SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
DUKE-WEEKS REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1740409
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
(317) 808-6000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Dennis D. Oklak
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
(317) 808-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
Alan W. Becker, Esq.
Bose McKinney & Evans LLP
135 North Pennsylvania Street, Suite 2700
Indianapolis, Indiana 46204
(317) 684-5000
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. / /
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. / X /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share (1) Offering Price Fee
- ------------------- ---------- -------------- -------------- ------------
Common Stock, $.01 100,047 $19.875 $1,988,434.13 $524.95
par value
- --------------------------------------------------------------------------------
(1) Estimated using April 14, 2000 data solely for the purpose of calculating
the registration fee pursuant to Rule 457(c).
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may
determine.
PROSPECTUS
100,047 Shares
Common Stock
-----------------------
The selling shareholders identified in this prospectus may
offer and sell up to 100,047 shares of our common stock. They
would receive these shares in exchange for units of limited
partnership interest issued in connection with contributions of
real estate to Duke-Weeks Realty Limited Partnership. The
registration of these shares of our common stock does not
necessarily mean that any of these shares will be sold by any of
the selling shareholders. We will not receive any cash proceeds
from the exchange of units for our common stock or from any sale
of our common stock by the selling shareholders.
Our common stock is listed on the New York Stock Exchange under
the symbol DRE. On March 31, 2000 the closing price of one share
of our common stock as reported on the New York Stock Exchange
was $18.81.
--------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
--------------------------------
The date of this prospectus is ___________, 2000.
If it is against the law in any state or other jurisdiction
to make an offer to sell our common stock (or to solicit an offer
from someone to buy our common stock), then this prospectus does
not apply to any person in that state, and this prospectus makes
no offer or solicitation to any such person.
You should rely only on the information incorporated by
reference or provided in this prospectus or any supplement.
Neither we nor any of the selling shareholders have authorized
anyone to provide you with different information. You should not
assume that the information in this prospectus or any supplement
is accurate as of any date other than the date on the front of
these documents.
-----------------------------
TABLE OF CONTENTS
PAGE
The Company 3
Use of Proceeds 3
Restrictions on Ownership of Shares 4
Federal Income Tax Considerations 4
Selling Shareholders 15
Plan of Distribution 16
Legal Opinions 17
Experts 17
Where You Can Find More Information 18
FORWARD-LOOKING STATEMENTS
This prospectus and any prospectus supplement includes and
incorporates by reference forward-looking statements. We have
based these forward-looking statements on our current
expectations and projections about future events. These forward-
looking statements are subject to risks, uncertainties and
assumptions about us, including, among other things:
- Our anticipated future acquisition and development strategies;
- Tax risks, including our continued qualification as a real
estate investment trust;
- The limited geographic diversification of our real estate
portfolio; and
- General real estate investment risks, including local
market conditions and rental rates, competition for tenants,
tenant defaults, possible environmental liabilities and
financing risks.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these
risks, uncertainties and assumptions, the forward-looking events
discussed in this prospectus supplement and discussed in or
incorporated by reference in the accompanying prospectus may not
occur.
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THE FOLLOWING INFORMATION MAY NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE
PROSPECTUS AND ANY ACCOMPANYING SUPPLEMENT, AS WELL AS THE
DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS BEFORE
MAKING AN INVESTMENT DECISION. UNLESS INDICATED OTHERWISE, THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS PRESENTED AS OF
DECEMBER 31, 1999. ALL REFERENCES TO "WE" OR "DUKE" IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS MEAN DUKE-
WEEKS REALTY CORPORATION AND ALL ENTITIES OWNED OR CONTROLLED BY
DUKE-WEEKS REALTY CORPORATION, EXCEPT WHERE IT IS MADE CLEAR THAT
THE TERM MEANS ONLY THE PARENT COMPANY.
THE COMPANY
We are a self-administered and self-managed real estate
investment trust (a "REIT") that began operations through a
related entity in 1972. As of December 31, 1999, we:
- Owned 925 industrial, office and retail properties
(including properties under development), consisting of over
102 million square feet located in 13 states; and
- Owned or controlled approximately 4,300 acres of land with
an estimated future development potential of over 62 million
square feet of industrial, office and retail properties.
We provide the following services for our properties and for
certain properties owned by third parties:
- leasing
- management
- construction
- development
- other tenant-related services
We directly or indirectly hold all of our interests in our
properties and land and we conduct all of our operations through
Duke-Weeks Realty Limited Partnership (the "Operating
Partnership"). Holders of units in the Operating Partnership
(other than us) may exchange them for our common stock on a one
for one basis. When units are exchanged for common stock, our
percentage interest in the Operating Partnership increases. We
control the Operating Partnership as its sole general partner and
own, as of December 31, 1999, approximately 87% of the Operating
Partnership's units.
We are an Indiana corporation that was originally incorporated
in the State of Delaware in 1985, and reincorporated in the State
of Indiana in 1992. Our executive offices are located at 8888
Keystone Crossing, Suite 1200, Indianapolis, Indiana 46240, and
our telephone number is (317) 808-6000.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common
stock offered by the selling shareholders.
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RESTRICTIONS ON OWNERSHIP OF SHARES
For us to qualify as a REIT for federal income tax purposes, no
more than 50% in value of our outstanding capital shares may be
owned, directly or indirectly, by five or fewer individuals (as
defined in the law to include certain entities) during the last
half of a taxable year or during a proportionate part of a
shorter taxable year. In addition, our common stock must also 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. Because we expect to continue to qualify
as a REIT, our Articles of Incorporation contain a restriction
intended to ensure compliance with these requirements which:
- authorizes, but does not require, our board of directors
to refuse to give effect to a transfer of common stock
which, in its opinion, might jeopardize our status as a
REIT;
- voids any acquisition of shares which would result in our
disqualification as a REIT;
- gives our board of directors the authority to take any
actions it thinks are advisable to enforce the provision,
which might include, but are not limited to, refusing to
give effect to, or seeking to enjoin, a transfer which might
jeopardize our status as a REIT; and
- requires any shareholder to provide us with any
information regarding his or her direct and indirect
ownership of common stock that we reasonably require.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of material federal income tax
considerations relevant to us and to an investor in shares of our
common stock. You should be aware of the following about this
summary:
- It is based upon current law.
- It does not cover all possible tax considerations.
- It does not include a detailed description of any state,
local, or foreign tax considerations.
- It does not describe all of the aspects of Federal income
taxation that may be relevant to you in light of your
particular circumstances.
