SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant X
Filed by a party other than the registrant
Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
Check the appropriate box:
x Preliminary proxy statement
Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Bedford Property Investors, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of filing fee (Check the appropriate box):
x $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
Fee Paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[BEDFORD LETTERHEAD]
Dear Stockholder:
The directors and officers join me in extending to you a cordial
invitation to attend a Special Meeting of Stockholders. This meeting will be
on [ , 1996] at 1:00 p.m., at the principal office of the
Company, 270 Lafayette Circle, Lafayette, California.
Enclosed please find the Notice of Meeting, Proxy Statement, and two
separate Proxy Cards, one to be used by Common Stockholders and the other to
be used by Preferred Stockholders. At this Special Meeting two proposals will
be considered. The first proposal, if approved, would delete Article VIII of
the Company's charter which relates to certain business combinations. This
first proposal will be voted upon by both Common and Preferred
Stockholders voting together as a single class. The second proposal
will put to a vote an authorization for the amendment to the Company's charter
which would effect a reverse stock split of the Company's Common Stock. This
second proposal will be voted upon solely by the Company's Common Stockholders.
Your management and the Board of Directors unanimously recommend that
you vote FOR both proposals. Please take time to review and vote on each
proposal. Your vote is important.
Hope to see you at the Special Meeting.
Very truly yours,
Peter B. Bedford
Chairman of the Board and Chief Executive Officer<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
270 Lafayette Circle
Lafayette, CA 94549
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held _____________, 1996
TO THE STOCKHOLDERS:
A Special Meeting of Stockholders of Bedford Property
Investors, Inc., a Maryland corporation (the "Company"), will be held at the
principal office of the Company, 270 Lafayette Circle, Lafayette, California
on [ ______________, 1996], at 1:00 p.m. local time, for the following
purposes:
(1) to consider and act upon a proposal (the "Business
Combination Proposal") to amend the Charter of the Company to delete in its
entirety Article VIII thereto, which relates to certain limitations on
business combinations with interested stockholders.
(2) to consider and act upon a proposal (the "Reverse Stock
Split Proposal") to authorize an amendment to Article V of the charter of
the Company to effect a reverse stock split in which one new share par value
$0.02 per share, will be exchanged for every two shares,par value $0.01 per
share, presently issued and outstanding; and
(3) to transact such other business as may be properly brought
before the Special Meeting and any postponements or adjournments thereof.
Only stockholders of record at the close of business on
January 30, 1996 are entitled to notice of and to vote at the meeting and any
postponements or adjournment thereof.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. THE PRESENCE AT THE MEETING, IN PERSON OR BY PROXY, OF STOCKHOLDERS
ENTITLED TO CAST A MAJORITY OF ALL VOTES ENTITLED TO BE CAST AT THE MEETING
SHALL CONSTITUTE A QUORUM. THIS PROXY STATEMENT IS ACCOMPANIED BY TWO FORMS
OF PROXY CARD: THE BLUE CARD FOR USE BY THE HOLDERS OF THE COMPANY'S COMMON
STOCK AND THE RED CARD FOR USE BY THE HOLDERS OF THE COMPANY'S SERIES A
PREFERRED STOCK. IF YOU CANNOT ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE APPROPRIATE ACCOMPANYING PROXY CARD IN THE ENCLOSED
ENVELOPE AS PROMPTLY AS POSSIBLE.
By Order of the Board of Directors
Jennifer I. Mori
Secretary
________________, 1996
Lafayette, California<PAGE>
Preliminary Proxy Statement
Dated February 14, 1996
BEDFORD PROPERTY INVESTORS, INC.
270 Lafayette Circle
Lafayette, CA 94549
PROXY STATEMENT
, 1996
Special Meeting of Stockholders
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Board of Directors" or the
"Board") of Bedford Property Investors, Inc., a Maryland corporation (the
"Company"), of proxies from the holders (the "Stockholders") of the Company's
issued and outstanding shares of Common Stock, par value $0.01 per share (the
"Common Stock"), and Series A Convertible Preferred Stock, par value $0.01
per share (the "Preferred Stock"), to be exercised at a Special Meeting of
Stockholders to be held on [_________________, ______________________,] 1996,
at the principal office of the Company, 270 Lafayette Circle, Lafayette,
California, at 1:00 p.m. local time, and at any adjournment(s) or
postponement(s) of such meeting (the "Special Meeting"), for the purposes
set forth below.
This Proxy Statement and the enclosed proxy cards are being
mailed to the Stockholders on or about [_______________].
The purpose of the Special Meeting is to consider and act
upon the following two proposals:
(1) A proposal (the "Business Combination Proposal") to
amend the Charter of the Company (the "Charter") to delete in its entirety
Article VIII thereto, which relates to certain limitations on business
combinations with interested Stockholders.
(2) A proposal (the "Reverse Stock Split Proposal") to authorize
an amendment to Article V of the Charter to effect a reverse stock split
(the "Reverse Stock Split") in which one new share, par value $0.02 per
share, would be exchanged for every two shares, par value $0.01 per share,
presently issued and outstanding.
and to transact such other business as may be properly
brought before the Special Meeting and any postponements or adjournments
thereof.
