<PAGE>
As filed with the Securities and Exchange Commission on May 18, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Weeks Corporation
(Exact name of registrant as specified in its charter)
--------------
Georgia 58-1525322
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
(770) 923-4076
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
A. RAY WEEKS, JR.
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
(770) 923-4076
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
with a copy to:
WILLIAM H. HESS, ESQ.
King & Spalding
1185 Avenue of the Americas
New York, New York 10036
(212) 556-2100
--------------
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
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to Amount to Offering Price Aggregate Amount of
be Registered be Registered Per Unit(1) Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 value
per share............. 2,359,882 $32.03 $ 75,589,970 $21,014
- -------------------------------------------------------------------------------------------
8% Series A Cumulative
Redeemable Preferred
Stock................. 1,400,000 $23.75 $ 33,250,000 $ 9,244
- -------------------------------------------------------------------------------------------
8.625% Series D
Cumulative Redeemable
Preferred Stock....... 2,600,000 $25.00 $ 65,000,000 $18,070
- -------------------------------------------------------------------------------------------
Total................ $173,839,970 $48,328
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
--------------
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. The +
+Selling Shareholders may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This Prospectus is not an offer to sell these securities and it is not +
+soliciting an offer to buy these securities in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 14, 1999
PROSPECTUS
LOGO
OF WEEKS CORPORATION
APPEARS HERE
WEEKS CORPORATION
2,659,307 Shares of Common Stock
1,400,000 Shares of 8.0% Series A Cumulative Redeemable Preferred Stock
2,600,000 Shares of 8.625% Series D Cumulative Redeemable Preferred Stock
-----------
Weeks Corporation is a self-administered equity real estate investment trust
that manages and conducts its business through Weeks Realty, L.P. The persons
listed as our Selling Shareholders in this Prospectus are offering up to
2,659,307 shares of Weeks Common Stock, 1,400,000 shares of Weeks Series A
Preferred Stock, and 2,600,000 shares of Weeks Series D Preferred Stock. We
will not receive any of the proceeds of any sales of the shares offered by the
Selling Shareholders.
The Selling Shareholders currently own common or preferred units of limited
partnership interest in Weeks Realty, L.P. (the "Operating Partnership"), of
which our wholly owned subsidiary, Weeks GP Holdings, Inc. ("Weeks GP" or the
"General Partner"), owns the sole general partnership interest. These units
were issued to the Selling Shareholders in a series of transactions in which
they contributed either certain properties or cash to the Operating
Partnership.
The Selling Shareholders may offer their shares through public or private
transactions, in the over-the-counter markets, on any exchanges on which our
Common Stock or Preferred Stock is traded at the time of sale, at prevailing
market prices or at privately negotiated prices. The shares may be sold
directly or through agents or broker-dealers acting as principal or agent, or
in block trades or through one or more underwriters on a firm commitment or
best efforts basis. The Selling Shareholders may engage underwriters, brokers,
dealers or agents, who may receive commissions or discounts from the Selling
Shareholders. We will pay substantially all of the expenses incident to the
registration of these shares, except for the selling commissions.
The Selling Shareholders and any underwriters, agents or broker-dealers that
participate with the Selling Shareholders in the distribution of the shares may
be deemed to be "underwriters" within the meaning of the Securities Act of
1933, and any commissions received by them and any profit on the resale of the
shares may be deemed to be underwriting commissions or discounts under such
Act.
Weeks Common Stock is traded on the New York Stock Exchange under the ticker
symbol "WKS." On May , 1999, the closing price of one share of Common Stock as
reported on the NYSE was $ .
Weeks Series A Preferred Stock is traded on the NYSE. On May , 1999, the
closing price of one share of Series A Preferred Stock as reported on the NYSE
was $ .
We have filed an application to list the Series D Preferred Shares on the
NYSE, although there can be no assurance that such shares will be approved for
listing.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is
a criminal offense.
The date of this Prospectus is , 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any document that we filed with the SEC at the SEC's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549 or at its Regional
Offices located at 7 World Trade Center, Suite 1300, New York, New York 10048,
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of
such materials can be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You may
call the SEC at 1-800-732-0330 for further information on the operation of such
public reference rooms. You also can request copies of such documents, upon
payment of a duplicating fee, by writing to the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or obtain copies of such documents from the SEC's web
site at http://www.sec.gov. You may also inspect the documents at the NYSE.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13 (c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
documents contain important business information about our company and its
financial condition.
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1998;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999.
3. The Company's Current Report on Form 8-K filed with the Commission on
March 5, 1999;
4. The Company's Registration Statement on Form 8-A filed with the
Commission on October 9, 1997 registering the Series A Preferred Stock
under Section 12(b) of the Exchange Act;
5. The Company's Registration Statement on Form 8-A filed with the
Commission on May 18, 1999 registering the Series D Preferred Stock under
Section 12(b) of the Exchange Act; and
6. The Company's Registration Statement on Form 8-A dated August 12,
1994, registering the Common Stock under Section 12(b) of the Exchange Act.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
(770) 923-3221
This Prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
Prospectus or any prospectus supplement. We have not authorized anyone else to
provide you with different information. The Selling Shareholders will not make
an offer of the shares in any state where the offer is not permitted. You
should not assume that the information in this Prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
2
<PAGE>
SECURITIES TO BE OFFERED
This Prospectus relates to the offer and sale from time to time by the
holders thereof of up to (i) 2,359,882 shares of Common Stock, (ii) 1,400,000
shares of Series A Preferred Stock, and (iii) 2,600,000 shares of Series D
Preferred Stock. These securities are being registered by us as required under
the terms of certain registration rights agreements, and we will not receive
any proceeds from the sale thereof.
During 1997 and 1998, the Operating Partnership acquired certain properties
from each of (i) GB Partners, Ltd., (ii) PCTC Associates, LLC, (iii) Sanford H.
Orkin and Barbara H. Orkin, (iv) The Futrell Properties Limited Partnership No.
1, (v) Thomas M. Beckman and Thomas B. Fowler, Jr., and (vi) Ackerman & Co.,
each in exchange for common units of limited partnership interest ("Common
Units") of the Operating Partnership. The rights associated with the Common
Units permit the holders thereof to exchange each Common Unit 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"), our wholly owned subsidiary, Weeks GP
Holdings, Inc. ("Weeks GP" or the "General Partner") may elect to pay cash for
some or all of the Common Units when these rights are exercised. The amount of
such cash payment would be based upon the fair market value of the Common Stock
that would have been issued had the General Partner not elected to pay cash.
The General Partner, Weeks LP Holdings, Inc., also a wholly owned subsidiary of
the Company ("Weeks LP"), or any combination of them has the right to acquire
directly any Common Units tendered to the Operating Partnership for exchange,
rather than causing the Operating Partnership to exchange such Common Units. As
a result, we may from time to time issue up to 266,424 shares of Common Stock
upon the acquisition of Common Units tendered for exchange.
On November 6, 1998, AEW Targeted Securities Fund, L.P. purchased (i)
1,400,000 Series C Preferred Partnership Units (the "Series C Preferred Units")
and (ii) a warrant (the "Warrant") to purchase either 1,046,729 shares of
Common Stock or 1,400,000 shares of Series A Preferred Stock. The Series C
Preferred Units permit the holders thereof, at any time, to exchange the
Series C Preferred Units for cash or, at the option of the Operating
Partnership, shares of Common Stock. In addition, the Operating Partnership has
the right, following certain dates or after certain events, to redeem the
Series C Preferred Units for cash, or at the option of the Operating
Partnership, shares of Common Stock. Pursuant to the Partnership Agreement, the
General Partner may elect to pay cash for the Series C Preferred Units with
respect to which the foregoing rights are exercised, and the amount of such
cash payment would be based on the capital account balance in the Operating
Partnership of each holder of Series C Preferred Units. The General Partner,
Weeks LP, or any combination of them has the right to elect to acquire any
Series C Preferred Units tendered for exchange or called for redemption, rather
than causing the Operating Partnership to exchange or redeem such Units. As a
result of the exercise of the Warrant and the exchange or redemption of the
Series C Preferred Units, we may from time to time issue up to 1,400,000 shares
of Series A Preferred Stock or 2,093,458 shares of Common Stock.
On November 12, 1998, Goldman Sachs 1998 Exchange Fund, L.P. purchased
2,600,000 Series D Preferred Partnership Units (the "Series D Preferred Units",
and together with the Series C Preferred Units, the "Preferred Units"). The
Series D Preferred Units permit the holders thereof, following certain dates or
after certain events, to exchange each Series D Preferred Unit for one share of
Series D Preferred Stock. Pursuant to the Partnership Agreement, the General
Partner may elect to pay cash for the Series D Preferred Units with respect to
which these rights are exercised. The amount of such cash payment would be
based on the capital account balance in the Operating Partnership of each
holder. The General Partner, Weeks LP, or any combination of them has the right
to elect to acquire directly any Series D Preferred Units tendered to the
Operating Partnership for exchange, rather than causing the Operating
Partnership to exchange such Units. As a result, we
3
<PAGE>
may from time to time issue up to 2,600,000 shares of Series D Preferred Stock
upon the acquisition of Series D Preferred Units tendered for exchange.
The Company will not receive any proceeds from the sale of any of these
securities, but will indirectly acquire Common Units or Preferred Units
tendered for exchange for which it elects to issue shares. The Company is
registering the securities 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.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES,
PREFERRED STOCK DIVIDENDS AND PREFERRED UNIT DISTRIBUTIONS
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges, Preferred Stock dividends and Preferred Unit distributions
for each of the last five fiscal years and for the three months ended March 31,
1999. With respect to periods prior to August 24, 1994, the Company's
consolidated ratio reflects the operating results from the businesses
previously conducted by Weeks and its affiliates and predecessors.
