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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Patriot American Hospitality, Inc. Patriot American Hospitality
- ------------------------------------ ------------------------------------
(Exact name of registrant or Operating Company
organization) -----------------
(Exact name of registrant or
organization)
Delaware Delaware
- ------------------------------------ ------------------------------------
(State of incorporation or (State of incorporation or
organization) organization)
94-0358820 94-2878485
- ------------------------------------ ------------------------------------
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
3030 LBJ Freeway, Suite 1500 3030 LBJ Freeway, Suite 1500
Dallas, TX 75234 Dallas, TX 75234
- ------------------------------------ ------------------------------------
(Address of principal executive (Address of principal executive
officers) officers)
If this Form relates to the If this Form relates to the
registration of a class of debt registration of a class of debt
securities and is effective upon securities and is effective upon
filing pursuant to General filing pursuant to General
Instruction A(c)(1) please check Instruction A(c)(1) please check
the following box. [_] the following box. [_]
If this Form relates to the If this Form relates to the
registration of a class of debt registration of a class of debt
securities and is to become securities and is to become
effective simultaneously with effective simultaneously with
the effectiveness of a concurrent the effectiveness of a concurrent
registration statement under the registration statement under the
Securities Act of 1933 pursuant to Securities Act of 1933 pursuant to
General Instruction A(c)(2) please General Instruction A(c)(2) please
check the following box. [_] check the following box. [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of class to be so registered Title of class to be so registered
- ------------------------------------ ------------------------------------
Common Stock, par value $.01 Common Stock, par value $.01
Name of each exchange on which each Name of each exchange on which each
class is to be registered class is to be registered
- ------------------------------------ ------------------------------------
The New York Stock Exchange The New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrants' Securities to be Registered
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A description of the shares of common stock, par value $.01, of Patriot
American Hospitality, Inc. and the shares of common stock, par value $.01, of
Patriot American Hospitality Operating Company, which shares are paired and
trade as a single unit, is set forth under the heading "Description of Capital
Stock" in the Registration Statement on Form S-4 (Registration Statement Nos.
333-28085 and 333-28085-1) of California Jockey Club and Bay Meadows Operating
Company (predecessors of Patriot American Hospitality, Inc. and Patriot American
Hospitality Operating Company, respectively) filed under the Securities Act of
1933, as amended, with the Securities and Exchange Commission on May 30, 1997,
which information is incorporated herein by reference and attached hereto as
Exhibit 14.
Item 2. Exhibits
--------
(1) Annual Report on Form 10-K for California Jockey Club and Bay Meadows
Operating Company (Nos. 001-09319 and 001-09320) for the fiscal year
ended December 31, 1996.
(2) Current Reports on Form 8-K dated (i) February 24, 1997 (Nos. 001-
09319 and 001-09320 filed March 3, 1997) and (ii) May 28, 1997 (Nos.
001-09319 and 001-09320 filed June 5, 1997).
(3) Quarterly Report on Form 10-Q (Nos. 001-09319 and 001-09320) for the
fiscal quarter ended March 31, 1997.
(4) Quarterly Report on Form 10-Q/A (Nos. 001-09319 and 001-09320) for the
fiscal quarter ended March 31, 1997 (filed May 16, 1997).
(5) Joint Proxy Statement/Prospectus of California Jockey Club, Bay Meadows
Operating Company and Patriot American Hospitality, Inc., which
constitutes a part of the Registration Statement on Form S-4 of
California Jockey Club and Bay Meadows Operating Company (Registration
Statement Nos. 333-28085 and 333-28085-1), as mailed to stockholders of
California Jockey Club and Bay Meadows Operating Company.
(6) Joint Proxy Statement/Prospectus of California Jockey Club, Bay Meadows
Operating Company and Patriot American Hospitality, Inc., which
constitutes a part of the Registration Statement on Form S-4 of
California Jockey Club and Bay Meadows Operating Company (Registration
Statement Nos. 333-28085 and 333-28085-1), as mailed to stockholders of
Patriot American Hospitality, Inc.
(7) Amended and Restated Certificate of Incorporation of Patriot American
Hospitality, Inc.
(8) Amended and Restated Bylaws of Patriot American Hospitality, Inc.
(9) Amended and Restated Certificate of Incorporation of Patriot American
Hospitality Operating Company.
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(10) Amended and Restated Bylaws of Patriot American Hospitality Operating
Company.
(11) A specimen certificate for shares of Common Stock of Patriot American
Hospitality, Inc. and shares of Common Stock of Patriot American
Hospitality Operating Company.
(12) Annual Report to Stockholders of California Jockey Club.
(13) Annual Report to Stockholders of Bay Meadows Operating Company.
*(14) "Description of Capital Stock" section of Registration Statement on
Form S-4 (Registration Statement Nos. 333-28085 and 333-28085-1) of
California Jockey Club and Bay Meadows Operating Company filed under
the Securities Act of 1933, as amended, with the Securities and
Exchange Commission on May 30, 1997.
