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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 5, 1999
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HOMESTEAD VILLAGE INCORPORATED
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-12269 74-2770966
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Commission File Number) (I.R.S. Employer Identification No.)
2100 RiverEdge Parkway, 9th Floor, Atlanta, Georgia 30328
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(Address of Principal Executive Offices) (Zip Code)
(770) 303-2200
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(Registrant's Telephone Number, Including Area Code)
Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On April 5, 1999, the Registrant and Security Capital Group
Incorporated amended the Investor Agreement dated as of October 17, 1996.
Amendment No. 1 to the Investor Agreement is attached hereto as exhibit
99.1 and is incorporated herein by reference.
On April 5, 1999, the Registrant announced the commencement of a
rights offering of 76,489,092 shares of its common stock at $2.75 per share
to shareholders of record on April 5, 1999, and the sale of up to 5,329,089
additional shares of its common stock at the same price. Unless extended,
the rights offering will expire on April 23, 1999. The announcements
pertaining to this rights offering are attached hereto as exhibits 99.2 and
99.3 and are incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Amendment No. 1, dated as of April 5, 1999, to
the Investor Agreement, dated as of October 17,
1996, by and between Homestead Village
Incorporated and Security Capital Group
Incorporated.
99.2 Press Release dated March 25, 1999.
99.3 Press Release dated April 5, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HOMESTEAD VILLAGE INCORPORATED
Dated: April 14, 1999 By: /s/ Jeffrey A. Klopf
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Jeffrey A. Klopf
Secretary
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Exhibit
No. Description
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99.1 Amendment No. 1, dated as of April 5, 1999, to
the Investor Agreement, dated as of October 17,
1996, by and between Homestead Village
Incorporated and Security Capital Group
Incorporated.
99.2 Press Release dated March 25, 1999.
99.3 Press Release dated April 5, 1999.
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Exhibit 99.1
AMENDMENT NO. 1
TO
INVESTOR AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of April 5,
1999, to the Investor Agreement, dated as of October 17, 1996, (the
"Agreement"), is made by and between Homestead Village Incorporated, a
Maryland corporation (the "Company"), and Security Capital Group
Incorporated, a Maryland corporation ("SCG").
WHEREAS, SCG has, at the request of Homestead in a letter dated
March 24, 1999, agreed, subject to agreement on appropriate documentation
and price, to purchase $205 million of shares of Common Stock to the extent
shares of Common Stock have not been purchased by other parties in the
rights offering (the "Rights Offering") announced by the Company on March
25, 1999, and expected to be consummated on or about April 28, 1999 (the
"SCG Commitment"); and
WHEREAS, in connection with the Rights Offering and the SCG
Commitment, SCG has required that the Agreement be amended as provided in
this Amendment; and
WHEREAS, the Company believes in connection with the Rights
Offering and the SCG Commitment that it is in the best interest of the
Company that the Agreement be amended as provided in this Amendment; and
WHEREAS, Security Capital Atlantic Incorporated has merged with
and into Security Capital Pacific Trust, which has changed its name to
Archstone Communities Trust ("Archstone").
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained in this Amendment and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby amend the Agreement as follows:
1. References to Security Capital Atlantic Incorporated, Atlantic and the
Atlantic Investor Agreement in the Agreement are deleted, and references to
Security Capital Pacific Trust, PTR and the PTR Investor Agreement are
changed to Archstone Communities Trust, Archstone and the Archstone
Investor Agreement, respectively.
2. The following definition of "Disqualified Stock" is added to Section 1:
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"Disqualified Stock" shall mean any of the Company's
shares of equity securities which by their terms (or by
the terms of any security into which they are convertible
or for which they are exchangeable or exercisable) (a)
matures or is subject to mandatory redemption, pursuant
to a sinking fund obligation or otherwise, (b) is
convertible into or exchangeable or exercisable for
Disqualified Stock or an obligation of the Company, which
would be classified as a liability under generally
accepted accounting principals, or is secured or may be
secured by a lien on any of the Company's assets or
property, (c) is redeemable at the option of the holder
of such security or (d) otherwise requires any payments
by the Company.
