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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 14, 1998
Crestline Capital Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 1-14635 52-2039044
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation Indemnification no.)
10400 Fernwood Road
Bethesda, Maryland 20817
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (301) 380-9000
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Item 5. Other Events.
On December 11, 1998, the Board of Directors of Crestline Capital
Corporation (the "Company") declared, effective December 14, 1998, a dividend
distribution of one right ("Right") for each outstanding share of common stock
(the "Common Stock") of the Company. The distribution is payable to stockholders
of record on December 15, 1998. Each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock ("Preferred Stock") at a price of
$65.00 per one one-thousandth 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 Company and The Bank of New York,
as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will separate
from the Common Stock and a distribution of Rights Certificates (as defined
below) will occur upon the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days (or such later date as the Board of
Directors may determine) following the commencement of a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person of 20% or more of the outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date"). For purposes
of the Rights Agreement, a person is not deemed to beneficially own "Exempt
Shares," which are defined in the Rights Agreement as (i) shares of Common Stock
that are received pursuant to the distribution (the "Distribution") by Host
Marriott Corporation ("HMC") of the shares of Common Stock to holders of shares
of common stock ("HMC Common Stock") of HMC, which shares of HMC Common Stock
were beneficially owned by such person on February 3, 1989, and owned
continuously thereafter until the Distribution, (ii) shares of Common Stock
which were acquired by a person pursuant to a gift, bequest, inheritance or
distribution from a trust or from a corporation controlled by such person, where
such shares of Common Stock were Exempt Shares prior to such acquisition, and
where such shares were beneficially owned by such person continuously after such
acquisition, (iii) shares of Common Stock acquired by such person as a result of
a stock dividend, stock distribution or other recapitalization, in respect of
Exempt Shares only, whereby any Common Stock received by such person is
substantially proportional to the amount of Common Stock owned by such person
prior to such transaction and where such Common Stock is beneficially owned by
such person continuously thereafter, and (iv) shares of Common Stock acquired by
such person as a result of such person becoming a beneficial owner pursuant
solely to clauses (ii) and (iii) above by any other person.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates, and will be transferred with and only with the Common
Stock certificates, (ii) new Common Stock certificates issued after December 15,
1998 upon transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 13, 2008, unless earlier redeemed or
exchanged by the Company
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as described below. The Rights will not be exercisable by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Rights has not been obtained or is not
obtainable.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
evidence the Rights. Except as otherwise determined by the Board of Directors,
only shares of Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that a person becomes the beneficial owner of 20% or
more of the then outstanding shares of Common Stock (except pursuant to an offer
for all outstanding shares of Common Stock which the Board of Directors
determine to be fair to and otherwise in the best interests of the Company and
its stockholders), each holder of a Right will, after the end of the Redemption
Period (as defined below), have the right (subject to the ownership limit and
the other ownership restrictions contained in the Company's Articles of
Incorporation) to exercise the Right by purchasing, for an amount equal to the
purchase price for the Right set forth in the Rights Certificate (the "Purchase
Price"), Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times such amount.
Notwithstanding any of the foregoing, following the occurrence of the events set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger which follows an offer described in the preceding paragraph), or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have become null and void as
set forth above) shall, after the expiration of the Redemption Period, have the
right to receive, upon exercise, common stock of the acquiring company having a
value equal to two times the Purchase Price of the Right.
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which have
become null and void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of one one-thousandths of
a share of Preferred Stock or other securities or property 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 Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock 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
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fractional shares will be issued (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise.
In general, the Board of Directors of the Company, may cause the
Company to redeem the Rights in whole, but not in part, at any time during the
period commencing on December 14, 1998, and ending on the tenth day following
the Stock Acquisition Date, as such period may be extended or shortened by the
Board of Directors (the "Redemption Period") at a price (the "Redemption Price")
of $.005 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Under certain circumstances set forth in
the Rights Agreement, the decision to redeem the Rights will require the
concurrence of two-thirds of the Board of Directors. After the Redemption Period
has expired, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company and there are no other Acquiring Persons. Immediately upon the action of
the Board of Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be subject to federal taxation to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
Other than those provisions relating to the principal economic terms
of the Rights (other than an increase in the Purchase Price), any of the
provisions of the Rights Agreement may be amended by the Board of Directors of
the Company 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 or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided however, no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable.
A total of 60,000 shares of Preferred Stock are reserved for
issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors.
The Rights Agreement, which specifies the terms of the Rights, is
attached hereto as Exhibit 4.1 and is incorporated herein by reference. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such Exhibit.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
4.1 Rights Agreement, dated as of December 14, 1998, between
the Company and the Rights Agent (incorporated by
reference to Exhibit 4.1 of the Company's Form 8-A,
dated December 17, 1998 (No. 1-14635)).
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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.
CRESTLINE CAPITAL CORPORATION
By: /s/ James L. Francis
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Date: December 17, 1998 Name: James L. Francis
Title: Executive Vice President, Chief
Financial Officer and Treasurer
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Exhibits
4.1 Rights Agreement, dated as of December 14, 1998, between the
Company and the Rights Agent (incorporated by reference to
Exhibit 4.1 of the Company's Form 8-A, dated December 17, 1998
(No. 1-14635)).
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