________________
*Filed herewith.
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SIGNATURES
----------
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, as amended, the Registrants have duly caused this amended registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
PATRIOT AMERICAN HOSPITALITY, INC.
June 25, 1997 By: /s/ Cindy Pervenanze
--------------------
Name: Cindy Pervenanze
Title: Vice President - Financial
Reporting
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY
June 25, 1997 By: /s/ Cindy Pervenanze
--------------------
Name: Cindy Pervenanze
Title: Vice President - Financial
Reporting
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EXHIBIT INDEX
Exhibit
-------
(1) Annual Report on Form 10-K for California Jockey Club and Bay Meadows
Operating Company (Nos. 001-09319 and 001-09320) for the fiscal year
ended December 31, 1996.
(2) Current Reports on Form 8-K dated (i) February 24, 1997 (Nos. 001-
09319 and 001-09320 filed March 3, 1997) and (ii) May 28, 1997 (Nos.
001-09319 and 001-09320 filed June 5, 1997).
(3) Quarterly Report on Form 10-Q (Nos. 001-09319 and 001-09320) for the
fiscal quarter ended March 31, 1997.
(4) Quarterly Report on Form 10-Q/A (Nos. 001-09319 and 001-09320) for the
fiscal quarter ended March 31, 1997 (filed May 16, 1997).
(5) Joint Proxy Statement/Prospectus of California Jockey Club, Bay Meadows
Operating Company and Patriot American Hospitality, Inc., which
constitutes a part of the Registration Statement on Form S-4 of
California Jockey Club and Bay Meadows Operating Company (Registration
Statement Nos. 333-28085 and 333-28085-1), as mailed to stockholders of
California Jockey Club and Bay Meadows Operating Company.
(6) Joint Proxy Statement/Prospectus of California Jockey Club, Bay Meadows
Operating Company and Patriot American Hospitality, Inc., which
constitutes a part of the Registration Statement on Form S-4 of
California Jockey Club and Bay Meadows Operating Company (Registration
Statement Nos. 333-28085 and 333-28085-1), as mailed to stockholders of
Patriot American Hospitality, Inc.
(7) Amended and Restated Certificate of Incorporation of Patriot American
Hospitality, Inc.
(8) Amended and Restated Bylaws of Patriot American Hospitality, Inc.
(9) Amended and Restated Certificate of Incorporation of Patriot American
Hospitality Operating Company.
(10) Amended and Restated Bylaws of Patriot American Hospitality Operating
Company.
(11) A specimen certificate for shares of Common Stock of Patriot American
Hospitality, Inc. and shares of Common Stock of Patriot American
Hospitality Operating Company.
(12) Annual Report to Stockholders of California Jockey Club.
(13) Annual Report to Stockholders of Bay Meadows Operating Company.
*(14) "Description of Capital Stock" section of Registration Statement on
Form S-4 (Registration Statement Nos. 333-28085 and 333-28085-1) of
California Jockey Club and Bay Meadows Operating Company filed under
the Securities Act of 1933, as amended, with the Securities and
Exchange Commission on May 30, 1997.
_______________
*Filed herewith.
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EXHIBIT 14
DESCRIPTION OF CAPITAL STOCK
Upon approval of the Proposals, the rights of stockholders of New Patriot
REIT and New Patriot Operating Company will be governed by the Restated Charters
and the Restated Bylaws. The following discussion summarizes certain of the key
terms of the Restated Charter and the Restated Bylaws. This summary does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Restated Charters and the Restated Bylaws, which are attached
to this Joint Proxy Statement/Prospectus as Annexes B and D and Annexes C and E,
respectively, and the relevant provisions of the DGCL. Stockholders of Patriot,
Cal Jockey and Bay Meadows should carefully read the Restated Charters and the
Restated Bylaws.
Cal Jockey currently has the authority to issue 10,000,000 shares of Cal
Jockey Common Stock and 3,000,000 shares of Cal Jockey Preferred Stock under the
Cal Jockey Charter. Bay Meadows currently has the authority to issue 10,000,000
shares of Bay Meadows Common Stock and 3,000,000 shares of Bay Meadows Preferred
Stock under the Bay Meadows Charter. Patriot currently has the authority to
issue 200,000,000 shares of Patriot Common Stock and 20,000,000 shares of
preferred stock, no par value. Under the Restated Charters, each of New Patriot
REIT and New Patriot Operating Company will have the authority to issue
650,000,000 shares of New Patriot REIT Common Stock and New Patriot Operating
Company Common Stock, respectively, 100,000,000 shares of preferred stock, par
value $.01 per share (the "Preferred Stock"), and 750,000,000 shares of excess
stock, par value $.01 per share (the "Excess Stock"). No shares of Preferred
Stock or Excess Stock will be outstanding immediately following the consummation
of the Merger.
