceeds received by the trust for such excess shares. Prior to a sale of any
such excess shares by the trust, the trustee will be entitled to receive, in
trust for the benefit of the Beneficiary, all dividends and other
distributions paid by the Company with respect to such excess shares, and also
will be entitled to exercise all voting rights with respect to such excess
shares. Any sales proceeds received by the trust in excess of the amount that
must be distributed to a Prohibited Transferee or Prohibited Owner, as the
case may be, will be distributed to the Beneficiary.
Any purported transfer of capital stock of the Company that would otherwise
cause the Company to be beneficially owned by fewer than 100 persons will be
null and void in its entirety, and the intended transferee will acquire no
rights in such stock.
Every owner of more than 1% (or such lower percentage as may be required by
the Code or regulations promulgated thereunder ("Treasury Regulations")) 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 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.
DESCRIPTION OF UNITS
GENERAL
All of the Company's assets are held by, and all of its operations are
conducted through, the Operating Partnership. At September 30, 1997, the
Company indirectly controlled the Operating Partnership through its wholly
owned subsidiaries, Weeks GP (the sole general partner of the Operating
Partnership) and Weeks LP, which own in the aggregate approximately 77.5% of
the Units thereof. The remaining Units are held by the Limited Partners. The
material terms of the Units, including a summary of certain terms and
provisions of the Partnership Agreement, are set forth below. The following
description of the terms and provisions of the Units and certain other matters
does not purport to be complete and is subject to and qualified in its
entirety by reference to applicable provisions of Georgia law and the
Partnership Agreement. For a comparison of the voting and other rights of
holders of Units and the Company's shareholders, see "Exercise of Exchange
Rights--Comparison of Ownership of Units and Common Stock."
Holders of Units (other than the General Partner) hold limited partnership
interests in the Operating Partnership and all holders of Units (including the
General Partner) are entitled to share in cash distributions from, and in the
profits and losses of, the Operating Partnership. Each Unit generally receives
distributions in the same amount received by each share of Common Stock. The
Units are exchangeable for shares of Common Stock on a one-for-one basis, or
cash, at the General Partner's option. The Units are registered under the
Exchange Act, which registration does not affect their
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restricted nature. The Units are not listed on the NYSE or any other exchange
or quoted on any national market system.
The Operating Partnership was formed as a limited partnership under the
Georgia Revised Uniform Limited Partnership Act ("GRULPA"). Holders of Units
have the rights to which limited partners are entitled under GRULPA. The Units
cannot be sold, assigned, pledged or otherwise disposed of by a holder unless
they are so registered or an exemption from such registration is available. In
addition, the Partnership Agreement imposes restrictions on the transfer of
Units, some of which are described herein.
PURPOSES, BUSINESS AND MANAGEMENT
The purpose of the Operating Partnership includes the conduct of any
business that may lawfully be conducted by a limited partnership formed under
GRULPA, except that the Partnership Agreement requires the business of the
Operating Partnership to be conducted in such a manner that will permit the
Company to be classified as a REIT under Section 856 of the Code, unless the
Company elects not to qualify as a REIT, or the Company ceases to qualify as a
REIT for reasons other than the conduct of the business of the Operating
Partnership. The Operating Partnership may, subject to the foregoing
limitation, enter into partnerships, joint ventures or similar arrangements
and may own interests in any other entity.
The General Partner, as sole general partner, has the exclusive power and
authority to conduct the business of the Operating Partnership, subject to the
consent of the Limited Partners in certain limited circumstances discussed
below. No Limited Partner, in his capacity as such, may take part in the
operation, management or control of the business of the Operating Partnership.
In particular, the Limited Partners expressly acknowledge in the Partnership
Agreement that the General Partner is acting on behalf of the Operating
Partnership and the Company's shareholders collectively, and generally is
under no obligation to consider the tax consequences to individual Limited
Partners of any action taken by it in exercising its authority under the
Partnership Agreement. The General Partner intends to make decisions in its
capacity as general partner of the Operating Partnership so as to maximize the
profitability of the Company as a whole, independent of the tax effects on the
Limited Partners. Neither the General Partner, nor the Operating Partnership
nor the Company will have liability to a Limited Partner as a result of an
income tax liability by such Limited Partner as a result of an action (or
inaction) by the General Partner pursuant to its authority under the
Partnership Agreement.
ABILITY TO ENGAGE IN OTHER BUSINESSES; CONFLICTS OF INTEREST
The General Partner may not conduct any business other than the business of
the Operating Partnership. In furtherance of the business and purposes of the
Operating Partnership and for the benefit of the Operating Partnership as a
whole, the General Partner may conduct business activities other than through
the Operating Partnership, conduct businesses not connected with the
ownership, acquisition and disposition of partnership interests and the
management of the business of the Operating Partnership, and own assets other
than the partnership interests.
DISTRIBUTIONS; ALLOCATIONS OF INCOME AND LOSS
The Partnership Agreement provides for the distribution of Net Operating
Cash Flow (as defined below), as determined in the manner provided in the
Partnership Agreement, to the General Partner and the Limited Partners in
proportion to their percentage interests in the Operating Partnership. "Net
Operating Cash Flow" is generally defined as all cash receipts of the
Partnership from all sources, excluding capital contributions, minus all cash
costs and expenses of the Operating Partnership,
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reserves, principal payments on debt and capital expenditures and other
adjustments. In addition, the Partnership Agreement generally provides for the
allocation to the General Partner and the Limited Partners of items of
Operating Partnership income and loss in accordance with their percentage
interests in the Operating Partnership.
BORROWING BY THE OPERATING PARTNERSHIP
The General Partner is authorized to cause the Operating Partnership to
borrow money and to issue and guarantee debt as it deems necessary for the
conduct of the activities of the Operating Partnership. Such debt may be
secured by deeds to secure debt, mortgages, deeds of trust, liens or
encumbrances on properties of the Operating Partnership. The General Partner
may also cause the Operating Partnership to borrow money to enable the
Operating Partnership to make distributions in an amount sufficient to permit
the Company, so long as it qualifies as a REIT, to avoid the payment of any
federal income tax.
REIMBURSEMENT OF GENERAL PARTNER
The General Partner will not receive any compensation for its services as
general partner of the Operating Partnership. The General Partner, however, as
a partner in the Operating Partnership, has the same right to allocations and
distributions as other partners of the Operating Partnership. In addition, the
Operating Partnership has agreed to reimburse the General Partner for all
expenses it incurs relating to the ownership and operation of, or for the
benefit of, the Operating Partnership, and any offering of Units, other
partnership interests or shares of Common Stock, including expenses in
connection with the registration of shares of Common Stock under the
Registration Statement of which this Prospectus is a part.
LIABILITY OF THE GENERAL PARTNER AND THE LIMITED PARTNERS
The General Partner is liable for all general obligations of the Operating
Partnership to the extent Operating Partnership funds are reasonably available
to the General Partner. Neither the Company nor the General Partner is
obligated to expend its individual funds for payments to third parties on
behalf of the Partnership or to undertake any individual liability or
obligation on behalf of the Operating Partnership. The General Partner is not
liable for the nonrecourse obligations of the Operating Partnership.
The Limited Partners are not required to make additional contributions to
the Operating Partnership. Assuming that a Limited Partner acts in conformity
with the provisions of the Partnership Agreement, the liability of the Limited
Partner for obligations of the Operating Partnership under GRULPA is limited,
subject to certain possible exceptions, generally to the loss of the Limited
Partner's investment in the Operating Partnership represented by his Units.
The Operating Partnership is qualified to conduct business in Georgia, North
Carolina, South Carolina, Tennessee and Florida. Maintenance of limited
liability may require compliance with certain legal requirements of those
jurisdictions and certain other jurisdictions. Limitations on the liability of
a limited partner for the obligations of a limited partnership have not
clearly been established in many states; accordingly, if it were determined
that the right, or exercise of the right by the Limited Partners, to make
certain amendments to the Partnership Agreement or to take other action
pursuant to the Partnership Agreement constituted "control" of the Operating
Partnership's business for the purposes of the statutes of any relevant state,
the Limited Partners might be held personally liable for the Operating
Partnership's obligations. The Operating Partnership operates in a manner the
General Partner deems reasonable, necessary and appropriate to preserve the
limited liability of the Limited Partners.
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EXCULPATION AND INDEMNIFICATION OF THE GENERAL PARTNER
The Partnership Agreement generally provides that the General Partner will
incur no liability to the Operating Partnership or any Limited Partner for
losses sustained or liabilities incurred as a result of errors in judgment or
of any act or omission if the General Partner acted in good faith. In
addition, the General Partner is not responsible for any misconduct or
negligence on the part of its agents provided the General Partner appointed
such agents in good faith. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisors and any action it takes or omits to take in reliance
upon the opinion of such persons, as to matters which the General Partner
reasonably believes to be within their professional or expert competence,
shall be conclusively presumed to have been done or omitted in good faith and
in accordance with such opinion.
The Partnership Agreement also provides for indemnification of the General
Partner, the directors, officers and Affiliates (as defined in the Partnership
Agreement) of the General Partner, the Company and the Operating Partnership
and such other persons as the General Partner may from time to time designate,
against any and all losses, claims, damages, liabilities, expenses, judgments,
fines, settlements (including, but not limited to, reasonable attorneys' fees
and expenses), and other amounts arising from any and all claims, demands,
actions, suits or proceedings that relate to the operations of the Operating
Partnership in which such person may be involved, or is threatened to be
involved, provided that the Operating Partnership shall not indemnify any such
person (i) for intentional misconduct or a knowing violation of the law, or
(ii) for any transaction for which such person received a personal benefit in
violation or breach of any provision of the Partnership Agreement.
SALES OF ASSETS
Under the Partnership Agreement, the General Partner generally has the
exclusive authority to determine whether, when and on what terms the assets of
the Operating Partnership (including the Properties) will be sold. A sale of
all or substantially all of the assets of the Operating Partnership to the
Company, the General Partner or an Affiliate of either (or a merger of the
Operating Partnership with another entity if the Operating Partnership is not
the surviving entity), however, requires the consent of a majority in interest
of the Limited Partners (other than Weeks LP).
REMOVAL OF THE GENERAL PARTNER; TRANSFER OF GENERAL PARTNER'S INTEREST
The Partnership Agreement provides that the General Partner may not be
removed by the Limited Partners. The General Partner may not transfer any of
its interests except in connection with a merger or sale of all or
substantially all its assets.
TRANSFERABILITY OF INTERESTS
The Partnership Agreement provides that the General Partner may not
voluntarily withdraw from, or transfer any portion of its interest in, the
Operating Partnership, without the consent of a majority-in- interest of the
Limited Partners (other than Weeks LP). In addition to certain other
prohibitions on transfer, in no event may a Limited Partner transfer his
interest in the Operating Partnership if such transfer would cause a
termination of the Operating Partnership for federal income tax purposes or
would cause, or in the judgment of the General Partner might cause, the
Company to cease to comply with the requirements under the Code for
qualification as a REIT. The Limited Partners are permitted at any time under
the Partnership Agreement to transfer the economic attributes of their
interests in the Operating Partnership to their Affiliates, upon notice to the
General Partner and upon providing the General Partner an opinion of counsel
reasonably acceptable to the General Partner to the effect that such transfer
may be effected without violation of any federal or state securities laws.
Such transferees, however, will not be admitted as substitute limited partners
unless the transferor so directs
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and the General Partner consents and the transferees agree to assume the
obligations of the transferor under the Partnership Agreement.
NO WITHDRAWAL BY LIMITED PARTNERS
No Limited Partner has the right to withdraw from or reduce his capital
contribution to the Operating Partnership, except as a result of the exchange
or transfer of his Units pursuant to the terms of the Partnership Agreement.
ISSUANCE OF ADDITIONAL LIMITED PARTNERSHIP INTERESTS
The General Partner is authorized, without the consent of the Limited
Partners, to cause the Operating Partnership to issue additional Units to the
partners or to other persons for such consideration and on such terms and
conditions as the General Partner deems appropriate. In addition, the General
Partner may cause the Operating Partnership to issue to the General Partner
and/or Weeks LP (as applicable) additional Units, or other additional
partnership interests in different series or classes which may be senior to
the Units, in conjunction with an offering of securities of the Company having
substantially similar rights, in which the proceeds thereof are contributed to
the Operating Partnership by the General Partner or Weeks LP (as determined by
the General Partner in its sole discretion). Consideration for additional
partnership interests may be cash or any property or other assets permitted by
GRULPA. In connection with the Company's offering of the Series A Preferred
Shares, the General Partner caused the Operating Partnership to issue to Weeks
LP 6,000,000 of the Operating Partnership's 8.00% Series A Preferred
Partnership Units having terms and provisions substantially identical to those
of the Series A Preferred Shares.
MEETINGS; VOTING
Meetings of the Limited Partners may be called only by the General Partner.
Limited Partners may vote either in person or by proxy at meetings. Any action
that is required or permitted to be taken by the Limited Partners of the
Operating Partnership may be taken at a meeting of the Limited Partners. On
matters in which Limited Partners are entitled to vote, each Limited Partner
(other than Weeks LP) will have a vote equal to the number of Units he holds
in the Operating Partnership, in connection with (i) the sale of all or
substantially all of the assets of the Operating Partnership, (ii) the merger
of the Operating Partnership into another entity if the Operating Partnership
is not the surviving entity, (iii) the dissolution of the Operating
Partnership or (iv) the acquisition of any personal or real property other
than in the name of the Operating Partnership or of certain other entities in
which the Operating Partnership has an interest. A transferee of Units who has
not been admitted as a Limited Partner of record with respect to such Units
will have no voting rights with respect to such Units, even if such transferee
holds other Units as to which it has been admitted as Limited Partner. The
Partnership Agreement does not provide for annual meetings of the Limited
Partners.
