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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):
September 3, 1999
SUMMIT PROPERTIES INC.
(Exact Name of Registrant as specified in its charter)
MARYLAND 1-12792 56-1857807
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
212 SOUTH TRYON STREET, SUITE 500, CHARLOTTE, NC 28281
(Address of principal executive offices and zip code)
(704) 334-9905
(Registrant's telephone number, including area code)
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Item 5. Other Events
On September 3, 1999, Summit Properties Partnership, L.P. (the
"Operating Partnership"), the entity through which Summit Properties Inc. (the
"Company"), a Maryland corporation, conducts substantially all of its business
and owns (either directly or through subsidiaries) substantially all of its
assets, completed a private placement of 2,200,000 of its 8.75% Series C
Cumulative Redeemable Perpetual Preferred Units (the "Series C Preferred Units")
to an institutional investor at a price of $25.00 per unit. The net proceeds of
approximately $53.5 million were used to repay amounts outstanding under the
Company's unsecured line of credit. In connection with such placement, the
partnership agreement of the Operating Partnership was amended to provide for
and to describe the rights of the holders of the Series C Preferred Units.
Distributions on the Series C Preferred Units will be cumulative from
the date of original issuance and payable quarterly on the last business day of
each of March, June, and September and on December 21st of each year commencing
September 30, 1999, at an annual rate of 8.75% on the $25.00 original capital
contribution per unit. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Operating Partnership, the Series C Preferred
Units will be entitled to a preferential distribution equal to the capital
account attributable to such unit (initially $25.00 per unit), including an
amount equal to all accumulated, accrued and unpaid distributions. With respect
to payment of distributions and amounts upon liquidation, the Series C Preferred
Units will rank senior to any junior units, including the Operating
Partnership's common units of limited partnership interest and on a parity with
its 8.95% Series B Cumulative Redeemable Perpetual Preferred Units.
On and after September 3, 2004, the Operating Partnership may redeem
the Series C Preferred Units at its option, for cash at a redemption price equal
to the redeemed holder's capital account (initially $25.00 per unit), including
an amount equal to all accumulated, accrued and unpaid distributions thereon to
the date of redemption, which such redemption may be in whole, at any time, or
in part, at any time that all accumulated and unpaid distributions have been
paid on all Series C Preferred Units for all periods up to and including such
date of redemption. The Series C Preferred Units are not subject to any
mandatory redemption provisions. No sinking fund will be established for the
retirement or redemption of the Series C Preferred Units.
Holders of the Series C Preferred Units have the right to exchange
Series C Preferred Units, in whole or in part (subject to certain exceptions and
limitations), for shares of 8.75% Series C Cumulative Redeemable Preferred Stock
of the Company (the "Series C Preferred Stock") on a one-for-one basis. The
exchange right is exercisable, in minimum amounts of 550,000 units, at the
option of the holders of the Series C Preferred Units (i) at any time on or
after September 3, 2009, (ii) at any time if full quarterly distributions shall
not have been timely made for six quarters, whether or not consecutive, (iii)
upon the occurrence of certain specified events related to the federal income
tax treatment of the Operating Partnership or the Series C Preferred Units for
federal income tax purposes, or (iv) at any time that the institutional
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investor's holdings in the Operating Partnership exceed 18% of the total profits
of or capital interests in the Operating Partnership for a taxable year.
On September 3, 1999, the Company filed Articles Supplementary to its
charter classifying and establishing a class of 2,200,000 shares of Series C
Preferred Stock and describing such Series C Preferred Stock and the rights of
the holders thereof. The Company's Board of Directors has reserved such Series C
Preferred Stock for issuance upon exchange of Series C Preferred Units. In
general, the distribution and liquidation preferences and other rights of
holders of Series C Preferred Stock and the Company's right to redeem Series C
Preferred Stock are substantially similar to the related distribution and
liquidation preferences and other rights of holders of Series C Preferred Units
and the Operating Partnership's right to redeem Series C Preferred Units, except
as set forth below.
Neither the Series C Preferred Units nor the Series C Preferred Stock
are convertible into or exchangeable for any other securities, except that (i)
Series C Preferred Units may be exchanged for Series C Preferred Stock as
described above and (ii) Series C Preferred Stock may be converted automatically
into shares of Excess Stock (a separate class of stock into which shares in
excess of the Company's stock ownership limit are automatically convertible) in
order to ensure that the Company remains a qualified REIT for federal income tax
purposes.