COMMON STOCK
The holders of paired shares of New Patriot REIT Common Stock and New
Patriot Operating Company Common Stock will be entitled to one vote per share on
all matters voted on by stockholders, including elections of directors. Except
as otherwise required by law, by the Restated Charters with respect to Excess
Stock or provided in any resolution adopted by the Board of Directors of either
New Patriot REIT or New Patriot Operating Company with respect to any series of
Preferred Stock, the holders of paired shares of New Patriot REIT Common Stock
and New Patriot Operating Company Common Stock exclusively possess all voting
power. The Restated Charters do not provide for cumulative voting in the
election of directors. Subject to any preferential rights of any outstanding
series of Preferred Stock and the rights of holders of Excess Stock, the holders
of paired shares of New Patriot REIT Common Stock and New Patriot Operating
Company Common Stock are entitled to such dividends as may be declared from time
to time by the Boards of Directors of New Patriot REIT and New Patriot Operating
Company from funds available for such purpose, and upon liquidation will be
entitled to receive pro rata all assets of New Patriot REIT and New Patriot
Operating Company available for distribution to such holders. All paired shares
of New Patriot REIT Common Stock and New Patriot Operating Company Common Stock
issued pursuant to the Merger will be fully paid and nonassessable, and the
holders thereof will not have preemptive rights.
PREFERRED STOCK
The Board of Directors of each of New Patriot REIT and New Patriot
Operating Company is authorized to provide for the issuance of shares of
Preferred Stock in one or more series, to establish the number of shares in each
series and to fix the designation, powers, preferences and rights of each such
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series and the qualifications, limitations or restrictions thereof. Because the
Board of Directors of each of New Patriot REIT and New Patriot Operating Company
has the power to establish the preferences and rights of each class or series of
Preferred Stock, each Board of Directors may afford the holders of any series or
class of Preferred Stock preferences, powers and rights, voting or otherwise,
senior to the rights of holders of shares of New Patriot REIT Common Stock or
New Patriot Operating Company Common Stock, respectively. The issuance of
shares of Preferred Stock could have the effect of delaying or preventing a
change in control of New Patriot REIT and New Patriot Operating Company.
EXCESS STOCK
Upon the violation of certain transfer restrictions contained in the
Restated Charters, shares of any class or series of Equity Stock of New Patriot
REIT and New Patriot Operating Company will automatically be converted into an
equal number of shares of Excess Stock of New Patriot REIT or New Patriot
Operating Company, as the case may be, and transferred to a trust (a "Trust").
Such shares of Excess Stock held in trust shall remain outstanding shares of
stock of New Patriot REIT and New Patriot Operating Company and shall be held by
the trustee of the Trust (the "Trustee") for the benefit of a charitable
beneficiary (a "Beneficiary"). The Trustee and the Beneficiary shall be
designated pursuant to the terms of the Pairing Agreement. Each share of Excess
Stock shall entitle the holder to the number of votes the holder would have if
such share of Excess Stock was a share of Equity Stock of the same class or
series from which such Excess Stock was converted, on all matters submitted to a
vote at any meeting of stockholders. The Trustee, as record holder of the
Excess Stock, shall be entitled to vote all shares of Excess Stock. Each share
of Excess Stock shall be entitled to the same dividends and distributions (as to
timing and amount) as may be declared by the Board of Directors of New Patriot
REIT or New Patriot Operating Company, as the case may be, as shares of the
class or series of Equity Stock from which such Excess Stock was converted. The
Trustee of the Trust, as record holder of the shares of the Excess Stock, shall
be entitled to receive all dividends and distributions and shall hold such
dividends and distributions in trust for the benefit of the Beneficiary of the
Trust. Upon the sale of the shares of Excess Stock to either a permitted
transferee under the Restated Charters (the "Permitted Transferee") or to New
Patriot REIT and New Patriot Operating Company, such shares of Excess Stock will
be automatically converted into an equal number of shares of Equity Stock of the
same class or series from which such Excess Stock was converted.
THE PAIRING AGREEMENT
Under the Pairing Agreement, shares of New Patriot REIT Common Stock and
New Patriot Operating Company Common Stock and shares of Preferred Stock that
are convertible into shares of New Patriot REIT Common Stock and New Patriot
Operating Company Common Stock shall not be transferrable or transferred on the
books of such company unless a simultaneous transfer is made by the same
transferor to the same transferee of an equal number of shares of that same
class or series of Equity Stock of the other company. Neither New Patriot REIT
nor New Patriot Operating Company may issue shares of New Patriot REIT Common
Stock and New Patriot Operating Company Common Stock or shares of Preferred
Stock that are convertible into shares of New Patriot REIT Common Stock and New
Patriot Operating Company Common Stock unless provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
shares of that same class or series of Equity Stock of the other company and for
the pairing of such shares. Each certificate issued for paired shares of New
Patriot REIT or New Patriot Operating Company must be issued "back-to-back" with
a certificate evidencing the same number of shares of the other company. The
certificates must bear a conspicuous legend on its face referring to the
restrictions on ownership and transfer under the Pairing Agreement.
