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) December 15, 1999
WILSHIRE REAL ESTATE INVESTMENT INC.
(Exact name of registrant as specified in its charter)
Maryland 0-23911 52-2081138
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)
1310 S.W. 17th Street, Portland, OR 97201
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (503) 721-6500
<PAGE>
Item 5. Other Events.
Wilshire Real Estate Investment Inc. today announced that its Board of
Directors has adopted a Stockholder Rights Plan under which stock purchase
rights will be distributed as a dividend to holders of its Common Stockholders
at the rate of one right for each share of Common Stock held of record as of the
close of business on January 3, 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibits are filed as part of this report:
99.1 Summary of Rights to Purchase Shares
99.2 Press Release dated December 23, 1999
2
<PAGE>
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.
Date: December 23, 1999
WILSHIRE REAL ESTATE
INVESTMENT INC.
By: /s/ Lawrence A. Mendelsohn
Lawrence A. Mendelsohn
President
By: /s/ Chris Tassos
Chris Tassos
Executive Vice President and Chief
Financial Officer
3
<PAGE>
Exhibit 99.1
SUMMARY OF RIGHTS TO PURCHASE SHARES
On December 15, 1999, the Board of Directors of Wilshire Real
Estate Investment Inc. (the "Corporation") declared a dividend distribution of
one right (a "Right") to purchase one one-tenth of a share of the Common Stock,
$.0001 par value, of the Corporation (the "Common Shares") for each outstanding
share of Common Stock, payable to the stockholders of record on January 3, 2000
(the "Record Date"). The Board of Directors also authorized and directed the
issuance of one Right with respect to each Common Share issued thereafter until
the Distribution Date (as defined below) and, in certain circumstances, with
respect to Common Shares issued after the Distribution Date. Except as set forth
below, each Right, when it becomes exercisable, entitles the registered holder
to purchase from the Corporation one one-tenth of a Common Share at a price of
$15.00 per whole Common Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and The Bank of New York, as Rights
Agent (the "Rights Agent"), dated as of December 23, 1999.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right Certificates
will be distributed. The Rights will separate from the Common Shares upon the
earliest to occur of (i) a person or group of affiliated persons having acquired
beneficial ownership of 5% or more of the outstanding Common Shares (except
pursuant to a Permitted Offer, as hereinafter defined) or an existing 5%
beneficial owner acquires an additional 1% or more of the outstanding Common
Shares (except pursuant to a Permitted Offer); or (ii) 10 days (or such later
date as the Board of Directors may determine) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming an Acquiring
Person (as hereinafter defined) (the earliest of such dates being called the
"Distribution Date"). A person or group whose acquisition of Common Shares
causes a Distribution Date pursuant to clause (i) above is an "Acquiring
Person." The date that a person or group becomes an Acquiring Person is the
"Shares Acquisition Date." A person who acquires Common Shares pursuant to a
tender or exchange offer which is for all outstanding Common Shares at a price
and on terms which a majority of the Board of Directors determines (prior to
acquisition) to be adequate and in the best interests of the Corporation and its
stockholders (other than such person, its affiliates) (together with certain
securities offerings by the Corporation, a "Permitted Offer") will not be deemed
to be an Acquiring Person and such person's ownership will not constitute a
Distribution Date.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Shares. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon the transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. In most cases, as soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date (and to each initial record holder of certain Common
Shares issued after the Distribution Date), and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date,
and will expire at the close of business on December 23, 2009, unless earlier
redeemed by the Corporation as described below.
4
<PAGE>
In the event that any person becomes an Acquiring Person, each
holder of Rights (other than Rights that have become void as described below)
will thereafter have the right (the "Flip-In Right") to receive, upon exercise
of such Rights, the number of Common Shares (or, in certain circumstances, other
securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the aggregate exercise price of such
Rights; provided, however, in the event that a Person has become an Acquiring
Person on the Shares Acquisition Date, (1) the Rights (other than rights held by
the Acquiring Person) shall be deemed to be automatically exercised on the
Shares Acquisition Date, (2) each Holder will be entitled to receive Common
Shares of the Corporation at an exchange ratio of one Common Share (or a lesser
ratio as determined by the Board of Directors, if the Corporation does not have
sufficient authorized and unreserved Common Shares) per Right, in lieu of paying
the Purchase Price and receiving the Common Shares otherwise provided herein.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are or (under certain circumstances specified in the
Rights Agreement) were beneficially owned by any Acquiring Person or any
affiliate thereof will be null and void.