<TABLE>
<CAPTION>
Jan. 1, 1994 Aug. 24, 1994 Three Months
To To Year Ended Year Ended Year Ended Year Ended Ended
Aug. 24, 1994 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1998 March 31, 1999
------------- ------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges,
Preferred Stock
dividends and
Preferred Unit
Distributions:(1)..... 1.06x 2.69x 1.96x 1.88x 1.78x 1.34x 1.53x
</TABLE>
- --------
(1) For purposes of computing the ratio, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income before
minority interests and extraordinary items. Fixed charges consist of
interest costs, whether expensed or capitalized, and amortization of debt
discounts and issue costs, whether expensed or capitalized. Fixed charges,
Preferred Stock dividends and preferred unit distributions consist of fixed
charges, dividends on the Company's Preferred Stock and Preferred Unit
distributions on the Operating Partnership's Series C and Series D
Preferred Partnership Units.
4
<PAGE>
THE COMPANY
We are a self-administered and self-managed real estate investment trust (a
"REIT") that was organized under Georgia law to continue and expand the fully
integrated real estate business previously conducted by Weeks and its
affiliates. Since 1965, we, together with our affiliates and predecessors, have
developed, owned, managed, constructed and acquired primarily institutional-
quality industrial and suburban office properties in select suburban markets in
the southeast United States and Texas. As of December 31, 1998, we owned 373
properties totaling approximately 31.7 million square feet, including 54
properties that were under development or in lease-up and which were under
agreement to acquire. All of these properties are located in Atlanta, Georgia;
Nashville, Tennessee; Raleigh-Durham-Chapel Hill, North Carolina; Miami,
Orlando, Jacksonville, Ft. Lauderdale and Tampa, Florida; Dallas, Texas; and
Spartanburg, South Carolina.
At December 31, 1998, we also owned or controlled (through agreements to
acquire, options and marketing and development agreements) approximately 1,871
net usable acres of undeveloped land located primarily in existing business
parks with zoning and infrastructure in place. We believe the development
potential of this land could ultimately total approximately 19.6 million square
feet (based upon our estimate of the appropriate density and anticipated
building types that may be developed, net of land necessary to provide for
adequate infrastructure).
We conduct substantially all of our business through the Operating
Partnership. As of December 31, 1998, we owned an approximate 72.9% ownership
interest in the Operating Partnership, and the remaining approximate 27.1%
limited partnership interest in the Operating Partnership was owned by various
individuals and entities (including certain of our officers and directors). Of
the 72.9% interest in the Operating Partnership held by us as of December 31,
1998, we owned the sole 1.3% general partnership interest in the Operating
Partnership through Weeks GP and a 71.6% limited partnership interest in the
Operating Partnership through Weeks LP. As the sole general partner of the
Operating Partnership, we have control over the management of the Operating
Partnership and over the properties.
We conduct our third-party service business through two companies: Weeks
Realty Services, Inc. which conducts third-party landscape, property management
and leasing services, and Weeks Construction Services, Inc. which conducts
third-party construction services. We hold 100% of the nonvoting and 1% of the
voting common shares of these subsidiaries. The remaining voting common shares
are held by three of our executive officers. The ownership of the common shares
of these companies entitles us to substantially all (99%) of the economic
benefits from the results of their operations.
We own, develop and operate primarily industrial and suburban office
properties, most of which are located in landscaped business park settings. Our
business strategy emphasizes high quality properties and tenant service. Our
approximately 576 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. Our
strategy for growth includes intensive management of our properties, developing
and acquiring additional properties that are consistent with our 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 our tenants. We concentrate our activities in a limited number of Sunbelt
cities where we believe we can sustain a significant market presence.
Our Common Stock is listed on the NYSE under the symbol "WKS." Our Series A
Preferred Stock is listed on the NYSE, and we intend to file an application to
list the Series D Preferred Stock on the NYSE, although there can be no
assurance that such shares will be approved for listing. We
5
<PAGE>
were incorporated under the laws of Georgia in 1983, and the Operating
Partnership is a Georgia limited partnership that was formed in June 1994. Our
principal executive offices are located at 4497 Park Drive, Norcross, Georgia
30093, and our telephone number is (770) 923-4076.
On March 1, 1999, we announced that we had entered into an Agreement and Plan
of Merger with Duke Realty Investments, Inc., an Indiana based REIT
specializing in industrial and office building development and ownership whose
common stock is traded on the NYSE under the trading symbol "DRE" ("Duke"), and
that the Operating Partnership had entered into an Agreement and Plan of Merger
with Duke Realty Limited Partnership, the operating partnership through which
Duke owns and manages its properties ("Duke OP"). These agreements provide for
the merger of Weeks with and into Duke and the merger of the Operating
Partnership with and into Duke OP. After the effective time of the mergers,
Duke will change its name to Duke-Weeks Realty Corporation.
The consummation of the transactions contemplated by the merger agreements is
expected to occur on or about June 30, 1999, and is subject to approval by the
stockholders of Duke and our shareholders and satisfaction of certain other
customary closing conditions. There can be no assurance that the transactions
contemplated by the merger agreements will be consummated. For a more complete
description of the pending merger transactions, see the documents incorporated
by reference in this Prospectus as described in "Where You Can Find More
Information."
6
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
Under our Restated Articles of Incorporation, as amended (the "Articles"),
our authorized capital stock 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").
The following statements are brief summaries of certain provisions of our
Articles and our Third Amended and Restated Bylaws ("Bylaws"). For more detail
you should refer to the Articles and Bylaws which have been filed as exhibits
to this Registration Statement or to other reports incorporated by reference to
this Prospectus.
Common Stock
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, and will be, when issued in
accordance with the terms of the Partnership Agreement, fully paid and
nonassessable and are not, and will not be, subject to preemptive or similar
rights. Subject to such preferential rights as may be granted by the Board of
Directors in connection with the 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 our liquidation, dissolution or winding up, 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,
our Board of Directors is authorized to designate and issue, from our
authorized but unissued capital stock, up to 20,000,000 shares of one or more
classes or series of Preferred Stock without shareholder approval. Our Board of
Directors may affix and determine the preferences, limitations and relative
rights of each class or series of Preferred Stock so issued. Because our 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 Weeks. Except for the Series A Preferred
Shares, which are traded on the NYSE, no shares of Preferred Stock currently
are issued and outstanding.
7
<PAGE>
Series D Preferred Shares. The following summary sets forth the material
terms and provisions of our 8.625% Series D Cumulative Redeemable Preferred
Stock, par value $.01 per share (the "Series D Preferred Shares"). For more
detail you should read the applicable provisions of the Articles and the
Bylaws. We have not previously issued Series D Preferred Shares, and this
Prospectus covers the resale of 2,600,000 shares of Series D Preferred Stock
following any issuance of such shares. We have filed an application to list the
Series D Preferred Stock on the NYSE, although there can be no assurance that
such shares will be approved for listing.
General. The holders of the Series D Preferred Shares have no preemptive
rights with respect to any shares of our capital stock or any of our other
securities convertible into or carrying rights or options to purchase any such
shares. The Series D Preferred Shares are not subject to any sinking fund or
other obligation of Weeks to redeem or retire the Series D Preferred Shares.
The transfer agent, registrar and dividend disbursing agent for the Series D
Preferred Shares is Wachovia Bank, N.A.
Ranking. With respect to payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series D Preferred Shares rank senior to the
Common Stock and shall rank equally in all rights with the Series A Preferred
Stock.
While any Series D Preferred Shares are outstanding, we may not authorize,
create or increase the authorized amount of any class of security that ranks
senior to the Series D 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 D Preferred
Shares and Parity Shares (as defined below), voting as a single class. However,
we 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 D 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 D 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 8.625% of the liquidation preference per annum (equivalent to $2.15625
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 D 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 our records 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 our Board of Directors 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 D Preferred Shares is credited
against the earliest accrued but unpaid dividend due with respect to the Series
D 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
8
<PAGE>
default thereunder, or if such authorization or payment is restricted or
prohibited by law. Dividends on Series D 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 D Preferred Shares that is in
arrears. Holders of Series D 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 D Preferred
Shares.
If, for any taxable year, we elect to designate as "capital gain dividends"
(as defined in Section 857 of the Internal Revenue Code of 1986, as amended
(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 D Preferred
Shares will be in the same portion that the Total Dividends paid or made
available to the holders of Series D 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 D Preferred Shares for all
prior dividend periods. If accrued dividends on the Series D Preferred Shares
for all prior dividend periods have not been paid in full, then any dividend
declared on the Series D 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 D Preferred Shares and such Parity Shares.
We may not (i) declare, pay or set apart funds for the payment of any
dividend or other distribution with respect to any Junior Shares 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 that we make for purposes of our employee
incentive or benefit plan or any such plan for any of our subsidiaries), unless
(A) all cumulative dividends with respect to the Series D 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 D
Preferred Shares and any Parity Shares.
Liquidation Rights. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of Series D Preferred
Shares will be entitled to receive out of our assets legally available for
distribution to shareholders a liquidation preference of $25.00 per Series D
Preferred Share, plus an amount per Series D 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 we have paid the holders of Series D Preferred Shares and Parity Shares
their liquidation preference in full, we will not make payment 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, our assets,
or proceeds of our assets, distributable among the holders of the Series D
Preferred Shares are insufficient to pay in full the amount payable upon
liquidation with respect to the Series D Preferred Shares and any other Parity
Shares, then we will distribute such assets, or the proceeds, among the holders
of Series D Preferred Shares and any such Parity Shares ratably in accordance
with the respective amounts which would be payable on those shares if such
amounts were paid in full. Neither a consolidation nor a merger between us and
another entity, a statutory
9
<PAGE>
share exchange by us or a sale, lease or transfer of all or substantially all
of our assets will be considered a liquidation, dissolution or winding up,
voluntary or involuntary, of the Company.