- It does not describe all of the aspects of Federal income
taxation that may be relevant 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) subject
to special treatment under the federal income tax laws.
Holders of units intending to exchange their units for shares of
common stock should consult with their own tax advisors with
respect to Federal, state, local and other tax laws applicable to
their specific situations. As used in this section, the terms
"we" and "Duke" refer solely to Duke-Weeks Realty Corporation.
YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE
SPECIFIC FEDERAL, STATE AND LOCAL TAX CONSEQUENCES TO YOU OF THE
ACQUISITION, OWNERSHIP AND SALE OF COMMON STOCK IN DUKE AND OUR
ELECTION TO BE TAXED AS A REIT, INCLUDING POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
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TAXATION OF DUKE
GENERAL. Duke expects to continue to be taxed as a REIT for
federal income tax purposes. Duke's management believes that Duke
was organized and has operated in a manner that meets the
requirements for qualification and taxation as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"), and that
Duke intends to continue to operate in such a manner. We cannot
assure you, however, that Duke will continue to operate in a
manner that will allow it to remain qualified as a REIT.
In the opinion of Bose McKinney & Evans LLP, which has acted as
our counsel, if the assumptions and representations referred to
below are true, Duke's proposed methods of operation and the
proposed methods of operation of the Operating Partnership and
Duke Realty Services Limited Partnership (the "Services
Partnership") since and including 1994 have permitted and will
permit Duke to continue to qualify to be taxed as a REIT for all
years since and including 1994 and for Duke's current and
subsequent taxable years. This opinion is:
- based on an assumption that Duke was organized in
conformity with and has satisfied the requirements for
qualification and taxation as a REIT under the Code for each
of its taxable years from and including the first year for
which it made the election to be taxed as a REIT through
1993;
- based upon certain assumptions relating to the
organization and operation of Duke Services, Inc. ("DSI"),
the Operating Partnership and the Services Partnership;
- conditioned upon certain representations made by Duke's
personnel and affiliates as to certain factual matters
relating to Duke's past operations and its intended manner
of future operation and the intended manner of future
operation of the Operating Partnership and the Services
Partnership; and
- based upon Duke's receipt of a letter ruling from the IRS
dated September 30, 1994, which concluded that the Operating
Partnership's and Duke's distributive shares of the gross
income of the Services Partnership will be in proportion to
the respective percentage shares of the capital interests of
the partners of the Services Partnership.
Bose McKinney & Evans LLP is not aware of any facts or
circumstances which are inconsistent with these assumptions and
representations. Unlike a tax ruling, an opinion of counsel is
not binding upon the IRS, and we cannot be sure that the IRS will
not challenge Duke's status as a REIT for Federal income tax
purposes. Duke's qualification and taxation as a REIT has
depended and will depend upon, among other things, its ability to
meet on a continuing basis, through ownership of assets, actual
annual operating results, receipt of qualifying real estate
income, distribution levels and diversity of stock ownership, the
various qualification tests imposed under the Internal Revenue
Code discussed below. Bose McKinney & Evans LLP will not review
compliance with these tests on a periodic or continuing basis.
Accordingly, neither Bose McKinney & Evans LLP nor we can assure
you that Duke will continue to satisfy these tests. See "Taxation
of Duke - Failure to Qualify."
The following is a general summary of the Code sections which
govern the federal income tax treatment of a REIT and its
shareholders. These sections of the Code are highly technical and
complex. This summary is qualified in its entirety by the
applicable Code provisions, Treasury Regulations, and
administrative and judicial interpretations as currently in
effect.
So long as Duke qualifies for taxation as a REIT and
distributes at least 95% of its REIT taxable income (computed
without regard to net capital gains or the dividends paid
deduction) for its taxable year to its shareholders, Duke will
generally not be subject to federal income tax with respect to
income which it distributes to its shareholders. However, Duke
may be subject to federal income tax under certain circumstances,
including taxes at regular corporate rates on any undistributed
REIT taxable income, the "alternative minimum tax" on its items
of tax
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preference, and taxes imposed on income and gain generated
by certain extraordinary transactions.
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) which has the calendar year as its taxable year;
(6) the beneficial ownership of which is held by 100 or
more persons;
(7) 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
(8) which meets certain income and assets tests, described
below.
We believe Duke currently satisfies all requirements.
INCOME TESTS. In order to qualify as a REIT, there are two
gross income tests that must be satisfied annually. For purposes
of these tests, Duke is deemed to be entitled to a share of the
gross income attributable to its proportionate interest in any
partnerships in which it holds an interest. The tests are:
- First, at least 75% of Duke'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 (including "rents from real
property," gain from the sale of real property and, in
certain circumstances, interest) or from qualified types of
temporary investments.
- Second, at least 95% of Duke's gross income (excluding
gross income from prohibited transactions) for each taxable
year must be derived from the same items which qualify under
the 75% income test or from dividends, interest and gain
from the sale or disposition of stock or securities, or from
any combination of the foregoing.
Rents Duke receives will qualify as "rents from real property"
in satisfying the gross income tests for a REIT described above
only if several conditions (related to the relationship of the
tenant to Duke, the method of determining the rent payable and
nature of the property leased) are met. Duke does not anticipate
receiving rents in excess of a minimal amount that fail to meet
these conditions. Finally, for rents received to qualify as
"rents from real property," Duke generally must not operate or
manage the property or furnish or render services to tenants,
other than through an "independent contractor" that is adequately
compensated and from whom Duke derives no income. However, Duke
may perform services "usually or customarily rendered" in
connection with the rental of space for occupancy only and not
otherwise considered "rendered to the occupant" ("Permissible
Services").
Duke provides certain management, development, construction and
other tenant related services with respect to our properties
through the Operating Partnership, which is not an independent
contractor. Our management believes that the material services
provided to tenants by the Operating Partnership are Permissible
Services. To the extent services to tenants do not constitute
Permissible Services, such services are performed by independent
contractors.
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Under the Taxpayer Relief Act of 1997 (the "1997 Act"), in
determining whether a REIT satisfies the income tests, a REIT's
rental income from a property will not cease to qualify as "rents
from real property" merely because the REIT performs services for
a tenant other than permitted customary services if the amount
that the REIT is deemed to have received as a result of performing
impermissible services does not exceed one percent of all amounts
received directly or indirectly by the REIT with respect to such
property. The amount that a REIT will be deemed to have received for
performing impermissible services is at least 150% of the direct
cost to the REIT of providing those services.