In addition, neither New Patriot REIT nor New Patriot Operating Company
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may declare a stock dividend, issue any rights or warrants or otherwise
reclassify shares unless the other company simultaneously takes the same or
equivalent action.
CERTAIN PROVISIONS OF THE RESTATED CHARTERS AND RESTATED BYLAWS
Restrictions on Ownership and Transfer
For New Patriot REIT to qualify as a REIT under the Code, it must meet
certain requirements concerning the ownership of its outstanding shares of
capital stock. Specifically, not more than 50% in value of New Patriot REIT's
outstanding shares of capital stock may be owned, directly or indirectly, by
five or fewer individuals (as defined in the Code to include certain entities)
during the last half of a taxable year, and New Patriot REIT must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of twelve months or during a proportionate part of a shorter taxable year.
In addition, New Patriot REIT must meet certain requirements regarding the
nature of its gross income in order to qualify as a REIT. One such requirement
is that at least 75% of New Patriot REIT's gross income for each year must
consist of rents from real property and income from certain other real property
investments. The rents received by the Patriot Partnership and its subsidiary
partnerships from the Lessees will not qualify as rents from real property if
New Patriot REIT owns, actually or constructively, 10% or more of the ownership
interests in any Lessee within the meaning of Section 856(d)(2)(B) of the Code,
the result of which would be the loss of REIT status for New Patriot REIT. See
"Certain Federal Income Tax Considerations-REIT Qualification."
The Restated Charters provide, pursuant to the Ownership Limit, that no
person or entity may Beneficially Own or Constructively Own (as those terms are
defined below) in excess of 9.8% of the outstanding shares of any class or
series of Equity Stock of New Patriot REIT or New Patriot Operating Company,
unless the Ownership Limit is waived by the Board of Directors of the relevant
corporation in accordance with the Restated Charters. Any transfer of Equity
Stock of New Patriot REIT or New Patriot Operating Company that would (i) result
in any person or entity owning, directly or indirectly, shares of Equity Stock
of New Patriot REIT or New Patriot Operating Company in excess of the Ownership
Limit, unless the Ownership Limit is waived by the Board of Directors of the
relevant corporation in accordance with the Restated Charters, (ii) result in
the capital stock of New Patriot REIT being beneficially owned (within the
meaning of Section 856(a)(5) of the Code) by fewer than 100 persons within the
meaning of Section 856(a)(5) of the Code, (iii) result in New Patriot REIT being
"closely held" within the meaning of Section 856(h) of the Code or (iv) cause
New Patriot REIT to own, actually or constructively, 10% or more of the
ownership interests in a tenant of the real property of New Patriot REIT or a
subsidiary of New Patriot REIT within the meaning of section 856(d)(2)(B) of the
Code, shall be void ab initio, and the intended transferee will acquire no right
or interest in such shares of Equity Stock. For purposes of the Restated
Charters, "Beneficial Ownership" means, with respect to any individual or
entity, ownership of shares of Equity Stock equal to the sum of (i) the shares
of Equity Stock directly or indirectly owned by such individual or entity, (ii)
the number of shares of Equity Stock treated as owned directly or indirectly by
such individual or entity through the application of the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code, and (iii) the number of shares of Equity Stock which such individual or
entity is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange
Act. For purposes of computing the percentage of shares of any class or series
of Equity Stock of New Patriot REIT or New Patriot Operating Company
Beneficially Owned by any person or entity, any shares of Equity Stock of New
Patriot REIT or New Patriot Operating Company which are deemed to be
Beneficially Owned by such person or entity pursuant to Rule 13d-3 of the
Exchange Act but which are not outstanding shall be deemed to be outstanding.
The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall
have correlative meanings. Also for purposes of the Restated Charters,
"Constructive Ownership" means ownership of shares of Equity Stock by an
individual or entity who is or would be treated as a direct or indirect owner of
such shares of Equity Stock through the application of Section 318 of
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the Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have correlative
meanings.
Upon the occurrence of a purported transfer of shares that would result in
a violation of any of the foregoing transfer restrictions, that number of shares
that violate the transfer restrictions shall be automatically converted into an
equal number of shares of Excess Stock and transferred to a Trust for the
benefit of the Beneficiary, effective on the Trading Day (as hereinafter
defined) prior to the date of the purported transfer of such shares, and the
record holder of the shares of Equity Stock that are converted into shares of
Excess Stock (a "Prohibited Owner") shall submit such number of shares of Equity
Stock to New Patriot REIT or New Patriot Operating Company, as the case may be,
for registration in the name of the Trustee. In the case of Equity Stock that
is paired, upon the conversion of a share of Equity Stock into a share of Excess
Stock, the corresponding paired share of that same class or series of Equity
Stock of the other company shall simultaneously be converted into a share of
Excess Stock; such shares of Excess Stock shall be paired and shall be
simultaneously transferred to a Trust. Upon the occurrence of such a conversion
of shares of any class or series of Equity Stock into an equal number of shares
of Excess Stock, such shares of Equity Stock shall be automatically retired and
canceled, without any action required by the Board of Directors of either of New
Patriot REIT or New Patriot Operating Company, and shall thereupon be restored
to the status of authorized but unissued shares of the particular class or
series of Equity Stock from which such Excess Stock was converted and may be
reissued as that particular class or series of Equity Stock.