The holders of record of the shares of Common Stock at the
close of business on January 30, 1996 (the "Record Date") are entitled to
notice of and to vote at the Special Meeting in relation to the Business
Combination Proposal and the Reverse Stock Split Proposal (collectively, the
"Proposals"). The holders of record of Preferred Stock at the close of
business on the Record Date are entitled to notice of and to vote at
the Special Meeting only in relation to the Business Combination Proposal,
on which they will vote together with the Common Stock holders as a single
class. At the close of business on the Record Date, 6,090,650 shares of
Common Stock and 8,333,334 shares of Preferred Stock were outstanding,
each of which is entitled to cast one vote (collectively, the Common
Stock and Preferred Stock are referred to herein as the "Outstanding Stock").
The presence at the Special Meeting, in person or by proxy,
of Stockholders entitled to cast a majority of all the votes entitled to be
cast at the Special Meeting will constitute a quorum for the transaction of
business at the Special Meeting. Abstentions and broker non-votes (i.e.,
votes not cast by a broker or other record holder in "street" or nominee
name solely because such record holder does not have discretionary
authority to vote on the matter) will be counted toward the presence of a
quorum. Abstentions and broker non-votes, however, will have the same effect
as votes against the Proposals.
Under the terms of the Charter, the Business Combination
Proposal will require the affirmative vote of 80% of the Outstanding
Preferred and Common Stock, voting together as class, in order to pass and
the Reverse Stock Split Proposal will require the affirmative vote
of a majority of the Outstanding Common Stock in order to pass.
At its Annual Meeting of Stockholders held on September 13,
1995, the Company solicited proxies for and sought Stockholder approval of a
provision identical to that contained in the Business Combination Proposal.
This proposal received the affirmative vote of approximately 75% of the
outstanding Common Stock at the meeting, less than the 80% required for
approval. Since certain contractual obligations impose an ongoing obligation
on the Company to attempt to have Article VIII deleted from the Charter,
the Board of Directors has called the Special Meeting to solicit votes on the
Business Combination Proposal.
The owner of the Preferred Stock has informed the Company
that it intends to vote all 8,333,334 shares of the Preferred Stock in favor
of the Business Combination Proposal. These shares were not outstanding at
the Company's last Annual Meeting of Stockholders and accordingly could not
be voted on this proposal at that meeting. In addition, Mr. Peter Bedford
has informed the Company that he intends to vote his 1,711,825 shares of
Common Stock in favor of the Business Combination Proposal.
The Company has filed a registration statement with the
Securities and Exchange Commission for an offering of shares of Common Stock.
The Board of Directors currently intends to implement the Reverse Stock Split
in order to facilitate this public offering. In the event the Board of
Directors decides to not go forward with the public offering, the Board will
not implement the Reverse Stock Split. Under Section 2-612 of the
Maryland General Corporation Law ("MGCL"), the Board of Directors may abandon
the Reverse Stock Split at any time before, during or after the Special
Meeting and prior to filing the amendment to the Charter with the Maryland
State Department of Assessments and Taxation if for any reason the
Board of Directors deems it advisable to do so. The Board currently
anticipates consummating the Company's offering during 1996. In the event
the Board of Directors decides to not go forward with the public offering
during 1996, the Board will not file the Reverse Stock Split
Articles (as defined below) and will not effect the Reverse Stock
Split.
Under the Maryland General Corporation Law ("MGCL"), neither
Proposal will entitle the holders of Outstanding Stock to appraisal rights
with respect to such shares.
All expenses in connection with the solicitation of proxies
will be borne by the Company. In addition to solicitation by mail, officers
and directors of the Company may also solicit proxies by mail, telephone,
facsimile or in person. Additionally, the Company may retain the services of
a professional proxy solicitation firm to assist in the solicitation of
proxies, at a cost of approximately $9,000 plus expenses, which would
be borne by the Company.
This proxy statement is accompanied by two forms of proxy
card: the blue card is for use by the Common Stockholders and the red card
is for use by the Preferred Stockholders. The shares of Common Stock
represented by properly executed Common Stock proxy cards will be voted at
the Special Meeting as indicated or, if no instruction is given, in favor of
the Business Combination Proposal and the Reverse Stock Split
Proposal. The shares of outstanding Preferred Stock represented by all
properly executed Preferred Stock proxy cards will be voted at the Special
Meeting as indicated or, if no instruction is given, in favor of
the Business Combination Proposal. Any person giving a proxy has the
right to revoke it at any time before it is exercised (a) by filing with the
Secretary of the Company a duly signed revocation or proxy bearing a later
date or (b) by voting in person at the Special Meeting.
Under the MGCL, only the purposes specified in the Notice of
Special Meeting of Stockholders may be considered at the Special Meeting.
PROPOSAL ONE: BUSINESS COMBINATION PROPOSAL
AMENDMENT OF CHARTER TO DELETE
ARTICLE VIII REGARDING CERTAIN BUSINESS COMBINATIONS
Under the proposed Articles of Amendment, attached hereto as
Exhibit A (the "Business Combination Articles"), Article VIII of the Charter
relating to certain business combinations (as defined below) between the
Company and any Article VIII Interested Stockholder (as defined below) would
be deleted in its entirety. The substance of Article VIII
was originally included in the Company's Certificate of Incorporation
when it was incorporated as a Delaware corporation in 1984. Article VIII
requires a business combination to be approved by the holders of at least 80%
of the Voting Stock (as defined below), subject to certain exceptions. Among
these exceptions is the approval of a business combination by a majority of
disinterested members of the Board of Directors.