AMENDMENT OF PARTNERSHIP AGREEMENT
Amendments to the Partnership Agreement may be proposed by the General
Partner. Generally, the Partnership Agreement may be amended with the approval
of the General Partner and a majority- in-interest of the Limited Partners.
Certain amendments that would, among other things, convert a Limited Partner's
interest into a general partner's interest; modify the limited liability of a
Limited Partner; or alter or modify the Exchange Rights of a Limited Partner
must be approved by the General Partner and each Limited Partner that would be
adversely affected by such amendment. Notwithstanding the foregoing, the
General Partner shall have the power, without the consent of the Limited
Partners, to amend the Partnership Agreement as may be required to (i) with
the approval of the Independent Directors (as defined in the Partnership
Agreement) of the Company, add to the obligations of the General Partner or
the Company or surrender any rights or power granted
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to the General Partner or the Company, or any Affiliate of the General Partner
or the Company, for the benefit of the Limited Partners, (ii) reflect the
admission, substitution, termination, or withdrawal of partners in accordance
with the terms of the Partnership Agreement, (iii) establish the designations,
rights, powers, duties and preferences of any additional partnership interests
issued in accordance with the terms of the Partnership Agreement, (iv) reflect
a change that is of an inconsequential nature and does not materially
adversely affect the Limited Partners, or cure any ambiguity, correct or
supplement any provisions of the Partnership Agreement not inconsistent with
law or with other provisions of the Partnership Agreement, or make other
changes concerning matters under the Partnership Agreement that are not
otherwise inconsistent with the Partnership Agreement or law, (v) satisfy any
requirements of federal or state law or regulatory or judicial order, (vi)
change the name of the Operating Partnership, or (vii) maintain the Company's
status as a REIT.
BOOKS AND REPORTS
The General Partner is required to keep the Operating Partnership's books
and records at the principal office of the Operating Partnership. The books of
the Operating Partnership are required to be maintained for financial and tax
reporting purposes in accordance with generally accepted accounting
principles. The Limited Partners have the right, subject to certain
limitations, to receive copies of the Company's filings with the Commission,
the Operating Partnership's tax return, a list of partners, the Partnership
Agreement, the partnership certificate and all amendments thereto, and
information about the capital contributions of the partners.
The General Partner will furnish to each Limited Partner, as soon as
practicable after the close of each fiscal year, an annual report containing
financial statements of the Operating Partnership (or the Company, if
consolidated financial statements including the Operating Partnership are
prepared) for each fiscal year. The financial statements will be audited by a
firm of independent public accountants selected by the General Partner.
DISSOLUTION, WINDING UP AND TERMINATION
The Operating Partnership will continue in full force and effect until the
earlier of (i) the bankruptcy, incapacity or other event that causes the last
general partner of the Operating Partnership to cease to be a general partner
unless, within 90 days after such event, a majority in interest of the Limited
Partners agrees in writing to continue the business of the Operating
Partnership and to the appointment of a successor general partner, (ii) the
election to dissolve the Operating Partnership made in writing by the General
Partner with the consent of a majority in interest of the Limited Partners
(other than Weeks LP), (iii) the sale or other disposition of all or
substantially all of the assets of the Operating Partnership, (iv) the entry
of a decree of judicial dissolution of the Operating Partnership pursuant to
Georgia law or (v) December 31, 2093, unless the General Partner, in its sole
and absolute discretion, extends such date by written notice to the Limited
Partners given prior to such date. Upon dissolution, the General Partner or
any liquidator will proceed to liquidate the assets of the Operating
Partnership and apply the proceeds therefrom in the order of priority set
forth in the Partnership Agreement.
SHARES AVAILABLE FOR FUTURE SALE
At September 30, 1997, approximately 18,504,689 shares of Common Stock
(including 1,924,548 shares eligible to be sold in the public market pursuant
to the Company's 1995 shelf registration statement (File No. 33-96534)
covering shares of Common Stock issued or issuable in connection with the
Formation Transactions) were eligible to be sold in the public market.
Pursuant to this Prospectus, a total of 3,297,633 additional shares of Common
Stock will be eligible to be sold in the public market (see "Plan of
Distribution"). This represents an approximately 18% increase in the number of
shares
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of Common Stock of the Company eligible to be sold in the public market.
Additional shares of Common Stock may be available for sale in the public
markets from time to time pursuant to the following: (i) 930,579 shares have
been reserved for issuance pursuant to the Company's Incentive Stock Plan (as
of September 30, 1997, the Company had granted 38,764 shares of unvested
restricted Common Stock and had outstanding options for an aggregate of
732,950 shares of Common Stock), and (ii) the Company may offer from time to
time, pursuant to the Universal Shelf Registration Statement, shares of Common
Stock, shares of the Company's Preferred Stock convertible into shares of
Common Stock, warrants exercisable for shares of Common Stock, or debt
securities of the Operating Partnership, together or separately, and in
amounts, at prices and on terms to be determined at the time of sale, at an
aggregate initial offering price not to exceed $600,000,000 (there presently
is $450,000,000 of available capacity under the Universal Shelf Registration
Statement).
The shares of Common Stock acquired in the Formation Transactions or upon
exchange of Units ("Restricted Shares") are or will be "restricted" securities
within the meaning of Rule 144 promulgated under the Securities Act ("Rule
144") and may not be sold in the absence of registration under the Securities
Act unless an exemption from registration is available, including exemptions
contained in Rule 144. As described below under "Registration Rights," the
Company has granted the Selling Shareholders and certain other persons certain
registration rights with respect to their shares of Common Stock.
In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of acquisition of Restricted Shares from the
Company or any "affiliate" of the Company, as that term is defined under the
Securities Act (such one-year period will be measured from the date shares of
Common Stock are issued in exchange for Units, not from the date such Units
were issued), the acquiror or subsequent holder thereof is entitled to sell
within any three-month period a number of shares that does not exceed the
greater of (i) 1% of the then outstanding number of shares of Common Stock or
(ii) the average weekly trading volume of the Common Stock during the four
calendar weeks preceding the date on which notice of the sale is filed with
the Commission. Sales under Rule 144 are also subject to certain manner of
sale provisions, notice requirements and the availability of current public
information about the Company. If two years have elapsed since the date of
acquisition of Restricted Shares from the Company or from any affiliate of the
Company, and the acquiror or subsequent holder thereof is deemed not to have
been an affiliate of the Company at any time during the 90 days preceding a
sale, such person would be entitled to sell such shares in the public market
under Rule 144(k) without regard to the volume limitations, manner of sale
provisions, public information requirements or notice requirements described
above. As defined in Rule 144, an "affiliate" of an issuer is a person that
directly or indirectly, through the use of one or more intermediaries,
controls, is controlled by, or is under common control with, such issuer.
As of September 30, 1997, A. Ray Weeks, Jr., Director, Chairman and Chief
Executive Officer of the Company, Thomas D. Senkbeil, Director, Vice Chairman
and Chief Investment Officer of the Company, Forrest W. Robinson, Director,
President and Chief Operating Officer of the Company, John W. Nelley, Jr.,
Director and Managing Director of the Company, and Albert W. Buckley, Jr.,
Managing Director of the Company beneficially owned shares of Common Stock and
Units aggregating approximately 17.5% of the Common Stock, assuming the
exchange of all Units for shares of Common Stock on the basis of an initial
exchange ratio of one share of Common Stock for each Unit. The shares of
Common Stock beneficially owned by Messrs. Weeks, Senkbeil and Robinson are
subject to the registration rights described below in connection with the
Formation Registration Rights Agreement and the shares of Common Stock
beneficially owned by Messrs. Nelley and Buckley are subject to the
registration rights described below in connection with the NWI Registration
Rights Agreement.
26
<PAGE>
The Company has adopted the Incentive Stock Plan for the purpose of
attracting and retaining officers, other key employees and directors. The
Company has reserved 930,579 shares of Common Stock for issuance under the
Incentive Stock Plan. As of September 30, 1997, the Company had granted 38,764
shares of unvested restricted Common Stock and had outstanding options for an
aggregate of 732,950 shares of Common Stock to certain directors, executive
officers and employees of the Company.
No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, or the availability of shares for future sale, will
have on the market price prevailing from time to time. Sales of substantial
amounts of shares of Common Stock (including shares issued upon the exchange
of Units or exercise of stock options), or the perception that such sales
could occur, could adversely affect prevailing market prices for the shares.
REGISTRATION RIGHTS
The Company has filed the Registration Statement of which this Prospectus is
a part pursuant to its obligations under the Registration Rights Agreements.
The following summary does not purport to be complete and is qualified in its
entirety by reference to each of the Registration Rights Agreements.
Under the NWI Registration Rights Agreement, the Company is obligated to
file the Registration Statement as soon as practicable after November 1, 1997
with respect to the 1,080,752 Units issued in connection with the initial
closing of Properties acquired by the Company from the NWI Group (as defined
in the NWI Registration Rights Agreement) on November 1, 1996 (the "Initial
Closing") and to use its reasonable efforts to cause the Registration
Statement to be declared effective by the Commission as soon as practicable
thereafter. The Company is obligated to file a similar registration statement
with respect to Units issued in subsequent closings of Properties acquired by
the Company from the NWI Group on November 27, 1996, December 30, 1996 and
March 31, 1997 (the "Subsequent Closings") as soon as practicable following
the first anniversary of each such closing. The Registration Statement relates
to the 1,080,752 Acquisition Units issued in connection with the Initial
Closing and the 162,232, 89,277 and 501,488 Acquisition Units issued in
connection with the Subsequent Closings on November 27, 1996, December 30,
1996 and March 31, 1997, respectively. The Company also is obligated to keep
the Registration Statement continuously effective for a period expiring on the
earlier of (i) the date on which all of the securities covered thereby have
been sold pursuant thereto or any other effective registration statement and
(ii) the date on which (A) all securities covered thereby have been sold or
otherwise transferred pursuant to Rule 144 under the Securities Act and (B)
all securities covered thereby are eligible for sale under Rule 144 of the
Securities Act in a single transaction. The NWI Registration Rights Agreement
grants these rights to the holders of Common Stock and Units specified
therein. Any shares that have been sold pursuant to the Registration
Statement, or have been otherwise transferred and new certificates for them
have been issued without legal restriction on further transfer of such shares,
will no longer be entitled to the benefits of the NWI Registration Rights
Agreement.
Pursuant to the Formation Registration Rights Agreement, the Company has
granted Messrs. Weeks, Senkbeil and Robinson (and certain entities controlled
by them) certain "demand" and "piggyback" registration rights with respect to
the shares of Common Stock acquired by them in connection with the Formation
Transactions and the exercise of the Exchange Rights. With certain
limitations, these registration rights grant Messrs. Weeks, Senkbeil and
Robinson (and certain entities controlled by them) opportunities to demand
registration of all or any portion of their respective unregistered shares of
Common Stock and the right to have such shares of Common Stock registered
incidentally to any registration being conducted by the Company of shares of
Common Stock or securities substantially similar to shares of Common Stock.
The Company will bear all out-of-pocket expenses in connection with all
offerings pursuant to demand and piggyback rights. These registration
27
<PAGE>
rights became effective on August 17, 1997 and will be satisfied upon the
effectiveness of the Registration Statement.
The Company has no obligation under the Registration Rights Agreements to
retain any underwriter to effect the sale of the shares covered thereby.
Pursuant to the Registration Rights Agreements, the Company agreed to pay
all expenses of effecting the registration of the Secondary Shares (other than
underwriting discounts and commissions, fees and disbursements of counsel
representing the Selling Shareholders, and transfer taxes, if any) pursuant to
the Registration Statement. The Company also agreed to indemnify the Selling
Shareholders and their respective partners, officers and directors, as
applicable, and any person who controls any Selling Shareholder against
certain losses, claims, damages and expenses arising under the securities
laws. NWI Group agreed to indemnify the Company and each of its respective
directors and officers (including each director and officer of the Company who
signed the Registration Statement), and any person who controls the Company
against other losses, claims, damages and expenses arising under the
securities laws insofar as such loss, claim, damage or expense relates to
written information furnished to the Company by NWI Group expressly for use in
the Registration Statement or Prospectus or any amendment or supplement
thereto. In addition, Messrs. Weeks, Senkbeil and Robinson (and certain
entities controlled by them) severally agreed to indemnify the Company, the
other Selling Shareholders who are a party to the Formation Registration
Rights Agreement, and each of its respective directors and officers (including
each director and officer of the Company who signed the Registration
Statement), and any person who controls the Company against other losses,
claims, damages and expenses arising under the securities laws insofar as such
loss, claim, damage or expense relates to written information furnished to the
Company by Messrs. Weeks, Senkbeil or Robinson (or certain entities controlled
by them) expressly for use in the Registration Statement or Prospectus or any
amendment or supplement thereto.