Duke derives a portion of its income from the Operating
Partnership's interest as a limited partner in the Services
Partnership and its ownership of DSI, which is a general partner
of the Services Partnership. The Services Partnership receives
fees for real estate services with respect to properties that are
not owned directly by the Operating Partnership and fees in
consideration for the performance of management and
administrative services with respect to properties that are not
entirely owned by the Operating Partnership. All or a portion of
such fees will not qualify as "rents from real property" for
purposes of the 75% or 95% gross income tests. Pursuant to
Treasury Regulations, a partner's capital interest in a
partnership determines its proportionate interest in the
partnership's gross income from partnership assets for purposes
of the 75% and 95% gross income tests. For this purpose, the
capital interest of a partner is determined by dividing its
capital account by the sum of all partners' capital accounts.
The partnership agreement of the Services Partnership provides,
however, for varying allocations of income which differ from
capital interests, subject to certain limitations on the
aggregate amount of gross income which may be allocated to the
Operating Partnership and DSI. Duke has obtained a letter ruling
from the IRS that allocations according to capital interests are
proper for applying the 75% and 95% gross income tests. Thus, for
purposes of these gross income tests, the Services Partnership
allocates its gross income to the Operating Partnership and DSI
based on their capital interests in the Services Partnership.
Although certain of the fees allocated from the Services
Partnership do not qualify under the 75% or 95% gross income
tests as "rents from real property," we believe that the
aggregate amount of such fees (and any other non-qualifying
income) allocated to Duke in any taxable year has not and will
not cause Duke to exceed the limits on non-qualifying income
under the 75% or 95% gross income tests described above.
If Duke fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, Duke may nevertheless qualify
as a REIT for such year if it is entitled to relief under certain
provisions of the Code. It is not possible, however, to state
whether in all circumstances Duke would be entitled to the
benefit of these relief provisions. Even if these relief
provisions apply, a tax would be imposed on certain excess net
income.
ASSET TESTS. In order for Duke to maintain its qualification
as a REIT, at the close of each quarter of its taxable year, it
must also satisfy three tests relating to the nature of its
assets. These tests are:
- First, at least 75% of the value of its total assets must
be represented by "real estate assets," cash, cash items,
and government securities.
- Second, not more than 25% of its total assets may be
represented by securities other than those in the 75% assets
class.
- Third, of the assets held in securities other than those
in the 75% assets class, the value of any one issuer's
securities Duke owns may not exceed 5% of the value of its
total assets, and it may not own more than 10% of any one
issuer's outstanding voting securities (excluding securities
of a qualified REIT subsidiary as defined in the Code or
another REIT).
Duke is deemed to directly hold its proportionate share of all
real estate and other assets of the Operating Partnership as well
as its proportionate share of all assets deemed owned by the
Operating Partnership and DSI
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through their ownership of partnership interests in the Services
Partnership and other partnerships. As a result, Duke's management
believes that more than 75% of its assets are real estate assets.
In addition, Duke's management does not expect it to hold:
- any securities representing more than 10% of any one
issuer's voting securities other than DSI, which is a qualified
REIT subsidiary; nor
- securities of any one issuer exceeding 5% of the value of
Duke's gross assets (determined in accordance with generally
accepted accounting principles).
ANNUAL DISTRIBUTION REQUIREMENTS. In order to qualify as a
REIT, Duke generally must distribute dividends (other than
capital gain dividends) to its shareholders in an amount at least
equal to:
- the sum of:
- 95% of its "REIT taxable income" (computed without
regard to the dividends paid deduction and its net
capital gain); and
- 95% of the net income (after tax), if any, from
foreclosure property;
- minus the sum of certain items of non-cash income.
To the extent that Duke does not distribute all of its net
capital gain or distribute at least 95%, but less than 100%, of
its "REIT taxable income," as adjusted, Duke will be subject to
tax on the undistributed amount at regular capital gains and
ordinary corporate tax rates. Furthermore, Duke will be subject
to regular capital gains and ordinary corporate tax rates on
undistributed income and also may be subject to a 4% excise tax
on undistributed income in certain events if it should fail to
distribute during each calendar year at least the sum of:
- 85% of its REIT ordinary income for such year;
- 95% of its REIT net capital gain income for such year; and
- any undistributed taxable income from prior periods.
Under the 1997 Act, certain non-cash income, including income
from cancellation of indebtedness and original issue discount,
will be excluded from income in determining the amount of
dividends that a REIT is required to distribute. In addition, a
REIT may elect to retain and pay income tax on any net long-term
capital gains and require its shareholders to include such
undistributed net capital gains in their income. If a REIT made
such an election, the REIT's shareholders would receive a tax
credit attributable to their share of capital gains tax paid by
the REIT on the undistributed net capital gain that was included
in the shareholders' income, and such shareholders would receive
an increase in the basis of their shares in the amount of
undistributed net capital gain included in their income reduced
by the amount of the credit.
Duke believes that it has made and intends to continue to make
timely distributions sufficient to satisfy the annual
distribution requirements. In this regard, the partnership
agreement of the Operating Partnership authorizes Duke, 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 Duke to meet these distribution
requirements. It is possible, however, that from time to time
Duke may not have sufficient cash or other liquid assets to meet
the 95% distribution requirement due primarily to the expenditure
of cash for nondeductible expenses such as principal amortization
or capital expenditures. In such event, Duke may borrow or may
cause the Operating Partnership to arrange for short term or
other borrowing to permit the payment of required dividends or
pay dividends in the form of taxable stock dividends. If the
amount of nondeductible expenses exceeds non-cash deductions, the
Operating Partnership may refinance
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its indebtedness to reduce principal payments and borrow funds for
capital expenditures.
FAILURE TO QUALIFY. If Duke fails to qualify for taxation as a
REIT in any taxable year, it will be subject to tax (including
any applicable corporate alternative minimum tax) on its taxable
income at regular corporate rates. Distributions to shareholders
in any year in which Duke fails to qualify will not be required
to be made and, if made, will not be deductible by Duke. Unless
entitled to relief under specific statutory provisions, Duke also
will be disqualified from taxation as a REIT for the four taxable
years following the year during which qualification was lost. It
is not possible to state whether in all circumstances Duke would
be entitled to such statutory relief. The 1997 Act contains a
number of technical provisions that reduce the risk that a REIT
will inadvertently fail to qualify as a REIT.