Redemption. We will not redeem the Series D Preferred Shares prior to
November 12, 2003. On and after November 12, 2003, we, at our 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 D Preferred Shares, may redeem the Series D 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 to the date
fixed for redemption, without interest. The redemption price of the Series D
Preferred Shares (other than the portion consisting of accrued and unpaid
dividends) is payable solely out of proceeds from the sale of our other capital
stock, which may include Common Stock, Preferred Stock, depositary shares,
interests, participations or other ownership interests in Weeks however
designated (other than debt securities convertible into or exchangeable for
equity securities), and any rights, warrants or options to purchase any of the
foregoing. If fewer than all of the outstanding Series D Preferred Shares are
to be redeemed, we will determine the number of shares to be redeemed 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 that
we determine in our sole discretion to be equitable.
Unless we have paid or declared or contemporaneously declared and paid full
cumulative dividends on all Series D Preferred Shares and any Parity Shares and
a sum sufficient for the payment is set apart for payment for all past dividend
periods and the then-current dividend period, we may not redeem or purchase
Series D Preferred Shares or Parity Shares except pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding Series D
Preferred Shares or Parity Shares, as the case may be.
We will mail notice of redemption at least 30 days but not more than 90 days
before the redemption date to each holder of record of Series D Preferred
Shares to be redeemed at the address shown on our stock transfer books. Each
notice shall state: (i) the redemption date; (ii) the number of Series D
Preferred Shares to be redeemed; (iii) the redemption price per share; (iv) the
place or places where certificates for Series D Preferred Shares are to be
surrendered for payment of the redemption price; and (v) that dividends on the
Series D Preferred Shares will cease to accrue on such redemption date. If we
decide to redeem fewer than all Series D Preferred Shares, the notice mailed to
each such holder shall also specify the number of Series D Preferred Shares we
will redeem from such holder. If we have given notice of redemption of any
Series D Preferred Shares and if we have set aside the funds necessary for such
redemption in trust for the benefit of the holders of Series D Preferred Shares
that are being redeemed, then from and after the redemption date, dividends
will cease to accrue on the Series D Preferred Shares, such Series D 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 D Preferred Shares at the close of business on a Record
Date are entitled to receive the dividends payable with respect to such Series
D 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. We
will make no payment or allowance for unpaid dividends, whether or not in
arrears, on Series D 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 D Preferred Shares have no stated maturity and are not subject to
any sinking fund or mandatory redemption.
10
<PAGE>
Voting Rights. Except as indicated below, or except as otherwise from time to
time required by applicable law, the holders of Series D Preferred Shares have
no voting rights.
If six consecutive quarterly dividends payable on the Series D Preferred
Shares or any Parity Shares are in arrears, whether or not earned or declared,
the number of directors then constituting our Board of Directors will be
increased by two, and the holders of Series D 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 our 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 D Preferred Shares and such other
voting Parity Shares have been declared and paid or set aside for payment. Such
voting rights will terminate when we declare and pay or set aside for payment
all such accrued and unpaid dividends. 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 D 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 D
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 D 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 D Preferred Shares, or consolidate us with or
merge us with another entity, unless in each such case each Series D 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 identical to that of the Series D Preferred Shares
(except for changes that do not materially and adversely affect the holders of
Series D 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 D
Preferred Shares with respect to the payment of dividends or the distribution
of assets or amounts upon liquidation, dissolution or winding up of our
affairs. However, we 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 D Preferred Shares.
Except as provided above and as required by applicable law, the holders of
Series D Preferred Shares are not entitled to vote on any merger or
consolidation involving us, on any share exchange or on a sale of all or
substantially all of our assets.
Retirement. Except as otherwise provided in the Articles, all Series D
Preferred Shares issued and reacquired by us shall be restored to the status of
authorized but unissued shares of Preferred Stock, without designation as to
class or series.
Conversion. The Series D Preferred Shares are not convertible into or
exchangeable for any of our other property or securities at the option of the
holder.
Record Holders. We and our transfer agent may deem and treat the record
holder of any Series D Preferred Shares as the true and lawful owner thereof
for all purposes, and neither us nor our transfer agent shall be affected by
any notice to the contrary.
Restrictions on Transfer. For information regarding restrictions on ownership
of the Series D Preferred Shares, see "Description of Capital Stock--
Restrictions on Transfer."
11
<PAGE>
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 our Board of Directors and may
discourage or make more difficult any attempt by a person or group to obtain
control over us.
Ownership Limit. The Ownership Limit (as defined in this Prospectus) may have
the effect of precluding acquisition of control over the Company by a third
party without the consent of our 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. Under the Articles, our 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 our
control 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 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 Company's best interests, 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 our
shareholders, may consider the interests of our employees, customers, suppliers
and creditors and the employees, customers, suppliers and creditors of our
subsidiaries, 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.
12
<PAGE>
Limitation of Directors' and Officers' Liability
The Articles eliminate, subject to certain exceptions, the personal liability
of a director to the Company or our 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 to 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, we are 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. We are 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 if (i) such director
or officer furnishes us 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 us 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. We may not indemnify a director (i) in connection
with a proceeding by us or in our right in which the director was adjudged
liable to us, 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
We have entered into indemnification agreements with each of our directors.
The indemnification agreements require, among other things, that we indemnify
our 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. We also must indemnify and advance all reasonable expenses incurred
by directors seeking to enforce their rights under the indemnification
agreements, and cover directors under our 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 our Board of
Directors or by our 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, we must elect in our Articles or Bylaws to be
covered by the restrictions imposed by these statutes. We have not elected to
be covered by such restrictions; however, we, by action of the Board of
Directors without shareholder approval, may in the future amend the Bylaws to
make such an election. Furthermore, shareholders may amend or repeal the Bylaws
or adopt new
13
<PAGE>
Bylaws (even though the Bylaws may also be amended or repealed by the Board of
Directors) and may also expressly provide that any Bylaw so amended or repealed
by them may not be amended or repealed by the Board of Directors.
The Business Combination Statute regulates business combinations such as
mergers, consolidations, share exchanges and asset purchases where the acquired
business has at least 100 shareholders residing in Georgia and has its
principal office in Georgia, as we do, 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, we cannot, subject to certain exceptions, merge with or
sell all or substantially all of our assets, 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 us or our affiliate 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.
The Ownership Limit may delay or impede a transaction or a change in control
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, our 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. 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
14
<PAGE>
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 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. 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 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 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 our 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 our REIT status.
If any purported transfer of the Company's capital stock or any other event
would otherwise result in any person or entity holding shares of the Company's
capital stock 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 cause us to fail
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.
15
<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 that we select (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 that are paid 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 the Company's capital stock 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 our capital stock must file a written notice with us
containing the information specified in the Articles within 30 days after
December 31 and June 30 of each year. In addition, whenever we demand, each
shareholder shall disclose to us in writing such information as we may request
in order to determine the effect, if any, of such shareholder's actual and
constructive ownership on our 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.
SELLING SHAREHOLDERS
The following table lists the Selling Shareholders who may sell the
securities covered by this Prospectus (the "Secondary Shares"), as well as the
number and percentage of shares of Common Stock and Preferred Stock each of
them owns. 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. The number and percentage of shares on the following table represents
the number and percentage of shares of Common Stock and Preferred Stock, as
applicable, each of the Selling Shareholders holds plus (i) the number of
shares of Common Stock into which Common Units and Preferred 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) or issuable upon exercise
of the Warrant, and (ii) the number of Preferred Shares into which Preferred
Units held by such Selling Shareholder may be exchanged or issuable upon
exercise of the Warrant. If necessary we will include other required
information about any of the Selling Shareholders in a prospectus supplement.
16
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
After the Offering
(Assuming Exchange of
Beneficial Ownership Prior to Offering (Assuming Units for Secondary
Exchange of Units for Secondary Shares and Exercise Shares and Exercise of
of Warrant) Warrant)
----------------------------------------------------- Number of Number of -------------------------
Percentage of Shares of Shares of
Percentage of Number of Shares of Common Preferred Number of Percentage of
Number of Shares of Shares of Preferred Stock Stock Shares of Shares of
Shares of Common Stock Preferred Stock Offered Offered Common Common Stock
Name Common Stock Outstanding (1) Stock Outstanding(1) Hereby Hereby Stock Outstanding (1)
- ---- ------------ --------------- --------- -------------- --------- --------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GB Partners,
Ltd(2)............... 18,461 * -- -- 18,461 -- -- *
PCTC Associates,
LLC.................. 47,273 * -- -- 47,273 -- -- *
Sanford H. Orkin..... 40,789 * -- -- 40,789 -- -- *
Barbara H. Orkin, as
Trustee of the Sheri
Orkin Life Trust U/A
with Sanford H.
Orkin................ 6,798 * -- -- 6,798 -- -- *
Barbara H. Orkin, as
Trustee of the Laurie
Orkin Life Trust U/A
with Sanford H.
Orkin................ 6,798 * -- -- 6,798 -- -- *
Barbara H. Orkin, as
Trustee of the
Michael Orkin Life
Trust U/A with
Sanford H. Orkin..... 6,798 * -- -- 6,798 -- -- *
Barbara H. Orkin, as
Trustee of the
Kenneth Orkin Life
Trust U/A with
Sanford H. Orkin..... 6,798 * -- -- 6,798 -- -- *
The Futrell
Properties Limited
Partnership No. 1.... 45,895 * -- -- 45,895 -- -- *
Thomas M. Beckman.... 28,643 * -- -- 28,643 -- -- *
Thomas B. Fowler,
Jr................... 28,643 * -- -- 28,643 -- -- *
Ackerman & Co........ 29,528 * -- -- 29,528 -- -- *
AEW Targeted
Securities Fund,
L.P.(3).............. 2,333,558 8.57% 1,400,000 18.92% 2,093,458 1,400,000 240,100 *
Goldman Sachs 1998
Exchange Fund, L.P... -- * 2,600,000 100.00% -- 2,600,000 -- *
</TABLE>
- ----
* Represents less than 1% of the Company's outstanding class of securities
(1) The percentage owned calculations are based on the number of shares of
Common Stock and each class of Preferred Stock (assuming issuance of all
Secondary Shares) outstanding on May 14, 1999.