An interested stockholder under Article VIII of the Charter
(an "Article VIII Interested Stockholder") means any individual, firm,
corporation (other than the Company) or other entity which, as of the record
date for the determination of Stockholders entitled to notice of and to vote
on any business combination, or immediately prior to the consummation of a
business combination, is the beneficial owner of ten percent (10%) or more of
the outstanding Voting Stock. Bed Preferred No. 1 Limited Partnership, a
Delaware limited partnership ("BPLP"), is the holder of all outstanding
shares of Preferred Stock, and is an affiliate of AEW Partners, L.P., a
Delaware limited partnership ("AEW"). BPLP and AEW are Article VIII
Interested Stockholders.
Article VIII of the Charter defines "Voting Stock" as the
outstanding shares of capital stock of the Company entitled to vote generally
in the election of directors. The Company has been advised by counsel that
both the Common Stock and the Preferred Stock qualify as Voting Stock under
this definition.
A "business combination" under Article VIII of the Charter
includes (i) a merger or consolidation of the Company with or into an Article
VIII Interested Stockholder or its affiliate, (ii) a transfer of any of the
Company's assets with an aggregate fair market value greater than $5,000,000
to an Article VIII Interested Stockholder or its affiliate, (iii) a
reclassification of securities or a recapitalization of the Company
which would have the affect of increasing the proportionate share of
outstanding shares of any class of equity securities of the Company
convertible into such class of equity securities owned by an Article VIII
Interested Stockholder or its affiliate or (iv) the adoption of any
plan of liquidation or dissolution of the Company proposed by or on behalf of
an Article VIII Interested Stockholder or its affiliate.
The principal purpose of charter provisions such as Article
VIII is to deter persons from acquiring more than ten percent of the voting
power of a corporation without approval by the corporation's board of directors.
In accordance with the Series A Convertible Preferred Stock
Purchase Agreement between the Company and AEW, dated May 18, 1995, which AEW
assigned to BPLP (the "Preferred Stock Purchase Agreement"), the Company
previously solicited proxies for and sought Stockholder approval of an
amendment to the Charter to delete in its entirety Article VIII at the
Annual Meeting of Stockholders of the Company held on September 13,
1995. This proposal received the affirmative vote of approximately
75% of the outstanding Common Stock at the Annual Meeting, less than the 80%
required to delete Article VIII from the Charter. Since the Preferred Stock
Purchase Agreement imposes an ongoing obligation on the Company to attempt to
have Article VIII deleted from the Charter, the Board of Directors
has called the Special Meeting to solicit votes on the Business
Combination Proposal.
BPLP has informed the Company that it intends to vote all
8,333,334 shares of the Preferred Stock in favor of the Business Combination
Proposal. These shares were not outstanding at the Company's last Annual
Meeting of Stockholders and accordingly could not be voted on this proposal
at that meeting. In addition, Mr. Peter Bedford has informed the
Company that he intends to vote his 1,711,825 shares of Common Stock
in favor of this Proposal (See "Security Ownership of Certain Beneficial
Owners and Management"). With the Preferred Stock and Mr. Bedford's Common
Stock voting in favor of the Proposal, the Business Combination Proposal will
pass if it receives the vote of approximately 35% of the remaining shares of
outstanding Common Stock.
Management believes that the investment community views
charter provisions such as Article VIII unfavorably and, thus, management
believes that the continued presence of Article VIII in the Charter may tend
to discourage investment in the Company. Significantly,
AEW expressed the desire to have the provisions removed from the
Charter at the time it executed the agreement to acquire the Preferred Stock
from the Company.
As a result of the removal of Article VIII, the Company
could become more vulnerable to coercive two-tiered, front-end loaded or
partial offers which may not offer full value to all Stockholders, and to
purchasers seeking to accumulate blocks of stock in order to
exercise a controlling influence over the policies of the Company,
whose interests may conflict with those of the Stockholders. In addition,
the removal of Article VIII from the Charter would, if BPLP then controlled
the Board of Directors, permit BPLP to cause the Company to
liquidate or redeem the outstanding shares of Preferred Stock, or
enter into certain transactions with BPLP or its affiliates. Any liquidation,
however, would be subject to approval by the Stockholders. Any of such
transactions could result in a greater return to the holders of the
Preferred Stock than to the holders of the Common Stock. Management
believes, however, that the detriment resulting from loss of such protection
is outweighed by its belief that the deletion of Article VIII from the Charter
will make the Company more attractive to the investment community.
At the time of Article VIII's inclusion in the Corporation's
Certificate of Incorporation, Delaware had not yet enacted statutory anti-
takeover provisions. Since that time, many states, including Delaware and
Maryland, have enacted statutes designed to deter hostile takeovers. In this
regard, the MGCL provides that certain "business combinations" (including a
merger, consolidation, share exchange or, in certain circumstances, an asset
transfer or issuance or a reclassification of equity securities)
between a Maryland corporation and any person who beneficially owns ten percent
or more of the voting power of the corporation's shares or an affiliate of
the corporation who, at any time within the two-year period prior to the date
in question, was the beneficial owner of ten percent or more of the
voting power of the then outstanding voting stock of the corporation
(an "Interested Stockholder") or an affiliate of such an Interested
Stockholder are prohibited for five years after the most recent date on which
the Interested Stockholder becomes an Interested Stockholder.