TAX ASPECTS OF DUKE'S INVESTMENTS IN PARTNERSHIPS
EFFECT OF TAX STATUS OF OPERATING PARTNERSHIP AND SERVICES
PARTNERSHIP AND OTHER PARTNERSHIPS ON REIT QUALIFICATION. All of
Duke's investments are through DSI and the Operating Partnership,
which in turn hold interests in other partnerships, including the
Services Partnership. We believe that the Operating Partnership,
and each other partnership in which it holds an interest, are
properly treated as partnerships for tax purposes (and not as an
association taxable as a corporation). If, however, the Operating
Partnership were treated as an association taxable as a
corporation, Duke would cease to qualify as a REIT.
TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. The Operating
Partnership was formed by way of contributions of appreciated
property (including certain of the properties it currently owns)
to the Operating Partnership. When property is contributed to a
partnership in exchange for an interest in the partnership, the
partnership generally takes a carryover basis in that property
for tax purposes equal to the adjusted basis of the contributing
partner in the property, rather than a basis equal to the fair
market value of the property at the time of contribution (this
difference is referred to as "Book Tax Difference"). The
partnership agreement of the Operating Partnership requires
allocations of income, gain, loss and deduction with respect to a
contributed property be made in a manner consistent with the
special rules of Section 704(c) of the Code and the associated
regulations, which will tend to eliminate the Book Tax
Differences with respect to the contributed properties over the
life of the Operating Partnership. However, because of certain
technical limitations, the special allocation rules of Section
704(c) may not always entirely eliminate the Book Tax Differences
on an annual basis or with respect to a specific taxable
transaction such as a sale. Thus, the carryover basis of the
contributed properties in the hands of the Operating Partnership
could cause the following effects:
- Duke could be allocated lower amounts of depreciation and
other deductions for tax purposes than would be allocated to
it if all of the Operating Partnership's properties were to
have a tax basis equal to their fair market value at the
time of contribution.
- Duke could possibly be allocated taxable gain in the event
of a sale of such contributed properties in excess of the
economic or book income allocated to it as a result of such
sale.
These principles also apply in determining Duke's earnings and
profits for purposes of determining the portion of distributions
taxable as dividend income. The application of these rules over
time may result in a higher portion of distributions being taxed
as dividends than would have occurred had the Operating
Partnership purchased its interests in its properties at their
agreed values.
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TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS
As long as Duke qualifies as a REIT, dividend distributions
made to its taxable domestic shareholders out of current or
accumulated earnings and profits (and not designated as capital
gain dividends) will be taken into account by them as ordinary
income and will not be eligible for the dividends received
deduction for corporations. In addition, any dividend Duke
declares in October, November or December of any year payable to
a shareholder of record on a specified date in any such month
will be treated as both paid by Duke and received by the
shareholder on December 31 of such year, provided that Duke
actually pays the dividend during January of the following
calendar year.
Distributions in excess of current and accumulated earnings and
profits will not be taxable to a holder to the extent that they
do not exceed the adjusted basis of the holder's shares, but
rather will reduce the adjusted basis of such shares. To the
extent that such distributions exceed the adjusted basis of a
holder's shares, they will be included in income as long-term
capital gain (or short-term capital gain if the shares have been
held for one year or less) assuming the shares are a capital
asset in the hands of the holder. Shareholders may not include
in their individual income tax returns any of Duke's net operating
losses or capital losses.
In general, a domestic shareholder will realize capital gain or
loss on the disposition of common stock equal to the difference
between (1) the amount of cash and the fair market value of any
property received on such disposition and (2) the shareholder's
adjusted basis of such common stock. Under the 1997 Act, as
revised by the recently-enacted IRS Restructuring Act, for gains
realized after December 31, 1997, and subject to certain
exceptions:
- the maximum rate of tax on net capital gains of
individuals, trusts and estates from the sale or exchange of
assets held for more than 12 months has been reduced to 20%;
- the maximum rate of tax on net capital gains of
individuals, trusts and estates from the sale or exchange of
assets is reduced to 18% for assets acquired after
December 31, 2000 and held for more than five years;
- for taxpayers who would be subject to a maximum tax rate
of 15%, the rate on net capital gains is reduced to 10%;
- for taxpayers who would be subject to a maximum tax rate
of 15%, effective for taxable years commencing after
December 31, 2000, the rate is reduced to 8% for assets held
for more than five years;
- the maximum rate for net capital gains attributable to the
sale of depreciable real property held for more than 12
months is 25% to the extent of the deductions for
depreciation with respect to such property; and
- long-term capital gain Duke allocates to a shareholder
will be subject to the 25% rate to the extent that the gain
does not exceed depreciation on real property the Operating
Partnership sells.
The taxation of capital gains of corporations was not changed by
the 1997 Act or the IRS Restructuring Act. Loss upon a sale or
exchange of common stock by a shareholder who has held such
common stock for six months or less (after applying certain
holding period rules) will be treated as a long-term capital loss
to the extent of distributions from Duke required to be treated
by such shareholder as long-term capital gain.
TAXATION OF TAX-EXEMPT SHAREHOLDERS
Tax-exempt entities, including qualified employee pension and
profit sharing trusts and individual retirement accounts,
generally are exempt from federal income taxation. However, they
are subject to taxation on their unrelated business taxable
income ("UBTI"). While many investments in real estate generate
UBTI, the IRS has
- 10 -
issued a published ruling that dividend distributions from a REIT
to an exempt employee pension trust do not constitute UBTI, provided
that the shares of the REIT are not otherwise used in an unrelated
trade or business of the exempt employee pension trust. Based
on that ruling, amounts Duke distributes to exempt organizations
generally should not constitute UBTI. However, if an exempt organization
finances its acquisitions of the common shares with debt, a portion
of its income from Duke will constitute UBTI pursuant to the
"debt-financed property" rules. Furthermore, social clubs,
voluntary employee benefit associations, supplemental
unemployment benefit trusts, and qualified group legal services
plans that are exempt from taxation under paragraphs (7), (9),
(17), and (20), respectively, of Code section 501(c) are subject
to different UBTI rules, which generally will require them to
characterize distributions from Duke as UBTI.
In addition, in certain circumstances, a pension trust that
owns more than 10% of Duke's shares is required to treat a
percentage of the dividends from Duke as UBTI (the "UBTI
Percentage"). The UBTI Percentage is Duke's gross income derived
from an unrelated trade or business (determined as if Duke were a
pension trust) divided by Duke's gross income for the year in
which the dividends are paid. The UBTI rule applies to a pension
trust holding more than 10% of Duke's stock only if:
- the UBTI Percentage is at least 5%;
- Duke qualifies as a REIT by reason of the modification of
the "five or fewer" stock ownership requirement that allows
the beneficiaries of the pension trust to be treated as
holding Duke shares in proportion to their actuarial
interests in the pension trust; and
- either:
- one pension trust owns more than 25% of the value
of Duke's shares; or
- a group of pension trusts individually holding
more than 10% of the value of Duke's shares collectively
owns more than 50% of the value of Duke's shares.