Shares of Equity Stock that are converted into shares of Excess Stock and
transferred to a Trust shall be held in trust for the exclusive benefit of the
Beneficiary. Shares of Excess Stock will remain issued and outstanding shares
of stock. Each share of Excess Stock shall be entitled to the same dividends
and distributions (as to both timing and amount) as may be declared by the Board
of Directors of New Patriot REIT or New Patriot Operating Company, as the case
may be, as shares of the class or series of Equity Stock from which such Excess
Stock was converted. The Trustee, as record holder of the shares of Excess
Stock, shall be entitled to receive all dividends and distributions and shall
hold all such dividends or distributions in trust for the benefit of the
Beneficiary. The Prohibited Owner with respect to such shares of Excess Stock
shall repay to the Trust the amount of any dividends or distributions received
by it (i) that are attributable to any shares of Equity Stock that have been
converted into shares of Excess Stock and (ii) the record date of which was on
or after the date that such shares were converted into shares of Excess Stock.
New Patriot REIT and New Patriot Operating Company shall take all measures that
they determine reasonably necessary to recover the amount of any such dividend
or distribution paid to a Prohibited Owner, including, if necessary, withholding
any portion of future dividends or distributions payable on shares of Equity
Stock beneficially owned or constructively owned by the person who, but for the
restrictions on transfer, would constructively own or beneficially own the
shares of Excess Stock and, as soon as reasonably practicable following receipt
or withholding thereof, shall pay over to the Trust for the benefit of the
Beneficiary the dividends so received or withheld, as the case may be.
In the event of any voluntary or involuntary liquidation of, or winding up
of, or any distribution of the assets of, New Patriot REIT or New Patriot
Operating Company, each holder of shares of Excess Stock shall be entitled to
receive, ratably with each other holder of shares of Equity Stock of the same
class or series from which the Equity Stock was converted, that portion of the
assets of New Patriot REIT or New Patriot Operating Company, as the case may be,
that is available for distribution to the holders of such class or series of
Equity Stock. The Trust shall distribute to the Prohibited Owner the amounts
received upon such liquidation, dissolution, or winding up, or distribution;
provided, however, that the Prohibited Owner shall not be entitled to receive
amounts in excess of, in the case of a purported transfer in which the
Prohibited Owner gave value for shares of Equity Stock and which transfer
resulted in the conversion of the shares into shares of Excess Stock, the price
per share, if any, such Prohibited Owner paid for the shares of Equity Stock
(which, in the case of Equity Stock that is paired, shall equal the price paid
per share
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multiplied by the most recent Valuation Percentage (as hereinafter defined))
and, in the case of a non-transfer event or transfer in which the Prohibited
Owner did not give value for such shares (e.g., if the shares were received
through a gift or devise) and which non-transfer event or transfer, as the case
may be, resulted in the conversion of the shares into shares of Excess Stock,
the price per share equal to the Market Price (as hereinafter defined) on the
date of such non-transfer event or transfer. Any remaining amount in such Trust
shall be distributed to the Beneficiary.
Each share of Excess Stock shall entitle the holder to the number of votes
the holder would have, if such share of Excess Stock was a share of Equity Stock
of the same class or series from which such Excess Stock was converted, on all
matters submitted to a vote at any meeting of stockholders. The holders of
shares of Excess Stock converted from the same class or series of Equity Stock
shall vote together with the holders of such Equity Stock as a single class on
all such matters. The Trustee, as record holder of the shares of Excess Stock,
shall be entitled to vote all shares of Excess Stock. Any vote taken by a
Prohibited Owner prior to the discovery by New Patriot REIT or New Patriot
Operating Company, as the case may be, that the shares of Equity Stock were
exchanged for shares of Excess Stock will be rescinded as void ab initio.