3. Section 6 of the Agreement is hereby amended and restated in its
entirety as follows:
6. Covenants of the Company. The Company covenants and agrees with
SCG as follows:
(a) Board Representation. So long as SCG shall continue
to Beneficially Own 10% or more of the outstanding shares
of Common Stock, the Company shall not increase the
number of members of its board to more than seven (7),
and SCG shall be entitled to designate one or more
Persons for nomination to the Board (such Person, a
"Nominee") as follows and the Company will use its best
efforts to cause the prompt election of such Nominee or
Nominees:
(i) So long as SCG Beneficially Owns at least
10% but less than 25% of the outstanding shares
of Common Stock, one (1) Nominee;
(ii) So long as SCG Beneficially Owns at least
25% or more of the outstanding shares of Common
Stock, that number of Nominees as shall bear
approximately the same ratio (rounded up to the
nearest whole number) to the total number of
members of the Board as the number of shares of
Common Stock beneficially owned by SCG bears to
the total number of outstanding shares of Common
Stock, provided, that SCG shall be entitled to
designate not more than two (2) Nominees so long
as the Board consists of not more than seven (7)
members. The Company will take all necessary
action to permit the maximum number of Nominees to
be on the Board, consistent with the Company's
charter.
(b) Operating Committee. So long as SCG shall continue to
Beneficially Own at least 50% or more of the outstanding
shares of Common Stock, the Company will form and
maintain an Operating Committee which shall consist of
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the two Co-Chairmen of the Company and two members of
senior management of SCG selected by the Vice Chairman of
SCG. The Operating Committee shall meet on a weekly basis
and shall review all operations of the Company, its
financial condition and financial performance, forecasts,
and other matters reasonably requested by SCG.
(c) File Public Reports. So long as SCG shall continue to
Beneficially Own any shares of Common Stock, the Company
shall file on a timely basis all annual, quarterly and
other reports required to be filed by it under Sections
13 and 15(d) of the Exchange Act, and the rules and
regulations of the Commission thereunder, as amended from
time to time.
(d) Reports. So long as SCG shall continue to
Beneficially Own 25% or more of the outstanding shares of
Common Stock, the Company shall provide SCG, on a timely
basis, weekly cash sources and uses reports, weekly
development reports, weekly operating reports and such
other reports as are reasonably requested by SCG.
(e) Approval Rights. So long as SCG shall continue to
Beneficially Own 50.1% or more of the outstanding shares
of Common Stock, SCG shall have the right (each, an
"Approval Right") to approve the following matters as
proposed by the Company, provided, however, that nothing
contained in this Section 6(e) shall in any way restrict
or impair the obligations and rights of any party under
the terms of any agreement entered into prior to the date
of this Amendment.:
(i) Budget. The Company's annual budget.
(ii) Expenses. Incurring expenses in any year
exceeding (A) any line item in the annual budget
by $500,000 or 10% and (B) the total expenses
set forth in the annual budget by 5%.
(iii) Equity Securities. The issuance or sale of
any Common Stock or grant of any rights, options
or warrants to subscribe for or purchase shares
of Common Stock or any security convertible into
or exchangeable for Common Stock. The provisions
of this clause (iii) shall not apply to (A) the
sale or grant of any options to purchase shares
of Common Stock pursuant to the provisions of
any benefit plan approved by the stockholders of
the Company, (B) the issuance or sale of shares
of Common Stock upon the exercise of any rights,
options or warrants granted, or upon the
conversion or exchange of any convertible
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or exchangeable security issued or sold, prior
to the date of this Amendment or in accordance
with the provisions of this clause (iii), (C)
the issuance and sale of any shares of Common
Stock pursuant to any dividend reinvestment and
share purchase plan approved by the Board, or
(D) the issuance, grant or distribution of
rights, options or warrants to all holders of
Common Stock entitling them to subscribe for or
purchase shares of Common Stock or securities
convertible into or exercisable for shares of
Common Stock.
(iv) Disqualified Stock. The issuance or sale
of any Disqualified Stock.
(v) Benefit Plans and Compensation. The adoption
of any employee benefit plan pursuant to which
shares of Common Stock or any securities
convertible into shares of Common Stock may be
issued and any action with respect to the
compensation of senior officers of the Company
(including the granting or award of any bonuses
or share-based incentive awards).
(vi) Indebtedness. The incurrence,
restructuring, renegotiation or repayment of
indebtedness for borrowed money (including
guarantees thereof) in which the aggregate
amount involved exceeds $1,000,000.
(vii) Dividends. The declaration or payment of
any dividend or other distribution.
(viii) Assets. The acquisition or sale of any
assets in any single transaction or series of
related transactions in which the aggregate
purchase price paid or received by the Company
exceeds $1,000,000.
(ix) Management Contracts. Entering into any new
contract with a service provider (A) for
investment management, property management, or
leasing services or (B) that reasonably
contemplates annual contract payments by the
Company in excess of $500,000.
(x) Commitments. Entering into any new contract
or contracts for any commitments, including but
not limited to construction, development or
other capital expenditures, for which the total
cost is reasonably expected to exceed $1,000,000
for any contract or $5,000,000 in the aggregate.
