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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) October 17, 1996
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SECURITY CAPITAL PACIFIC TRUST
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-10272 74-6056896
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(Commission File Number) (I.R.S. Employer Identification No.)
7777 Market Center Avenue, El Paso, Texas 79912
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(Address of Principal Executive Offices) (Zip Code)
(915) 877-3900
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On October 17, 1996, the Registrant announced the closing of the Homestead
Village(R) Merger Agreement and on October 18, 1996, the Registrant mailed a
notice to the holders of the Cumulative Convertible Series A Preferred Shares
regarding an adjustment to the conversion price.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press Release dated October 17, 1996.
99.2 Notice to Holders of Cumulative Convertible Series A
Preferred Shares Regarding the Adjustment to the
Conversion Price.
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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.
SECURITY CAPITAL PACIFIC TRUST
Dated: October 21, 1996 By: /s/ Jeffrey A. Klopf
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Jeffrey A. Klopf
Senior Vice President and Secretary
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Exhibit 99.1
Press Release
For Immediate Release
SECURITY CAPITAL PACIFIC TRUST
Announces
Closing of Homestead Village(R) Merger Agreement
October 17, 1996 -- Security Capital Pacific Trust (New York Stock Exchange
Symbol: PTR) today announced the closing of the merger and distribution
agreement under which its Homestead Village(R) properties have been spun off to
a newly formed company, Homestead Village Incorporated (Homestead).
PTR also announced that its Board of Trustees declared a distribution of
all 9,485,727 shares of Homestead common stock and warrants to purchase an
additional 6,363,789 Homestead common shares which PTR received in the spin-off.
The distribution will be payable on November 12, 1996, to shareholders of record
on October 29, 1996. The exact number of Homestead securities payable per PTR
common share will depend on the number of PTR common shares outstanding on the
distribution record date. Each PTR common shareholder as of the distribution
record date will receive a maximum of .127974 shares of Homestead common stock
and .085855 Homestead warrants per PTR common share, and a minimum of .113475
shares of Homestead common stock and .076128 Homestead warrants per PTR common
share, plus cash for fractional shares and warrants.
PTR is the preeminent real estate operating company focusing on the
development, acquisition, operation and long-term ownership of multifamily
properties in the growing markets of the western United States. PTR's primary
objective is generating long-term, sustainable growth in per share cash flow.
As of August 31, 1996, and giving effect to the Homestead spin-off, PTR's
portfolio included 41,739 operating multifamily units, 5,663 units under
construction and an estimated 6,125 units in planning. In addition, PTR owns
land for future development of an expected 3,936 units.
FOR MORE INFORMATION, CONTACT: K. Scott Canon
(800) 982-9293
or
Gerard de Gunzburg
(212) 838-9292
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Exhibit 99.2
SECURITY CAPITAL PACIFIC TRUST
7777 Market Center Avenue
El Paso, Texas 77912
NOTICE
TO HOLDERS OF
SECURITY CAPITAL PACIFIC TRUST
CUMULATIVE CONVERTIBLE
SERIES A PREFERRED SHARES OF BENEFICIAL INTEREST
OF ADJUSTMENT TO CONVERSION PRICE
October 17, 1996
Dear Preferred Shareholder:
Security Capital Pacific Trust ("PTR") hereby gives you notice that a
distribution (the "Distribution") of shares of common stock of Homestead Village
Incorporated, a Maryland corporation ("Homestead"), $0.01 par value per share
(the "Homestead Common Stock"), and warrants of Homestead, each to purchase one
share of Homestead Common Stock, at an exercise price of $10.00 per share (the
"Homestead Warrants" and, together with the Homestead Common Stock, the
"Homestead Securities"), will be made by PTR on November 12, 1996, or as soon
thereafter as practicable, to holders of common shares of beneficial interest of
PTR, $1.00 par value per share (the "PTR Common Shares"), of record at the close
of business on October 29, 1996 (the "Distribution Record Date"). This notice is
made pursuant to Section 6(f) of the Articles Supplementary (the "Articles
Supplementary") for the Cumulative Convertible Series A Preferred Shares of
Beneficial Interest (the "Series A Preferred Shares") of PTR, dated as of
November 22, 1993. In accordance with the Articles Supplementary, and as
described in more detail below, there will be an adjustment in the conversion
price of the Series A Preferred Shares immediately after the Distribution Record
Date. Capitalized terms used but not defined herein shall have the meaning
ascribed to such terms in the Articles Supplementary.