Thereafter, any such business combination must be recommended by the
board of directors of such corporation and approved by the affirmative vote of
at least (a) 80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation and (b) two-thirds
of the votes entitled to be cast by holders of the voting stock of the
corporation other than shares held by the Interested Stockholder with whom (or
with whose affiliate) the business combination is to be effected, unless,
among other conditions, the corporation's common stockholders receive a
minimum price (as defined in the MGCL) for their shares and the
consideration is received in cash or in the same form as previously
paid by the Interested Stockholder for its shares.
The minimum price referred to above is defined in the MGCL
as the highest of: (i) the highest price per share paid by an Interested
Stockholder, plus a compounded interest factor, based on U.S. Treasury
obligations, less dividends paid, (a) at any time within five
years prior to the announcement date of the business combination or
(b) within five years before a transaction in which it became an Interested
Stockholder, whichever is higher; (ii) the market value per share, plus a
compounded interest factor based on U.S. Treasury obligations
less dividends paid, on (a) the announcement date of the business
combination (the "announcement date price") or (b) the date on which an
Interested Stockholder first became an Interested Stockholder (the
"determination date price"), whichever is higher; or (iii) the higher
of the announcement date price or the determination date price (not
including the interest factor or dividends) multiplied by a fraction in which
the numerator is the price referred to in (i)(a) above, and the denominator is
the price paid by the bidder on the first day that the bidder
acquired any shares during the period referred to in (i)(a).
The provisions of the MGCL described above do not apply,
however, to business combinations that are approved by the board of directors of
the corporation prior to the time that the Interested Stockholder becomes an
Interested Stockholder. Pursuant to the statute, the Company has exempted
any business combinations with any person and, consequently, the five-year
prohibition and the super-majority vote requirements will not apply
to any such business combinations at this time. The statute allows
the Board of Directors to repeal this exemption. As a condition to AEW's
purchase of the Preferred Stock, however, the Board of Directors adopted a
resolution (the "MGCL Resolution") which irrevocably exempts
any business combination between the Company and AEW, any affiliate of
AEW or any transferee of AEW from the provisions of the MGCL relating to
business combinations described above. As noted above, BPLP is an affiliate
of AEW, and any business combination between the Company and BPLP or its
affiliates is therefore irrevocably exempt from the provisions of the MGCL
relating to business combinations. The exemption from the MGCL
provided by the MGCL Resolution is not the subject of the Business
Combination Proposal and this Resolution will continue to apply.
The Board of Directors, in connection with the sale of the
Preferred Stock, also adopted resolutions which, pursuant to Article VIII as
currently set forth in the Charter, irrevocably exempt any business
combinations which may occur between the Company and
AEW, any affiliate of AEW or any transferee of AEW, including any
transaction contemplated by or resulting from the exercise of any redemption
right of the Preferred Stock which may constitute a business combination.
The effect of these resolutions adopted by the Board is to
cause the provisions of Article VIII to no longer apply to any
business combination which may occur between the Company and BPLP (as an
affiliate of AEW) or its affiliates. These resolutions will continue to
apply even if the proposed amendment to the Charter is not
approved at the Special Meeting. These resolutions and the approval
of the Business Combination Proposal would result in BPLP and an affiliate of
BPLP, or any other beneficial owner of ten percent or more of the outstanding
Voting Stock of the Company, being able to enter into business combinations
with the Company which may not be in the best interest of the Stockholders.
Vote Required; Recommendation of the Board of Directors
Approval of the Business Combination Proposal requires the
affirmative vote of 80% of the outstanding shares of Common Stock and
Preferred Stock, voting together as a single class. Accordingly, failure to
vote for the Business Combination Proposal, even by abstaining or by failing
to be represented at the Special Meeting, constitutes a vote against the
Business Combination Proposal. If approved, the Business Combination
Articles will become effective upon the filing thereof with the State
Department of Assessments and Taxation of Maryland. THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THE BUSINESS COMBINATION PROPOSAL (AS ENACTED
BY ADOPTION OF THE BUSINESS COMBINATION ARTICLES OF AMENDMENT ATTACHED HERETO
AS EXHIBIT A). IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY,
PROXIES SOLICITED IN CONNECTION WITH THIS PROXY STATEMENT WILL
BE SO VOTED.
PROPOSAL TWO: REVERSE STOCK SPLIT PROPOSAL
AMENDMENT OF THE CHARTER TO EFFECT A REVERSE STOCK SPLIT
Under the proposed Articles of Amendment, attached hereto as
Exhibit B (the "Reverse Stock Split Articles"), Article V of the Charter
would be amended to reduce the number of authorized shares of the Company and
to increase the par value of the Company's common stock to effect the Reverse
Stock Split in which one new share, par value $0.02 per share, would be
exchanged for every two shares, par value $0.01 per share, presently issued
and outstanding.
In order to effect the Reverse Stock Split, the Board of
Directors of the Company has approved, subject to Stockholder approval
solicited hereby, a proposal (i) to amend the Company's Charter to decrease
the number of authorized shares of Common Stock from 30 million shares to 15
million shares and to increase the par value of the Common Stock
from $0.01 per share to $0.02 per share and (ii) to effect a one for
two reverse stock split.
The Company has filed a registration statement with the
Securities and Exchange Commission for an offering of shares of Common Stock.