(xi) Joint Venture Agreements. Entering into
any joint venture,
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partnership or similar agreement with a third
party for the development of any properties
owned or to be purchased by the Company in which
the book value of any property to be contributed
by the Company to the entity exceeds $1,000,000
individually or $5,000,000 in the aggregate.
(xii) Franchising or Licensing. Entering into
any franchising or licensing agreements for any
property owned or to be purchased or developed
by the Company or the franchising or licensing
of the Company's name or concepts used in the
operation of the Company.
(xiii) Articles of Incorporation or Bylaws. Any
amendment to the Articles of Incorporation or
Bylaws of the Company.
(xiv) Anti-takeover Provisions. The waiver of
(A) the provision of Title 3, Subtitle 6 of the
Corporations and Associations Article of the
Annotated Code of Maryland entitled "Special
Voting Requirements" (Sections 3-601 through and
including 3-604), or any successor statute, with
respect to any business combination other than
between or among the Company and SCG and SCG's
affiliates or successors, (B) the provisions of
Title 3, Subtitle 7 of the Corporations and
Associations Article of the Annotated Code of
Maryland (Sections 3-701 through 3-709), or any
successor statute, with respect to any
acquisition of Common Stock by any Person other
than SCG and SCG's affiliates and successors and
(C) any provisions of the Rights Agreement
between the Company and The First National Bank
of Boston, dated May 16, 1996, or any successor
agreement, with respect to any acquisition or
ownership of Common Stock by any Person other
than SCG and SCG's affiliates and successors.
Notwithstanding anything to the contrary contained herein, the
Approval Rights of SCG shall terminate and be of no further force or effect
at such time as SCG Beneficially Owns less than 50.1% of the outstanding
shares of Common Stock.
(f) Approval Rights Procedures. The Company shall submit
to SCG (attention Vice Chairman) any proposed action with
respect to which SCG has an Approval Right for
consideration by SCG together with information which sets
forth in reasonable detail the background and reasons for
such action, reasonably in advance of the date any action
would be required to be taken by or on behalf of the
Company to permit SCG to review the information and make
an informed decision. Approval of any action by SCG shall
require the written consent of SCG. No action taken by
SCG under this Section 6(f) shall
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advantage SCG to the disadvantage of shareholders of the
Company other than SCG; and any action taken by SCG under
this Section 6(f) involving SCG as a party to the
transaction shall be done on the basis of arms length
dealing.
(g) Company Support. If there is a final judicial
determination before any court of competent jurisdiction
that any or all of the Approval Rights are not
enforceable or exercisable in any manner by SCG, whether
by reason of Maryland statutory or common law or
otherwise, the Company agrees to defer any action
proposed by the Company which is the subject of any such
Approval Rights, which was so determined not to be
enforceable or exercisable and SCG shall have the right
to cause the Company to call a special meeting of
stockholders at which meeting SCG may present an
alternative slate of directors for election (which slate
may include some of the same nominees as the then current
Board). The Company and SCG agree that they will each use
their best efforts to prepare and file with the
Commission definitive proxy materials, to have such
materials cleared by the Commission and to mail such
materials to the Company's stockholders, as soon as
practicable. The Company shall in any event provide SCG
with a list of the stockholders of record for such
meeting and a complete list of non-objecting stockholders
and deposits in securities positions listing as of such
date. The Company and SCG shall not, and their respective
directors, officers, employees and agents shall not, take
any action that would have the effect of delaying,
preventing or impeding the special meeting of
stockholders or the mailing of proxy materials in respect
of such meeting, including the commencement of any
action, suit or proceeding at law or in equity seeking to
enjoin, delay or impede the special meeting or the
mailing of proxy materials in respect of such meeting.
The parties shall each bear their own costs in connection
with any special meeting of stockholders pursuant to this
Section 5(e); provided, that the Company shall bear all
costs typically borne by companies in connection with
annual meetings of shareholders.
(h) Non-Interference. The Company shall not provide any
Person with rights which are similar or more extensive
than the Approval Rights provided to SCG hereunder and
shall not grant to any Person or group the right to
nominate a greater number of members to the Board than
the number SCG is entitled to designate pursuant to
Section 6(a), in each case, without the prior approval of
SCG, which may be withheld in SCG's sole and absolute
discretion. The Company shall not enter into any
agreement or arrangement with any Person which shall
impede or impair the Approval Rights in any manner.