The Trustee shall have the exclusive and absolute right to designate a
Permitted Transferee of any and all shares of Excess Stock if New Patriot REIT
or New Patriot Operating Company or both, in the case of paired shares, fail to
exercise its or their option with respect to such shares as described below;
provided, however, that (i) the Permitted Transferee so designated purchases for
valuable consideration (whether in a public or private sale) the shares of
Excess Stock (which, in the case of Excess Stock that is paired, shall equal the
price paid per share multiplied by the most recent Valuation Percentage) and
(ii) the Permitted Transferee so designated may acquire such shares of Excess
Stock without violating any of the aforementioned transfer restrictions and
without such acquisition resulting in the exchange of such shares of Equity
Stock so acquired for shares of Excess Stock and the transfer of such shares of
Excess Stock to a Trust. Upon the designation by the Trustee of a Permitted
Transferee, the Trustee shall cause to be transferred to the Permitted
Transferee that number of shares of Excess Stock of New Patriot REIT or New
Patriot Operating Company, as the case may be, acquired by the Permitted
Transferee. Upon such transfer of the shares of Excess Stock to the Permitted
Transferee, such shares of Excess Stock shall be automatically converted into an
equal number of shares of Equity Stock of the same class and series from which
such Excess Stock was converted. In the case of Equity Stock that is paired,
upon the conversion of a share of Excess Stock into a share of Equity Stock of
the same class or series from which such Excess Stock was converted, the
corresponding paired share of Excess Stock of the other company shall
simultaneously be converted into a share of Equity Stock of the same class or
series from which such Excess Stock was converted and such shares of Equity
Stock shall be paired. Upon the occurrence of such a conversion of shares of
Excess Stock into an equal number of shares of Equity Stock, such shares of
Excess Stock shall be automatically retired and canceled, without any action
required by the Board of Directors of New Patriot REIT or New Patriot Operating
Company, and shall thereupon be restored to the status of authorized but
unissued shares of Excess Stock and may be reissued as such. The Trustee shall
(i) cause to be recorded on the stock transfer books of New Patriot REIT or New
Patriot Operating Company or both, in the case of paired shares, that the
Permitted Transferee is the holder of record of such number of shares of Equity
Stock and (ii) distribute to the Beneficiary any and all amounts held with
respect to the shares of Excess Stock after making payment to the Prohibited
Owner. If the transfer of shares of Excess Stock to a purported Permitted
Transferee shall violate any of the aforementioned transfer restrictions
including, without limitation, the Ownership Limit, such transfer shall be void
ab initio as to that number of shares of Excess Stock that cause the violation
of any such restriction when such shares are converted into shares of Equity
Stock and the purported Permitted Transferee shall be deemed to be a Prohibited
Owner and shall acquire no rights in such shares of Excess Stock. Such shares
of Equity Stock shall be automatically re-converted into Excess Stock and
transferred to the Trust from which they were originally sold. Such conversion
and transfer to the Trust shall be effective as of the close of trading on the
Trading Day prior to
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the date of the transfer to the purported Permitted Transferee and the
provisions of the Restated Charters regarding compensation to a Prohibited Owner
shall apply to such shares with respect to any future transfer of such shares by
the Trust.
A Prohibited Owner shall be entitled to receive from the Trustee following
the sale or other disposition of such shares of Excess Stock the lesser of (i)
(a) in the case of a purported transfer in which the Prohibited Owner gave value
for shares of Equity Stock and which transfer resulted in the conversion of such
shares into shares of Excess Stock, the price per share, if any, such Prohibited
Owner paid for the shares of Equity Stock (which, in the case of Excess Stock
that is paired, shall be determined based on the Valuation Percentage) and (b)
in the case of a non-transfer event or transfer in which the Prohibited Owner
did not give value for such shares (e.g., if the shares were received through a
gift or devise) and which non-transfer event or transfer, as the case may be,
resulted in the conversion of such shares into shares of Excess Stock, the price
per share equal to the Market Price on the date of such non-transfer event or
transfer and (ii) the price per share (which, in the case of Excess Stock that
is paired, shall be determined based on the Valuation Percentage) received by
the Trustee from the sale or other disposition of such shares of Excess Stock.
Any amounts received by the Trustee in respect of such shares of Excess Stock
and in excess of such amounts to be paid the Prohibited Owner shall be
distributed to the Beneficiary.
Shares of Excess Stock shall be deemed to have been offered for sale by a
Trust to New Patriot REIT or New Patriot Operating Company or both, in the case
of paired shares, or a designee of such company or companies, at a price per
share equal to the lesser of (i) the price per share (which, in the case of
Excess Stock that is paired, shall be determined based on the Valuation
Percentage) in the transaction that created such shares of Excess Stock (or, in
the case of devise, gift or non-transfer event, the Market Price at the time of
such devise, gift or non-transfer event) or (ii) the Market Price on the date
either company or both companies, in the case of paired shares, accept such
offer. Either company or both companies, in the case of paired shares, shall
have the right to accept such offer for a period of 90 days following the later
of (a) the date of the non-transfer event or purported transfer which results in
such shares of Excess Stock or (b) the date on which either company or both
companies, in the case of paired shares, determine in good faith that a transfer
or non-transfer event resulting in shares of Excess Stock has previously
occurred, if either company or both companies, in the case of paired shares, do
not receive a notice of such transfer or non-transfer event. In the case of
shares of Excess Stock that are paired, neither New Patriot REIT nor New Patriot
Operating Company shall accept such an offer with respect to its shares of
Excess Stock without the agreement of the other company to accept such offer
with respect to the corresponding paired shares of its Excess Stock.