(2) GB Partners, Ltd, is a Florida limited partnership, of which Charles D.
Graham and Bobby L. Beavers serve as the sole general partners. Mr.
Graham has served as a Senior Vice President of the Company since October
27, 1997, and Mr. Beavers has served as a Vice President of the Company
since October 27, 1997.
(3) AEW Targeted Securities Fund, L.P. is a partnership of which AEW TSF,
L.L.C. is the General Partner. AEW TSF, Inc., a wholly owned subsidiary of
AEW Capital Management, L.P., is the manager-member of AEW TSF, L.L.C. AEW
Capital Management, Inc. is the general partner of AEW Capital Management,
L.P. As such, AEW TSF, L.L.C., AEW TSF, Inc., AEW Capital Management, L.P.
and AEW Capital Management, Inc. may be deemed to beneficially own the
Common Stock and Preferred Stock referred to in the table above. In
addition, AEW Capital Management, L.P. and AEW Capital Management, Inc.,
also beneficially own 240,100 shares of our Common Stock.
17
<PAGE>
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 or Preferred
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 or Preferred
Stock and, to the extent such discussion contains statements of law or legal
conclusions, such statements and conclusions are the opinion of King &
Spalding.
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. It does not discuss all of the
aspects of federal income taxation that may be relevant to a prospective
shareholder in light of his 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 "Pass-Through Affiliate" refers to any partnership or limited
liability company in which the Operating Partnership owns an interest.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE COMPANY'S ELECTION TO BE
TAXED AS A REIT AND OF THE PURCHASE, OWNERSHIP, AND SALE OF COMMON STOCK AND
PREFERRED STOCK, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX
CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, AND SALE, 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, 1996, 1997 and 1998, and that
its current organization and method of operation should enable it to continue
to qualify as a REIT. Investors should be aware, however, that opinions of
counsel are not binding upon the Internal Revenue Service ("IRS") or any
court. Further, King & Spalding's opinion is based on various assumptions and
is conditioned upon certain representations made by the Company as to certain
relevant factual matters relating to the organization and the past, current
and expected future manner of operation of the Company, the Operating
Partnership and the Pass-Through Affiliates. Moreover, the Company's continued
qualification and taxation as a REIT depends upon the Company's ability to
meet on a continuing basis, through actual annual operating results,
distribution levels and diversity of stock ownership, the various
qualification tests imposed by the Code and discussed below. King & Spalding
will not review compliance with these tests on a continuing basis. No
assurance can be given that the Company will satisfy such tests on a
continuing basis. See "--Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
U.S. federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and
judicial interpretations thereof.
18
<PAGE>
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 customers 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 customers in the ordinary course of
business), such income will be subject to a 100% tax. Fifth, if the Company
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), and has nonetheless maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on the net income attributable to the greater of the amount by which
the Company fails the 75% or 95% test. Sixth, if the Company should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net income for
such year, and (iii) any undistributed taxable income from prior years, the
Company would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if the Company
acquires any asset from a C corporation (i.e., a corporation generally subject
to full corporate level tax) in a transaction in which the basis of the asset
in the Company's hands is determined by reference to the basis of the asset (or
any other property) in the hands of the C corporation, and the Company
recognizes gain on the disposition of such asset during the 10-year period
beginning on the date on which such asset was acquired by the Company, then, to
the extent of such property's "built-in" gain (the excess of the fair market
value of such property at the time of acquisition by the Company over the
adjusted basis of such property at such time), and assuming the Company will
make an election pursuant to Notice 88-19, such gain will be subject to tax at
the highest regular corporate rate applicable (as provided in retroactive IRS
regulations that have been announced but have not yet been promulgated).
Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) which is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares or by
transferable certificates of beneficial interest; (3) which would be taxable as
a domestic corporation but for Sections 856 through 859 of the Code; (4) which
is neither a financial institution nor an insurance company subject to certain
provisions of the Code; (5) the beneficial ownership of which is held by 100 or
more persons; (6) during the last half of each taxable year not more than 50%
in value of the outstanding stock of which is owned, directly or indirectly, by
five or fewer individuals (as defined in the Code to include certain entities);
and (7) which meets certain other tests, described below, regarding the nature
of its income and assets. The Code provides that conditions (1) through (4),
inclusive, must be met during the entire taxable year and that condition (5)
must be met during at least 335 days of a taxable year of twelve months, or
during a proportionate part of a taxable year of less than twelve months. The
Company has issued sufficient shares of Common Stock with sufficient diversity
of ownership to allow the Company to satisfy requirements (5) and (6). In
addition, the Company's Articles provide restrictions regarding the transfer of
its shares that are intended to assist the Company in continuing to satisfy the
share ownership requirements described in (5) and (6) above. See "Description
of Capital Stock--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.
19
<PAGE>
In the case of a REIT that owns the stock of a corporation that is a
"qualified REIT subsidiary" within the meaning of Section 856(i)(2) of the
Code, the subsidiary will not be treated as a separate corporation, and the
assets, liabilities, and items of income, deduction, and credit of the
subsidiary will be treated as assets, liabilities, and such items of the REIT.
Weeks GP and Weeks LP are "qualified REIT subsidiaries" of the Company, so the
separate existence of these corporations will be ignored for U.S. federal tax
purposes, and the Company will be treated as directly holding the assets and
liabilities and receiving the tax items of these subsidiaries. Further, in the
case of a REIT that is a partner in an entity that is classified for federal
income tax purposes as 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 any Pass-Through Affiliate will be treated as assets,
liabilities, and items of income of the Company for purposes of applying the
requirements described herein.
Income Tests. To maintain qualification as a REIT, two 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. In addition, 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 have represented less than 30% of the REIT's gross
income (including gross income from prohibited transactions) for such taxable
year. The Taxpayer Relief Act of 1997 repealed the 30% gross income test
effective for the Company's taxable year that began on 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." In addition,
for the Company's taxable years beginning after December 31, 1997, the
"independent contractor" requirement does not apply to noncustomary services
provided by the Company, the annual value of which does not exceed 1% of the
gross income derived from the property with respect to which the services are
provided. For this purpose, the noncustomary services may not be valued at less
than 150% of the Company's direct
20
<PAGE>
cost of providing the services. The Company believes that it does not provide
any noncustomary services at its properties other than through qualifying
independent contractors, except as permitted by the 1% de minimis exception or
to the extent that the amount of resulting nonqualifying income would not cause
the Company to fail to satisfy the 95% and 75% gross income tests.
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 net income derived from a prohibited transaction is subject to a 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 any
Pass-Through Affiliate is held for sale to customers and that the sale of any
Property or development land by such entities is not in the 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 entities will attempt
to comply with the terms of safe harbor provisions in the Code prescribing when
asset sales will not be characterized as prohibited transactions. Complete
assurance cannot be given, however, that the Company or such entities will
comply with the safe-harbor provisions of the Code or avoid owning property
that may be characterized as property held "primarily for sale to customers in
the ordinary course of business".
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such year
if it is entitled to relief under certain provisions of the Code. These relief
provisions generally are available if the Company's failure to meet such tests
was due to reasonable cause and not due to willful neglect, the Company
attaches a schedule of the sources of its income to its return, and any
incorrect information on the schedules was not due to fraud with intent to
evade tax. It is not possible, however, to state whether in all circumstances
the Company would be entitled to the benefit of these relief provisions. As
discussed above in "General," even if these relief provisions were to apply, a
tax would be imposed with respect to the Company's excess net income. 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 certain 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 Pass-Through Affiliates 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, of the
investments excluded from the 75% 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
21
<PAGE>
(including as a result of increasing its interest in the Operating Partnership
as limited partners exchange their Units for cash or Common Stock).
As described above, the Operating Partnership owns 100% of the nonvoting
stock and 1% of the voting stock of 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.
Clinton Administration's Proposed Changes to REIT Asset Tests. The Clinton
Administration's budget proposal announced on February 1, 1999 includes a
proposal to amend the 10% voting securities test by prohibiting a REIT from
owning more than 10% of the vote or value of any issuer (a "non-qualified REIT
subsidiary") other than a qualified REIT subsidiary or another REIT. As
proposed, the measure would take effect on the date of enactment. The proposal
would provide an exception to the new 10% vote-and-value test, and also to the
5% asset test under current law, for "taxable REIT subsidiaries." One kind of
taxable REIT subsidiary, to be called a "qualified business subsidiary," would
be allowed to undertake non-tenant related activities that would generate
nonqualifying income if performed by a REIT, such as third-party management and
development. Another kind of taxable REIT subsidiary, to be called a "qualified
independent contractor subsidiary," would be allowed to perform noncustomary
and other currently prohibited services with respect to REIT tenants as well as
activities that could be performed by a qualified business subsisdiary.
A number of constraints would be imposed on a taxable REIT subsidiary to
ensure that the REIT could not, through a taxable REIT subsidiary, engage in
substantial non-real estate activities and also to ensure that the taxable REIT
subsidiary pays a corporate level tax on its earnings. First, the value of all
taxable REIT subsidiaries owned by a REIT could not represent more than 15% of
the value of the REIT's total assets, and within that 15-percent limitation, no
more than 5% of the total value of a REIT's assets could consist of qualified
independent contractor subsidiaries. Second, a taxable REIT subsidiary would
not be entitled to deduct any interest incurred or debt funded directly or
indirectly by the REIT. Third, a 100% excise tax would be imposed on certain
"excess payments" to ensure arm's length (i) pricing for services provided to
REIT tenants and (ii) allocation of shared expenses between the REIT and the
taxable REIT subsidiary. Fourth, there would be limitations placed upon
intercompany rentals between the REIT and its taxable REIT subsidiary. Certain
additional limitations also could apply.
