<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1998
REGISTRATION NO. 333-42821
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
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(2)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 value
per share............. 3,953,637 $31.625 $125,033,770 $37,193
</TABLE>
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- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee for
the additional 656,004 shares being registered pursuant to this Amendment
No. 1 to Registration Statement. 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 January 22, 1998
as reported on the New York Stock Exchange.
(2) $31,072 of the registration fee was paid previously in connection with the
initial filing of this Registration Statement.
--------------
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 JANUARY 26, 1998
PROSPECTUS
3,953,637 SHARES
[LOGO OF WEEKS WEEKS CORPORATION
CORPORATION APPEARS
HERE] COMMON STOCK
----------
This Prospectus relates to the offer and sale from time to time by the
holders thereof of up to (i) 331,882 shares (the "Original Shares") of common
stock, par value $.01 per share ("Common Stock"), of Weeks Corporation (the
"Company") and (ii) 3,621,755 shares (the "Exchange Shares") of Common Stock
if, and to the extent that, the holders of up to 3,621,755 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 Units
for shares of Common Stock. The holders of the Original Shares and the Exchange
Shares are collectively referred to herein as the "Selling Shareholders". The
Original Shares and the Units were issued in connection with (i) the Formation
Transactions (as herein defined), (ii) the acquisition of Properties (as herein
defined) from NWI Warehouse Group, L.P. ("NWI") and the real estate operations
of Buckley & Company Real Estate, Inc. ("Buckley"), and (iii) the acquisition
of interests in the Beacon Centre Properties (as herein defined) from Laurence
Tisch, Preston Tisch, The Benenson Capital Company and Raha Associates, Inc.
(collectively, the "Beacon Centre Partners"). 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"), (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 (iii) that
certain Registration Rights Agreement, dated as of January 9, 1998, by and
among the Company and the Beacon Centre Partners (the "Beacon Centre
Registration Rights Agreement" and, together with the Formation Registration
Rights Agreement and the NWI 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 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 January , 1998.
<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 January 9, 1998 filed
with the Commission on January 23, 1998;
(vi) The Company's Current Report on Form 8-K dated October 7, 1997 filed
with the Commission on October 9, 1997;
(vii) The Company's Current Report on Form 8-K dated October 3, 1997
filed with the Commission on October 6, 1997;
(viii) The Company's Current Report on Form 8-K dated May 7, 1997 filed
with the Commission on May 12, 1997;
(ix) The Company's Current Report on Form 8-K dated May 2, 1997 filed
with the Commission on May 2, 1997;
2
<PAGE>
(x) The Company's Current Report on Form 8-K dated March 25, 1997 filed
with the Commission on March 26, 1997;
(xi) 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);
(xii) The Company's Current Report on Form 8-K dated November 5, 1996
filed with the Commission on November 6, 1996;
(xiii) 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
(xiv) 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.
At September 30, 1997, the Company's portfolio was 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. At September 30, 1997, industrial Properties represented
approximately 90% of the square footage of all of the Properties, and suburban
office Properties represented 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.
At September 30, 1997, the Company also owned or controlled (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.
RECENT DEVELOPMENTS
On January 9, 1998, the Company acquired an approximately 2.3 million square
foot portfolio of properties and approximately 5 acres of land subject to
ground leases in the Beacon Centre project in Miami, Florida (the "Beacon
Centre Properties"). The Beacon Centre Properties are comprised of 24 buildings
of business distribution, business service, office and retail space on
approximately 205 acres. At December 31, 1997, the average Occupancy Rate of
the Beacon Centre Properties was approximately 99%. The purchase price for the
Beacon Centre Properties of approximately $175 million, including closing costs
and acquisition expenses, consisted of the issuance of 928,570 Units; the
assumption of approximately $78.2 million of mortgage indebtedness; the
assumption of certain other liabilities in excess of certain other assets of
approximately $4.2 million; and cash of approximately $64.3 million. In
connection with the acquisition, the Company has also agreed, subject to
customary closing conditions, to acquire a 90,000 square foot building under
development and approximately 8.4 acres of adjacent undeveloped land.
RISK FACTORS
Prospective investors 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 the offer and sale from time to time by the
holders thereof of up to (i) 331,882 Original Shares and (ii) 3,621,755
Exchange Shares if, and to the extent that, the holders of up to 3,621,755
Units exercise their respective rights to exchange such Units for cash or
shares of Common Stock (the "Exchange Rights"). (Original Shares and Exchange
Shares are collectively referred to herein as the "Secondary Shares"). The
Secondary 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 certain of the 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 Units,
1,112,002 of which were issued to certain of the Selling Shareholders. The
remaining Units covered by this Prospectus 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, and the Company's acquisition of
the Beacon Centre
5
<PAGE>
Properties on January 9, 1998. The Operating Partnership issued to NWI a total
of 1,080,752, 162,232, 89,277 and 501,488 Units, respectively, on each of the
foregoing dates. An additional 20,000 Units were issued to Buckley on November
1, 1996 in connection with the acquisition of the real estate operations of
Buckley on that date. In connection with the Company's acquisition of the
Beacon Centre Properties, on January 9, 1998, the Operating Partnership issued
a total of 928,570 Units to the partners holding interests in the Beacon Centre
Properties, 656,004 of which were issued to the Beacon Centre Partners.