"Market Price" on any date shall mean the average of the Closing Price for
the five consecutive Trading Days ending on such date. "Closing Price" on any
date shall mean the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the shares of Equity Stock are not listed or admitted to trading on the NYSE,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Equity Stock are listed or admitted to trading or, if the
shares of Equity Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
or, if such system is no longer in use, the principal other automated quotation
system that may then be in use or, if the shares of Equity Stock are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the shares of Equity
Stock. In the case of Equity Stock that is paired, "Market Price" shall mean
the "Market Price" for paired shares multiplied by a fraction (expressed as a
percentage) determined by dividing the value for such Equity Stock most recently
determined under the Pairing
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Agreement over the value of a paired share most recently determined under the
Pairing Agreement (the "Valuation Percentage"). "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares of
Equity Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Equity Stock are not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
Any person or entity that acquires or attempts to acquire shares of Equity
Stock in violation of the aforementioned transfer restrictions, or any person or
entity that owned shares of Equity Stock that were transferred to a Trust, shall
immediately give written notice to New Patriot REIT or New Patriot Operating
Company or both, in the case of paired shares, of such event and shall provide
such other information as the appropriate company or both companies, as the case
may be, may request to determine the effect, if any, of such violation, on New
Patriot REIT's status as a REIT.
Each person or entity that is an owner, actually or constructively, of
shares of Equity Stock and each person or entity that (including the stockholder
of record) is holding shares of Equity Stock for such an owner shall provide to
New Patriot REIT or New Patriot Operating Company or both, in the case of paired
shares, a written statement or affidavit stating such information as the
appropriate company or both companies, as the case may be, may request to
determine New Patriot REIT's status as a REIT and to ensure compliance with the
Ownership Limit. In addition, every person or entity that owns of record,
actually or constructively, more than 5%, or such lower percentages as required
pursuant to regulations under the Code, of the outstanding shares of any class
or series of Equity Stock of New Patriot REIT or New Patriot Operating Company
shall, within 30 days after January 1 of each year, provide to New Patriot REIT
or New Patriot Operating Company or both, in the case of paired shares, a
written statement or affidavit stating the name and address of such owner, the
number of shares of Equity Stock owned, actually or constructively, and a
description of how such shares are held.
All certificates representing shares of Equity Stock shall bear a legend
referring to the aforementioned transfer restrictions. The transfer
restrictions will continue to apply until the Board of Directors of New Patriot
REIT determines that it is no longer in the best interests of New Patriot REIT
to attempt to qualify, or to continue to qualify, as a REIT.
The restrictions on transfer contained in the Restated Charters could have
the effect of discouraging a takeover or other transaction in which holders of
some, or a majority, of shares of Equity Stock might receive a premium from
their shares of Equity Stock over the then prevailing Market Price or which such
holders might believe to be otherwise in their best interest.
Number of Directors; Removal; Filling Vacancies
The Restated Charters and the Restated Bylaws provide that the number of
directors of each of New Patriot REIT and New Patriot Operating Company shall be
fixed by resolution duly adopted from time to time by the Board of Directors.
Pursuant to the terms of the Restated Charters, the directors are divided into
three classes with the term of office of one class expiring each year. As the
term of each class expires, directors in that class will be elected for a term
of three years and until their successors are duly elected and qualified.
The Restated Charters and the Restated Bylaws each provide that a director
may be removed, only for cause, by the vote of holders of at least 75% of the
outstanding shares of capital stock entitled to vote for the election of
directors at a special meeting of the stockholders called for the purpose of
removing such director. "Cause," with respect to the removal of any director,
is defined in the Restated Charters to mean only (i) conviction of a felony,
(ii) declaration of unsound mind by order of court, (iii) gross dereliction of
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duty, (iv) commission of any action involving moral turpitude or (v) commission
of an action which constitutes intentional misconduct or a knowing violation of
law if such action in either event results both in an improper substantial
personal benefit and a material injury to New Patriot REIT or New Patriot
Operating Company, as the case may be. Any and all vacancies in the Board of
Directors, however occurring, shall be filled solely by the affirmative vote of
a majority of the remaining directors then in office, even if less than a quorum
of the Board of Directors. Any director so appointed shall hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred and until such director's successor is duly elected and qualified or,
if earlier, such director's earlier resignation or removal.
The staggered board provision prevents stockholders of New Patriot REIT and
New Patriot Operating Company from voting on the election of all directors at
each annual meeting. The existence of a staggered board, the fact that
directors may only be removed for cause and the fact that vacancies in the Board
of Directors shall be filled solely by the remaining directors may have the
effect of delaying or deferring a change in control of New Patriot REIT and New
Patriot Operating Company or the removal of incumbent management.
Special Meetings of Stockholders
The Restated Bylaws provide that a special meeting of stockholders may only
be called by the Chairman of the Board of Directors or a majority of the Board
of Directors. Accordingly, stockholders of New Patriot REIT and New Patriot
Operating Company will have no ability to call a special meeting of
stockholders.