SELLING SHAREHOLDERS
As described elsewhere herein, "Selling Shareholders" are (i) those persons
(or their permitted transferees) who received Original Shares in the Formation
Transactions, (ii) those persons (or their permitted transferees) who have
received and may receive Exchange Shares upon the exchange of Original Units
who may be affiliates of the Company, and (iii) those persons who have
received and may receive Exchange Shares upon the exchange of Acquisition
Units who may be affiliates of the Company.
The following table provides the names of and the number and percentage of
shares of Common Stock beneficially owned by each Selling Shareholder and the
number and percentage of shares of Common Stock beneficially owned by each
Selling Shareholder upon completion of the offering, assuming each Selling
Shareholder exchanges all of its Units for shares of Common Stock and sells
all of its shares of Common Stock pursuant to this Prospectus. Since the
Selling Shareholders may sell all, or some or none of their Secondary Shares,
no estimate can be made of the actual aggregate number of Secondary Shares
that are to be offered hereby or that will be owned by each Selling
Shareholder upon completion of the offering to which this Prospectus relates.
In addition to the Common Stock they currently own, certain Selling
Shareholders may also offer the Exchange Shares they will own if the Units
they hold are exchanged for shares of Common Stock. The number and percentage
of shares on the following table represents the number and percentage of
shares of Common Stock each of the Selling Shareholders holds plus the number
of Exchange Shares into which Units held by such Selling Shareholder may be
exchanged (if the Company elects to issue shares rather than pay cash upon
such exchange). The extent to which the person holds Units as opposed to
shares of Common Stock is set forth in the notes to the following table.
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<PAGE>
The Secondary Shares offered by this Prospectus may be offered from time to
time by the Selling Shareholders named below:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER THE OFFERING
(ASSUMING EXCHANGE OF (ASSUMING EXCHANGE OF
UNITS FOR COMMON STOCK) UNITS FOR COMMON STOCK)
--------------------------- --------------------------
PERCENTAGE NUMBER OF NUMBER OF PERCENTAGE OF
NUMBER OF OF SHARES OF SHARES SHARES OF SHARES OF
SHARES OF COMMON STOCK OFFERED COMMON COMMON STOCK
NAME COMMON STOCK OUTSTANDING HEREBY STOCK OUTSTANDING
- ---- ------------ ------------ --------- --------- -------------
<S> <C> <C> <C> <C> <C>
A. Ray Weeks, Jr.,
Chairman and Chief
Executive Officer...... 1,788,039(1) 7.80% 845,603 494,397(7) 2.16%
Thomas D. Senkbeil,
Vice Chairman and Chief
Investment Officer..... 213,474(2) * 101,542 68,682(8) *
Forrest W. Robinson,
President and Chief
Operating Officer...... 159,587(3) * 48,700 67,637(9) *
John W. Nelley, Jr.
Managing Director...... 1,979,249(4) 8.65% -- 145,500(10) *
Albert W. Buckley, Jr.,
Managing Director...... 1,993,749(5) 8.71% -- 140,000(11) *
Helen B. Weeks.......... 163,048(6) * 160,606 2,442 *
NWI Warehouse Group,
L.P.................... 1,933,749 8.47% 1,833,749 100,000 *
Buckley and Company Real
Estate, Inc............ 20,000 * 20,000 -- *
Weeks Foundation, Inc... 31,180 * 31,810 -- *
Weeks Horizon Corp...... 116,012 * 116,012 -- *
Weeks Hillside Corp..... 78,145 * 78,145 -- *
Weeks Southridge Corp... 42,993 * 42,993 -- *
HV, Inc................. 17,074 * 17,074 -- *
Weeks Management Corp... 1,142 * 1,142 -- *
RTF Management Corp..... 257 * 257 -- *
</TABLE>
- --------
* Represents less than 1% of the Company's outstanding Common Stock
(1) Includes (a) 3,467 shares of Common Stock and 400,155 Units held by trusts
of which Mr. Weeks is co-trustee and a 20% beneficiary, (b) 31,810 shares
of Common Stock held by Weeks Foundation, Inc., a foundation of which Mr.
Weeks is a director, (c) 255,623 Units held by corporations that A. Ray
Weeks, Jr. controls, including Units held by those corporations discussed
in notes (2) and (3) below, (d) 163,048 Units held by Mr. Weeks' spouse,
and (e) 73,333 shares of Common Stock issuable upon the exercise of stock
options that are currently exercisable or are exercisable within 60 days.
(2) Includes (a) 42,993 Units held by a corporation which is owned 60%, 30%
and 10%, respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson, (b)
257 Units held by a corporation which is owned 75%, 20% and 5%,
respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson, and (c) 61,667
shares of Common Stock issuable upon the exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(3) Includes (a) 42,993 Units held by a corporation which is owned 60%, 30%
and 10%, respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson, (b)
257 Units held by a corporation which is owned 75%, 20% and 5%,
respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson, and (c) 61,667
shares of Common Stock issuable upon the exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(4) Includes (a) 100,000 shares of Common Stock and 1,833,749 Units held by
NWI Warehouse Group, L.P., a partnership of which Mr. Nelley is a general
partner, and (b) 40,000 shares of Common Stock issuable upon the exercise
of stock options that are currently exercisable or are exercisable within
60 days. Mr. Nelley disclaims beneficial ownership of 78,437 of the shares
of Common Stock and 1,438,334 of the Units held by NWI Warehouse Group,
L.P.
(5) Includes (a) 100,000 shares of Common Stock and 1,833,749 Units held by
NWI Warehouse Group, L.P., a partnership of which Mr. Buckley is a general
partner, (b) 20,000 shares of Common Stock held by Buckely and Company
Real Estate, Inc., a corporation that Mr. Buckley controls, and (c) 40,000
shares of Common Stock issuable upon the exercise of stock options that
are currently exercisable or are exercisable within 60 days. Mr. Buckley
disclaims beneficial
29
<PAGE>
ownership of 78,841 of the shares of Common Stock and 1,445,747 of the
Units held by NWI Warehouse, L.P.
(6) Excludes 355,134 shares of Common Stock and 1,269,857 Units beneficially
owned by A. Ray Weeks, Jr., Mrs. Weeks' spouse.
(7) Includes (a) 3,467 shares of Common Stock and 400,155 Units held by trusts
of which Mr. Weeks is co-trustee and a 20% beneficiary, (b) 2,442 Units
held by Mr. Weeks' spouse, and (c) 73,333 shares of Common Stock issuable
upon the exercise of stock options that are currently exercisable or are
exercisable within 60 days.
(8) Includes 61,667 shares of Common Stock issuable upon the exercise of stock
options that are currently exercisable or are exercisable within 60 days.
(9) Includes 61,667 shares of Common Stock issuable upon the exercise of stock
options that are currently exercisable or are exercisable within 60 days.
(10) Includes (a) 100,000 shares of Common Stock held by NWI Warehouse Group,
L.P., a partnership of which Mr. Nelley is a general partner, and (b)
40,000 shares of Common Stock issuable upon the exercise of stock options
that are currently exercisable of are exercisable within 60 days. Mr.
Nelley disclaims beneficial ownership of 78,437 of the shares of Common
Stock held by NWI Warehouse Group, L.P.
(11)Includes (a) 100,000 shares of Common Stock held by NWI Warehouse Group,
L.P., a partnership of which Mr. Buckley is a general partner, and (b)
40,000 shares of Common Stock issuable upon the exercise of stock options
that are currently exercisable or are exercisable within 60 days. Mr.
Buckley disclaims beneficial ownership of 78,841 of the shares of Common
Stock held by NWI Warehouse Group, L.P.
30
<PAGE>
EXERCISE OF EXCHANGE RIGHTS
GENERAL
Each Limited Partner (other than certain Limited Partners subject to
contractual restrictions on their right to exercise the Exchange Rights for a
period of time) may, subject to certain limitations, elect to exercise the
Exchange Rights with respect to all or a portion of the Units held by such
Limited Partner at any time, by delivering a notice to the Operating
Partnership (the "Conversion Exercise Notice") to the Operating Partnership.
Once delivered, the Conversion Exercise Notice is irrevocable, subject to
compliance by the Operating Partnership with the terms of the Exchange Rights.
Upon exercise of the Exchange Rights, such Limited Partner will receive, at
the option of the General Partner, either (i) a number of shares of Common
Stock equal to the number of Units exchanged (subject to certain anti-dilution
adjustments for stock splits and similar events), (ii) cash in an amount equal
to the market value of the number of shares of Common Stock he would have
received pursuant to (i) above, or (iii) shares of Common Stock for part of
the Units exchanged and cash in such amount for the remainder of the Units
exchanged. The market value of the Common Stock for this purpose will be equal
to the average of the closing trading price of the Common Stock for the ten
consecutive trading days before the day on which the Conversion Exercise
Notice was received by the Operating Partnership.
In lieu of the Operating Partnership exchanging Units, the General Partner
or Weeks LP or a combination thereof, in the sole discretion of the General
Partner, has the right to assume directly and satisfy the Exchange Right of a
Limited Partner by issuing to such Limited Partner the shares of Common Stock
or paying the cash described in the preceding paragraph. The Company
anticipates that the General Partner generally will elect to assume directly
and satisfy any Exchange Right exercised by a Limited Partner through the
issuance of shares of Common Stock (the Exchange Shares), whereupon the
Company will acquire the Units being exchanged and will indirectly become the
owner of the Units through Weeks GP or Weeks LP, as applicable. Such an
acquisition by the Company will be treated as a sale of the Limited Partners'
Units to the Company for Federal income tax purposes. See "--Tax Consequences
of Exercise of Exchange Rights" below. Upon exchange, such Limited Partner's
right to receive distributions with respect to the Units exchanged will cease
(but if such Units are exchanged for Exchange Shares, the Limited Partner will
have rights as a shareholder of the Company from the time of his acquisition
of the Exchange Shares).
A Limited Partner must notify the General Partner of his desire to exercise
the Exchange Rights by sending the Conversion Exercise Notice in the form
attached as an exhibit to the Partnership Agreement, a copy of which is
available from the Operating Partnership. A Limited Partner must request the
exchange of at least 1,000 Units (or all of the Units held by such Limited
Partner, if less). The exchange generally will occur within 20 days after the
Conversion Exercise Notice is delivered by the Limited Partner to the
Operating Partnership, except that no exchange can occur if the delivery of
Exchange Shares would be prohibited under the Ownership Limit.
TAX CONSEQUENCES OF EXERCISE OF EXCHANGE RIGHTS
The following discussion summarizes the Federal income tax considerations
that are material to a Limited Partner in connection with the exercise of the
Exchange Rights. King & Spalding, which has acted as tax counsel to the
Company, is of the opinion that the following discussion fairly summarizes the
Federal income tax consequences that are material to a Limited Partner who so
exercises his Exchange Rights.
The following discussion 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 Limited Partner exercising his
Exchange Rights in light of his particular circumstances or to certain types
of Limited Partners (including
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<PAGE>
insurance companies, tax-exempt entities, financial institutions or broker-
dealers, foreign corporations and persons who are not citizens or residents of
the United States) who are subject to special treatment under the Federal
income tax laws.
EACH LIMITED PARTNER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF EXERCISING THE EXCHANGE
RIGHTS, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF SUCH EXERCISE AND OF POTENTIAL CHANGES AND APPLICABLE LAWS.
Tax Treatment of Exercise of Exchange Rights. If the General Partner assumes
and performs the Operating Partnership's obligations under the Exchange
Rights, the Partnership Agreement provides that the exchange will be treated
by the General Partner, the Operating Partnership and the Limited Partner
exercising his Exchange Rights as a sale of Units by such Limited Partner to
the General Partner at the time of such exchange. In that event, such sale
will be fully taxable to the Limited Partner exercising his Exchange Rights
and such Limited Partner will be treated as realizing for tax purposes an
amount equal to the sum of the cash or the value of the Common Stock received
in the exchange plus the amount of any Operating Partnership liabilities
allocable to the exchanged Units at the time of the exchange. The
determination of the amount of gain or loss is discussed more fully below. If
the Company does not elect to assume the Operating Partnership's obligations
under the Exchange Rights and the Operating Partnership exchanges such Units
for cash or shares of Common Stock that the General Partner contributes to the
Operating Partnership to effect such exchange, the exchange likely would be
treated for tax purposes as a sale of such Units to the Company in a fully
taxable transaction, although the matter is not free from doubt. In that
event, the Limited Partner exercising his Exchange Rights would be treated as
realizing an amount equal to the sum of the cash or the fair market value of
the shares of Common Stock received in the exchange plus the amount of any
Operating Partnership liabilities allocable to the exchanged Units at the time
of the exchange. In the event that an exchange of Units for shares of Common
Stock were treated as a redemption by the Operating Partnership rather than a
sale to the Company, Section 731(c) of the Code could apply to treat such
shares in the same manner as a distribution of money, and a Limited Partner
thus could recognize taxable gain as a result of such distribution.
If the Operating Partnership chooses to exchange a Limited Partner's Units
for cash that is not contributed by the Company to effect the exchange, the
tax consequences would be the same as described in the previous paragraph,
except that if the Operating Partnership exchanged less than all of a Limited
Partner's Units, the Limited Partner would not be permitted to recognize any
loss occurring on the transaction and would recognize taxable gain only to the
extent that the cash, plus the amount of any Operating Partnership liabilities
allocable to the exchanged Units, exceeded the Limited Partner's adjusted
basis in all of such Limited Partner's Units immediately before the exchange.