The Exchange Rights permit the holders thereof to exchange each Unit or for
one share of Common Stock (subject to certain adjustments). Pursuant to the
Second Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, as amended (the "Partnership Agreement"), the General 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., also 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 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 3,621,755 Exchange Shares upon the
acquisition of 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 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 offered or sold by the holders thereof.
6
<PAGE>
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below prior to making an investment decision regarding the
Common Stock offered hereby.
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 3,953,637 additional shares of
Common Stock will be eligible to be sold in the public market. See "Plan of
Distribution." This represents an approximately 21% increase in the number of
shares of Common Stock of the Company eligible to be sold in the public market
as of September 30, 1997. 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.
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.
At September 30, 1997, the Company's portfolio was 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. At September 30, 1997, industrial Properties represented
approximately 90% of the square footage of all of the Properties, and suburban
office Properties represented approximately 10%. The average Occupancy Rate of
the Company's In-service Properties was 96.0% at September 30, 1997.
At September 30, 1997, the Company also owned or controlled (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
7
<PAGE>
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 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.
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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 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 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, the withdrawal
or dissolution of the General Partner, or a decree of judicial dissolution of
the Operating Partnership pursuant to the provisions of Georgia law, prior to
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December 31, 2093, without a vote of the Limited Partners (other than Weeks
LP). 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 this paragraph and in the
paragraph below).
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 (other than Weeks LP) 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 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
17
<PAGE>
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.
18
<PAGE>
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.
19
<PAGE>
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.
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 3,953,637 additional shares of Common
Stock will be eligible to be sold in the public market (see "Plan of
Distribution"). This represents an approximately 21% increase in the number of
shares of Common Stock of the Company eligible to be sold in the public market
as of September 30, 1997. 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).
20
<PAGE>
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.
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.
21
<PAGE>
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.
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.
These demand and piggyback rights became exercisable on August 17, 1997, and
the Registration Statement has been filed, in part, pursuant to the request of
Messrs. Weeks, Senkbeil and Robinson under the Formation Registration Rights
Agreement. Although such demand and piggyback rights still may be exercised
following the effectiveness of the Registration Statement in order to effect
or participate in an underwritten offering of Common Stock, Messrs. Weeks,
Senkbeil and Robinson have informed the Company that they have no present
intention of exercising such rights. The rights under the Formation
Registration Rights Agreement survive until the date on which all of the
securities held by Messrs. Weeks, Senkbeil and Robinson (and certain entitites
controlled by them) (i) have been sold pursuant to the Registration Statement
or any other effective registration statement, (ii) have been sold or
otherwise transferred pursuant to Rule 144 under the Securities Act, or (iii)
are eligible for sale under Rule 144 of the Securities Act in a single
transaction.
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 Exchange Shares that may be acquired in exchange for 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 the
Exchange Shares that may be acquired in exchange for the 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 Exchange Shares that may be
acquired in exchange for the 1,080,752 Units issued in connection with the
Initial Closing and the Exchange Shares that may be acquired in exchange for
the 162,232, 89,277 and 501,488 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 until the date on which all of the securities covered
thereby (i) have been sold pursuant to the Registration Statement or any other
effective registration statement, (ii) have been sold or otherwise transferred
pursuant to Rule 144 under the Securities Act, or (iii) 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 Beacon Centre Registration Rights Agreement, the Company is
obligated to file the Registration Statement no later than January 26, 1998
with respect to the Exchange Shares that
22
<PAGE>
may be acquired in exchange for the 656,004 Units issued to the Beacon Centre
Partners in connection with the acquisition of the Beacon Centre Properties
and to use its reasonable best efforts to cause the Registration Statement to
be declared effective by the Commission as soon as practicable thereafter. The
Company also is obligated to use its reasonable best efforts to keep the
Registration Statement continuously effective until the date on which all of
the securities covered thereby (i) have been sold pursuant to the Registration
Statement or any other effective registration statement, (ii) have been sold
or otherwise transferred pursuant to Rule 144 under the Securities Act, or
(iii) are eligible for sale under Rule 144 of the Securities Act in a single
transaction. The Beacon Centre 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 Beacon Centre Registration Rights Agreement.
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 beneficial owners, 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. The Beacon Centre Partners severally agreed, subject to certain
limitations, 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 such person 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, and (ii) those persons (or their permitted transferees) who may
receive Exchange Shares upon the exchange of Units.
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,
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<PAGE>
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, 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 of Common Stock rather than
pay cash upon such exchange).