The Board of Directors currently intends to implement the Reverse Stock Split
in order to facilitate this public offering. In the event the Board of
Directors decides to not go forward with the public offering, the Board will
not implement the Reverse Stock Split. Under Section 2-612 of the
MGCL, the Board of Directors may abandon the Reverse Stock Split at any time
before, during or after the Special Meeting and prior to filing the amendment
to the Charter with the Maryland State Department of Assessments and Taxation
if for any reason the Board of Directors deems it advisable to do so. The
Board currently anticipates consummating the Company's offering during 1996.
In the event the Board of Directors decides to not go forward with the
public offering during 1996, the Board will not file the Reverse Stock Split
Articles and will not effect the Reverse Stock Split.
Charter Amendment
Under the Reverse Stock Split Proposal, Article V of the Company's
Charter will be amended to read as follows:
"Section 1. Authorized Shares. The total number of shares of stock
which the Corporation has authority to issue is 35,000,000 shares, of which
15,000,000 shares are shares of Common Stock, $0.02 par value per share
("Common Stock"), 10,000,000 shares are shares of Preferred
Stock, $0.01 par value per share ("Preferred Stock"), and 10,000,000
shares are shares of Series A Convertible Preferred Stock, $0.01 par value
per share ("Series A Preferred"). The aggregate par value of all authorized
shares of stock having a par value is $500,000."
Reasons for the Reverse Stock Split Proposal
The Company has filed a registration statement with the Securities
and Exchange Commission for an offering of shares of Common Stock. The
Company is seeking authorization to effect the Reverse Stock Split in order
to facilitate this offering and its general access to the capital markets.
The Company believes that the adoption of the Reverse Stock Split Proposal
would facilitate the offering and increase the acceptance of the Common Stock
by the financial community and the investing public.
Principal Effects of Reverse Stock Split
If the Reverse Stock Split Proposal is approved, the total
number of shares of Common Stock held by each Stockholder would be converted
automatically into a right to receive an amount of whole shares of new common
stock equal to the number of shares owned immediately prior to the Reverse
Stock Split divided by two. All fractional shares would be disposed of as
set forth below.
There were 458 Common Stockholders of record of the Company
as of January 30, 1995. The Reverse Stock Split Proposal, if adopted, is
not expected to cause a significant change in the number of Stockholders.
The Company has no plans for the cancellation or purchase of its shares from
individuals holding a nominal number of such shares if the Reverse Stock
Split Proposal is adopted.
The Company has authorized Common Stock of 30 million
shares. The authorized Common Stock will be reduced to 15 million shares as a
result of the Reverse Stock Split Proposal. As of the Record Date, the number
of issued and outstanding shares of Common Stock was 6,090,650. Based upon
the Company's best estimates, the aggregate number of shares of new common
stock that will be issued and outstanding as a result of the
Reverse Stock Split will be approximately 3,045,000. There will be an
estimated 11,955,000 authorized but unissued shares of new common stock as a
result of the Reverse Stock Split.
As of the Record Date, there were outstanding options to
purchase an aggregate of 687,500 shares of Common Stock under the Company's
1992 Directors' Stock Option Plan and 1985 Stock Option Plan (collectively the
"Plans"). In addition, an aggregate of 1,404,750 shares remain available for
grant under the 1985 Stock Option Plan. The Plans provide for automatic
adjustment of the number and per share price of shares subject to outstanding
options and available for future grant in the event of a change in
capitalization, such as a reverse stock split. In the event the Reverse Stock
Split is enacted, the number of shares of new common stock issuable upon
exercise of outstanding options will be reduced to 343,750 and the exercise
prices will be two times the present exercise prices. The number of
shares of new common stock available for grant under the 1985 Stock Option
Plan will be reduced to 702,375.
As of the Record Date, the Company had reserved an indeterminate and
sufficient number of shares of Common Stock to cover conversion of the
8,333,334 shares of the Company's Series A Preferred Stock. Subject to certain
adjustments, until September 18, 1997 each share of Preferred Stock converts
into one share of Common Stock. If the Reverse Stock Split Proposal is
approved and effected, the conversion price would be adjusted
proportionately so that after the Reverse Stock Split a Preferred
Stockholder would receive 50% of the common stock he would have received had
he converted prior to the split.
Approval of the Reverse Stock Split Proposal would not affect any
Stockholder's percentage ownership interest in the Company or proportional
voting power, except for the elimination of fractional shares as described
below. The rights and privileges of the holders of
Common Stock would not be affected substantially by adoption of the
Reverse Stock Split Proposal. However, the Reverse Stock Split may result in
some Stockholders owning "odd-lots" of less than 100 shares of common stock.
Brokerage commissions and other costs, of transactions in odd-lots are
generally higher than the cost of transactions in even multiples of 100 shares.
Although the Company anticipates that the reverse stock
split will not adversely affect the Company's stock price, there can be no
assurance that the market price of the Company's Common Stock after the
proposed Reverse Stock Split will be two times the market
price before the proposed Reverse Stock Split, or that the price
following the Reverse Stock Split will either exceed or remain in excess of
the current market price.
Dissenting Stockholders have no appraisal rights under Maryland law
or under the Company's Charter or Bylaws in connection with the Reverse Stock
Split.