Limitation of Liability and Indemnification
The Restated Charters, in conjunction with the DGCL, eliminate a director's
personal liability to New Patriot REIT or New Patriot Operating Company, as the
case may be, or their respective stockholders for breach of fiduciary duty,
except for liability (i) for any breach of the director's duty of loyalty to New
Patriot REIT or New Patriot Operating Company, as the case may be, or their
respective stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit.
The DGCL permits, but does not require, a corporation to indemnify its
directors, officers, employees or agents and expressly provides that the
indemnification provided for under the DGCL shall not be deemed exclusive of any
indemnification right under any bylaw, vote of stockholders or disinterested
directors, or otherwise. The DGCL permits indemnification against expenses and
certain other liabilities arising out of legal actions brought or threatened
against such persons for their conduct on behalf of the corporation, provided
that each such person acted in good faith and in a manner that he or she
reasonably believed was in or not opposed to the corporation's best interests
and in the case of a criminal proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The DGCL does not allow indemnification of
directors in the case of an action by or in the right of the corporation
(including stockholder derivative suits) unless the directors successfully
defend the action or indemnification is ordered by the court. The Restated
Bylaws provide for indemnification to the fullest extent authorized by the DGCL
and, therefore, these statutory indemnification rights are available to the
directors, officers, employees and agents of New Patriot REIT and New Patriot
Operating Company.
Amendment of Restated Charters and Restated Bylaws
The Restated Charters provide that, with the exception of certain
provisions concerning business
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combinations with interested stockholders which require the approval of a
greater proportion, the Restated Charter may be amended in the manner prescribed
by the DGCL, which requires the approval of the Board of Directors and the
approval of the stockholders by the affirmative vote of a majority of the
outstanding shares entitled to vote on such amendment.
The Restated Bylaws may be amended or repealed (i) except as otherwise
provided by law, by the affirmative vote of a majority of the directors then in
office or (ii) at any meeting of stockholders by the affirmative vote of at
least two-thirds of the shares present in person or represented by proxy at such
meeting and entitled to vote on such amendment or repeal, voting together as a
single class; provided, however, that if the Board of Directors recommends that
stockholders approve such amendment or repeal at such meeting of stockholders,
such amendment or repeal shall only require the affirmative vote of the majority
of the shares present in person or represented by proxy at such meeting and
entitled to vote on such amendment or repeal, voting together as a single class.
Business Combinations
The DGCL requires that a merger, consolidation or any sale, lease or
exchange of all or substantially all of a corporation's property and assets
(collectively, "business combinations") be approved by a majority of the
outstanding shares of the corporation entitled to vote on such a matter, or a
greater proportion if required by the certificate of incorporation. In
addition, under the DGCL, a publicly-held corporation may not engage in a
business combination with an "interested stockholder" for a period of three
years following the time of the transaction in which the person became an
interested stockholder, unless (i) prior to such time the board of directors of
the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder's becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced or (iii) at or subsequent to such time, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the vote of 66 2/3% of
the outstanding voting stock which is not owned by the interested stockholder.
Subject to certain exceptions, the DGCL defines an "interested stockholder" as a
person who, together with affiliates and associates, owns, or within three years
did own, 15% or more of the corporation's voting stock.
The Restated Bylaws provide that any corporate action shall be approved at
a stockholder meeting at which a quorum is present by the affirmative vote of a
majority of shares present in person or by proxy at such meeting and entitled to
vote on the matter, except where a larger vote is required by law, the Restated
Charters or the Restated Bylaws. The DGCL provides for a larger vote with
respect to business combinations and, therefore, a business combination
involving New Patriot REIT or New Patriot Operating Company requires the
approval of a majority of the outstanding shares of New Patriot REIT or New
Patriot Operating Company, as the case may be. In addition, the Restated
Charters provide that a business combination with a Related Person (as defined
below) requires, with certain exceptions, the approval of 66 2/3% of the
outstanding shares of capital stock of New Patriot REIT or New Patriot Operating
Company, as the case may be, which shall include the affirmative vote of at
least 50% of the outstanding shares of capital stock held by stockholders other
than the Related Person. However, such 66 2/3% voting requirement shall not be
applicable if the business combination was approved by the Board of Directors
prior to the acquisition by such Related Person of the beneficial ownership of
5% or more of the outstanding shares of the capital stock of New Patriot REIT or
New Patriot Operating Company, as the case may be. For purposes of the Restated
Charters, a "Related Person" is defined as any person or entity who beneficially
owns (as defined in Rule 13d-3 promulgated under the Exchange Act) more than 5%
of the outstanding shares of capital stock of New Patriot REIT or New Patriot
Operating Company, as the case may be, and any "affiliate" or "associate" (as
those terms are defined in Rule 12b-2 promulgated under the Exchange Act).
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The business combination provisions of the DGCL, together with the Related
Person provision of the Restated Charters, may have the effect of deterring
certain takeovers of New Patriot REIT and New Patriot Operating Company.
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