TAX RELIEF EXTENSION ACT OF 1999
The Tax Relief Extension Act of 1999, signed into law by
President Clinton on December 17, 1999, contains several
provisions modifying current law as it applies to REITs.
First, under prior law, a REIT could own no more than 10% of the
outstanding voting securities of a single issuer. Under the act,
a REIT also generally cannot own more than 10% of the total value
of securities of a single issuer. In addition, no more than 20%
of the value of a REIT's assets can be represented by securities
of the taxable REIT subsidiaries permitted under the act.
However, for purposes of the new ten-percent-value test,
securities are generally defined to exclude certain safe-harbor
debt owned by a REIT if the issuer is an individual or if the
REIT owns no other securities of the issuer; where a REIT owns
securities of a partnership, safe-harbor debt is excluded from
the definition of securities only if the REIT owns at least 20%
or more of the profits interest in the partnership.
Second, a broad exception to the limitations on ownership of
securities of a single issuer applies in the case of a "taxable
REIT subsidiary" that meets certain requirements. To qualify as
a taxable REIT subsidiary, both the REIT and the subsidiary
corporation must join in an election. In addition, any
corporation (other than a REIT or a qualified REIT subsidiary
that does properly elect with the REIT to be a taxable REIT
subsidiary) of which a taxable REIT subsidiary owns, directly or
indirectly, more than 35% of the vote or value is automatically
treated as a taxable REIT subsidiary. Securities of taxable
REIT subsidiaries cannot exceed 20% of the total value of a
REIT's assets. A taxable REIT subsidiary can engage in certain
business activities that under prior law could disqualify the REIT
status because the taxable REIT subsidiary's activities and relationship
with the REIT could have prevented certain income from qualifying
as rents from real property. Under the act, the subsidiary can
provide services to tenants of REIT property
- 11 -
(even if such services were not considered services customarily
furnished in connection with the rental of real property), and can
manage or operate properties, generally for third parties, without
causing amounts received or accrued directly or indirectly by the
REIT for such activities to fail to be treated as rents from real
property. However, rents paid to a REIT generally are not
qualified rents if the REIT owns more than 10% of the value (as
well as of the vote) of a corporation paying the rents. The
exceptions are for rents that are paid by taxable rent
subsidiaries and that also meet a limited rental exception (when
90% of space is leased to third parties at comparable rents) and
an exception for rents from certain lodging facilities (operated
by an independent contractor). Furthermore, interest paid by a
taxable REIT subsidiary to the related REIT is subject to certain
rules by which the taxable REIT subsidiary cannot deduct interest
in any year that would exceed 50% of the subsidiary's adjusted
gross income. If the taxable REIT subsidiary's debt/equity ratio
exceeds 1.5 to 1. In addition, if any amount of interest, rent or
other deductions of the taxable REIT subsidiary for amounts paid
to the REIT is determined to be other than at arms-length, an
excise tax of 100% is imposed on the portion that was excessive.
Certain safe harbors are provided for certain rental payments.
Third, the act modifies the REIT distribution requirements to
conform to the rules for regulated investment companies; thus, a
REIT is required to distribute only 90%, rather than 95%, of its
income.
Fourth, as to the definition of "independent contractor", if
any class of stock of the REIT or the person being tested as an
independent contractor is regularly traded on an established
securities market, only persons who directly or for indirectly
own 5% or more of such class of stock shall be counted in
determining whether the 35% ownership limitations have been
exceeded.
Fifth, the act modifies the present law rule that permits
certain rents from personal property to be treated as real estate
rental income if such personal property does not exceed 15% of
the aggregate of real and personal property. The act replaces
the prior law comparison of the adjusted bases of properties with
a comparison based on fair market values.
The effective date of the Act is taxable years beginning after
December 31, 2000. As to provisions related to permitted
ownership of securities of an issuer, special transition rules
apply. Thus, the new rules forbidding a REIT to own more than 10%
of the value of securities of a single issuer do not apply to a
REIT with respect to securities held directly or indirectly by
such REIT on July 12, 1999, or acquired pursuant to the terms of
a written binding contract in effect on that date and at all
times thereafter until the acquisition. Similarly, securities
received in a tax-free exchange or reorganizations with respect
to or in exchange for such grandfathered securities would also be
grandfathered. The grandfathering of such securities ceases to
apply if the REIT acquires additional securities of that issuer
after that date, other than pursuant to a binding contract in
effect on that date and at all times thereafter or in a
reorganization with another corporation, the securities of which
are grandfathered.
The transition rule applicable to securities also ceases to
apply to securities of a corporation as of the first day after
July 12, 1999, on which such corporation engages in a substantial
new line of business, or acquires any substantial asset, other
than pursuant to a binding contract in effect on such date and at
all times thereafter or in a reorganization or transaction in
which gain or loss is not recognized by reason of Section 1031 or
1033 of the Internal Revenue Code. If a corporation makes an
election to become a taxable REIT subsidiary, effective before
January 1, 2004, and at a time when the REIT's ownership is
grandfathered under these rules, the election is treated as a
reorganization under Section 368(a)(1)(A) of the Internal Revenue
Code.
Finally, the new 10% of value limitation for purposes of
defining qualified rents is effective for taxable years beginning
after December 21, 2000. However, there is an exception for
rents paid under a lease or pursuant to a binding contract in
effect on July 12, 1999, and at all times thereafter.
- 12 -
BACKUP WITHHOLDING
Duke will report to its domestic shareholders and the IRS the
amount of dividends paid during each calendar year, and the
amount of tax withheld, if any. 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:
- is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact; or
- 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 that does not provide Duke with his or her correct
taxpayer identification number may also be subject to penalties
imposed by the IRS. A shareholder can credit any amount paid as
backup withholding against the shareholder's income tax
liability. In addition, Duke may be required to withhold a
portion of capital gain distributions made to any shareholders
who fail to certify their non-foreign status to Duke.