Fractional Shares and Exchange of Stock Certificates
No scrip or fractional shares certificates will be issued in
connection with the Reverse Stock Split. The Board of Directors has
authorized the Company's officers to combine all fractional shares and to
direct Chemical Mellon Bank (the "Exchange Agent") to sell such
combined fractional shares on the open market on behalf of and as an
agent for the Stockholders entitled to such fractional shares under the terms of
the Reverse Stock Split. Sales of fractional interests will be effected by the
Exchange Agent as soon as practicable on the basis of prevailing market prices
of the Common Stock at the time of sale. The sales proceeds will then be
distributed to entitled Stockholders as cash payment in lieu of fractional
shares. The Company estimates that transaction fees associated with
sales of fractional share interests will be less than $1,000 which will be
borne by the Company. A payment in lieu of a fractional share will be made to
an entitled Stockholder promptly after receipt of a properly
completed letter of transmittal and stock certificate(s) for all of
his shares of Common Stock outstanding prior to the Reverse Stock Split.
As soon as practicable after the Effective Date, the Company will
send a letter of transmittal to each Stockholder of record on the Effective
Date for use in transmitting certificates representing shares of Common Stock
("old certificates") to the Exchange Agent, c/o Chemical Mellon Shareholder
Services, 450 West 33rd Street, 15th Floor, New York, NY 10001. The letter of
transmittal will contain instructions for the surrender of old certificates to
the Exchange Agent in exchange for certificates representing the
number of whole shares of new common stock. No new certificate will be issued
to a Stockholder, and no cash will be paid in lieu of fractional shares of
new Common Stock, until the Stockholder has surrendered all old certificates
together with a properly completed and executed letter of transmittal to the
Exchange Agent.
Upon proper completion and execution of the letter of transmittal
and return thereof to the Exchange Agent, together with all old certificates,
a Stockholder will receive a new certificate or certificates representing the
number of whole shares of common stock into which their shares of Common Stock
have been converted as a result of the Reverse Stock Split. Stockholders
should not forward their certificates to the Exchange Agent until the letter
of transmittal is received and should surrender their certificates
only with such letter of transmittal. Until surrendered, outstanding old
certificates held by a Stockholder will be deemed for all purposes to
represent the number of whole shares of Common Stock to which
the Stockholder is entitled as a result of the Reverse Stock Split.
New York Stock Exchange Listing
If the Reverse Stock Split Proposal is approved by the
Stockholders at the Special Meeting and if the Board of Directors decide to
go forward with the Reverse Stock Split in order to facilitate the Company's
concurrent public offering, an amendment to Article V of the Charter, in the
form set forth above, would be filed with the Maryland State
Department of Assessments and Taxation and the Reverse Stock Split
will become effective as of 5:00 p.m. E.S.T. on the date of such filing
("Effective Date"). It is expected that such filing would take place on
[_________] or shortly thereafter. Without any further action on the part
of the Company or the Stockholders, the shares of Common Stock held by
Stockholders of record will be converted at 5:00 p.m. E.S.T. on the Effective
Date into the right to receive an amount of whole shares of new common stock
equal to the number of their old shares divided by two, with any fractional
shares eliminated as described above. The Company intends to
make application with the New York Stock Exchange, where the Common
Stock is currently traded, for listing and registration of the new common
stock, where the Common Stock is currently traded.
Certain Federal Income Tax Consequences
The following is a summary of the material anticipated
Federal income tax consequences of the Reverse Stock Split to Stockholders of
the Company, prepared after consultation with counsel. This summary is based
on the Federal income tax laws as now in effect and as currently interpreted;
it does not take into account possible changes in such tax laws or
interpretations, including amendments to applicable statutes,
regulations and proposed regulations or changes in judicial or administrative
rulings, some of which may have retroactive effect. This summary does not
purport to address all aspects of the possible Federal income tax consequences
of the Reverse Stock Split and is not intended as tax advice to any
person. In particular, and without limiting the foregoing, this
summary does not consider the Federal income tax consequences to Stockholders
of the Company in light of their individual investment circumstances or to
holders subject to special treatment under the Federal income
tax laws (for example, life insurance companies, financial
institutions, tax-exempt organizations, regulated investment companies and
foreign taxpayers). The summary does not address any consequence of the Reverse
Stock Split under any state, local or foreign tax laws.
No ruling will be obtained from the Internal Revenue Service
(the "Service") regarding the Federal income tax consequences to the
Stockholders of the Company as a result of the Reverse Stock Split.
ACCORDINGLY, EACH STOCKHOLDER IS ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE PROPOSED TRANSACTION TO SUCH
STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN
INCOME AND OTHER TAX LAWS.
The Reverse Stock Split effectively would call for
Stockholders of the Company to exchange their Common Stock for an amount of
whole shares of new common stock equal to the number of shares of Common Stock
owned immediately prior to the Reverse Stock Split divided by two. No
fractional shares of new common stock will be issued. A Stockholder who
might be otherwise entitled to receive a fractional share of new
common stock as a result of the transaction will receive, in lieu thereof,
cash representing the value of such fractional share as
determined by an open market sale of all combined fractional shares.
See "Fractional Shares and Exchange of Stock Certificates."
If approved by the Company's Stockholders the Reverse Stock
Split will qualify as a "recapitalization" as described in Section 368(a)(1)
of the Internal Revenue Code (the "Code"). Consequently, no gain or loss
will be recognized by the Company and no gain or loss will be recognized by
Common Stockholders who exchange their shares in connection with the Reverse
Stock Split. With reference to exchanging Common Stockholders, the
aggregate basis of new shares received (including any fractional share
deemed received) will be the same as the aggregate basis of Common Stock
surrendered in exchange thereof. Similarly, the holding period for new common
stock received as a result of the Reverse Stock Split
(including any fractional share deemed to received) will include the
holding period of the shares of Common Stock surrendered in exchange thereof.