Tax Treatment of Disposition of Units by Limited Partner Generally. If a
Unit is exchanged in a manner that is treated as a sale of the Unit, or a
Limited Partner otherwise disposes of a Unit, the determination of gain or
loss from the sale or other disposition will be based on the difference
between the amount considered realized for tax purposes and the tax basis in
such Unit. See "--Basis of Units" below. Upon the sale of a Unit, the "amount
realized" will be measured by the sum of the cash and fair market value of
other property (e.g., Exchange Shares) received plus the amount of any
Operating Partnership liabilities allocable to the Unit sold. To the extent
the amount of cash or property received plus the allocable share of any
Operating Partnership liabilities exceeds the Limited Partner's basis for the
Unit disposed of, such Limited Partner will recognize gain. It is possible
that the amount of gain recognized or even the tax liability resulting from
such gain could exceed the amount of cash and the value of any other property
(e.g., Exchange Shares) received upon such disposition.
Except as described below, any gain recognized upon a sale or other
disposition of Units will be treated as gain attributable to the sale or
disposition of a capital asset. To the extent, however, that
32
<PAGE>
the amount realized upon the sale of a Unit attributable to a Limited
Partner's share of "unrealized receivables" of the Operating Partnership (as
defined in Section 751 of the Code) exceeds the basis attributable to those
assets, such excess will be treated as ordinary income. Unrealized receivables
include, to the extent not previously included in Operating Partnership
income, any rights to payment for services rendered or to be rendered.
Unrealized receivables also include amounts that would be subject to recapture
as ordinary income if the Operating Partnership had sold its assets at their
fair market value at the time of the transfer of a Unit.
Basis of Units. In general, a Limited Partner who received his Units in
exchange for the contribution of property had an initial tax basis in his
Units ("Initial Basis") equal to his basis in the contributed property.
Similarly, in general, a Limited Partner who contributed a partnership
interest in exchange for his Units had an Initial Basis in the Units equal to
his basis in the contributed partnership interest. A Limited Partner's Initial
Basis in his Units generally is increased by (i) such Limited Partner's share
of Operating Partnership taxable income and (ii) increases in his share of
liabilities of the Operating Partnership. Generally, such Limited Partner's
basis in his Units is decreased (but not below zero) by (i) his share of
Operating Partnership distributions, (ii) decreases in his share of
liabilities of the Operating Partnership, (iii) his share of losses of the
Operating Partnership and (iv) his share of nondeductible expenditures of the
Operating Partnership that are not chargeable to capital.
Potential Application of the Disguised Sale Regulations to an Exchange of
Units. There is a risk that the exercise by a Limited Partner of his Exchange
Rights may cause such Limited Partner's original transfer of property to the
Operating Partnership in exchange for Units to be treated as a "disguised
sale" of property. The Code and the Treasury Regulations thereunder (the
"Disguised Sale Regulations") generally provide that, unless one of the
prescribed exceptions is applicable, a partner's contribution of property to a
partnership and a simultaneous or subsequent transfer of money or other
consideration (including the assumption of or taking subject to a liability)
from the partnership to the partner will be presumed to be a sale, in whole or
in part, of such property by the partner to the partnership. Further, the
Disguised Sale Regulations provide generally that, in the absence of an
applicable exception, if money or other consideration is transferred by a
partnership to a partner within two years of the partner's contribution of
property, the transactions are presumed to be a sale of the contributed
property unless the facts and circumstances clearly establish that the
transfers do not constitute a sale. The Disguised Sale Regulations also
provide that if two years have passed between the transfer of money or other
consideration and the contribution of property, the transactions will be
presumed not to be a sale unless the facts and circumstances clearly establish
that the transfers constitute a sale.
Accordingly, if a Limited Partner exercises his Exchange Rights, the
Internal Revenue Service ("IRS") could contend that the Disguised Sale
Regulations apply because the Limited Partner will thus receive cash or shares
of Common Stock subsequent to his previous contribution of property to the
Operating Partnership. In that event, the IRS could contend that such
contribution of property was taxable as a disguised sale under the Disguised
Sale Regulations. Any gain recognized thereby may be eligible for installment
reporting under Section 453 of the Code, subject to certain limitations.
COMPARISON OF OWNERSHIP OF UNITS AND SHARES OF COMMON STOCK
Generally, an investment in shares of Common Stock is substantially
equivalent economically to an investment in Units in the Operating
Partnership. A holder of a share of Common Stock receives the same
distribution that a holder of a Unit receives and shareholders and Unitholders
generally share in the risks and rewards of ownership in the enterprise being
conducted by the Company (through the Operating Partnership). However, there
are some differences between ownership of Units and ownership of shares of
Common Stock, some of which may be material to investors.
33
<PAGE>
The information below highlights a number of the significant differences
between the Operating Partnership and the Company relating to, among other
things, form of organization, permitted investments, policies and
restrictions, management structure, compensation and fees, investor rights and
Federal income taxation, and compares certain legal rights associated with the
ownership of Units and Common Stock, respectively. These comparisons are
intended to assist Limited Partners in understanding how their investment will
be changed if their Units are exchanged for Common Stock. THIS DISCUSSION IS
SUMMARY IN NATURE AND DOES NOT CONSTITUTE A COMPLETE DISCUSSION OF THESE
MATTERS, AND HOLDERS OF UNITS SHOULD CAREFULLY REVIEW THE BALANCE OF THIS
PROSPECTUS AND THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART
FOR ADDITIONAL IMPORTANT INFORMATION ABOUT THE COMPANY.
Form of Organization and Assets Owned. The Operating Partnership is
organized as a Georgia limited partnership. The Operating Partnership owns
interests (directly and through subsidiary partnerships) in the Properties and
Development Land and, through Weeks Realty Services and Weeks Construction
Services, in the Company's third party management and development businesses.
The Company is a Georgia corporation. The Company has elected to be taxed as
a REIT and intends to maintain its qualification as a REIT. The Company's only
asset is its interest in the Operating Partnership, which gives the Company an
indirect investment in the Properties, Development Land and other assets owned
by the Operating Partnership.
Length of Investment. The Operating Partnership has a stated termination
date of December 31, 2093, although it may be terminated earlier or extended
under certain circumstances. The Company has a perpetual term and intends to
continue its operations for an indefinite time period.
Purpose and Permitted Investments. The purpose of the Operating Partnership
is the conduct of any business that may be lawfully conducted by a limited
partnership formed under GRULPA, except that the Partnership Agreement
requires the business of the Operating Partnership to be conducted in such a
manner that will permit the Company to be classified as a REIT under Section
856 of the Code, unless the Company elects not to qualify as a REIT or ceases
to qualify as a REIT for reasons other than the conduct of the business of the
Operating Partnership. The Operating Partnership may, subject to the foregoing
limitation, invest in or enter into partnerships, joint ventures or similar
arrangements and may own interests in any other entity.
Under the Articles, the Company may engage in any lawful activity permitted
by the GBCC. However, under the Partnership Agreement, neither the Company nor
the General Partner may conduct any business other than, in the case of the
General Partner, the business of the Operating Partnership and cannot own any
assets other than its, in the case of the General Partner, interest in the
Operating Partnership and, in the case of the Company, interests in entities
that hold interests in the Operating Partnership and other assets necessary to
carry out their respective responsibilities under the Partnership Agreement
and its Articles of Incorporation.
Additional Equity. The Operating Partnership is authorized to issue Units
and other partnership interests to the partners or to other persons for such
consideration and on such terms and conditions as the General Partner, in its
sole discretion, may deem appropriate. In addition, the General Partner may
cause the Operating Partnership to issue to the Company additional Units, or
other partnership interests in different series or classes which may be senior
to the Units, in conjunction with the offering of securities of the Company
having substantially similar rights, in which the proceeds thereof are
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contributed to the Operating Partnership. Consideration for additional
partnership interests may be cash or other property or other assets permitted
by GRULPA.
The Board of Directors of the Company may issue, in its discretion,
additional equity securities consisting of Common Stock or Preferred Stock;
provided, that the total number of shares issued does not exceed the
authorized number of shares of capital stock set forth in the Articles. As
long as the Operating Partnership is in existence, the proceeds of all equity
capital raised by the Company will be contributed to the Operating Partnership
in exchange for Units or other interests in the Operating Partnership.
Borrowing Policies. Under the Partnership Agreement, the Operating
Partnership has no restrictions on borrowings, and the General Partner has
full power and authority to borrow money on behalf of the Operating
Partnership. The Company is not restricted under its governing instruments
from incurring borrowings.
Other Investment Restrictions. Other than restrictions precluding
investments by the Operating Partnership that would adversely affect the
qualification of the Company as a REIT, there are no restrictions upon the
Operating Partnership's authority to enter into certain transactions,
including among others, making investments, lending Operating Partnership
funds, or reinvesting the Operating Partnership's cash flow and net sale or
refinancing proceeds.
The Articles and the Bylaws do not impose any restrictions upon the types of
investments made by the Company, except that under the Articles the Board of
Directors is prohibited from voluntarily electing not to be qualified as a
REIT, unless a majority of the shareholders vote to terminate the Company's
REIT status.
Management Control. All management powers over the business and affairs of
the Operating Partnership are vested in the General Partner of the Operating
Partnership, and no Limited Partner has any right to participate in or
exercise control or management power over the business and affairs of the
Operating Partnership, except that the General Partner of the Operating
Partnership may not, without the prior consent of the Limited Partners (other
than Weeks LP), (i) sell or otherwise dispose of all or substantially all of
the Operating Partnership's assets to the General Partner or an affiliate of
the General Partner, (ii) cause the Operating Partnership to merge into
another entity if the Operating Partnership is not the surviving entity, (iii)
subject to limited exceptions, take title to any property other than in the
name of the Operating Partnership and (iv) subject to certain exceptions,
cause or permit the Operating Partnership to dissolve. The General Partner may
not be removed by the Limited Partners with or without cause.
The Board of Directors has exclusive control over the Company's business and
affairs subject only to the restrictions in the Articles and Bylaws and the
Partnership Agreement. The Board of Directors is classified into three classes
of directors serving staggered three-year terms, with directors serving until
the election and qualification of their successors. At each annual meeting of
the shareholders, the successors of the class of directors whose terms expire
at that meeting will be elected. The policies adopted by the Board of
Directors may be altered or eliminated without a vote of the shareholders.
Accordingly, except for their vote in the elections of directors, shareholders
have no control over the ordinary business policies of the Company. The Board
of Directors cannot change the Company's policy of maintaining its status as a
REIT, however, without the approval of holders of a majority of the
outstanding shares of Common Stock.
Fiduciary Duties. Under the Partnership Agreement, the General Partner
generally is under no obligation to take into account the tax consequences to
any Limited Partner of any action taken by it, and the General Partner will
have no liability to a Limited Partner for any acts or omissions performed or
omitted to be performed by it within the scope of the authority conferred upon
the General Partner by the Partnership Agreement and GRULPA so long as the
General Partner acted in good faith.
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Under Georgia law, the directors must perform their duties in good faith, in
a manner that they believe in good faith to be in the best interests of the
Company and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances. Directors of the Company who act
in such a manner generally will not be liable to the Company for monetary
damages arising from their activities.
Management Liability and Indemnification. The Partnership Agreement
generally provides that the General Partner will incur no liability to the
Operating Partnership or any Limited Partner for losses sustained or
liabilities incurred as a result of errors in judgment or of any act or
omission, if the General Partner acted in good faith. In addition, the General
Partner is not responsible for any misconduct or negligence on the part of its
agents, provided the General Partner appointed such agents in good faith. The
General Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisors
and any action it takes or omits to take in reliance upon the opinion of such
persons, as to matters which the General Partner reasonably believes to be
within their professional or expert competence, shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such
opinion. The Partnership Agreement also provides for indemnification of the
General Partner, the directors, officers and affiliates of the General
Partner, and such other persons as the General Partner may from time to time
designate, against any and all losses, damages, claims, liabilities, expenses,
judgments, fines, settlements and other amounts incurred by reason of any act
performed in good faith or in enforcing the provisions of the indemnity;
provided, however, that the Operating Partnership shall not indemnify any such
person (i) for intentional misconduct or a knowing violation of the law, or
(ii) for any transaction for which such person received a personal benefit in
violation or breach of any provision of the Partnership Agreement.
The Articles eliminate 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 except for (i) any appropriation, in
violation of the directors's duties, of any business opportunity of the
Company, (ii) acts or omissions which involve intentional misconduct or a
knowing violation of law, (iii) unlawful corporate distributions or (iv) any
transactions from which the director derived 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. These provisions of
the Articles will limit the remedies available to a shareholder in the event
of certain breaches of a director's duties to such shareholder or the Company.
Anti-Takeover Provisions. Except in limited circumstances, the General
Partner of the Operating Partnership has exclusive management power over the
business and affairs of the Operating Partnership. The General Partner may not
be removed by the Limited Partners with or without cause. Under the
Partnership Agreement, a Limited Partner may, subject to certain restrictions,
transfer the economic attributes of such Limited Partners' partnership
interest to any person, upon notice to the Company and upon providing to the
Company an opinion of counsel reasonably acceptable to the Company to the
effect that such transfer may be effected without violation of any Federal or
state securities laws. Such transferee, however, will not be admitted as a
substitute Limited Partner unless the General Partner consents and the
transferee agrees to assume the obligations of the transferor under the
Partnership Agreement.