The Treasury Department has issued proposed regulations
regarding the withholding and information reporting rules
discussed above. In general, the proposed regulations do not
alter the substantive withholding requirements but unify current
certification procedures and forms, and clarify and modify
reliance standards. If finalized in their current form, the
proposed regulations would generally be effective for payments
made after December 31, 1997, subject to certain transition
rules.
TAXATION OF NON-U.S. SHAREHOLDERS
The rules governing U.S. federal income taxation of nonresident
alien individuals, foreign corporations, foreign partnerships,
and other foreign shareholders are complex, and this is only a
limited summary of those 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 on an investment
in our securities, including any reporting requirements.
Distributions that are not attributable to gain from the
Operating Partnership's sales or exchanges of U.S. real property
interests and not designated by Duke as capital gain dividends
will be treated as dividends of ordinary income to the extent
that they are made out of Duke's current or accumulated earnings
and profits. Such distributions, ordinarily, will be subject to a
withholding tax equal to 30% of the gross amount of the
distribution unless an applicable tax treaty reduces that tax.
Distributions in excess of Duke's current and accumulated
earnings and profits will not be taxable to a non-U.S.
shareholder to the extent that they do not exceed the adjusted
basis of the shareholder's common stock, but rather will reduce
the adjusted basis of that common stock. To the extent that such
distributions exceed the adjusted tax basis of a non-U.S.
shareholder's common stock, the non-U.S. shareholder will have
tax liability if the non-U.S. shareholder would otherwise be
subject to tax on any gain from the sale or disposition of his or
her common stock as described below (in which case the
shareholder may also be required to pay a 30% branch profits tax
if the shareholder is a foreign corporation). As a result of a
legislative change made by the Small Business Job Protection Act
of 1996, Duke is required to withhold 10% of any distribution in
excess of its current accumulated earnings and profits.
Consequently, although Duke intends to withhold at a rate of 30%
on the entire amount of any distribution, to the extent that it
does not do so any portion of a distribution not subject to
withholding at a rate of 30% will be subject to withholding at a
rate of 10%. However, the non-U.S. shareholder may seek a refund
of such amounts from the IRS if it is subsequently determined
that such distribution was, in fact, in excess of Duke's current
or accumulated earnings and profits, and the amount withheld
exceeds the non-U.S. shareholder's United States tax liability,
if any, with respect to the distribution.
For any year in which Duke qualifies as a REIT, distributions
that are attributable to gain from the Operating Partnership's
sales or exchanges of U.S. real property interests will be taxed
to a non-U.S. shareholder under the
- 13 -
provisions of the Foreign Investment in Real Property Tax Act of
1980 ("FIRPTA") at the normal capital gain rates applicable to
domestic shareholders (subject to applicable alternative minimum
tax and a special alternative minimum tax in the case of nonresident
alien individuals). Also, distributions subject to FIRPTA 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.
Duke is required to withhold 35% of any distribution that it
designates or could designate as a capital gain dividend. The
amount withheld is creditable against the non-U.S. shareholder's
FIRPTA tax liability.
Gain recognized by a non-U.S. shareholder upon a sale of common
stock generally will not be taxed under FIRPTA if Duke is a
"domestically controlled REIT," defined generally as a REIT in
which at all times during a specified testing period less than
50% in value of the stock was held directly or indirectly by
foreign persons. Duke believes that it is a "domestically
controlled REIT," and, therefore, that the sale of common stock
will not be subject to taxation under FIRPTA. If the gain on the
sale of common stock were to be subject to tax under FIRPTA, the
non-U.S. shareholder would be subject to the same treatment as
domestic shareholders with respect to such gain (subject to
applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals), and
the purchaser of the common stock would be required to withhold
and pay to the IRS 10% of the purchase price.
STATE AND LOCAL TAXES
We or our shareholders or both may be subject to state, local
or other taxation in various state, local or other jurisdictions,
including those in which we or they transact business or reside.
The tax treatment in such jurisdictions may differ from the
Federal income tax consequences discussed above. Consequently,
you should consult your own tax advisor regarding the effect of
state and local tax laws on an investment in our shares.
- 14 -
SELLING SHAREHOLDERS
As described previously, the selling shareholders are persons
who have received or will receive shares of common stock in
exchange for units, together with donees and pledgees and persons
to whom units will be given by other owners of units pursuant to
a planned giving program. The following table provides the names
of the selling shareholders and the maximum number of such shares
of common stock each selling shareholder will offer with this
prospectus. The selling shareholders may sell all, some or none
of their common stock received in exchange for units, so no
estimate can be made of the total number of such shares that are
to be offered by this prospectus, or the total number of shares
of common stock that will be owned by each selling shareholder
upon completion of the offering to which this prospectus relates.
MAXIMUM NUMBER
OF EXCHANGE
NAME(1) SHARESOFFERED
- -------------------------------------------- --------------
Steven V. Ciuni 4,500
William C. Moran 12,124
Patricia Moran 1,154
Meredith Moran 1,154
Ross C. Farro 66,568
Bruce Seyburn 1,199
Jim Raiskin 161
Estate of Alvin Gendelman 267
Harry Walts 548
Martin Tessler, M.D. 644
Dr. Martin Taylor 322
Elizabeth Benson 1,444
Gary S. Benson 2,886
Joan K. Veres 5,296
Joan F. Blane Revocable Trust Dated 5/6/97 630
Ursuline Academy 1,100
St. Mary's Church 50
-------
TOTAL 100,047
=======
- ---------------
(1) Selling shareholders that are entities may distribute shares
of common stock received by them in exchange for units to
their equity owners prior to sale under this prospectus. The
selling shareholders may also include persons who are donees
or pledgees of the listed selling shareholders. Any such
persons will be identified by a supplement to this prospectus.
- 15 -
PLAN OF DISTRIBUTION
This prospectus relates to the offer and sale from time to time
of shares of common stock by persons who have received or will
receive them without registration. We have registered these
shares for sale to provide the selling shareholders with freely
tradeable securities, but registration of such shares does not
necessarily mean that all or any of such shares will be offered
or sold by the selling shareholders. We have not and will not
receive any proceeds from the offering by the selling
shareholders or from the issuance of the shares to holders of
units (but we will acquire from such holders the units tendered
for exchange).
Subject to the terms and conditions contained in the
partnership agreement of the Operating Partnership, we have
agreed, as general partner of the Operating Partnership, to
exchange all or a portion of the units held by limited partners
in the Operating Partnership for shares of common stock at a
ratio determined in accordance with the Operating Partnership's
partnership agreement. Following any such exchange, we will
become the owner of the units so exchanged.