A holder of Common Stock receiving cash in lieu of a
fractional share will be treated as receiving the payment in connection with
the redemption determined under Section 302 of the Code. As such, a holder
of Common Stock will generally recognize gain or loss upon such payment equal
to the difference, if any, between such Stockholder's basis in the
fractional share (as described above) and the amount of cash received.
Such gain or loss will be capital gain or loss and will be long-term capital
gain or loss if the Stockholder's holding period (calculated as described
above) exceeds one year. A holder of Common Stock receiving
cash in lieu of a fractional share may be subject to dividend
treatment on such payment if the redemption of the fractional share is
"essentially equivalent to a dividend" under Section 302 of
the Code. However, based on a published IRS ruling, dividend
treatment is unlikely if, taking into account the constructive ownership rules
set forth in Section 318 of the Code, (a) the stockholder's relative stock
interest in the Company is minimal, (b) the stockholder exercises
no control over the Company's affairs and (c) there is a reduction in
the stockholder's proportionate interest in the Company.
Vote Required; Recommendation of the Board of Directors
In order to effect the Reverse Stock Split Proposal, the
Company's Certificate of Incorporation must be amended, which requires, under
Section 2-104(b)(4) of the MGCL and the Company's Charter, the affirmative
vote of a majority of the votes entitled to be cast on the
matter. Accordingly, failure to vote for the Reverse Stock Split
Proposal, even by abstaining or by failing to be represented at the Special
Meeting, constitutes a vote against the Reverse Stock Split Proposal. If
approved, the Reverse Stock Split Articles will become effective upon
the filing thereof with the State Department of Assessments and
Taxation of Maryland. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE REVERSE STOCK SPLIT PROPOSAL (AS ENACTED BY ADOPTION OF THE REVERSE
STOCK SPLIT ARTICLES OF AMENDMENT ATTACHED HERETO AS EXHIBIT B).
IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED
IN CONNECTION WITH THIS PROXY STATEMENT WILL BE SO VOTED.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1995,
with respect to directors, certain employees of the Company and each person
who is known by the Company to own beneficially more than 5% of the shares of
its Common Stock, and with respect to shares owned beneficially by all
directors and officers of the Company as a group. The following information
does not reflect the proposed Reverse Stock Split.
Title Number of Shares Percent of
of Class Name and Address Beneficially Owned Class
Preferred Stock Bed Preferred No. 1 8,333,334 100%
Limited Partnership
225 Franklin Street
Boston, MA 02110-2803
Common Stock Peter B. Bedford 1,819,325(1) 31.4%
Common Stock Anthony M. Downs 70,500(2) 1.2%
Common Stock Anthony M. Frank 78,000(2) 1.3%
Common Stock Claude M. Ballard 71,000(2) 1.2%
Common Stock Martin I. Zankel 90,000(2) 1.6%
Common Stock Thomas G. Eastman 0 0%
Common Stock Thomas H. Nolan 0 0%
Common Stock Bob Pester 71,000 1.2%
Common Stock Donald A. Lorenz 51,700 (3)
Common Stock Hanh Kihara 7,500 (3)
Common Stock All Directors and Officers
as a group (12 persons) 2,260,125(4) 37.1%
_________________
(1) Includes 300,000 shares owned by Mr. Bedford's children (as to
which Mr. Bedford has sole voting power and may be deemed to be the beneficial
owner) and 107,500 shares of Common Stock subject to options which are
currently exercisable or become exercisable within 60 days of December 31, 1995.
(2) Includes currently exercisable options to purchase 70,000
shares of Common Stock.
(3) Less than 1%.
(4) Includes options to purchase 405,000 shares which are currently
exercisable or become exercisable within 60 days of December 31, 1995.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the annual
meeting of Stockholders to be held in 1996 must be received by the Company
at its principal executive offices no later than March 18, 1996 for inclusion
in the Company's Proxy Statement and form of proxy relating to that meeting.
Such proposals must meet the requirements of the rules of the Securities and
Exchange Commission relating to stockholder proposals.
GENERAL MATTERS
The Board of Directors knows of no matter, other than those referred to
in this Proxy Statement, which will be presented at the Special Meeting.
However, if any other matters are properly brought before the meeting or any
of its adjournments, the person or persons voting the proxies will vote them
in accordance with their judgement on such matters.
<PAGE>
Exhibit A
ARTICLES OF AMENDMENT OF
CHARTER
BEDFORD PROPERTY INVESTORS, INC.
THIS IS TO CERTIFY THAT:
FIRST: The charter of Bedford Property Investors, Inc., a
Maryland corporation (the Corporation ), is hereby amended by deleting
existing Article VIII in its entirety.
SECOND: The charter of the Corporation is further amended by
deleting the remainder of the penultimate sentence of Article IX following the
phrase entitled to be cast on the matter.
THIRD: The amendment to the charter of the Corporation as set
forth above has been duly adopted by the board of directors and approved by
the Stockholders of the Corporation as required by law.