Except as otherwise required by law, holders of the Series C Preferred
Units have only the following voting rights: so long as any Series C Preferred
Units remain outstanding, the Operating Partnership may not, without the
affirmative vote of the holders of at least two-thirds of the Series C Preferred
Units outstanding, (i) authorize or create, or increase the authorized or issued
amount of, any class or series of Operating Partnership units ranking senior to
the Series C Preferred Units, (ii) issue any class or series of Operating
Partnership units ranking on parity with the Series C Preferred Units to an
affiliate of the Operating Partnership ("Partnership Affiliate"), reclassify any
Operating Partnership unit held by a Partnership Affiliate into any such parity
unit, or issue any security or obligation with the right to purchase any such
parity unit to a Partnership Affiliate unless such units are issued either (x)
in connection with the issuance of a corresponding class or series of preferred
stock by the Company to parties who are not Partnership Affiliates or (y) under
terms no more favorable to such Partnership Affiliate than those that would be
offered in an arm's length transaction to an unrelated party in the good faith
determination of the Board of Directors of the Company, (iii) either (a)
consolidate, merge with or into, or transfer all or substantially all of its
assets to another party, or (b) amend, alter or repeal provisions of the
Operating Partnership's partnership agreement, in each case in a transaction or
manner that would materially and adversely affect any power, special right,
preference, privilege or voting power of the Series C Preferred Units or holders
thereof, or (iv) enter into any contract, mortgage, loan or other agreement that
(a) prohibits or restricts a holder of Series C Preferred Units from exercising
any rights it has to effect an exchange of Series C Preferred Units or (b)
expressly prohibits the Company from making an offering of "capital stock" which
the Company must make in order to satisfy an obligation to pay for Series C
Preferred Units with respect to which a holder exercises an exchange right for
which the Company would be required to deliver Excess Stock rather than Series C
Preferred Stock except
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for agreements of the Company entered into with an underwriter in connection
with an offering of securities or agreements of the Company entered into in
connection with any proposed merger, consolidation, sale of assets or similar
transaction; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all of the Operating Partnership's assets as
an entirety, so long as (l) the Operating Partnership is the surviving entity
and the Series C Preferred Units remain outstanding with the terms thereof
unchanged, or (2) the resulting, surviving or transferee entity is a
partnership, limited liability company or other pass-through entity organized
under the laws of any state and substitutes the Series C Preferred Units for
other interests in such entity having substantially the same terms and rights as
the Series C Preferred Units, including with respect to distributions, voting
rights and rights upon liquidation, dissolution or winding-up, then the
occurrence of any such event shall be deemed not to materially and adversely
affect such powers, special rights, preferences, privileges or voting powers of
the Series C Preferred Units or the parties holding such Series C Preferred
Units; provided further that any increase in the amount of partnership interests
or the creation or issuance of any other class or series of partnership
interests or obligation or security convertible into or evidencing the right to
purchase any such partnership interests, in each case ranking (y) junior to the
Series C Preferred Units with respect to payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, or (z) on a
parity to the Series C Preferred Units with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up shall
(subject to certain exceptions) be deemed not to materially and adversely affect
such powers, special rights, preferences, privileges or voting powers of the
Series C Preferred Units or the parties holding such Series C Preferred Units;
and provided further, that any agreement pursuant to which a transaction that
satisfies the conditions in either of the foregoing two provisos is to be
effected shall be deemed not to be an agreement requiring consent under the
foregoing clause (iv).
In addition to the foregoing, holders of the Series C Preferred Stock
outstanding and the Series C Preferred Units outstanding voting together as a
single class shall have substantially similar voting rights to those outlined in
the above paragraph with respect to changes made to the Company's amended and
restated articles of incorporation.
Holders of the Series C Preferred Stock will also have the following
voting right: whenever (i) quarterly dividends in arrears (whether or not
consecutive) on any Series C Preferred Stock and (ii) unpaid quarterly
distributions attributable to Series C Preferred Units for which such Series C
Preferred Stock were exchanged equals or exceeds six, the holders of the Series
C Preferred Stock (voting separately as a class with all other series of stock
which rank on a parity with the Series C Preferred Stock as to distributions and
rights and upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of a total of two
additional directors of the Company until all dividends accumulated on such
Series C Preferred Stock have been fully paid or declared and a sum sufficient
for the payment thereof set aside for payment.