Merger and Distribution Agreement. PTR will distribute an aggregate of
9,485,727 shares of Homestead Common Stock and 6,363,727 Homestead Warrants to
PTR common shareholders of record on the Distribution Record Date. The number of
shares of Homestead Common Stock and the number of Homestead Warrants to be
received per PTR common share in the Distribution will depend on the number of
PTR Common Shares outstanding on the Distribution Record Date. Based on the
number of PTR Common Shares outstanding on October 16, 1996, each PTR common
shareholder would receive .127974 shares of Homestead Common Stock and .085855
Homestead Warrants for each PTR Common Share held. Cash will be paid in lieu of
any fractional shares of Homestead Common Stock and fractional Homestead
Warrants. See "Conversion of Series A Preferred Shares" for a description of
additional PTR Common Shares which may be issuable before the Distribution
Record Date.
The Distribution is being made in connection with the transactions
contemplated by the Merger and Distribution Agreement (the "Merger Agreement ")
among PTR, Security Capital Atlantic
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Incorporated, a Maryland corporation, Security Capital Group Incorporated, a
Maryland corporation, and Homestead. The Merger Agreement and the transactions
contemplated thereby have been approved by the Board of Trustees and by the PTR
common shareholders at a Special Meeting of the holders of PTR Common Shares
held on September 12, 1996, and the Merger Agreement closed on October 17, 1996.
For your information, enclosed is a PTR Proxy Statement, dated August 13, 1996,
with a Prospectus dated August 13, 1996 of Homestead, prepared for the PTR
Special Meeting, for information concerning the Distribution, Homestead and the
Homestead Securities.
Conversion Price Adjustment. The current conversion price for the Series A
Preferred Shares is $20.556 per share. Immediately after the Distribution Record
Date, the conversion price for the Series A Preferred Shares will be adjusted so
that it equals the price determined by multiplying (I) the conversion price in
effect immediately prior to the close of business on the Distribution Record
Date by (II) a fraction, the numerator of which shall be the Fair Market Value
per PTR Common Share less the fair market value (as determined by the Chairman
of the Board of PTR or the Board of Trustees of PTR, whose determination shall
be conclusive), as of the Distribution Record Date, of the fraction of a
Homestead Common Stock and Homestead Warrant to be distributed per PTR Common
Share, and the denominator of which shall be the Fair Market Value of a PTR
Common Share. The Fair Market Value of a PTR Common Share will be based on the
closing prices of PTR Common Shares on the New York Stock Exchange for five
consecutive trading days selected by PTR during the 20-trading day period
beginning on October 1, 1996. Such adjustment shall become effective immediately
at the opening of business on the Business Day next following the Distribution
Record Date and will be announced at that time. PTR may defer until the
occurrence of the Distribution (A) issuing to the holder of any Series A
Preferred Share converted after the Distribution Record Date and before the
occurrence of the Distribution the additional PTR Common Shares issuable upon
such conversion by reason of the adjustment required by the Distribution over
and above the PTR Common Shares issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of cash in
lieu of any fractional shares of scrip representing fractions of PTR Common
Shares.
Conversion of Series A Preferred Shares. Only holders of Series A Preferred
Shares who elect to convert their Series A Preferred Shares into PTR Common
Shares in accordance with the Articles Supplementary on or before the
Distribution Record Date will participate in the Distribution. To convert Series
A Preferred Shares, the holder must deliver certificates for the Series A
Preferred Shares to be converted and a properly completed notice of conversion
to Chase Mellon Shareholder Services, the transfer agent for the Series A
Preferred Shares, at the address set forth below, before 5:00 p.m. New York
time, on October 29, 1996, the Distribution Record Date.
If by regular mail: If by overnight mail or
hand delivery:
ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C.