FOURTH: The undersigned President acknowledges these Articles
of Amendment to be the corporate act of the Corporation and as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles
to be signed in its name and on its behalf by its President and attested to
by its Secretary on this _____ day of ____________, 1996.
ATTEST:
BEDFORD PROPERTY INVESTORS, INC.
By:
Its President
(seal)
By:
Its Secretary
(seal)
Exhibit B
ARTICLES OF AMENDMENT OF
CHARTER
OF
BEDFORD PROPERTY INVESTORS, INC.
THIS IS TO CERTIFY THAT:
FIRST: The charter of Bedford Property Investors, Inc., a
Maryland corporation (the "Corporation"), is hereby amended by deleting Section
1 of Article V in its entirety and replacing it with the following:
Section 1. Authorized Shares. The total number of shares of
stock which the Corporation has authority to issue is 35,000,000 shares, of
which 15,000,000 shares are shares of Common Stock, $0.02 par value per share
("Common Stock"), 10,000,000 shares are shares of Preferred Stock, $0.01 par
value per share ("Preferred Stock"), and 10,000,000 shares are shares of
Series A Convertible Preferred Stock, $0.01 par value per share ("Series A
Preferred"). The aggregate par value of all authorized shares of stock
having a par value is $500,000.
SECOND: The amendment to the charter of the Corporation as
set forth above has been duly advised by the board of directors and approved
by the Stockholders of the Corporation as required by law.
THIRD: The undersigned President acknowledges these Articles
of Amendment to be the corporate act of the Corporation and as to all
matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that
this statement is made under the penalties for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles
to be signed in its name and on its behalf by its President and attested to
by its Secretary on this ______ day of ___________________, 1996.
ATTEST:
BEDFORD PROPERTY INVESTORS,INC.
By:
Its President
(seal)
By:
Its Secretary
(seal)
Preliminary Copy
(This Proxy is to be Used by Common Stockholders Only)
BEDFORD PROPERTY INVESTORS, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY MANAGEMENT
The undersigned stockholder of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), hereby appoints Jennifer I. Mori and
Donald A. Lorenz, and each of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Special Meeting
of Stockholders of the Company to be held on ________________, 1996 at
1:00 p.m. at the principal office of the Company, 270 Lafayette Circle,
Lafayette, California, and at any adjournment(s) or postponement(s) thereof,
to cast on behalf of the undersigned all votes that the undersigned is
entitled to cast at such meeting and otherwise to represent the undersigned
at the meeting, with the same effect as if the undersigned were present.
The undersigned hereby revokes any proxy previously given with
respect to such shares.
1. Approval of the Amendment FOR AGAINST ABSTAIN
to the Company's Charter deleting
Article VIII thereof, and deleting the
remainder of the penultimate sentence of
Article IX after the phrase "entitled to be
cast on the matter" (the Business
Combination Proposal).
2. Approval of the Amendment to the FOR AGAINST ABSTAIN
Company's Charter Article V so as to effect
a reverse stock split in which one new share
of the Company's common stock, par value
$0.02 per share, would be exchanged for
every two shares, par value $0.01 per share,
presently issued and outstanding (the
Reverse Stock Split Proposal).
The undersigned acknowledges receipt of the Notice of Special
Meeting of Stockholders and the accompanying Proxy Statement.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION
IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE FOREGOING
PROPOSAL AND OTHERWISE IN THE DISCRETION OF THE PROXIES AT THE MEETING OR ANY
ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING
Please sign exactly as name appears hereon
and date. If the shares are held jointly, each
holder should sign. When signing as
an attorney, executor, administrator,
trustee, guardian or as an
officer signing for a corporation, please
give full title under signature.
Dated ____________________, 1996
Signature
Signature, if held
jointly
Votes must be indicated by filling in X in Black or Blue ink.
Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope
Preliminary Copy
(This Proxy is to be Used by Preferred Stockholders Only)
BEDFORD PROPERTY INVESTORS, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY MANAGEMENT
The undersigned stockholder of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), hereby appoints Jennifer I. Mori and
Donald A. Lorenz, and each of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Special Meeting
of Stockholders of the Company to be held on ________________, 1996 at
1:00 p.m. at the principal office of the Company, 270 Lafayette Circle,
Lafayette, California, and at any adjournment(s) or postponement(s) thereof,
to cast on behalf of the undersigned all votes that the undersigned is entitled
to cast at such meeting and otherwise to represent the undersigned at the
meeting, with the same affect as if the undersigned were present. The
undersigned hereby revokes any proxy previously given with respect to such
shares.
1. Approval of the Amendment FOR AGAINST ABSTAIN
to the Company's Charter deleting
Article VIII thereof, and deleting the
remainder of the penultimate sentence
of Article IX after the phrase "entitled
to be cast on the matter" (the Business
Combination Proposal).
The undersigned acknowledges receipt of the Notice of Special
Meeting of Stockholders and the accompanying Proxy Statement.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION
IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE FOREGOING
PROPOSAL AND OTHERWISE IN THE DISCRETION OF THE PROXIES AT THE MEETING OR ANY
ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING
Please sign exactly as name appears
hereon and date. If the
shares are held jointly, each holder
should sign. When signing
as an attorney, executor, administrator,
trustee, guardian or as
an officer signing for a corporation,
please give full title under
signature.
Dated ______________________________,1996
Signature
Signature, if held
jointly
Votes must be indicated by filling in X in Black or Blue ink.
Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope.