The Company believes that, if the proposal were to be enacted, the
Subsidiaries would qualify as taxable REIT subsidiaries. Accordingly, the
Company does not believe that the proposal jeopardizes its ability to qualify
as a REIT. Nevertheless, the constraints imposed on taxable REIT subsidiaries
that are described above potentially could limit the Subsidiaries' ability to
deduct interest and certain other expenses.
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
22
<PAGE>
which they relate, or in the following taxable year if declared before the
Company timely files its tax return for such year and if paid on or before the
first regular dividend payment after such declaration. To the extent that the
Company does not distribute all of its net capital gain or distributes at least
95%, but less than 100%, of its "REIT taxable income," as adjusted, it will be
subject to tax on the undistributed amount at regular capital gains and
ordinary corporate tax rates. Furthermore, if the Company should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net 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 these 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 impossible to predict
whether 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
23
<PAGE>
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. In
determining whether distributions are out of earnings and profits, the
Company's earnings and profits will be allocated first to the Preferred Stock
(to the extent of distributions made in respect thereof), and then to the
Common Stock. 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 Company's actual net
capital gain for the taxable year) without regard to the period for which the
shareholder held his shares. However, corporate shareholders are required to
treat up to 20% of certain capital gain dividends as ordinary income. The tax
rate applicable to capital gain dividends is described in "Taxation of
Shareholders--Capital Gains Rates" below.
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 shares of 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" below.
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. The
tax rate applicable to such gain is described in "Taxation of Shareholders--
Capital Gains Rates" below. 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 and payable to a shareholder of record on a specific date in any such
month is 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 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" below.
However, any loss upon a sale or exchange of shares by a shareholder who has
held such shares for six months or less (after applying certain holding period
rules) is 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. 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 one year. The tax rates applicable to ordinary income apply to gain
attributable to the sale or exchange of
24
<PAGE>
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 one year, 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 a REIT as capital gain dividends
(including deemed distributions of retained capital gains), the REIT may
designate (subject to certain limits) whether the dividend is taxable to non-
corporate shareholders at a 20% or a 25% rate.
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 a 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 or Preferred 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 or
Preferred Stock, including any reporting requirements.
25
<PAGE>
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company
as capital gain dividends are treated as dividends of ordinary income to the
extent that they are made out of current or accumulated earnings and profits of
the Company. Such distributions ordinarily are subject to a withholding tax
equal to 30% of the gross amount of the distribution unless an applicable tax
treaty reduces that tax. However, if income from the investment in the shares
of capital stock is treated as effectively connected with the Non-U.S.
Shareholder's conduct of a U.S. trade or business, the Non-U.S. Shareholder
generally is subject to a tax at graduated rates, in the same manner as U.S.
shareholders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax if the shareholder is a foreign corporation). The
Company withholds U.S. income tax at the rate of 30% on the gross amount of any
dividends paid to a Non-U.S. Shareholder that are not designated as capital
gain dividends unless (i) a lower treaty rate applies and the required form, if
any, evidencing eligibility for that reduced rate is filed with the Company or
(ii) the Non-U.S. Shareholder files an IRS Form 4224 (or W-8ECI) with the
Company claiming that the distribution is "effectively connected" income. The
Treasury Department 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 currently
provide that they will be effective for payments made after December 31, 1999,
subject to certain transition rules. In IRS Notice 99-25, however, the IRS
announced that the Treasury Department and the IRS intend to amend the new
regulations by delaying the effective date so that the new regulations will
apply to payments made after December 31, 2000, subject to certain transition
rules. Prospective investors should consult their own tax advisors as to the
effect, if any, of the new regulations on their purchase, ownership and
disposition of the Common or Preferred Stock.
Distributions in excess of current and accumulated earnings and profits of
the Company are not taxable to a shareholder to the extent that they do not
exceed the adjusted basis of the shareholder's shares of capital stock, but
rather will reduce the adjusted basis of such shares. To the extent that such
distributions exceed the adjusted basis of a Non-U.S. Shareholder's shares,
they give rise to tax liability if the Non-U.S. Shareholder is otherwise
subject to tax on any gain from the sale or disposition of his shares of
capital stock as described below. If it cannot be determined at the time a
distribution is made whether or not such distribution is in excess of current
and accumulated earnings and profits, the distribution is subject to
withholding at the rate applicable to dividends. The 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 of the Code (described below) 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.
26
<PAGE>
Gain recognized by a Non-U.S. Shareholder upon the sale or exchange of Common
or Preferred Stock generally will not be subject to U.S. tax unless the stock
constitutes a "United States real property interest" within the meaning of the
Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). The Company's
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 stock by a
Non-U.S. Shareholder would be subject to U.S. tax under FIRPTA will depend on
whether the 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. Shareholder's interest in the
Company.
If gain on the sale or exchange of the Company's stock were subject to tax
under FIRPTA, then (i) the Non-U.S. Shareholder would be subject to regular
U.S. income tax with respect to such gain in the same manner as a U.S.
shareholder (subject to any applicable alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien individuals), and (ii)
the purchaser of the stock would be required to withhold and remit to the IRS
10% of the purchase price unless the purchased stock was "regularly traded" on
an established securities market.
Notwithstanding the foregoing, gain from the sale or exchange of stock not
otherwise taxable under FIRPTA will be subject to U.S. tax if (i) the
investment in the 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 and Other Pass-Through Entities; Effect
on REIT Qualification. All of the Company's investments are made through the
Operating Partnership, which in turn holds interests in the Pass-Through
Affiliates. The Company has received a legal opinion from King & Spalding to
the effect that the Operating Partnership and each Pass-Through Affiliate that
is not 100% beneficially owned by the Operating Partnership will be treated for
U.S. federal income tax purposes as partnerships (and not as associations
taxable as corporations). Each Pass-Through Affiliate that is 100% beneficially
owned by the Operating Partnership is disregarded for federal income tax
purposes. 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
Pass-Through Affiliates were treated as taxable corporations, 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 a Pass-Through Affiliate (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 do not represent qualifying income under the 75% gross income test
described above and which could therefore make it more difficult for the
Company to meet such test. In addition, the Company would not be able to deduct
its share of any losses generated by such partnerships in computing its taxable
income, which would make it more difficult to satisfy the REIT distribution
requirements. 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 Operating 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
27
<PAGE>
acquisition by the Operating Partnership, except to the extent that gain is
recognized by the transferor in connection with the transfer. The Operating
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 Operating Partnership's tax depreciation
deductions will be allocated among the partners in accordance with their
respective percentage interests in the Operating Partnership, except as
otherwise required pursuant to Section 704(c) of the Code.
State and Local Taxes. The Company, the Operating Partnership, the Pass-
Through Affiliates, the Subsidiaries and the Company's shareholders may be
subject to 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 or Preferred Stock.
28
<PAGE>
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time by the
holders thereof of up to
(i) 2,359,882 shares of Common Stock, (ii) 1,400,000 shares of Series A
Preferred Stock, and
(iii) 2,600,000 shares of Series D Preferred Stock if, and to the extent that,
the holders exchange their Units or exercise the Warrant. The Company has
registered the foregoing Secondary 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.
Offer and Sale of Shares
Any of the Selling Shareholders or their pledgees, donees, transferees or
other successors in interest, may from time to time, in one or more
transactions, sell all or a portion of the shares in such transactions at
prices then prevailing or related to the then current market price or at
negotiated prices. The offering price of the shares from time to time will be
determined by the Selling Shareholders and, at the time of such determination,
may be higher or lower than the market price of the shares on the NYSE. If the
Selling Shareholders effect transactions by selling shares to or through
underwriters, brokers, dealers or agents, these underwriters, brokers, dealers
or agents may receive compensation in the form of discounts, concessions or
commissions from a Selling Shareholder or from purchasers of shares for whom
they may act as agents, and underwriters may sell shares to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. The Selling Shareholders and any brokers, dealers
or agents that participate in the distribution of the shares may be deemed to
be underwriters, and any profit on the sale of the shares by them and any
discounts, concessions or commissions received by any underwriters, brokers,
dealers or agents may be deemed to be underwriting discounts and commissions
under the Securities Act. Under agreements that may be entered into by us,
underwriters, brokers, dealers and agents who participate in the distribution
of shares may be entitled to indemnification by Weeks against certain
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such underwriters, brokers, dealers or agents
may be required to make in respect thereof. The shares may be sold directly or
through broker-dealers acting as principal or agent, or pursuant to a
distribution by one of more underwriters on a firm commitment or best-efforts
basis.
The Selling Shareholders, or their pledgees, donees, transferees or other
successors in interest, may offer and sell their shares in the following
manner:
. on the NYSE or other exchanges on which the shares are listed at the time of
sale;
. in the over-the-counter market or otherwise at prices and at terms then
prevailing or at prices related to the then current market price;
. in underwritten offerings;
. in privately negotiated transactions;
. in a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
. a broker or dealer may purchase as principal and resell such shares for its
own account pursuant to this Prospectus;
. an exchange distribution in accordance with the rules of the exchange;
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers; or
. through any combination of the above.
29
<PAGE>
The Selling Shareholders may enter into hedging transactions with broker-
dealers or other financial institutions. In connection with these transactions,
broker-dealers or other financial institutions may engage in short sales of our
stock in the course of hedging the positions they assume with the Selling
Shareholders. The Selling Shareholders may also enter into options or other
transactions with broker-dealers or other financial institutions of the shares
offered hereby, which securities the broker-dealers or other financial
institutions may resell pursuant to this Prospectus (as supplemented or amended
to reflect the transaction).
The Selling Shareholders may accept and, together with any agent of the
Selling Shareholders, reject in whole or in part any proposed purchase of the
shares offered by this Prospectus. We will not receive any proceeds from the
offering of shares by the Selling Shareholders.