The Articles and the Bylaws contain a number of provisions that may have the
effect of delaying, deferring or preventing a change in control of the Company
even if a change in control were in the shareholders' best interest. These
provisions include, among others: (i) a staggered Board of Directors;
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(ii) authorized capital stock that may be issued as Preferred Stock in the
discretion of the Board of Directors; and (iii) the Ownership Limit, which is
designed to avoid concentration of share ownership in a manner that would
jeopardize the Company's status as a REIT under the Code. See "Description of
Capital Stock."
Voting Rights. Under the Partnership Agreement, the Limited Partners have
voting rights only as to the dissolution of the Operating Partnership, the
sale of all or substantially all of the assets of the Operating Partnership to
the General Partner or an affiliate of the General Partner or a merger in
which the Operating Partnership is not the surviving entity, and certain
amendments to the Partnership Agreement, as described more fully below.
Otherwise, all decisions relating to the operation and management of the
Operating Partnership are made by the General Partner. See "Description of
Units." As of September 30, 1997, the Company held approximately 77.5% of the
outstanding Units. As Units are exchanged by Limited Partners, the Company's
percentage ownership of the Units will increase. If additional Units are
issued to third parties, the Company's percentage ownership of the Units will
decrease.
Holders of Common Stock have the right to vote on, among other things, a
merger or share exchange or sale of substantially all of the assets of the
Company, certain amendments to the Articles and dissolution of the Company.
The Company is managed and controlled by a Board of Directors consisting of
three classes having staggered terms of office. Each class is to be elected by
the shareholders at an annual meeting of the Company. Each share of Common
Stock has one vote, and the Articles permit the Board of Directors to
designate and issue Preferred Stock in one or more series having voting power
which may differ from that of the Common Stock. See "Description of Capital
Stock--Common Stock" and "--Preferred Stock."
Vote Required to Sell Assets or Merge. Under the Partnership Agreement, the
sale, exchange, transfer or other disposition of all or substantially all of
the Operating Partnership's assets to the General Partner or an affiliate of
the General Partner or merger into another entity where the Operating
Partnership is not the surviving entity requires the consent of the General
Partner and holders of a majority-in-interest of the Limited Partners (other
than Weeks LP).
Under Georgia law, the sale of all or substantially all of the assets of the
Company or any merger or consolidation of the Company requires the approval of
the Board of Directors and holders of a majority of the outstanding shares of
Common Stock. No approval of the shareholders is required for the sale of less
than all or substantially all of the Company's assets.
Compensation, Fees and Distributions. The General Partner does not receive
any compensation for its services as General Partner of the Operating
Partnership. As a partner in the Operating Partnership, however, the General
Partner has the same right to allocations and distributions as other partners
of the Operating Partnership.
The directors and officers of the Company receive compensation for their
services.
Liability of Investors. Under the Partnership Agreement and applicable state
law, the liability of the Limited Partners for the Operating Partnership's
debts and obligations is generally limited to the amount of their investment
in the Operating Partnership.
Under Georgia law, shareholders are not personally liable for the debts or
obligations of the Company.
Nature of Investment. The Units constitute equity interests entitling each
Limited Partner to, among other things, his pro rata share of cash
distributions made to the partners of the Operating Partnership. The Operating
Partnership generally intends to retain and reinvest proceeds of the sale of
property or excess refinancing proceeds in its business.
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The shares of Common Stock constitute equity interests in the Company. The
Company is entitled to receive its pro rata share of distributions made by the
Operating Partnership with respect to the Units, and each shareholder will be
entitled to his pro rata share of any dividends or distributions paid with
respect to the Common Stock. The dividends payable to the shareholders are not
fixed in amount and are only paid if, when and as declared by the Board of
Directors. In order to qualify as a REIT, the Company must distribute at least
95% of its taxable income (excluding capital gains), and any taxable income
(including capital gains) not distributed will be subject to corporate income
tax.
Potential Dilution of Rights. The General Partner of the Operating
Partnership is authorized, in its sole discretion and without Limited Partner
approval, to cause the Operating Partnership to issue additional limited
partnership interests and other equity securities for any partnership purpose
at any time to the Limited Partners or to other persons on terms established
by the General Partner.
The Board of Directors of the Company may issue, in its discretion,
additional shares of Common Stock and has the authority to issue from the
authorized capital stock a variety of other equity securities of the Company
with such preferences, limitations and relative rights as the Board of
Directors may designate at the time. The issuance of additional shares of
either Common Stock or other similar equity securities may result in the
dilution of the interests of the shareholders.
Liquidity. A Limited Partner may transfer the economic attributes of his
partnership interest subject to certain exceptions and conditions, including,
transfers (i) to any Person who lacks the legal right, power or capacity to
own an interest in the Operating Partnership, (ii) in violation of certain
provisions of certain mortgages or trust deeds, (iii) if in the judgment of
the General Partner such transfer might subject the Operating Partnership, the
General Partner or any other person to liability under any Federal or state
securities laws, (iv) if such transfer would cause, or in the judgment of the
General Partner such transfer might cause, the General Partner to cease to
qualify as a REIT, (v) if such transfer would cause a termination of the
Operating Partnership for Federal income tax purposes, or (vi) if such
transfer would, in the opinion of counsel to the Operating Partnership, cause
the Operating Partnership to cease to be classified as a partnership for
Federal income tax purposes. See "Description of Units--Restrictions on
Transfer."
The Exchange Shares will be freely transferable as registered securities
under the Securities Act. The Common Stock is listed on the NYSE. The breadth
and strength of this secondary market will depend, among other things, upon
the number of shares outstanding, the Company's financial results and
prospects, the general interest in the Company's and other real estate
investments, and the Company's dividend yield compared to that of other debt
and equity securities.
Federal Income Taxation. The Operating Partnership is not subject to Federal
income taxes. Instead, each holder of Units includes its allocable share of
the Operating Partnership's taxable income or loss in determining its
individual Federal income tax liability. Income and loss from the Operating
Partnership generally is subject to the "passive activity" limitations under
the Code. Under the "passive activity" rules, income and loss from the
Operating Partnership that is considered "passive" income or loss generally
can be offset against income and loss (including passive loss carry forwards
from prior years) from other investments that constitute "passive activities"
(unless the Operating Partnership is considered a "publicly traded
partnership" within the meaning of Section 7704 of the Code and applicable
Treasury Regulations, in which case income and loss from the Operating
Partnership can only be offset against other income and loss from the
Operating Partnership). Income of the Operating Partnership, however, that is
attributable to dividends or interest received from Weeks Realty Services or
Weeks Construction Services does not qualify as passive income and cannot be
offset with losses and deductions from a "passive activity." Cash
distributions from the Operating Partnership are not taxable to a holder of
Units except to the extent they exceed such holder's basis in his interest in
the Operating Partnership (which will include such holder's allocable share of
the Operating Partnership's debt). Each year, holders of Units receive a
Schedule K-1 tax form containing detailed tax information
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for inclusion in preparing their Federal income tax returns. Holders of Units
are required, in some cases, to file state income tax returns and/or pay state
income taxes in the states in which the Operating Partnership owns property,
even if they are not residents of those states, and in some such states
(including Georgia) the Operating Partnership is required to remit a
withholding tax with respect to such nonresidents.
The Company has elected to be taxed as a REIT. So long as it continues to
qualify as a REIT, the Company will be permitted to deduct distributions paid
to its shareholders, which effectively will reduce (or eliminate) the "double
taxation" that typically results when a corporation earns income and
distributes that income to its shareholders in the form of dividends. A REIT,
however, is subject to Federal income tax on income that is not distributed
and also may be subject to Federal income and excise taxes in certain
circumstances. Dividends paid by the Company will be treated as "portfolio"
income and cannot be offset with losses from "passive activities."
Distributions made by the Company to its taxable domestic shareholders out of
current or accumulated earnings and profits will be taken into account by them
as ordinary income. Distributions that are designated as capital gain
dividends generally will be taxed as long-term capital gain, subject to
certain limitations. Distributions in excess of current or accumulated
earnings and profits will be treated as a non-taxable return of basis to the
extent of a shareholder's adjusted basis in his Common Stock, and the
remainder of the distribution will be taxed as capital gain. Each year,
shareholders of the Company will receive an IRS Form 1099, which is used by
corporations to report dividends paid to their shareholders. Shareholders who
are individuals generally should not be required to file state income tax
returns and/or pay state income taxes outside of their state of residence with
respect to the Company's operations and distributions. The Company may be
required to pay state income taxes in certain states.
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 and, to the extent such discussion
contains statements of law or legal conclusions, such statements and
conclusions are the opinion of King & Spalding. If the Company offers
securities other than Common Stock pursuant to this Prospectus, a discussion
of the United States federal income tax considerations relevant to such
Securities will be included in the Prospectus Supplement relating thereto.
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 "Subsidiaries" refers to Weeks Realty Services and Weeks Construction
Services, and the term "Subsidiary Partnerships" refers to the Financing
Partnership, the NC Financing Partnership, Weeks Special Purpose, LLC and
Weeks SPV Financing, LLC.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE,
OWNERSHIP, AND SALE OF SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL,
FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE, AND
ELECTION AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
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TAXATION OF THE COMPANY
General. The Company has made an election to be taxed as a REIT under
Sections 856 and 860 of the Code commencing with its taxable year that ended
on December 31, 1994. The Company has received a legal opinion from King &
Spalding to the effect that the Company was organized and has operated in
conformity with the requirements for qualification and taxation as a REIT for
its taxable years ended December 31, 1994, 1995, and 1996, 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 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 Subsidiary
Partnerships. Moreover, the Company's continued qualification and taxation as
a REIT depends upon the Company's ability to meet on a continuing basis,
through actual annual operating results, distribution levels and diversity of
stock ownership, the various qualification tests imposed by the Code and
discussed below. King & Spalding will not review compliance with these tests
on a continuing basis. No assurance can be given that the Company will satisfy
such tests on a continuing basis. See "--Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
U.S. federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and
judicial interpretations thereof.
As a REIT, the Company generally is not subject to U.S. federal corporate
income tax on net income that it currently distributes to shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that generally results from investment in a corporation.
Notwithstanding its REIT election, however, the Company is still subject to
U.S. federal income tax in the following circumstances. First, the Company is
taxed at regular corporate rates on any undistributed taxable income,
including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the "alternative minimum tax" on
its items of tax preference. Third, if the Company has (i) net income from the
sale or other disposition of "foreclosure property" (which is, in general,
property acquired by foreclosure or otherwise on default of a loan or lease
secured by the property) which is held primarily for sale to clients in the
ordinary course of business or (ii) other non-qualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate
on such income. Fourth, if the Company has net income from prohibited
transactions (which are, in general, certain sales or other dispositions of
property (other than foreclosure property) held primarily for sale to clients
in the ordinary course of business), such income will be subject to a 100%
tax. Fifth, if the Company should fail to satisfy the 75% gross income test or
the 95% gross income test (as discussed below), and has nonetheless maintained
its qualification as a REIT because certain other requirements have been met,
it will be subject to a 100% tax on the gross income attributable to the
greater of the amount by which the Company fails the 75% or 95% test,
multiplied by a fraction intended to reflect the Company's profitability.
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
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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 federal income
tax purposes, and the Company will be treated as directly holding the assets
and liabilities and receiving the tax items of these subsidiaries. In the case
of a REIT that is a partner in a partnership, Treasury Regulations provide
that the REIT will be deemed to own its proportionate share of the assets of
the partnership and will be deemed to be entitled to the income of the
partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in
the hands of the REIT for purposes of Section 856 of the Code, including
satisfying the gross income tests and asset tests (as discussed below). Thus,
the Company's proportionate share of the assets, liabilities, and items of
income of the Operating Partnership and the Financing Partnership will be
treated as assets, liabilities, and items of income of the Company for
purposes of applying the requirements described herein. Finally, pursuant to
Treasury Regulations relating to entity classification (the "Check-the-Box
Regulations"), an unincorporated entity that has a single owner is disregarded
as an entity separate from its owner for federal income tax purposes. Under
the Check-the-Box Regulations, Weeks Special Purpose, LLC, Weeks SPV
Financing, LLC, and the NC Financing Partnership have a single owner and
therefore will be disregarded for tax purposes. Accordingly, the assets,
liabilities and items of income, deduction, and credit of Weeks SPV Financing,
LLC and the NC Financing Partnership will be treated as the assets,
liabilities, and items of income, deduction and credit of the Operating
Partnership for federal income tax purposes.
Income Tests. In order to maintain qualification as a REIT, several 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
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of the foregoing. Third, for each taxable year ending on or before December
31, 1997, 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.
The Taxpayer Relief Act of 1997 signed by the President on August 5, 1997 (the
"1997 Act") repeals the 30% gross income test effective for the Company's
taxable year beginning January 1, 1998.
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. For the Company's taxable years beginning after
December 31, 1997, the "independent contractor" requirement will not apply to
noncustomary services provided by the Company, the value of which does not
exceed 1% of the gross income derived in the taxable year from the property
with respect to which the services are provided. For this purpose, such
services may not be valued at less than 150% of the Company's direct cost of
providing the services.
The Operating Partnership receives rents from a company controlled by Ray
Weeks' spouse that may under certain circumstances constitute a Related Party
Tenant. The Company also receives certain other types of non-rent income,
including its allocable share of any dividends and interest paid by the
Subsidiaries to the Operating Partnership (which will qualify under the 95%
gross income test but not under the 75% gross income test). The Company
believes, however, that the aggregate amount of such income and other non-
qualifying income in any taxable year will not cause the Company to exceed the
limits on non-qualifying income under the 75% and 95% gross income tests.