The common stock is listed on the New York Stock Exchange.
As used in this prospectus, "selling shareholders" includes
donees and pledgees selling shares received from a named selling
shareholder after the date of this prospectus.
The selling shareholders will pay all costs, expenses and fees
in connection with the registration of the shares offered by this
prospectus. We expect these expenses to be approximately
$10,000. These expenses are estimated to include registration
fees of $500, printing and reproduction costs of $100, legal fees
of $5,000, New York Stock Exchange listing fees of $3,500 and
miscellaneous expenses of $900. The selling shareholders will
also pay brokerage commissions and similar selling expenses, if
any, for the sale of these shares.
Selling shareholders may sell shares from time to time in one
or more types of transactions (which may include block
transactions) on the New York Stock Exchange, in the
over-the-counter market, in negotiated transactions, through put
or call options transactions relating to the shares, through
short sales of shares, or a combination of such methods of sale,
at market prices prevailing at the time of sale, or at negotiated
prices. Such transactions may or may not involve brokers or
dealers. The selling shareholders have advised us that they have
not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of
their shares, nor is there an underwriter or coordinating broker
acting in connection with any proposed sale of shares by the
selling shareholders.
The selling shareholders may sell shares directly to purchasers
or to or through broker-dealers, which may act as agents or
principals. Such broker-dealers may receive compensation in the
form of discounts, concessions, or commissions from the selling
shareholders and/or the purchasers of shares for whom such broker-
dealers may act as agents or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
The selling shareholders and any broker-dealers that act in
connection with the sale of common stock might be deemed to be
"underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the shares of
common stock sold by them while acting as principals might be
deemed to be underwriting discounts or commissions under the
Securities Act.
Because selling shareholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the
selling shareholders will be subject to the prospectus delivery
requirements of the Securities Act, which may include delivery
through the facilities of the New York Stock Exchange pursuant to
Rule 153 under the Securities Act.
We have informed the selling shareholders that the anti-
manipulative provisions of Regulation M promulgated
- 16 -
under the Securities Exchange Act of 1934 may apply to their sales
in the market. Regulation M prohibits, with certain exceptions, any
selling broker-dealer or agent and any "affiliated purchasers"
from bidding for or purchasing any security which is the subject
of a distribution until his participation in that distribution is
completed. In addition, Regulation M under the Exchange Act prohibits
certain "stabilizing bids" or "stabilizing purchases" for the purpose of
pegging, fixing or stabilizing the price of common stock in
connection with an offering.
Selling shareholders also may resell all or a portion of their
shares in open market transactions in reliance upon Rule 144
under the Securities Act, provided they meet the criteria and
conform to the requirements of that rule.
If we are notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the
sale of shares of common stock under this prospectus through a
block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required, pursuant to Rule
424(b) under the Securities Act, disclosing the following:
- the name of each such selling shareholder and of the
participating broker-dealer(s);
- the number of shares of common stock involved;
- the price at which such shares of common stock were sold;
- the commissions paid or discounts or concessions allowed
to such broker-dealers, where applicable;
- that such broker-dealer(s) did not conduct any
investigation to verify the information set out or
incorporated by reference in this prospectus; and
- other facts material to the transaction.
In addition, if we are notified by a selling shareholder that a
donee or pledgee intends to sell more than 500 shares of common
stock, a supplement to this prospectus will be filed.
We have agreed to indemnify each selling shareholder against
certain liabilities, including liabilities arising under the
Securities Act. The selling shareholders may agree to indemnify
any agent, dealer or broker-dealer that participates in
transactions involving sales of the Shares against certain
liabilities, including liabilities arising under the Securities
Act.
LEGAL OPINIONS
The legality of the securities offered by this prospectus is
being passed upon for us by Bose McKinney & Evans LLP,
Indianapolis, Indiana. The description of Federal income tax
matters contained in this prospectus entitled "Federal Income Tax
Considerations" is also based on the opinion of Bose McKinney &
Evans LLP. Darell E. Zink, Jr., one of our officers and
directors, was a partner in Bose McKinney & Evans through 1982,
and was of counsel to that firm until December, 1990.
EXPERTS
The consolidated financial statements and related schedule of
Duke-Weeks Realty Corporation as of December 31, 1999 and 1998,
and for each of the years in the three-year period ended December
31, 1999, incorporated herein by reference, have been
incorporated herein in reliance on the report of KPMG LLP,
independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing.
- 17 -
The consolidated financial statements and schedule of Weeks
Corporation and its subsidiaries as of December 31, 1998 and
1997, and for each of the three years in the period ended
December 31, 1998, incorporated by reference herein, have been
audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the following SEC public reference rooms:
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
Our SEC filings can also be read at the following address:
New York Stock Exchange
20 Broad Street
New York, New York 10005
Our SEC filings are also available to the public from the SEC's
Web Site at http://www.sec.gov.
This prospectus is part of a registration statement we filed
with the SEC. 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 later information
that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until all
the selling shareholders sell all of the shares of common stock
to which this prospectus relates or the offering is otherwise
terminated. We also specifically incorporate by reference any
such filings made after the date of the initial registration
statement and prior to effectiveness of the registration
statement.
1. Our Annual Report on Form 10-K (file no. 1-9044) for the
year ended December 31, 1999.
2. The description of our common stock contained in our
registration statement on Form 8-A (file no. 1-9044) as
amended.
3. Weeks Corporation's Annual Report on Form 10-K (file
no. 1-13254) for the year ended December 31, 1998.
4. Weeks Corporation's Quarterly Report on Form 10-Q (file
no. 1-13254) for the quarter ended March 31, 1999.
You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address:
- 18 -
Investor Relations
Duke-Weeks Realty Corporation
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
Telephone: (317) 808-6000
- 19 -
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration Fee . . . . . . . . . . . . . . $ 500
Printing and Reproduction . . . . . . . . . 100
NYSE Listing Fee . . . . . . . . . . . . . . 3,500
Professional Fees and Expenses . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . 900
------
Total . . . . . . . . . . . . . . . . . . . $10,000
======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Duke-Weeks Realty Corporation is an Indiana corporation.
Duke's officers and directors are and will be indemnified under
Indiana law, the Second Amended and Restated Articles of
Incorporation of Duke, and the partnership agreements of the
Operating Partnership and Duke Realty Services Limited
Partnership against certain liabilities. Chapter 37 of The
Indiana Business Corporation Law (the "IBCL") requires a
corporation, unless its articles of incorporation provide
otherwise, to indemnify a director or an officer of the
corporation who is wholly successful, on the merits or otherwise,
in the defense of any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, against reasonable
expenses, including counsel fees, incurred in connection with the
proceeding. Duke's Second Amended and Restated Articles of
Incorporation do not contain any provision prohibiting such
indemnification.