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...... 1,791,373(1) 7.36% 845,603 497,731(7) 2.04%
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...... 2,401,681(4) 9.88% -- 567,932(10) 2.33%
Albert W. Buckley, Jr.,
Managing Director...... 2,416,181(5) 9.94% -- 562,432(11) 2.31%
Helen B. Weeks.......... 163,048(6) * 160,606 2,442 *
Laurence Tisch.......... 164,001 * 164,001 -- *
Preston Tisch........... 164,001 * 164,001 -- *
NWI Warehouse Group,
L.P.................... 2,356,181 9.71% 1,833,749 522,432 2.15%
Buckley and Company Real
Estate, Inc............ 20,000 * 20,000 -- *
The Benenson Capital
Company................ 320,721 1.32% 320,721 -- *
Raha Associates, Inc.... 7,281 * 7,281 -- *
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) 76,667 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
24
<PAGE>
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 2,256,181 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 1,769,676 of the Units held by NWI Warehouse Group,
L.P.
(5) Includes (a) 100,000 shares of Common Stock and 2,256,181 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 ownership of 78,841 of the shares of Common Stock and
1,778,797 of the Units held by NWI Warehouse, L.P.
(6) Excludes 358,468 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) 76,667 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 and 422,432 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 of are exercisable within
60 days. Mr. Nelley disclaims beneficial ownership of 78,437 of the
shares of Common Stock and 331,342 of the Units held by NWI Warehouse
Group, L.P.
(11) Includes (a) 100,000 shares of Common Stock and 422,432 Units 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 and 333,050 of the Units held by NWI Warehouse
Group, L.P.
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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.
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
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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 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
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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 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
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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 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
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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 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
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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, 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
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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.
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.
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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.
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
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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.
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
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<PAGE>
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 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.
35
<PAGE>
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time by the
holders thereof of up to (i) 331,882 Original Shares and (ii) 3,621,755
Exchange Shares if, and to the extent that, the holders of up to 3,621,755
Units exercise their respective Exchange Rights. 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 (but it may acquire from the 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.
The Company may from time to time issue up to 3,621,755 Exchange Shares upon
the acquisition of the Units 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
36
<PAGE>
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.
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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
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<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 4
Risk Factors............................................................... 7
The Company................................................................ 7
Description of Capital Stock............................................... 11
Shares Available for Future Sale........................................... 20
Registration Rights........................................................ 22
Selling Shareholders....................................................... 23
Federal Income Tax Considerations.......................................... 26
Plan of Distribution....................................................... 36
Legal Matters.............................................................. 36
Experts.................................................................... 36
</TABLE>
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3,953,637 SHARES
WEEKS CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
[LOGO OF WEEKS CORPORATION APPEARS HERE]
----------------
PROSPECTUS
----------------
January , 1998
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<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.............................................. $37,193
Legal Fees and Expense............................................ 50,000
Blue Sky Fees and Expenses (including fees of counsel)............ 5,000
Miscellaneous..................................................... 5,000
-------
Total........................................................... $97,193
=======
</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
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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.
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<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.
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<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
II-6
<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.
</TABLE>
- --------
* Previously filed
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
AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE SIGNED ON THIS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN ATLANTA, GEORGIA ON THE 26TH DAY OF
JANUARY, 1998.
Weeks Corporation
/s/ David P. Stockert
By: __________________________________
DAVID P. STOCKERT
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED BELOW AS OF THE 26TH DAY OF JANUARY, 1998.
SIGNATURE TITLE
Chairman of the Board and Chief
* Executive Officer and a Director
- ------------------------------------- (Principal Executive Officer)
A. RAY WEEKS, JR.
Vice Chairman of the Board and Chief
* Investment Officer and a Director
- -------------------------------------
THOMAS D. SENKBEIL
President and a Director
*
- -------------------------------------
FORREST W. ROBINSON
Managing Director and a Director
*
- -------------------------------------
JOHN W. NELLEY, JR.
Senior Vice President and Chief
* Financial Officer (Principal Financial
- ------------------------------------- Officer)
DAVID P. STOCKERT
Vice President and Controller
* (Principal Accounting Officer)
- -------------------------------------
ARTHUR J. QUIRK
Director
*
- -------------------------------------
BARRINGTON H. BRANCH
Director
*
- -------------------------------------
GEORGE D. BUSBEE
Director
*
- -------------------------------------
CHARLES R. EITEL
Director
*
- -------------------------------------
HAROLD S. LICHTIN
II-9
<PAGE>
Director
*
- -------------------------------------
WILLIAM O. MCCOY
Director
*
- -------------------------------------
WILLIAM CAVANAUGH III
Senior Vice President and Chief
/s/ David P. Stockert Financial Officer
*By:_________________________________
DAVID P. STOCKERT
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>
- --------
* Previously filed.
<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
January 23, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 (No. 333-42821) and related
Prospectus of Weeks Corporation for the registration of 3,953,637 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
January 23, 1998