Any gross income derived from a prohibited transaction is taken into account
in applying the 30% gross income test necessary to qualify as a REIT for its
taxable year ending on or before
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December 31, 1997 (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
Subsidiary Partnerships 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 held "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 gross income,
multiplied by a fraction intended to reflect the Company's profitability. The
foregoing relief provisions do not apply in the case of a failure to satisfy
the 30% gross income test (which, as noted above, has been repealed commencing
with the Company's 1998 taxable year).
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 Subsidiary Partnerships 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, the Company must maintain certain records and request certain
information from its shareholders designed to disclose the actual ownership of
its stock. The Company intends to comply with such requirements.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year
and no relief provisions apply, the Company will be subject to tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. Any distributions made by the Company to shareholders in any
year in which the Company fails to qualify will not be deductible by the
Company. In such event,
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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 will be taxed as gain from the sale or exchange of a
capital asset held for more than one year (to the extent they do not exceed
the payor's actual net capital gain for the taxable year) without regard to
the period for which the shareholder 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 Common Stock, but rather reduce the
adjusted basis of such shares. To the extent that such distributions exceed
the adjusted basis of a shareholder's Common Stock, they are included in
income as capital gain, assuming the shares are a capital asset in the hands
of the shareholder. The tax rate to which such capital gain will be subject
will depend on the shareholder's holding period for his shares. See "Taxation
of Shareholders--Capital Gains Rates Under the 1997 Act" below.
For its taxable years beginning after December 31, 1997, the Company may
elect to treat all or part of its undistributed net capital gain as if it had
been distributed to the Company's shareholders. If the Company should make
such an election, its shareholders would be required to include in their
income as long-term capital gain their proportionate share of the Company's
undistributed net capital gain as designated by the Company. Each such
shareholder would be deemed to have paid his proportionate share of the income
tax imposed on the Company with respect to such undistributed net capital
gain, and this amount would be credited or refunded to the shareholder. In
addition, the tax basis of the shareholder's stock would be increased by his
proportionate share of undistributed net capital gains included in his income
less his proportionate share of the income tax imposed on the Company with
respect to such gains.
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 gain or loss realized upon a taxable disposition of shares
of Common Stock by a shareholder who is not a dealer in securities will be
treated as a capital gain or loss. Lower marginal tax rates for individuals
may apply in the case of capital gains depending on the holding period of the
shares of Common Stock that are sold. See "Taxation of Shareholders--Capital
Gains Rates Under the 1997 Act" below. However, any loss upon a sale or
exchange of Common Stock 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.
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Capital Gains Rates Under the 1997 Act. For non-corporate taxpayers, the tax
rate differential between capital gain and ordinary income may be significant.
The highest marginal income tax rate applicable to a non-corporate taxpayer's
ordinary income is 39.6%. Any capital gain generally will be taxed to a non-
corporate taxpayer at a maximum rate of 20% with respect to capital assets
held for more than 18 months, and generally will be taxed at a maximum rate of
28% with respect to capital assets held for more than one year but not more
than 18 months. The tax rates applicable to ordinary income apply to gain
attributable to the sale or exchange of capital assets held for one year or
less. In the case of capital gain attributable to the sale or exchange of
certain real property held for more than 18 months, an amount of such gain
equal to the amount of all prior depreciation deductions not otherwise
required to be taxed as ordinary depreciation recapture income will be taxed
at a maximum rate of 25%. With respect to distributions designated by the
Company as capital gain dividends, the Company may also designate (subject to
certain limits) whether the dividend is taxable to shareholders as a 20% rate
distribution, an unrecaptured depreciation distribution taxed at a 25% rate,
or a 28% rate distribution.
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
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 Common Stock is 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.
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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 Common Stock,
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 final
regulations in October 1997 that will modify the manner in which the Company
complies with its obligations to withhold against distributions to Non-U.S.
Shareholders. The new regulations generally will apply to distributions made
after December 31, 1998.
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. Because it generally 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 Company will withhold
against the distribution at the rate applicable to dividends. The Company is
required 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.
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Gain recognized by a Non-U.S. Shareholder upon the sale or exchange of
Common Stock generally will not be subject to U.S. tax unless the capital
stock constitutes a "United States real property interest" within the meaning
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). The
capital stock will not constitute a "United States real property interest" so
long as the Company qualifies as a "domestically controlled REIT." A
"domestically controlled REIT" is a REIT in which at all times during a
specified testing period less than 50% in value of its stock is held, directly
or indirectly, by Non-U.S. Shareholders. Because the Company is publicly
traded, there can be no assurance that the Company will qualify as a
domestically controlled REIT. If the Company does not qualify (or ceases to
qualify) as a "domestically controlled REIT," whether gain arising from the
sale or exchange of capital stock by a Non-U.S. Shareholder would be subject
to U.S. tax under FIRPTA will depend on whether the capital stock is
"regularly traded" (as defined by applicable Treasury Regulations) on an
established securities market (e.g., the New York Stock Exchange) and on the
size of the selling Non-U.S. Shareholders interest in the Company.
If gain on the sale or exchange of capital stock were subject to tax under
FIRPTA, then (i) the Non-U.S. Shareholder would be subject to regular U.S.
income tax with respect to such gain in the same manner as a U.S. shareholder
(subject to any applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals), and (ii) the
purchaser of the capital stock would be required to withhold and remit to the
IRS 10% of the purchase price unless the purchased capital stock was
"regularly traded" on an established securities market.
Notwithstanding the foregoing, gain from the sale or exchange of capital
stock not otherwise taxable under FIRPTA will be subject to U.S. tax if (i)
the investment in capital stock is treated as effectively connected with a
U.S. trade or business of a Non-U.S. Shareholder, in which case the Non-U.S.
Shareholder will be subject to the same treatment as U.S. shareholders with
respect to such gain, or (ii) the Non-U.S. Shareholder is a nonresident alien
individual who is present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, in which case the
individual will be subject to a 30% tax on the individual's capital gains.
OTHER TAX CONSIDERATIONS
Tax Status of Operating Partnership; Effect on REIT Qualification. All of
the Company's investments are made through the Operating Partnership, which in
turn owns all of the interests in NC Financing Partnership and substantially
all of the interests in the Financing Partnership. 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
corporations). 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
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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 Common Stock.
PLAN OF DISTRIBUTION
This Prospectus relates to (i) the possible issuance by the Company of the
Exchange Shares if, and to the extent that, holders of Original Units exercise
their Exchange Rights, (ii) the possible issuance by the Company of the
Exchange Shares if, and to the extent that, holders of Acquisition Units
exercise their Exchange Rights, (iii) the offer and sale from time to time of
the Original Shares by the holders thereof and (iv) the offer and sale from
time to time of any Exchange Shares that may be issued to persons who may be
affiliates of the Company. The Company has registered the Exchange Shares and
Original Shares for sale to provide the holders thereof with freely tradeable
securities, but registration of such shares does not necessarily mean that any
of such shares will be issued by the Company or offered or sold by the holders
thereof.
The Company will not receive any proceeds from the offering by the Selling
Shareholders or from the issuance of the Exchange Shares to holders of
Original Units or Acquisition Units, as applicable, upon receiving a
Conversion Exercise Notice (but it may acquire from such holders the Units
tendered for exchange). The Secondary Shares may be sold from time to time to
purchasers directly by any of the Selling Shareholders. Alternatively, the
Selling Shareholders may from time to time offer the Secondary Shares through
dealers or agents, who may receive compensation in the form of commissions
from the Selling Shareholders and/or the purchasers of Secondary Shares for
whom they may act as agent. Without limiting the foregoing, such sales may be
in the form of secondary distributions, exchange distributions, block trades,
ordinary brokerage transactions or a combination of such methods of sale. The
Selling Shareholders and any dealers or agents that participate in the
distribution of Secondary Shares may be deemed to be "underwriters" within the
meaning of the Securities Act and any profit on the sale of Secondary Shares
by them and any commissions received by any such dealers or agents might be
deemed to be underwriting commissions under the Securities Act.
At the time a particular offering of Secondary Shares is made, a Prospectus
Supplement, if required, will be distributed that will set forth the name and
names of any dealers or agents and any commissions and other terms
constituting compensation from the Selling Shareholders and any other required
information. The Secondary Shares may be sold from time to time at varying
prices determined at the time of sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Secondary Shares may be sold only through registered or
licensed brokers or dealers. In addition, in certain states, the Secondary
Shares may not be sold unless they have been registered or qualified for sale
in such state or an exemption from such registration or qualification
requirement is available and is complied with.
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The Company may from time to time issue up to 2,965,751 Exchange Shares upon
the acquisition of the Original Units or Acquisition Units, as applicable,
tendered for exchange. The Company will acquire the exchanging Limited
Partner's Units in exchange for each Exchange Share that the Company issues in
connection with these acquisitions. Consequently, with each exchange, the
Company's interest in the Operating Partnership will increase. The Company's
Common Stock currently trades on the NYSE, and any Common Stock offered hereby
will be listed on the NYSE, subject to official notice of issuance. No
assurances can be given that there will be a market for the Common Stock.
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, 1996, as amended by Form 10-K/A-2
filed with the Commission on September 26, 1997 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 financial statements of Lichtin Properties included in the
Company's Current Report on Form 8-K dated November 5, 1996 and filed November
6, 1996, incorporated by reference in the Company's Current Report on Form 8-K
dated December 31, 1996 and filed on January 15, 1997, as amended by Form 8-
K/A dated December 31, 1996 and filed on March 14, 1997, all 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 statements of revenue and certain expenses of the Lichtin 1997
Acquisition Properties and the NWI 1997 Acquisition Properties included in the
Company's Current Report on Form 8-K dated October 3, 1997 and filed on
October 6, 1997, 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 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 the Company's Current Report on
Form 8-K dated March 25, 1997 and filed on March 26, 1997, all 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.
50
<PAGE>
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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.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 4
Risk Factors............................................................... 7
The Company................................................................ 8
Description of Capital Stock............................................... 11
Description of Units....................................................... 20
Shares Available for Future Sale........................................... 25
Registration Rights........................................................ 27
Selling Shareholders....................................................... 28
Exercise of Exchange Rights................................................ 31
Federal Income Tax Considerations.......................................... 39
Plan of Distribution....................................................... 49
Legal Matters.............................................................. 50
Experts.................................................................... 50
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,297,633 SHARES
WEEKS CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
[LOGO OF WEEKS CORPORATION APPEARS HERE]
----------------
PROSPECTUS
----------------
December , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table itemizes the expenses incurred by the Company in
connection with the offering of the shares of Common Stock being registered.
All the amounts shown are estimates except the Commission's registration fee.
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $31,072
Legal Fees and Expense............................................ 50,000
Blue Sky Fees and Expenses (including fees of counsel)............ 5,000
Miscellaneous..................................................... 5,000
-------
Total........................................................... $91,072
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the GBCC, 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 owned 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
international misconduct or a knowing violation of law, (c) for 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 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 expense 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.
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 Bylaws are not exclusive of any other right which any person
may have under any statute, provision of the Articles, provision of the
Bylaws, agreement, vote of shareholders or disinterested directors or
otherwise. 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 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
II-1
<PAGE>
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 matter 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 director to the fullest extent
permitted by applicable law as enacted or amended, and advance to directors
all reasonable expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The Company also must
indemnify and advance all reasonable expenses incurred by directors seeking to
enforce their rights under the indemnification agreements, and cover directors
under the Company's directors' and officers' liability insurance. Although the
indemnification agreements offer substantially the same scope of coverage
afforded by provisions in the Company's By laws, 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.
(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.
II-2
<PAGE>
(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) (2) (B) of this Code section.
(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 or she was adjudged liable on the basis that personal benefit was
improperly received by him or her, whether or not involving action in his
or her 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
II-3
<PAGE>
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.
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.
II-4
<PAGE>
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 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 or she 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:
II-5
<PAGE>
(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.
(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
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<PAGE>
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.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
3.1 Restated Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-
K/A for the year ended December 31, 1994).
3.2 Articles of Amendment of the Registrant's Restated Articles of
Incorporation.
3.3 Articles of Amendment of the Registrant's Restated Articles of
Incorporation.
3.4 Third Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-
K dated December 31, 1996 filed with the Commission on January 15,
1997).
4.1 A specimen certificate of Preferred Stock (incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated
October 9, 1997 filed with the Commission on October 9, 1997).
4.2 A specimen certificate of Common Stock (incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form S-11
(File No. 33-80314)).
5.1 Opinion of King & Spalding regarding the validity of the securities
being registered.
8.1 Opinion of King & Spalding regarding tax matters.
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>
II-7
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) 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 acts 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 end of the estimated
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 a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration statement or
any material change to such information in the Registration Statement;
Provided, however, that the undertakings set forth in paragraph (i) and
(ii) above shall not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference in this Registration
Statement.
(b) That, for the purpose of determining any liability under 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.
(c) 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.
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
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, offices and controlling person 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 Securities
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 of
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.
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, 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 THIS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN ATLANTA, GEORGIA ON THE DAY OF DECEMBER,
1997.
Weeks Corporation
/s/ David P. Stockert
By: __________________________________
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. and David P. Stockert, and each and
either 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 names 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 DAY OF DECEMBER, 1997.