The IBCL also permits a corporation to indemnify a director,
officer, employee or agent who is made a party to a proceeding
because the person was a director, officer, employee or agent of
the corporation against liability incurred in the proceeding if
(i) the individual's conduct was in good faith and (ii) the
individual reasonably believed (A) in the case of conduct in the
individual's official capacity with the corporation that the
conduct was in the corporation's best interests and (B) in all
other cases that the individual's conduct was at least not
opposed to the corporation's best interests and (iii) in the
case of a criminal proceeding, the individual either (A) had
reasonable cause to believe the individual's conduct was lawful
or (B) had no reasonable cause to believe the individual's
conduct was unlawful. The IBCL also permits a corporation to pay
for or reimburse reasonable expenses incurred before the final
disposition of the proceeding and permits a court of competent
jurisdiction to order a corporation to indemnify a director or
officer if the court determines that the person is fairly and
reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the person met the
standards for indemnification otherwise provided in the IBCL.
II-1
Duke's Second Amended and Restated Articles of Incorporation
provide for certain additional limitations of liability and
indemnification. Section 13.01 of the Second Amended and
Restated Articles of Incorporation provides that a director shall
not be personally liable to Duke or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's duty of loyalty to
the Company or its shareholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (3) for voting for or assenting to an unlawful
distribution, or (4) for any transaction from which the director
derived an improper personal benefit. Section 13.02 of the
Second Amended and Restated Articles of Incorporation generally
provides that any director or officer of Duke or any person who
is serving at the request of Duke as a director, officer,
employee or agent of another entity shall be indemnified and held
harmless by Duke to the fullest extent authorized by the IBCL
against all expense, liability and loss (including attorneys'
fees, judgments, fines, certain employee benefits excise taxes or
penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered in connection with a civil,
criminal, administrative or investigative action, suit or
proceeding to which such person is a party by reason of the
person's service with or at the request of Duke. Section 13.02
of the Second Amended and Restated Articles of Incorporation also
provides such persons with certain rights to be paid by Duke the
expenses incurred in defending any such proceeding in advance of
the final disposition and the right to enforce indemnification
claims against Duke by bringing suit against Duke.
Duke's Second Amended and Restated Articles of Incorporation
authorize it to maintain insurance to protect itself and any of
its directors, officers, employees or agents or those of another
corporation, partnership, joint venture, trust or other
enterprise against expense, liability or loss, whether or not
Duke would have the power to indemnify such person against such
expense, liability or loss under the IBCL. Duke currently
maintains officer and director liability insurance.
Each of the partnership agreements for the Operating
Partnership and Duke Realty Services Limited Partnership also
provides for indemnification of Duke and its officers and
directors to substantially the same extent provided to officers
and directors of Duke in its Second Amended and Restated Articles
of Incorporation, and limits the liability of Duke and its
officers and directors to the Operating Partnership and its
partners and to Duke Realty Services Limited Partnership and its
partners, respectively, to substantially the same extent limited
under Duke's Second Amended and Restated Articles of
Incorporation.
II-2
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration
Statement:
3.1 Second Amended and Restated Articles of Incorporation
of Duke-Weeks Realty Corporation, incorporated by
reference from Exhibit 3.1 to the Current Report of
Duke-Weeks Realty Corporation on Form 8-K filed July
15, 1999.
3.2 Second Amended and Restated Bylaws of Duke-Weeks
Realty Corporation, incorporated by reference from
Exhibit 3.2 to the Current Report of Duke-Weeks Realty
Corporation on Form 8-K filed July 15, 1999.
5 Opinion and consent of Bose McKinney & Evans
LLP regarding legality of the securities being
registered.
8 Opinion and consent of Bose McKinney & Evans
LLP regarding tax matters.
23.1 Consent of KPMG LLP.
23.2 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in
Item 15 above, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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The undersigned Registrant hereby further undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of a prospectus filed
with the Commission pursuant to Rule 424(b) (Section 230.424(b)
of 17 C.F.R.) 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 paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 (Section
239.13 of 17 C.F.R.), Form S-8 (Section 239.16b of 17 C.F.R.) or
Form F-3 (Section 239.33 of 17 C.F.R.), and 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 section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant further undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the
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Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Indianapolis, Indiana, on the ___ day of April,
2000.
DUKE-WEEKS REALTY CORPORATION
By: /s/ Dennis D. Oklak
-------------------------
Dennis D. Oklak
Executive Vice President
Chief Administrative Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933,
as amended, this registration statement has been signed by the
following persons in the capacities indicated as of the ____ day
of April, 2000.
SIGNATURE TITLE
Thomas L. Hefner* Director Chief Executive Officer
- ----------------------- and Chairman of the Board
Thomas L. Hefner (Principal Executive Officer)
Darell E. Zink, Jr.* Executive Vice President and Chief
- ------------------------ Financial Officer and a Director
Darell E. Zink, Jr. (Principal Accounting Officer)
/s/ Dennis D. Oklak Executive Vice President, Chief
- ---------------------- Administrative Officer and Treasurer
Dennis D. Oklak
Barrington H. Branch* Director
- ---------------------------
Barrington H. Branch
Geoffrey Button* Director
- ------------------------
Geoffrey Button
William Cavanaugh III* Director
- ----------------------------
William Cavanaugh III
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Ngaire E. Cuneo* Director
- ------------------------
Ngaire E. Cuneo
Charles R. Eitel* Director
- ------------------------
Charles R. Eitel
Howard L. Feinsand* Director
- ------------------------
Howard L. Feinsand
L. Ben Lytle* Director
- ------------------------
L. Ben Lytle
William O. McCoy* Director
- ------------------------
William O. McCoy
John W. Nelley, Jr.* Director
- ------------------------
John W. Nelley, Jr.
James E. Rogers* Director
- ------------------------
James E. Rogers
Thomas D. Senkbeil* Director
- ------------------------
Thomas D. Senkbeil
Jay J. Strauss* Director
- ------------------------
Jay J. Strauss
A. Ray Weeks, Jr.* Director
- -----------------------
A. Ray Weeks, Jr.
*By: /s/ Dennis D. Oklak
- --------------------------
Dennis D. Oklak
Attorney-in-fact
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