Prospectus Supplement Regarding Sales
To the extent required, we will set forth in a prospectus supplement
accompanying this Prospectus, or, if appropriate, in a post-effective
amendment, the following information: (i) the amount of the shares of Common
Stock or Preferred Stock, as applicable, to be sold; (ii) purchase prices;
(iii) public offering prices; (iv) the names of any agents, dealers or
underwriters; and (v) any applicable commissions or discounts with respect to a
particular offer.
Compliance with State Securities Laws
We have not registered or qualified the shares offered by this Prospectus
under the laws of any country, other than the United States. In certain states,
the Selling Shareholders may not offer or sell their shares unless (i) we have
registered or qualified such shares for sale in such states or (ii) we have
complied with an available exemption from registration or qualification. Also,
in certain states, to comply with such state securities laws, the Selling
Shareholders can offer and sell their shares only through registered or
licensed brokers or dealers.
Rule 144
The Selling Shareholders may also resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided such shareholder meets the criteria and conforms to the requirements
of such Rule.
Payment of Expenses
We will pay substantially all of the expenses related to the registration of
the shares of offered by this Prospectus. The Selling Shareholders will pay any
sales commissions or other seller's compensation applicable to such
transactions.
USE OF PROCEEDS
We are registering the shares offered by this Prospectus for the account of
the Selling Shareholders identified in the section of this Prospectus entitled
"Selling Shareholders." All of the net proceeds from the sale of the shares
will go to the Selling Shareholders who offer and sell their shares of stock.
We will not receive any part of the proceeds from the sale of such shares.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, we have made forward-looking
statements in this Prospectus and in the documents incorporated by reference in
this Prospectus, such as those pertaining to our capital resources, portfolio
performance and result of operations. "Forward-looking statements" are
30
<PAGE>
projections, plans, objectives or assumptions about Weeks. Forward-looking
statements involve numerous risks and uncertainties and you should not place
undue reliance on such statements since there can be no assurance that the
events or circumstances reflected in these statements will actually occur.
Certain such forward-looking statements can be identified by use of forward-
looking terminology such as "believes," "expects," "may," "will," "should,"
"seeks," "approximately," "intends," "plans," "pro forma," "estimates," or
"anticipates" or the negative thereof or other variations thereof or comparable
terminology, by discussions of strategy, plans or intentions. Such forward-
looking statements are necessarily dependent on assumptions, data or methods
that may be incorrect or imprecise and they may be incapable of being realized.
The following factors, among others, could cause actual results and future
events to differ materially from those set forth or contemplated in the
forward-looking statements: defaults or non-renewal of leases, increased
interest rates and operating costs, failure to obtain necessary outside
financing, difficulties in identifying properties to acquire and in effecting
acquisitions, failure to successfully integrate acquired properties and
operations, risks and uncertainties affecting property development and
construction (including, without limitation, construction delays, costs
overruns, inability to obtain necessary permits and public opposition to such
activities), failure to qualify as a REIT under the Code, environmental
uncertainties, risks related to natural disasters, financial market
fluctuations, changes in real estate and zoning laws and increases in real
property tax rates. Our success also depends upon economic trends generally,
including interest rates, income tax laws, governmental regulation,
legislation, population changes and those risk factors discussed in our other
filings made with the SEC. We assume no obligation to update forward-looking
statements.
LEGAL MATTERS
The validity of the securities offered by the Selling Shareholders, 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 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, 1998 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.
31
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
No person has been authorized in connection with the offering made hereby to
give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company or any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby to any person or by anyone
in any jurisdiction in which it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information...................................... 2
Securities to be Offered................................................. 3
Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock
Dividends............................................................... 4
The Company.............................................................. 5
Description of Capital Stock............................................. 7
Selling Shareholders..................................................... 16
Federal Income Tax Considerations........................................ 18
Plan of Distribution..................................................... 29
Use of Proceeds.......................................................... 30
Special Note of Caution Regarding Forward-Looking Statements............. 30
Legal Matters............................................................ 31
Experts.................................................................. 31
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Weeks Corporation
2,359,882 Shares of Common Stock
1,400,000 Shares of 8.0% Series A
Cumulative Redeemable Preferred Stock
2,600,000 Shares of 8.625% Series D
Cumulative Redeemable Preferred Stock
---------------
PROSPECTUS
---------------
May 18, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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 and Preferred Stock
being registered hereby. All amounts, other than the SEC Registration Fee, are
estimates.
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 48,629
Legal Fees and Expense........................................... 50,000
Blue Sky Fees and Expenses (including fees of counsel)........... 5,000
NYSE Listing Fees................................................ 5,000
Miscellaneous.................................................... 5,000
--------
Total.......................................................... $113,629
========
</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
II-1
<PAGE>
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 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.
II-2
<PAGE>
(4) "Expenses" includes counsel fees.
(5) "Liability" means the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an employee benefit
plan), or reasonable expenses incurred with respect to a proceeding.
(6) "Official capacity" means:
(A) When used with respect to a director, the office of director in a
corporation; and
(B) When used with respect to an officer, as contemplated in Code Section
14-2-857, the office in a corporation held by the officer.
Official capacity does not include service for any other domestic or foreign
corporation or any partnership, joint venture, trust, employee benefit plan, or
other entity.
(7) "Party" means an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(8) "Proceeding" means any threatened, pending or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative and whether formal or informal.
14-2-851. Authority to indemnify.
(a) Except as otherwise provided in this Code section, a corporation may
indemnify an individual who is a party to a proceeding because he or she is or
was a director against liability incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that such
conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed to
the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual had
no reasonable cause to believe such conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he or she believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subparagraph (a) (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.
II-3
<PAGE>
A corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he or she was a
party because he or she was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding.
14-2-853. Advance for expenses.
(a) A corporation may, before final disposition of a proceeding, advance
funds to pay for or reimburse the reasonable expenses incurred by a director
who is a party to a proceeding because he or she is a director if he or she
delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or she
has met the relevant standard of conduct described in Code Section 14-2-851
or that the proceeding involves conduct for which liability has been
eliminated under a provision of the articles of incorporation as authorized
by paragraph (4) of subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it is
ultimately determined that the director is not entitled to indemnification
under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this Code
section must be an unlimited general obligation of the director but need not be
secured and may be accepted without reference to the financial ability of the
director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a majority
vote of all the disinterested directors (a majority of whom shall for
such purpose constitute a quorum) or by a majority of the members of a
committee of two or more disinterested directors appointed by such a
vote; or
(B) When there are fewer than two disinterested directors, by the
vote necessary for action by the board in accordance with subsection
(c) of Code Section 14-2-824, in which authorization directors who do
not qualify as disinterested directors may participate; or
(2) By the shareholders, but shares owned or voted under the control of a
director who at the time does not qualify as a disinterested director with
respect to the proceeding may not be voted on the authorization.
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.
II-4
<PAGE>
(b) If the court determines that the director is entitled to indemnification
or advance for expenses under this part, it may also order the corporation to
pay the director's reasonable expenses to obtain court--ordered indemnification
or advance for expenses.
14-2-855. Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under Code Section 14-2-851
unless authorized thereunder and a determination has been made for a specific
proceeding that indemnification of the director is permissible in the
circumstances because he or she has met the relevant standard of conduct set
forth in Code Section 14-2-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of
directors by a majority vote of all the disinterested directors (a majority
of whom shall for such purpose constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors appointed by
such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors, selected by
the board of directors (in which selection directors who wish do not
qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the control
of a director who at the time does not qualify as a disinterested director
may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except that if there are
fewer than two disinterested directors or if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subparagraph
(b)(2)(B) of this Code section to select special legal counsel.
14-2-856. Shareholder approved indemnification.
(a) If authorized by the articles of incorporation or a bylaw, contract, or
resolution approved or ratified by the shareholders by a majority of the votes
entitled to be cast, a corporation may indemnify 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.
II-5
<PAGE>
(c) Where approved or authorized in the manner described in subsection (a) of
this Code section, a corporation may advance or reimburse expenses incurred in
advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of his
or her good faith belief that his or her conduct does not constitute
behavior of the kind described in subsection (b) of this Code section; and
(2) The director furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay any advances if it is
ultimately determined that the director is not entitled to indemnification
under this Code section.
14-2-857. Indemnification of officers, employees, and agents.
(a) A corporation may indemnify and advance expenses under this part to an
officer of the corporation who is a party to a proceeding because he or she is
an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a resolution of the
board of directors, or contract except for liability arising out of conduct
that constitutes:
(A) Appropriation, in violation of his or her duties, of any business
opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section
shall apply to an officer who is also a director if the sole basis on which he
or she is made a party to the proceeding is an act or omission solely as an
officer.
(c) An officer of a corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may apply to a court
under Code Section 14-2-854 for indemnification or advances for expenses, in
each case to the same extent to which a director may be entitled to
indemnification or advances for expenses under those provisions.
(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
II-6
<PAGE>
the act or omission giving rise to a proceeding to provide indemnification or
advance funds to pay for or reimburse expenses consistent with this part. Any
such obligatory provision shall be deemed to satisfy the requirements for
authorization referred to in subsection (c) of Code Section 14-2-853 or
subsection (c) of Code Section 14-2-855. Any such provision that obligates the
corporation to provide indemnification to the fullest extent permitted by law
shall be deemed to obligate the corporation to advance funds to pay for or
reimburse expenses in accordance with Code Section 14-2-853 to the fullest
extent permitted by law, unless the provision specifically provides otherwise.
(b) Any provision pursuant to subsection (a) of this Code section shall not
obligate the corporation to indemnify or advance expenses to a director of a
predecessor of the corporation, pertaining to conduct with respect to the
predecessor, unless otherwise specifically provided. Any provision for
indemnification or advance for expenses in the articles of incorporation,
bylaws, or a resolution of the board of directors or shareholders, partners,
or, in the case of limited liability companies, members or managers of a
predecessor of the corporation or other entity in a merger or in a contract to
which the predecessor is a party, existing at the time the merger takes effect,
shall be governed by paragraph (3) of subsection (a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation, limit
any of the rights to indemnification or advance for expenses created by or
pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director or an officer in connection with his or her
appearance as a witness in a proceeding at a time when he or she is not a
party.