SIGNATURE TITLE
/s/ A. Ray Weeks, Jr. Chairman of the Board and Chief
- ------------------------------------- Executive Officer and a Director
A. RAY WEEKS, JR. (Principal Executive Officer)
/s/ Thomas D. Senkbeil Vice Chairman of the Board and Chief
- ------------------------------------- Investment Officer and a Director
THOMAS D. SENKBEIL
/s/ Forrest W. Robinson President and a Director
- -------------------------------------
FORREST W. ROBINSON
/s/ John W. Nelley, Jr. Managing Director and a Director
- -------------------------------------
JOHN W. NELLEY, JR.
/s/ David P. Stockert Senior Vice President and Chief
- ------------------------------------- Financial Officer (Principal Financial
DAVID P. STOCKERT Officer)
/s/ Arthur J. Quirk Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
ARTHUR J. QUIRK
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<PAGE>
/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/ Harold S. Lichtin Director
- -------------------------------------
HAROLD S. LICHTIN
/s/ William O. McCoy Director
- -------------------------------------
WILLIAM O. MCCOY
/s/ William Cavanaugh III Director
- -------------------------------------
WILLIAM CAVANAUGH III
II-10
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
3.1 Restated Articles of Incorporation of the Company (incorporated
by reference to Exhibit 3.1 to the Registrant's Annual Report
on Form 10-K/A for the year ended December 31, 1994)...........
3.2 Articles of Amendment of the Registrant's Restated Articles of
Incorporation..................................................
3.3 Articles of Amendment of the Registrant's Restated Articles of
Incorporation..................................................
3.4 Third Amended and Restated Bylaws of the Company (incorporated
by reference to Exhibit 3.1 to the Registrant's Current Report
on Form 8-K dated December 31, 1996 filed with the Commission
on January 15, 1997)...........................................
4.1 A specimen certificate of Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Registrant's Current Report on
Form 8-K dated October 9, 1997 filed with the Commission on
October 9, 1997)...............................................
4.2 A specimen certificate of Common Stock (incorporated by
reference to Exhibit 4.1 to the Registrant's Registration
Statement on Form S-11 (File No. 33-80314))....................
5.1 Opinion of King & Spalding regarding the validity of the
securities being registered....................................
8.1 Opinion of King & Spalding regarding tax matters...............
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>
EXHIBIT 3.2
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to add the following as a new Section
2.2.1 of the Corporation's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), to determine the terms of a series of the
Preferred Stock. All capitalized terms used herein shall have the meanings
ascribed to them in the Articles of Incorporation.
"Section 2.2.1 8.00% Series A Cumulative Redeemable Preferred Stock.
-------------
(i) TITLE. The series of Preferred Stock is hereby designated as the
"8.00% Series A Cumulative Redeemable Preferred Stock" (the "Series A Preferred
Stock").
(ii) NUMBER. The maximum number of authorized shares of the Series A
Preferred Stock shall be 6,000,000.
(iii) RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Corporation, the Series A Preferred Stock shall
rank (a) senior to any class or series of Equity Stock of the Corporation
ranking, as to the payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, junior to the Series A Preferred Stock
(collectively, "Junior Stock"), (b) senior to any class or series of Equity
Stock of the Corporation ranking, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, junior to
the Series A Preferred Stock (collectively, "Fully Junior Stock"), and (c) on a
parity with any class or series of Equity Stock of the Corporation ranking, as
to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share thereof are
different from those of the Series A Preferred Stock, if the holders of such
class or series of Equity Stock and the Series A Preferred Stock shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts
<PAGE>
of accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other (collectively, "Parity Stock").
(iv) DIVIDENDS.
(A) The holders of the then outstanding Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, cumulative dividends at the rate of $2.00 per
share per year, payable in equal amounts of $0.50 per share quarterly in cash on
the last day of each January, April, July and October or, if not a Business Day
(as hereinafter defined), the next succeeding Business Day. Dividends shall
begin to accrue and shall be fully cumulative from the first date on which the
pertinent shares of the Series A Preferred Stock are issued and sold and shall
first be payable on October 31, 1997 (each such payment date being hereafter
called a "Quarterly Dividend Date" and each period ending on a Quarterly
Dividend Date being hereinafter called a "Dividend Period"). Dividends shall be
payable to holders of record as they appear in the share records of the
Corporation at the close of business on the applicable record date (the "Record
Date"), which shall be the 15th day of the calendar month in which the
applicable Quarterly Dividend Date falls on or such other date designated by the
Board of Directors of the Corporation for the payment of dividends that is not
more than 50 nor less than 10 days prior to such Quarterly Dividend Date. The
amount of any dividend payable for any Dividend Period shorter than a full
Dividend Period shall be prorated and computed on the basis of the actual number
of days in such period. Dividends paid on the Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a per share basis among
all such shares at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York City
are authorized or required by law, regulation or executive order to close.
(B) The amount of any dividends accrued on any Series A Preferred Stock at
any Quarterly Dividend Date shall be the amount of any unpaid dividends
accumulated thereon, to and including such Quarterly Dividend Date, whether or
not earned or declared, and the amount of dividends accrued on any shares of
Series A Preferred Stock at any date other than a Quarterly Dividend Date shall
be equal to the sum of the amount of any unpaid dividends accumulated thereon,
to and including the last preceding Quarterly Dividend Date, whether or not
earned or declared, plus an amount calculated on the basis of the annual
dividend rate of $2.00 per share for the period after such last preceding
Quarterly Dividend Date to and including the date as of which the calculation is
made based on the actual number of days in such period.
(C) Except as provided in this Section 2.2.1, the Series A Preferred Stock
will not be entitled to any dividends in excess of full cumulative dividends as
described above and shall not be entitled to participate in the earnings or
assets of the Corporation, and no interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series A
Preferred Stock which may be in arrears.
-2-
<PAGE>
(D) Any dividend payment made on the Series A Preferred Stock shall first
be credited against the earliest accrued but unpaid dividend due with respect to
such shares which remains payable.
(E) If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Code), any portion
(the "Capital Gains Amount") of the dividends paid or made available for the
year to holders of all classes of shares (the "Total Dividends"), then the
portion of the Capital Gains Amount that shall be allocated to the holders of
the Series A Preferred Stock shall equal (i) the Capital Gains Amount multiplied
by (ii) a fraction that is equal to (a) the total dividends paid or made
available to the holders of the Series A Preferred Stock for the year over (b)
the Total Dividends.
(F) No dividends on the Series A Preferred Stock shall be authorized by
the Board of Directors or be paid or set apart for payment by the Corporation at
such time as the terms and provisions of any agreement of the Corporation,
including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provide that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on the
Series A Preferred Stock will accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized.
(G) So long as any Series A Preferred Stock remain outstanding, no
dividends, except as described in the immediately following sentence, shall be
declared or paid or set apart for payment on any class or series of Parity Stock
for any period unless full cumulative dividends have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Series A Preferred Stock for all Dividend
Periods terminating on or prior to the dividend payment date for such class or
series of Parity Stock. When dividends are not paid in full or a sum sufficient
for such payment is not set apart, as aforesaid, all dividends declared upon
Series A Preferred Stock and all dividends declared upon any other class or
series of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series A Preferred Stock and
accumulated and unpaid on such Parity Stock.
(H) So long as any shares of Series A Preferred Stock remain outstanding,
no dividends (other than dividends or distributions paid solely in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Fully Junior
Stock) shall be declared or paid or set apart for payment or other distribution
declared or made upon Junior Stock or Fully Junior Stock, nor shall any Junior
Stock or Fully Junior Stock be redeemed, purchased or otherwise acquired (other
than a redemption, purchase or other acquisition of shares of Common Stock made
for purposes of any employee incentive or benefit plan of the Corporation or any
subsidiary) for any consideration (or any monies be paid to or made available
for a sinking fund for the redemption of any such shares)
-3-
<PAGE>
by the Corporation, directly or indirectly (except by conversion into or
exchange for shares of Fully Junior Stock), unless in each case (i) the full
cumulative dividends on all outstanding shares of Series A Preferred Stock and
any other Parity Stock of the Corporation shall have been or contemporaneously
are declared and paid or declared and set apart for payment for all past
Dividend Periods with respect to the Series A Preferred Stock and all past
dividend periods with respect to such Parity Stock and (ii) sufficient funds
shall have been or contemporaneously are declared and paid or declared and set
apart for the payment of the dividend for the current Dividend Period with
respect to the Series A Preferred Stock and the current dividend period with
respect to such Parity Stock.
(v) LIQUIDATION RIGHTS.
(A) Upon the voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of the Series A Preferred Stock then
outstanding shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its shareholders, before any payment
or distribution shall be made on any Junior Stock, the amount of $25.00 per
share, plus accrued and unpaid dividends thereon.
(B) After the payment to the holders of the Series A Preferred Stock of
the full preferential amounts provided for in this Section 2.2.1, any other
series or class of Junior Stock or Fully Junior Stock shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid, and the holders of the Series A
Preferred Stock, as such, shall have no right or claim to any of the remaining
assets of the Corporation.
(C) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the Series A Preferred Stock shall
be insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other shares of any class or series of Parity Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of the
Series A Preferred Stock and any such other Parity Stock ratably in accordance
with the respective amounts that would be payable on such Series A Preferred
Stock and any such other Parity Stock if all amounts payable thereon were paid
in full.
(D) Neither a consolidation nor a merger of any other entity into or with
the Corporation, a statutory share exchange by the Corporation or a sale, lease,
transfer or conveyance of all or substantially all of the property or business
of the Corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 2.2.1.
(vi) REDEMPTION.
(A) OPTIONAL REDEMPTION. On and after October 7, 2002, the Corporation
may, at its option, redeem at any time all or, from time to time, any part of
the Series A Preferred Stock at a price per share (the "Redemption Price"),
payable in cash, of $25.00, together with all accrued
-4-
<PAGE>
and unpaid dividends to and including the date fixed for redemption (the
"Redemption Date"), without interest, to the full extent the Company has funds
legally available therefor. The Series A Preferred Stock shall have no stated
maturity and will not be subject to any sinking fund or mandatory redemption
provisions.
(B) PROCEDURES OF REDEMPTION.
(1) Notice of redemption will be given by publication in a newspaper
of general circulation in the City of New York, such publication to be made
once a week for two successive weeks commencing not less than 30 nor more
than 90 days prior to the Redemption Date. Notice of any redemption will
also be mailed by the registrar, postage prepaid, not less than 30 nor more
than 90 days prior to the Redemption Date, addressed to each holder of
record of the Series A Preferred Stock to be redeemed at the address set
forth in the share transfer records of the registrar. Any notice mailed in
the manner provided herein shall be conclusively presumed to have been
given on the date mailed whether or not the holder received the notice. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any
Series A Preferred Stock except as to the holder to whom the Corporation
has failed to give notice or except as to the holder to whom notice was
defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series A Preferred Stock may be
listed or admitted to trading, such notice shall state: (a) the Redemption
Date; (b) the Redemption Price; (c) the number of shares of Series A
Preferred Stock to be redeemed; (d) the place or places where certificates
for such shares are to be surrendered for payment of the Redemption Price;
and (e) that dividends on the shares to be redeemed will cease to
accumulate on the Redemption Date. If fewer than all of the shares of
Series A Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series A
Preferred Stock to be redeemed from such holder.
(2) If notice has been mailed in accordance with subparagraph
(vi)(B)(1) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption shall have
been irrevocably set aside by the Corporation, separate and apart from its
other funds in trust for the pro rata benefit of the holders of the Series
A Preferred Stock so called for redemption, so as to be, and to continue to
be available therefor, then, from and after the Redemption Date, dividends
on the Series A Preferred Stock so called for redemption shall cease to
accumulate, and said shares shall no longer be deemed to be outstanding and
shall not have the status of Series A Preferred Stock and all rights of the
holders thereof as shareholders of the Corporation (except the right to
receive the Redemption Price) shall cease. Upon surrender, in accordance
with such notice, of the certificates for any shares of Series A Preferred
Stock so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such shares of
Series A Preferred Stock shall be redeemed by the Corporation at the
Redemption Price. In case fewer than all the shares of Series A Preferred
Stock represented by any such
-5-
<PAGE>
certificate are redeemed, a new certificate or certificates shall be issued
presenting the unredeemed shares of Series A Preferred Stock without cost
to the holder thereof.
(3) Any funds deposited with a bank or trust company for the purpose
of redeeming shares of Series A Preferred Stock shall be irrevocably
deposited except that:
(a) the Corporation shall be entitled to receive from such bank
or trust company the interest or other earnings, if any, earned on any
money so deposited in trust, and the holders of any shares redeemed
shall have no claim to such interest or other earnings; and
(b) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Series A Preferred Stock entitled
thereto at the expiration of two years from the applicable Redemption
Date shall be repaid, together with any interest or other earnings
earned thereon, to the Corporation, and after any such repayment, the
holders of the shares entitled to the funds so repaid to the
Corporation shall look only to the Corporation for payment without
interest or other earnings.
(4) No Series A Preferred Stock may be redeemed except from proceeds
from the sale of other capital stock of the Corporation, including but not
limited to common stock, preferred stock, depositary shares, interests,
participations or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for
equity securities) or options to purchase any of the foregoing.