(i) Inspection Rights and Office. So long as SCG
Beneficially Owns 25%
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or more of the outstanding shares of Common Stock, at any
time during regular business hours and as often as
reasonably requested of the Company's officers, the
Company will permit SCG or any authorized employee, agent
or representative of SCG to examine and make copies and
abstracts from the records and books of account of, and
to audit any such information, and to visit the
properties of, the Company and to discuss the affairs,
finances, and accounts of the Company with any of its
officers or directors and to provide copies of all
business plans of the Company; provided, that all costs
and expenses of such inspection and audit shall be borne
by SCG. The Company shall also provide an office at its
headquarters for a designee of SCG.
4. A new Section 6A is hereby added to the Agreement to read in its
entirety as follows:
6A. Rights Offering. SCG and the Company agree with
respect to the Rights Offering:
(a) SCG Commitment. SCG agrees to purchase to
the extent shares of Common Stock have not been
purchased by other parties in the Rights
Offering $205,000,000 of Common Stock in the
Rights Offering (the "SCG Commitment"), provided
that to the extent other persons acquire in the
aggregate more than $20,000,000 of Common Stock
from the Company in connection with the Rights
Offering ("Third Party Purchases"), the SCG
Commitment shall be reduced by the amount such
Third Party Purchases exceed $20,000,000.
(b) Third Party Participation. The Company
agrees that to the extent shares of Common Stock
remain available under the Rights Offering, the
Company shall accept offers from any of the
Company's stockholders as of the record date for
the Rights Offering to purchase more than such
stockholder's pro rata portion of Common Stock
offered in the Rights Offering and shall accept
offers from any Person who is not a stockholder
and who is approved by SCG to purchase shares of
Common Stock in the Rights Offering, in which
event the SCG Commitment shall be reduced by the
amount of such purchases.
5. Section 10(c) is amended and restated to read in its entirety as
follows:
(a) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given
if delivered personally, sent via a recognized overnight
courier with delivery confirmed in writing or sent via
facsimile to the parties at the following addresses (or
such other address for a party as shall be
specified by like notice ):
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If to Company:
Homestead Village Incorporated
2100 RiverEdge Parkway, 9th Floor
Atlanta, Georgia 30328
Attention: David C. Dressler, Jr.,
Co-Chairman and
Chief Investment Officer
Facsimile: (770) 303-0079
If to SCG:
Security Capital Group Incorporated
125 Lincoln Avenue
Santa Fe, New Mexico 87501
Attention: C. Ronald Blankenship, Vice Chairman
Facsimile: (505) 982-2925
6. All rights granted to SCG under this Amendment which are subject to
minimum Common Stock ownership by SCG shall remain in effect if SCG's
percentage ownership of outstanding Common Stock falls below any minimum
amount solely as a result of the issuance of additional Common Stock by the
Company.
7. Capitalized terms used in this Amendment but not specifically defined
herein shall have the meanings ascribed thereto in the Agreement. All
references to the term "Registerable Securities" in the Agreement shall be
deemed to include the Common Stock of the Company issued to or acquired by
SCG in connection with the Rights Offering.
8. All representations and warranties of the Company and SCG in the
Agreement are reiterated and are true as of the date of this Amendment.
9. Except as otherwise specifically modified hereby, the Agreement shall
remain in full force and effect.
10. This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland.
11. This Amendment may be executed in any number of counterparts, each of
which may be deemed an original and all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.
HOMESTEAD VILLAGE
INCORPORATED
By /s/ David C. Dressler, Jr.
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David C. Dressler, Jr.
Co-Chairman and Chief
Investment Officer
SECURITY CAPITAL GROUP
INCORPORATED
By: /s/ C. Ronald Blankenship
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C. Ronald Blankenship
Vice Chairman
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Exhibit 99.2
News Release Contact:Investor Relations, Kelly F. Lee
800/201-9455 770/303-8299
HOMESTEAD VILLAGE ANNOUNCES $225 MILLION RIGHTS OFFERING
ATLANTA -- (March 25, 1999) -- Homestead Village Incorporated (NYSE: HSD),
a leading owner and operator of moderately priced, extended stay lodging
facilities, today announced an offering of rights to purchase approximately
$225 million of common shares to be issued to shareholders of record as of
the close of business on April 5, 1999. Subscription documents and
prospectuses relating to the rights offering will be mailed shortly after
the record date. Any securities issued in connection with the rights
offering will be offered only by means of a prospectus.
Proceeds of the rights offering will be used to repay a $200 million line
of credit facility with Commerzbank and to reduce amounts outstanding under
Homestead's working capital facilities. The line of credit is due to mature
April 23, 1999 but is expected to be extended to the completion of the
offering in late April. The line is secured by a subscription agreement
from Security Capital Group Incorporated (NYSE: SCZ), Homestead's largest
shareholder. To the extent shares remain available, Security Capital Group
has agreed to purchase enough common shares in the offering to ensure that
proceeds of the offering are no less than $205 million.