Attn: Reorganization Department Attn: Reorganization Department
Midtown Station 120 Broadway, 13th Floor
P.O. Box 845 New York, NY 10271
New York, NY 10018
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As of October 16, 1996, there were issued and outstanding 7,763,800 shares
of Series A Preferred Shares which are convertible into an aggregate of
9,442,334 PTR Common Shares and options to acquire 28,000 PTR Common Shares
under the Share Option Plan for Outside Trustees. To the extent that any Series
A Preferred Shares are converted into, or options are exercised for, PTR Common
Shares prior to the Distribution Record Date, such conversions or exercises will
result in a proportionate reduction in the amount of Homestead Securities to be
received by each PTR common shareholder. If all outstanding Series A Preferred
Shares were converted into, and all outstanding options exercised for, PTR
Common Shares prior to the Distribution Record Date, an additional 9,470,334 PTR
Common Shares would be issued, which would result in each PTR common shareholder
receiving .113475 shares of Homestead Common Stock and .076128 Homestead
Warrants per PTR Common Share in the Distribution plus cash for fractional
shares and fractional warrants.
PTR is not making any recommendations to any holder of Series A Preferred
Shares whether to convert and therefore participate in the Distribution, or to
retain its Series A Preferred Shares.
Tax Consequences Resulting from the Distribution. The Distribution will
have certain Federal income tax consequences for holders of Series A Preferred
Shares who convert their Series A Preferred Shares, as well as those holders who
do not convert their Series A Preferred Shares. A holder of Series A Preferred
Shares which does not convert its Series A Preferred Shares into PTR Common
Shares before the Distribution Record Date will receive a "deemed distribution"
under Section 305(c) of the Internal Revenue Code of 1986, as amended (the
"Code"), as a result of the conversion price adjustment. The deemed distribution
will be treated as a taxable dividend to such holder to the extent that the
current and accumulated earnings and profits (the "E&P") of PTR are allocated to
such deemed distribution and will result in a corresponding increase in such
holder's tax basis in its Series A Preferred Shares. The amount of the deemed
distribution which exceeds the allocated E&P will be treated as a nontaxable
reduction (although not below zero) of such holder's tax basis in its Series A
Preferred Shares. However, immediately following such reduction in tax basis,
such holder will have a corresponding increase in its tax basis in its Series A
Preferred Shares. To the extent that the deemed distribution exceeds such
holder's tax basis in its Series A Preferred Shares, the deemed distribution
will be treated as gain to such holder. Any such gain will constitute capital
gain to such holder if the holder holds its Series A Preferred Shares as a
capital asset, and will constitute long-term capital gain if such holder has
held its shares for at least one year. Again, such gain will result in a
corresponding increase in such holder's tax basis in its Series A Preferred
Shares.
To the extent that PTR has a net capital gain for the taxable year, it may
designate all or a portion of any dividend distributed as a capital gain
dividend. In this event, holders will be provided written notice of such
designation within 30 days after the close of PTR's taxable year. Holders will
be taxed at the long-term capital gains rate on any such capital gain dividends
regardless of the shareholders' holding period of its Series A Preferred Shares.
The amount of capital gain dividends which may be designated by PTR will be
reduced by any capital loss carryovers of PTR. Gain recognized by PTR as a
result of the Distribution will constitute capital gain to the extent
attributable to properties held by PTR and its subsidiaries in excess of one
year prior to the Distribution and PTR anticipates that it will designate
dividends attributable to any net capital gain resulting from the Distribution
as capital gain dividends.
PTR is required to report the amount distributed to shareholders as a
result of the deemed distribution (and the allocation of such amount among
ordinary dividends, capital gain dividends and
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return of capital) to the IRS and each holder of Series A Preferred Shares which
does not convert on Form 1099-DIV.
A holder of Series A Preferred Shares which elects to convert such shares
prior to the Distribution Record Date will generally be treated in the same
manner as a holder of PTR Common Shares with respect to the Distribution. For a
discussion of the material United States Federal income tax consequences to such
a holder, see "Federal Income Tax Consequences" beginning on page 36 of the
enclosed PTR Proxy Statement.
If you have any questions regarding this Notice, please call K. Scott Canon
at (800) 982-9293 or Gerard de Gunzburg at (212) 838-9292.
SECURITY CAPITAL PACIFIC TRUST
Jeffrey A. Klopf
Secretary
Enclosures