(e) Except as expressly provided in Code Section 14-2-857, this part does not
limit a corporation's power to indemnify, advance expenses to, or provide or
maintain insurance on behalf of an employee or agent.
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 (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-3 (File No. 333-42821)).
3.3 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.3 to the
Registrant's Registration Statement on Form S-3 (File No. 333-42821)).
3.4 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.7 to the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1998).
3.5 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.8 to the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1998).
3.6 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 Series A 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 Series D Preferred Stock.
4.3 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)).
</TABLE>
II-7
<PAGE>
<TABLE>
<C> <S>
4.4 Warrant Certificate dated November 6, 1998 (incorporated by reference to
Exhibit 4.5 to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998).
5.1 Opinion of King & Spalding regarding the validity of the securities being
registered.
8.1 Opinion of King & Spalding regarding tax matters.
12.1 Consolidated Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends
23.1 Consent of King & Spalding (included as part of Exhibits 5.1 and 8.1
hereto).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on page II-10).
</TABLE>
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.
II-8
<PAGE>
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-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on this behalf by the undersigned,
thereunto duly authorized, in Atlanta, Georgia on the 18th day of May, 1999.
Weeks Corporation
/s/ David P. Stockert
By: __________________________________
David P. Stockert
Senior Vice President and Chief
Financial Officer
We, the undersigned directors and officers of Weeks Corporation, do hereby
constitute and appoint A. Ray Weeks, Jr., Thomas D. Senkbeil, Forrest W.
Robinson and David P. Stockert, and each and any of them, our true and lawful
attorneys-in-fact and agents, to do any and all acts and things in our names
and on our behalf in our capacities as directors and officers and to execute
any and all instruments for us and in our names in the capacities indicated
below, which said attorneys and agents, or any of them, may deem necessary or
advisable to enable said Corporation to comply with the Securities Act of 1933
and any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this registration statement, or any
registration statement for this offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, including
specifically, but without limitation, power and authority to sign for us or
any of us in our names in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and we do hereby
ratify and confirm all that said attorneys and agents, or any of them, shall
do or cause to be done by virtue thereof.
Signature Title
/s/ A. Ray Weeks, Jr. Chairman of the Board and Chief
- ------------------------------------- Executive Officer and a Director
A. Ray Weeks, Jr. (Principal Executive Officer)
/s/ Thomas D. Senkbeil Vice Chairman of the Board and Chief
- ------------------------------------- Investment Officer and a Director
Thomas D. Senkbeil
/s/ Forrest W. Robinson President and a Director
- -------------------------------------
Forrest W. Robinson
/s/ John W. Nelley, Jr. Managing Director and a Director
- -------------------------------------
John W. Nelley, Jr.
/s/ David P. Stockert Senior Vice President and Chief
- ------------------------------------- Financial Officer (Principal Financial
David P. Stockert Officer)
/s/ Arthur J. Quirk Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
Arthur J. Quirk
/s/ Barrington H. Branch Director
- -------------------------------------
Barrington H. Branch
II-10
<PAGE>
/s/ George D. Busbee Director
- -------------------------------------
George D. Busbee
/s/ Charles R. Eitel Director
- -------------------------------------
Charles R. Eitel
/s/ Harold S. Lichtin Director
- -------------------------------------
Harold S. Lichtin
/s/ William O. McCoy Director
- -------------------------------------
William O. McCoy
/s/ William Cavanaugh III Director
- -------------------------------------
William Cavanaugh III
/s/ Armand Codina Director
- -------------------------------------
Armand Codina
II-11
<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 (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-3 (File No. 333-
42821))........................................................
3.3 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.3 to the
Registrant's Registration Statement on Form S-3 (File No. 333-
42821))........................................................
3.4 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.7 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998).............................................
3.5 Articles of Amendment of the Registrant's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.8 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998).............................................
3.6 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 Series A 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 Series D Preferred Stock.............
4.3 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))....................
4.4 Warrant Certificate dated November 6, 1998 (incorporated by
reference to Exhibit 4.5 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1998)................
5.1 Opinion of King & Spalding regarding the validity of the
securities being registered....................................
8.1 Opinion of King & Spalding regarding tax matters...............
12.1 Consolidated Ratio of Earnings to Fixed Charges and Preferred
Stock Dividends................................................
23.1 Consent of King & Spalding (included as part of Exhibits 5.1
and 8.1 hereto)................................................
23.2 Consent of Arthur Andersen LLP.................................
24.1 Power of Attorney (included on page II-10). ...................
</TABLE>
<PAGE>
EXHIBIT 4.2
TEMPORARY CERTIFICATE--EXCHANGEABLE FOR DEFINITIVE ENGRAVED CERTIFICATE WHEN
READY FOR DELIVERY
- --------------------------------------------------------------------------------
NUMBER SHARES
WCA [LOGO OF WEEKS CORPORATION APPEARS HERE]
INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA
8.625% SERIES D CUMULATIVE SEE REVERSE SIDE
REDEEMABLE PREFERRED STOCK CERTAIN RESTRICTIONS
ON TRANSFER
THIS CERTIFICATE IS TRANSFERABLE
IN THE CITIES OF NEW YORK, NY CUSIP _______________
OR WINSTON-SALEM, NC
THIS IS TO CERTIFY THAT
is the
owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE 8.625% SERIES D CUMULATIVE
REDEEMABLE PREFERRED STOCK OF
Weeks Corporation transferable on the books of said Company in person
or by Attorney on the surrender of this certificate properly endorsed.
This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
Witness the seal of said Company and the signatures of its duly
authorized Officers.
Dated
/s/ [SIGNATURE APPEARS HERE] /s/ [SIGNATURE APPEARS HERE]
SECRETARY CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
COUNTERSIGNED AND REGISTERED:
WACHOVIA BANK, N.A.
(WINSTON-SALEM, NC) TRANSFER AGENT
AND REGISTRAR
BY AUTHORIZED SIGNATURE
- --------------------------------------------------------------------------------
<PAGE>
WEEKS CORPORATION
The Corporation's Articles of Amendment on file in the office of the Secretary
of State of Georgia set forth a full statement of the designations, preferences,
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption, and other relative rights
of the shares of Preferred Stock represented by this certificate. The shares of
Preferred Stock represented by this certificate are subject to restrictions on
transfer for the purpose of the Corporation's maintenance of its status as a
real estate investment trust (a "REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"). No person (other than A.R. Weeks, Jr., entities
controlled by him, and certain members of his family not including his siblings)
may at any time (1) Beneficially Own shares of any class of Equity Stock in
excess of 7.5% (or such other percentage as may be determined by the Board of
Directors of the Corporation) of the total number of shares of such class of
Equity Stock outstanding as of such time, or (2) Beneficially Own Equity Stock
that would result in the Corporation being "closely held" under Section 856 (b)
of the Code or otherwise failing to qualify as a REIT. In addition, the siblings
of A.R. Weeks, Jr. and certain members of their respective families (but not
including A.R. Weeks, Jr.) may not at any time Beneficially Own shares of any
class of Equity Stock in excess of 10% (or such other percentage as may be
determined by the Board of Directors of the Corporation with the consent of such
siblings) of the total number of shares of such class of Equity Stock
outstanding as of such time. In addition, A.R. Weeks, Jr., his siblings, and
certain members of their respective families may not at any time Beneficially
Own shares of any class of Equity Stock in excess of 19% (or such other
percentage as may be determined by the Board of Directors of the Corporation
with the consent of A.R. Weeks, Jr. and his siblings) of the total number of
shares of such class of Equity Stock outstanding as of such time. Any Person who
attempts to Beneficially Own shares of Equity Stock in excess of the above
limitations must immediately notify the Corporation in writing. If the
restrictions above are violated, the shares of Equity Stock represented will be
transferred automatically and by operation of law to a Trust and shall be
designated Shares-in-Trust. All capitalized terms in this legend have the
meanings defined in the Corporation's Amended and Restated Articles of
Incorporation, as the same may be further amended from time to time, a copy of
which, including the Articles of Amendment and the restrictions on transfer,
will be sent without charge to each shareholder who so requests.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____ Custodian ____
(Cust) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to Minors
Act ________
JT TEN -- as joint tenants with right of (State)
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
For value received,________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________
_________________________________________
___________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
___________________________________________________________________________
___________________________________________________________________________
_____________________________________________________________________ shares
of the preferred stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
Dated
-------------------
Signature(s) Guaranteed
-----------------------------
Signature(s)
------------------------ -----------------------------
THE SIGNATURE(S) SHOULD BE NOTICE: THE SIGNATURE(S) ON THIS
GUARANTEED BY AN ELIGIBLE ASSIGNMENT MUST CORRESPOND WITH THE
GUARANTOR INSTITUTION, AS NAME(S) AS WRITTEN UPON THE FACE OF THE
DEFINED IN RULE 17AD-1? CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
UNDER THE SECURITIES AND ALTERATION OR ENLARGEMENT, OR ANY CHANGE
EXCHANGE ACT OF 1934, AS WHATEVER.
AMENDED.
<PAGE>
EXHIBIT 5.1
May 18, 1999
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Re: Weeks Corporation --
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for Weeks Corporation, a Georgia corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the offering from time to time by certain shareholders of the Company, as set
forth in the prospectus contained in the Registration Statement (the
"Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each such supplement, a "Prospectus Supplement"), of up to (i)
2,359,882 shares of the Company's common stock, par value $.01 per share
("Common Stock"), (ii) 1,400,000 shares of the Company's 8% Series A Cumulative
Redeemable Preferred Stock, par value $.01 per share ("Series A Preferred
Stock"), and (iii) 2,600,000 shares of the Company's 8.625% Series D Cumulative
Redeemable Preferred Stock, par value $.01 per share ("Series D Preferred
Stock").