In the event that, at any time following the Shares
Acquisition Date, (i) the Corporation is acquired in a merger or other business
combination transaction in which the holders of all of the outstanding Common
Shares immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, then
each holder of Rights (except Rights which previously have been voided as set
forth above) shall thereafter have the right (the "Flip-Over Right") to receive,
upon exercise of such Rights, common shares of the acquiring company having a
value equal to two times the aggregate exercise price of the Rights; provided,
however, that the Flip Over Right shall not apply to any transaction described
in clause (i) if (x) such transaction is with a person or persons (or a wholly
owned subsidiary of any such person or persons) that acquired Common Shares
pursuant to a Permitted Offer and (y) the price and form of consideration
offered in such transaction is the same as that paid to all holders of Common
Shares whose shares were purchased pursuant to the Permitted Offer. The holder
of a Right will continue to have the Flip-Over Right whether or not such holder
exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Common Shares or
other securities issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Common Shares, (ii)
upon the grant to holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of the Common Shares, or (iii) upon the distribution to holders of the
Common Shares of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Common Shares will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the
Corporation may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"), which redemption shall be effective at such
time, on such basis and with such conditions as the Board of Directors may
establish in its sole discretion. The Corporation may, at its option, pay the
Redemption Price in Common Shares.
All of the provisions of the Rights Agreement may be amended
by the Board of Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely
5
<PAGE>
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders of the Corporation, stockholders
may, depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events thereafter.
6
<PAGE>
Exhibit 99.2
WILSHIRE REAL ESTATE INVESTMENT INC.
ADOPTS STOCKHOLDER RIGHTS PLAN
Portland, Oregon
December 23, 1999
Wilshire Real Estate Investment Inc. today announced that its
Board of Directors has adopted a Stockholder Rights Plan under which stock
purchase rights will be distributed as a dividend to holders of its Common
Stockholders at the rate of one right for each share of Common Stock held of
record as of the close of business on January 3, 2000.
"We believe that the Stockholder Rights Plan represents a
sound and reasonable means of protecting the Company's net operating loss carry
forwards," said Andrew A. Wiederhorn, the Chairman of the Board and Chief
Executive Officer of the Company. "Under IRS rules, the Company will not be able
to utilize its NOLs, if the Company undergoes a significant change in ownership.
The Plan addresses the Board's duty to protect the best interests of the Company
and its stockholders by diluting any new 5% holder or any existing 5% holder
that increases its stake by 1% or more, thereby preserving the Company's NOLs."
Mr. Wiederhorn also noted that "The Plan also deters abusive and coercive
takeover tactics not offering an adequate price to all stockholders. The Plan
does not prevent a proxy contest or an offer for all outstanding shares at a
price and on terms the Board of Directors determines to be adequate and in the
best interests of stockholders. Anyone seeking to acquire the Company will,
however, be encouraged by the Plan to treat all stockholders equally and to
negotiate with the Board."
If, subject to certain exceptions, any person or group
commences a tender or exchange offer to purchase 5 percent or more of the
Company's Common Stock, each right not owned by such person or group will
entitle its holder to purchase, at the right's current exercise price, shares of
Common Stock having a value of twice the right's current exercise price. If,
subject to certain exceptions, any person or group acquires 5% or more, or any
existing 5% holder increases its stake by 1%or more, of the Company's Common
Stock (an "Acquiring Person"), each right not owned by such person or group will
automatically be exercised and entitle its holder to receive one share of Common
Stock per right (or a lesser ratio as determined by the Board of Directors, if
the Corporation does not have sufficient authorized and unreserved shares) in
lieu of paying the purchase price. This right to purchase Common Stock at a
discount will not be triggered by a person or group's acquisition of 5% or more
of the Common Stock pursuant to a tender or exchange offer (or other securities
offering by the Company) which is for all outstanding shares at a price and on
terms that the Board of Directors determines (prior to acquisition) to be
adequate and in the best interests of the Company and its stockholders.
In addition, if, subject to certain exceptions, the Company is
acquired by another corporation in a merger or consolidation or more than 50
percent of the assets or earning power of the Company is acquired, each right
not owned by the acquiror or affiliates will entitle its holder to purchase, at
the right's current exercise price, common stock of the acquiror having a value
of twice the right's current exercise price. This right will not be triggered,
however, if such acquisition is by a person or group which acquired the
Company's Common Stock at a price and on terms that the Board of Directors
determines (prior to acquisition) to be adequate and in the best interests of
the Company and its stockholders.
The rights will expire in the year 2009. The rights dividend
will not be taxable to the Company's stockholders.
The Company may redeem all of the rights, at the option of the
Board of Directors, at a redemption price of $.001 per right or by the issuance
of shares of Common Stock then equivalent to $.001 per right, at any time prior
to any person becoming an Acquiring Person.
7
<PAGE>
Additional details of the Stockholder Rights Plan were filed
with the Securities and Exchange Commission today and will be outlined in a
letter that is being mailed the Company's stockholders on or about December 27,
1999.
8
<PAGE>