(5) Unless full accumulated dividends on all Series A Preferred Stock
and any other class or series of Parity Stock shall have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for all past Dividend Periods
and the then current Dividend Period, no Series A Preferred Stock or Parity
Stock shall be redeemed or purchased or otherwise acquired directly or
indirectly; provided, however, that the foregoing shall not prevent the
redemption of Series A Preferred Stock or Parity Stock to preserve the
Corporation's REIT status or the purchase or acquisition of Series A
Preferred Stock or Parity Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of Series A
Preferred Stock or Parity Stock, as the case may be.
(6) If the Redemption Date is after a Record Date and before the
related Quarterly Dividend Date, the dividend payable on such Quarterly
Dividend Date shall be paid to the holder in whose name the shares of
Series A Preferred Stock to be redeemed are registered at the close of
business on such Record Date notwithstanding the redemption thereof between
such Record Date and the related Quarterly Dividend Date or the
Corporation's default in the payment of the dividend due. Except as
provided above, the Company will make no payment or allowance for unpaid
dividends, whether or not in arrears, on Series A Preferred Stock to be
redeemed.
-6-
<PAGE>
(7) In case of redemption of less than all of the Series A
Preferred Stock at the time outstanding, the shares of Series A Preferred
Stock to be redeemed shall be selected by the Corporation by lot or pro
rata from the holders of record of such shares in proportion to the number
of shares of Series A Preferred Stock held by such holders (with
adjustments to avoid redemption of fractional shares) or by any other
equitable method determined by the Corporation in its sole and absolute
discretion.
(vii) VOTING RIGHTS. Except as required by law, and as set forth below,
the holders of the Series A Preferred Stock shall not be entitled to vote at any
meeting of the shareholders of the Corporation for election of Directors or for
any other purpose or otherwise to participate in any action taken by the
Corporation or the shareholders thereof, or to receive notice of any meeting of
shareholders and the consent of the holders of the Series A Preferred Stock
shall not be required for the taking of any corporate action.
(A) If and whenever dividends payable on the Series A Preferred Stock
or any series or class of Parity Stock shall be in arrears for six consecutive
Dividend Periods, whether or not declared, the number of directors then
constituting the Board of Directors shall be increased by two, and the holders
of such Series A Preferred Stock, together with the holders of shares of every
other series of Parity Stock, voting together as a single class regardless of
series, shall be entitled to vote for the election of two additional directors
of the Corporation at any annual meeting of shareholders or special meeting held
in place thereof, or at a special meeting of the holders of the Series A
Preferred Stock and the Parity Stock called as hereinafter provided. Whenever
all arrears in dividends on the Series A Preferred Stock and the Parity Stock
then outstanding shall have been paid and dividends thereon for the current
Dividend Period shall have been paid or declared and set apart for payment, then
the right of the holders of the Series A Preferred Stock and the Parity Stock to
elect such additional two directors shall immediately cease (but subject always
to the same provision for the vesting of such voting rights in the case of any
similar future arrearages in six consecutive Dividend Periods), and the terms of
office of all persons elected as directors by the holders of the Series A
Preferred Stock and the Parity Stock shall immediately terminate and the number
of the Board of Directors shall be reduced accordingly.
(B) At any time after such voting rights shall have been so vested in
the holders of the Series A Preferred Stock and the Parity Stock, the secretary
of the Corporation may, and upon the written request of holders of record of at
least ten percent (10%) of the Series A Preferred Stock then outstanding
(addressed to the secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Series A Preferred Stock and of the
Parity Stock for the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the shareholders or as
required by law. If any such special meeting required to be called as provided
above shall not be called by the secretary within 20 days after receipt of any
such request, then any holder of Series A Preferred Stock may call such meeting,
upon the notice provided above, and for that purpose shall have access to the
stock records of the Corporation. The directors elected at any such special
meeting shall hold office until the next annual meeting of the shareholders or
special meeting held in lieu thereof if such
-7-
<PAGE>
office shall not have previously terminated as provided above. If any vacancy
shall occur among the directors elected by the holders of the Series A Preferred
Stock and the Parity Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the Series A Preferred Stock and the Parity Stock or the successor of
such remaining director, to serve until the next annual meeting of the
shareholders or special meeting held in place thereof if such office shall not
have previously terminated as provided above.
(C) So long as any shares of Series A Preferred Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent of the holders
of at least two-thirds of the Series A Preferred Stock and the Parity Stock
outstanding at the time, acting as a single class regardless of series, given in
person or by proxy, either in writing or at a meeting,
(1) authorize or create, or increase the authorized or issued amount
of, any class or series of Equity Securities ranking prior to the Series A
Preferred Stock with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized shares of the Corporation into such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or
(2) amend, alter or repeal the provisions of the Articles of
Incorporation, including this Amendment, so as to materially and adversely
affect any right, preference, privilege or voting power of the Series A
Preferred Stock, the Parity Stock or the holders thereof; provided,
however, that the amendment of the provisions of the Articles of
Incorporation so as to authorize or create or to increase the authorized
amount of shares of any class of any Fully Junior Stock or Junior Stock
that are not senior in any respect to the Series A Preferred Stock, or any
shares of any class ranking on a parity with the Series A Preferred Stock
or the Parity Stock, shall not be deemed to adversely affect the rights,
preferences, privileges or voting power of the Series A Preferred Stock;
and provided further, however, that if any such amendment, alteration or
repeal would materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Stock or another series
of Parity Stock that is not enjoyed by some or all of the other series
otherwise entitled to vote in accordance herewith, the affirmative vote of
at least two thirds of the votes entitled to be cast by the holders of all
series similarly affected, similarly given, shall be required in lieu of
the affirmative vote of at least two thirds of the votes entitled to be
cast by the holders of the Series A Preferred Stock and the Parity Stock
otherwise entitled to vote in accordance herewith; or
(3) effect or validate a share exchange that affects the Series A
Preferred Stock, a consolidation with or merger of the Corporation into
another entity, or a consolidation with or merger of another entity into
the Corporation, unless in each such case each share of Series A Preferred
Stock (x) shall remain outstanding without a material and adverse change to
its terms and rights or (y) shall be converted into or exchanged for
preferred stock of the surviving entity having preferences, voting powers,
restrictions, limitations as to dividends,
-8-
<PAGE>
qualifications and terms or conditions of redemption thereof identical to
that of a share of Series A Preferred Stock (except for changes that do not
materially and adversely affect the holders of the Series A Preferred
Stock).
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Series A Preferred Stock shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
(D) On each matter submitted to a vote of the holders of Series A
Preferred Stock in accordance with this Section 2.2.1, or as otherwise required
by law, each share of Series A Preferred Stock shall be entitled to one vote.
With respect to each share of Series A Preferred Stock, the holder thereof may
designate a proxy, with each such proxy having the right to vote on behalf of
the holder.
(viii) RETIREMENT. Except as otherwise provided in the Articles of
Incorporation, all shares of Series A Preferred Stock which shall have been
issued and reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without designation
as to class or series.
(ix) CONVERSION. The shares of Series A Preferred Stock are not
convertible into or exchangeable for any other property or securities of the
Corporation.
(x) RECORD HOLDERS. The Corporation and the Corporation's transfer
agent may deem and treat the record holder of any shares of Series A Preferred
Stock as the true and lawful owner thereof for all purposes, and neither the
Corporation nor its transfer agent shall be affected by any notice to the
contrary.
III.
This Amendment was adopted by the Board of Directors on October 6, 1997.
IV.
This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.
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<PAGE>
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 7th day
of October, 1997.
WEEKS CORPORATION
By: /s/ A. R. Weeks, Jr.
-------------------------------------
A. R. Weeks, Jr.
Chairman and Chief Executive Officer
[CORPORATE SEAL]
Attest:
By: /s/ Elizabeth C. Belden
-------------------------------
Name: Elizabeth C. Belden
Title: Vice President and Secretary
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<PAGE>
EXHIBIT 3.3
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to delete subparagraph (vi)(A) of
Section 2.2.1 in its entirety and replace it with the following:
"(A) OPTIONAL REDEMPTION. On and after October 10, 2002, the Corporation
may, at its option, redeem at any time all or, from time to time, any part of
the Series A Preferred Stock at a price per share (the "Redemption Price"),
payable in cash, of $25.00, together with all accrued and unpaid dividends to
and including the date fixed for redemption (the "Redemption Date"), without
interest, to the full extent the Company has funds legally available therefor.
The Series A Preferred Stock shall have no stated maturity and will not be
subject to any sinking fund or mandatory redemption provisions."
III.
This Amendment was adopted by the Board of Directors on October 6, 1997.
IV.
This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.
<PAGE>
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 7th day
of October, 1997.
WEEKS CORPORATION
By: /s/ A. R. Weeks, Jr.
----------------------
A. R. Weeks, Jr.
Chairman and Chief Executive Officer
[CORPORATE SEAL]
Attest:
By: /s/ Elizabeth C. Belden
------------------------
Name: Elizabeth C. Belden
Title: Vice President and Secretary
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<PAGE>
EXHIBIT 5.1
December 19, 1997
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Re: Form S-3 Registration Statement relating to 3,297,633 shares of Common
----------------------------------------------------------------------
Stock, par value $.01 per share, 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 of up to 3,297,633 shares of Common Stock, par value
$.01 per share, of the Company, by the Company and certain shareholders of the
Company, as described in the Registration Statement. 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. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to such
terms in the Registration Statement.
Based upon 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;
(ii) The Original Shares are validly issued, fully paid and nonassessable;
and
<PAGE>
Weeks Corporation
December 19, 1997
Page 2
(iii) Upon the issuance and sale of the Exchange Shares as described in
the Registration Statement, the Exchange Shares will be validly issued, fully
paid and nonassessable.
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,
KING & SPALDING
<PAGE>
EXHIBIT 8.1
December 19, 1997
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Re: Weeks Corporation -- Shelf Registration
Ladies and Gentlemen:
We have acted as counsel for Weeks Corporation (the "Company") in
connection with that certain Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission
relating to the offering from time to time of up to 3,297,633 shares of Common
Stock of the Company, by the Company and certain shareholders of the Company, as
described in 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 Weeks Realty, L.P. (the "Operating Partnership")
and of Weeks Financing Limited Partnership (the "Financing Partnership") as
partnerships for federal income tax purposes; and
(iii) the accuracy of the discussion contained in the Prospectus,
which is included in the Registration Statement, under the following
headings: "Exercise of Exchange Rights -- Tax Consequences of Exercise of
Exchange Rights," "Exercise of Exchange Rights -- Comparison of Ownership
of Units and Shares of Common Stock -- Federal Income Taxation" and
"Federal Income Tax Considerations."
We understand that our opinion will be attached as an exhibit to the
Registration Statement and referred to in the Prospectus that is included in the
Registration Statement. We hereby consent to such use of our opinion.
<PAGE>
Weeks Corporation
December 19, 1997
Page 2
Unless otherwise indicated, all terms used herein with initial capital
letters shall have the same meaning as in the Prospectus.
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 the Operating
Partnership, as amended; (3) the respective Articles of Incorporation of the
Company, Weeks Realty Services, Inc., Weeks Construction Services, Inc., Weeks
GP Holdings, Inc., and Weeks LP Holdings, Inc., and bylaws of such corporations;
(4) the respective Agreements of Limited Partnership of the Financing
Partnership and of Weeks NC Financing Limited Partnership (the "NC Financing
Partnership"); (5) the respective Limited Liability Company Agreements of Weeks
Special Purpose, LLC and of Weeks SPV Financing, LLC; (6) the Employee Sharing,
Occupancy, and Administrative Services Agreement entered into by the Operating
Partnership, Weeks Realty Services, Inc. and Weeks Construction Services, Inc.;
and (7) 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 or telecopies, 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 also have 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, including
certain representations set forth in a letter to us of even date herewith.
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 years ending December 31, 1995 and
December 31, 1996, and its current organization and method of operation should
allow it to continue to qualify as a REIT.
(2) The Operating Partnership and the Financing Partnership, at all times
during their respective existences, have qualified as partnerships for federal
income tax purposes and not as "publicly traded partnerships" under Section
7704 of the Code.
<PAGE>
Weeks Corporation
December 19, 1997
Page 3
(3) The discussion contained in the Prospectus under the headings "Exercise
of Exchange Rights -- Tax Consequences of Exercise of Exchange Rights,"
"Exercise of Exchange Rights -- Comparison of Ownership of Units and Shares of
Common Stock -- Federal Income Taxation" and "Federal Income Tax Considerations"
fairly summarizes the federal income tax considerations that are material to a
holder of Common Stock and, to the extent such discussion contains statements of
law or legal conclusions, such statements and conclusions are the opinion of
King & Spalding.
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 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 Company.
Very truly yours,
KING & SPALDING
<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 21, 1997
included in Weeks Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Form 10-K/A-2 filed on September 26, 1997, our
report dated September 24, 1996 included in Weeks Corporation's Current Report
on Form 8-K dated November 5, 1996 and filed on November 6, 1996, and our
reports dated September 8, 1997 included in Weeks Corporation's Current Report
on Form 8-K dated October 3, 1997 and filed on October 6, 1997, and to all
references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
December 16, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Weeks Corporation
for the registration of 3,297,633 shares of common stock 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 as of
December 31, 1995 and 1994 and for each of the years then ended included in the
Form 8-K/A of Weeks Corporation dated November 1, 1996, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Atlanta, Georgia
December 16, 1997