In connection with this opinion, we have examined and relied upon such
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to form the basis for the opinions hereinafter set
forth. In all such examinations, we have assumed the genuineness of signatures
on original documents and the conformity to such original documents of all
copies submitted to us as certified, conformed or photographic copies, and as to
certificates of public officials, we have assumed the same to have been properly
given and to be accurate. As to matters of fact material to this opinion, we
have relied upon statements and representations of officers of the Company and
of public officials.
This opinion is limited in all respects to the federal laws of the
United States of America and the laws of the State of Georgia, and no opinion is
expressed with respect to the laws of any other jurisdiction or any effect which
such laws may have on the opinions expressed herein. This opinion is limited to
the matters stated herein, and no opinion is implied or may be inferred beyond
the matters expressly stated herein.
<PAGE>
Weeks Corporation
May 18, 1999
Page 2
__________________
Based upon the foregoing, and the other limitations and
qualifications set forth herein, we are of the opinion that:
(i) The Company is a corporation validly existing and, based solely on a
certificate of the Secretary of State of the State of Georgia, in good standing
under the laws of the State of Georgia.
(ii) Upon the issuance and sale of the shares of Common Stock as described
in the Registration Statement, such shares will be validly issued, fully paid
and nonassessable.
(iii) Upon the issuance and sale of the shares of Preferred Stock as
described in the Registration Statement, such shares will be validly issued,
fully paid and nonassessable.
This opinion is given as of the date hereof, and we assume no
obligation to advise you after the date hereof of facts or circumstances that
come to our attention or changes in law that occur which could affect the
opinions contained herein. This letter is being rendered solely for the benefit
of the Company in connection with the matters addressed herein. This opinion
may not be furnished to or relied upon by any person or entity for any purpose
without our prior written consent.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus that is included in the Registration Statement.
Very truly yours,
/s/ King & Spalding
<PAGE>
EXHIBIT 8.1
May 18, 1999
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Re: Opinion as to Tax Status of Weeks Corporation and Related Matters
-----------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Weeks Corporation, a Georgia corporation (the
"Company") and Weeks Realty, L.P., a Georgia limited partnership (the "Operating
Partnership") in connection with the registration statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission on
May 18, 1999, relating to (A) 2,359,882 shares of the Company's common stock,
(B) 1,400,000 shares of the Company's Series A Preferred Stock, and (C)
2,600,000 shares of the Company's Series D Preferred Stock. In connection
therewith, the Company has requested our opinion as to (i) the qualification of
the Company as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); (ii) the federal income tax
classification of the Operating Partnership and the various partnerships and
limited liability companies in which it directly or indirectly owns an interest;
and (iii) the accuracy of the discussion under the caption "Federal Income Tax
Considerations" in the Prospectus, which is included in the Registration
Statement.
Unless otherwise indicated, all terms used herein with initial capital
letters shall have the same meaning as in the Prospectus.
FACTS AND ASSUMPTIONS RELIED UPON
---------------------------------
In rendering the opinion expressed herein, we have examined such documents as
we have deemed appropriate, including (but not limited to) (1) the Registration
Statement; (2) the Second Amended and Restated Agreement of Limited Partnership
of the Operating Partnership, as amended through the date hereof; (3) the
respective Articles of Incorporation of the Company, Weeks Realty Services,
Inc., Weeks Construction Services, Inc., Weeks GP Holdings, Inc., and Weeks LP
Holdings, Inc., and bylaws of such corporations, as amended, if applicable; (4)
the respective limited partnership or limited liability company agreements, as
amended, of the partnerships, joint ventures, and limited liability companies in
which the Company owns an interest; and (5) the Company's analyses relating to
its compliance with the REIT gross income and asset tests.
<PAGE>
Weeks Corporation
May 18, 1999
Page 2
In our examination of documents, we have assumed, with your consent, that all
documents submitted to us are authentic originals, or if submitted as
photocopies or telecopies, that they faithfully reproduce the originals thereof,
that all such documents have been or will be duly executed to the extent
required, that all representations and statements set forth in such documents
are true and correct, and that all obligations imposed by any such documents on
the parties thereto have been or will be performed or satisfied in accordance
with their terms.
We also have obtained such additional information and representations as we
have deemed relevant and necessary through consultation with the officers of the
Company and with the Company's advisors, including certain representations set
forth in a letter to us of even date herewith.
OPINION
-------
Based upon and subject to the foregoing, we are of the following opinion.
(1) The Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under the Code for its
initial taxable year beginning August 23, 1994 and ending December 31, 1994 as
well as its taxable years ending December 31, 1995, 1996, 1997, and 1998
(collectively, the "Taxable Years"), and its current organization and method of
operation will allow it to continue to qualify as a REIT.
(2) The Operating Partnership and each partnership and limited liability
company in which it directly or indirectly owns less than 100% of the beneficial
interests therein are classified as partnerships for federal income tax purposes
and not as associations taxable as corporations or as "publicly traded
partnerships" under Section 7704 of the Code, and each such entity in which the
Operating Partnership directly or indirectly owns 100% of the beneficial
interests therein is disregarded as an entity for federal income tax purposes.
(3) The discussion contained in the Prospectus under the caption "Federal
Income Tax Considerations" fairly summarizes the federal income tax
considerations that are material to a holder of Common Stock or Preferred Stock,
and, to the extent such discussion contains statements of law or legal
conclusions, such statements and conclusions are the opinion of King & Spalding.
The opinion expressed herein is based upon the Code, the U.S. Treasury
Regulations promulgated thereunder, current administrative positions of the U.S.
Internal Revenue Service, and existing judicial decisions, any of which could be
changed at any time, possibly on a retroactive basis. Any such changes could
adversely affect the opinion rendered herein and the tax consequences to the
Company. In addition, as noted above, our opinion is based solely on the
documents that we have examined, the additional information that we have
obtained, and the representations that have been made to us, and cannot be
relied upon if any of the facts contained
<PAGE>
Weeks Corporation
May 18, 1999
Page 3
in such documents or in such additional information is, or later becomes,
inaccurate or if any of the representations made to us is, or later becomes,
inaccurate. We are not aware, however, of any facts or circumstances contrary to
or inconsistent with the information, assumptions, and representations upon
which we have relied for purposes of this opinion. Finally, our opinion is
limited to the tax matters specifically covered thereby, and we have not been
asked to address, nor have we addressed, any other tax matters.
We hereby consent to the filing of this opinion letter as an Exhibit to the
Registration Statement and to the reference to our firm in the Prospectus under
the headings "Federal Income Tax Considerations" and "Legal Matters." In giving
such consent, however, we do not thereby admit that we are an "expert" within
the meaning of the Securities Act of 1933, as amended. Except as stated in this
paragraph, this opinion letter may not be furnished to or relied upon by any
person or entity for any purpose without our prior written consent and may not
be quoted in whole or in part or otherwise referred to.
Very truly yours,
/s/ King & Spalding
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12.1
Weeks Corporation
Ratio Of Earnings To Fixed Charges and Earnings to Fixed
Charges, Preferred Stock Dividends and Preferred Unit Distributions
(in thousands)
Weeks Group Weeks Corporation
------------- ----------------------------------------------------------------------------------
Jan. 1, 1994 Aug. 24, 1994 Year Ended Year Ended Year Ended Year Ended Three Months
To To Dec. 31, Dec. 31, Dec. 30, Dec. 31, Ended
Aug. 23, 1994 Dec. 31, 1994 1995 1996 1997 1998 Mar. 31, 1999
------------- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Computation
- --------------------
Net income $ 516 $ 798 $8,426 $12,745 $22,975 $34,874 $12,247
Extraordinary Loss - 1,993 - - - 267 -
Minority Interests - 943 2,681 3,064 6,219 9,458 5,534
------ ---------------------------------------------------------------------------
Income Before
Minority Interests 516 3,734 11,107 15,809 29,194 44,599 17,781
Add:
Interest Expense 7,004 2,210 8,797 12,643 18,833 30,782 9,103
Interest Expense of
Unconsolidated Entities - - 295 365 372 155 51
------ ---------------------------------------------------------------------------
Earnings For Purposes
Of Computation $7,520 $5,944 $20,199 $28,817 $48,399 $75,536 $26,935
------ ---------------------------------------------------------------------------
Fixed Charges and Fixed Charges
plus Preferred Stock
Dividends Computation
- -------------------------------
Interest Expense $7,004 $2,210 $8,797 $12,643 $18,833 $30,782 $ 9,103
Interest Expense of
Unconsolidated Entities - - 295 365 372 155 51
Capitalized Interest 89 - 1,198 2,358 5,289 11,968 3,398
Capitalized Interest of
Unconsolidated Entities - - - - - 180 -
------ ---------------------------------------------------------------------------
Fixed Charges for Purposes
Of Computation $7,093 $2,210 $10,290 $15,366 $24,494 $43,085 $12,552
Preferred Stock
Dividends - - - - $ 2,720 $12,000 $ 3,000
Preferred Unit
Distributions - - - - - 1,191 2,102
------ ---------------------------------------------------------------------------
Fixed Charges,
Preferred Stock
Dividends and Preferred
Unit Distributions
for Purposes
Of Computation $7,093 $2,210 $10,290 $15,366 $27,214 $56,276 $17,654
------ ---------------------------------------------------------------------------
Ratio Of Earnings To
Fixed Charges 1.06 2.69 1.96 1.88 1.98 1.75 2.15
====== ===========================================================================
Ratio of Earnings to
Fixed Charges,
Preferred Stock
Dividends and
Preferred Unit
Distributions 1.06 2.69 1.96 1.88 1.78 1.34 1.53
====== ===========================================================================
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 26, 1999
included in Weeks Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998 and to all references to our Firm included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
May 14, 1999