Homestead Village Incorporated is committed to creating significant
shareholder value as a leading owner and operator of moderately priced,
extended stay lodging properties throughout the United States. Homestead is
focused on the corporate business traveler, and has developed a proprietary
operating system to ensure its customers a consistent, high-quality,
uniform lodging experience. The company's site selection program targets
infill locations proximate to major business centers and convenient to
services desired by its customers. Homestead seeks to build a national
brand recognized and valued by its major corporate customers by
concentrating on delivering high-quality service and product in strategic
locations. The company currently has 125 properties operating in 37
markets, including 24 of the top 25 travel destination markets.
# # #
In addition to historical information, this press release contains
forward-looking statements under the federal securities laws. These
statements are based on current expectations, estimates and projections
about the industry and markets in which Homestead operates, management's
beliefs and assumptions made by management. Forward-looking statements are
not guarantees of future performance and involve certain risks and
uncertainties which are difficult to predict. Actual operating results may
be affected by changes in national and local economic conditions,
competitive market conditions, changes in financial markets or interest
rates that could adversely affect Homestead's cost of capital and its
ability to meet its financing needs and obligations, weather, obtaining
governmental approvals and meeting development schedules, and therefore,
may differ materially from what is expressed or forecasted in this press
release.
Exhibit 99.3
News Release Contact:Investor Relations, Kelly F. Lee
800/201-9455 770/303-8299
HOMESTEAD VILLAGE PRICES 76,489,092 SHARE RIGHTS OFFERING
AT $2.75 PER SHARE
ATLANTA -- (April 6, 1999) -- Homestead Village Incorporated (NYSE: HSD)
announced today that it has priced its $210 million rights offering of
76,489,092 shares, previously announced on March 25, at $2.75 per share.
The rights offering price was based on the average closing price for
Homestead's common shares as reported by the New York Stock Exchange for
the 10-day period ending April 5, 1999.
Proceeds of the rights offering will be used to repay a $200 million line
of credit facility with Commerzbank and to reduce amounts outstanding under
Homestead's working capital facilities. The line is secured by a
subscription agreement from Security Capital Group Incorporated (NYSE:
SCZ), Homestead's largest shareholder. To the extent shares are not
purchased by other parties, Security Capital Group has agreed to purchase
enough common shares in the offering to ensure that proceeds of the
offering are no less than $205 million.
Homestead's common shareholders of record on April 5, 1999, will receive a
dividend of two rights for each share of common stock they own. One right
will be required to purchase one share of Homestead common stock in the
rights offering. Homestead shareholders who exercise all of their rights
may oversubscribe for additional shares of common stock that have not been
purchased by other shareholders in the rights offering. Rights certificates
and prospectuses will be mailed to shareholders on or about April 7. The
rights offering will expire on April 22. Rights are transferable and are
expected to trade on the New York Stock Exchange under the symbol "HSD.RT".
A copy of the prospectus supplement and accompanying prospectus relating to
the rights offering may be obtained from Homestead at 2100 RiverEdge
Parkway, 9th Floor, Atlanta, Georgia 30328, attention Kelly F. Lee.
Homestead Village Incorporated is committed to creating significant
shareholder value as a leading owner and operator of moderately priced,
extended stay lodging properties throughout the United States. Homestead is
focused on the corporate business traveler, and has developed a proprietary
operating system to ensure its customers a consistent, high-quality,
uniform lodging experience. The company's site selection program targets
infill locations proximate to major business centers and convenient to
services desired by its customers. Homestead seeks to build a national
brand recognized and valued by its major corporate customers by
concentrating on delivering high-quality service and product in strategic
locations. As of March 31, 1999, Homestead had 125 properties operating in
37 markets, including 24 of the top 25 travel destination markets.
# # #
In addition to historical information, this press release contains
forward-looking statements under the federal securities laws. These statements
are based on current expectations, estimates and projections about the
industry and markets in which Homestead operates, management's beliefs and
assumptions made by management. Forward-looking statements are not guarantees
of future performance and involve certain risks and uncertainties which are
difficult to predict. Actual operating results may be affected by changes in
national and local economic conditions, competitive market conditions, changes
in financial markets or interest rates that could adversely affect Homestead's
cost of capital and its ability to meet its financing needs and obligations,
weather, obtaining governmental approvals and meeting development schedules,
and therefore, may differ materially from what is expressed or forecasted in
this press release.