The Company has entered into a registration rights agreement for the
benefit of any holders of the Series C Preferred Stock pursuant to which such
holders will have certain
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registration rights (the "Registration Rights Agreement"). Under the
Registration Rights Agreement, the Company agreed that within 60 days after each
date on which all or any portion of the Series C Preferred Units are exchanged
for shares of Series C Preferred Stock (but no more than two occasions), it
would (i) prepare and file with the Securities and Exchange Commission a "shelf"
registration statement (a "Shelf Registration Statement") providing for the
resale of all of the Series C Preferred Stock (the "Registrable Securities")
held by such holders, (ii) use commercially reasonable efforts to cause the
Shelf Registration Statement to be declared effective within 120 days after the
date of such exchange, and (iii) use commercially reasonable efforts to keep
such Shelf Registration Statement continuously effective until the earliest of
(a) such time as all of the Registrable Securities have been sold pursuant to
the Shelf Registration Statement or Rule 144 under the Securities Act of 1933
and (b) the date on which all of the Registrable Securities may be sold (or
could be sold in the absence of the holder's ownership of securities of the
Company other than Registrable Securities) without volume restrictions in
accordance with Rule 144 under the Securities Act of 1933. If the Company
proposes to file a registration statement under the Securities Act of 1933 with
respect to an offering by the Company solely for cash for its own account
(subject to certain exceptions) or for the account of any of its respective
security holders, then the Company may be required, under certain circumstances,
to offer to certain holders of Registrable Securities the right to include their
Registrable Securities in such registration statement and use its commercially
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering in connection with such registration statement to
permit the Registrable Securities requested to be included in such registration
statement pursuant to the foregoing to be included (subject to a number of
limitations) on the same terms and conditions as any similar securities of the
Company included therein.
Pursuant to the Registration Rights Agreement, the Company has agreed
to pay certain expenses of effecting the registration of the Series C Preferred
Stock (excluding underwriting fees, discounts or commissions and transfer taxes,
certain legal fees and other expenses incurred by the holders of the Registrable
Securities). The Company also has agreed to indemnify (i) each holder of
Registrable Securities and its officers, directors and agents and any person who
controls any holder of Registrable Securities and (ii) any underwriter of
Registrable Securities and any person who controls such underwriter, against
certain losses, claims, damages, liabilities and expenses arising in connection
with certain statements and omissions in any registration statement effected
pursuant to the Registration Rights Agreement (a "Registration Statement"),
subject to certain limitations. In addition, each holder of Registrable
Securities has agreed to indemnify the Company, its directors, officers and
agents, and any person who controls the Company against all losses, claims,
damages, liabilities and expenses, subject to certain limitations, arising in
connection with certain statements and omissions in Registration Statements
insofar as such loss, claim, damage, liability or expense relates to written
information furnished to the Company by such holder for use in the Registration
Statement or prospectus or an amendment or supplement thereto.
On September 7, 1999 the Company issued the press release attached as
Exhibit 99.1 to this Current Report on Form 8-K.
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Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
The following exhibits are filed with this report.
Number Description
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3.1 Articles Supplementary, dated as of
September 3, 1999, Establishing and Fixing
the Rights and Preferences of a Series of
Shares of Preferred Stock for the 8.75%
Series C Cumulative Redeemable Perpetual
Preferred Stock of Summit Properties Inc.
(Incorporated by reference to Exhibit 99.1
of Summit Properties Partnership, L.P.'s
Current Report on Form 8-K filed on
September 17, 1999, File No. 0-22411).
10.1 Amendment, dated as of September 3, 1999, to
Amended Agreement of Limited Partnership of
Summit Properties Partnership, L.P.,
designating the 8.75% Series C Cumulative
Redeemable Perpetual Preferred Units
(Incorporated by reference to Exhibit 3.1 of
Summit Properties Partnership, L.P.'s
Current Report on Form 8-K filed on
September 17, 1999, File No.
0-22411).
99.1 Press release announcing the private
placement of 2,200,000 8.75% Series C
Cumulative Redeemable Perpetual Preferred
Units to an Institutional Investor, dated
September 7, 1999 (Incorporated by reference
to Exhibit 99.2 of Summit Properties
Partnership, L.P.'s Current Report on Form
8-K filed on September 17, 1999, File No.
0-22411).
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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.
Dated: September 17, 1999 SUMMIT PROPERTIES INC.
By: /s/ Michael G. Malone
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Michael G. Malone
Senior Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Description
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3.1 Articles Supplementary, dated as of September 3,
1999, Establishing and Fixing the Rights and
Preferences of a Series of Shares of Preferred Stock
for the 8.75% Series C Cumulative Redeemable
Perpetual Preferred Stock of Summit Properties Inc.
(Incorporated by reference to Exhibit 99.1 of Summit
Properties Partnership, L.P.'s Current Report on Form
8-K filed on September 17, 1999, File No. 0-22411).
10.1 Amendment, dated as of September 3, 1999, to Amended
Agreement of Limited Partnership of Summit Properties
Partnership, L.P., designating the 8.75% Series C
Cumulative Redeemable Perpetual Preferred Units
(Incorporated by reference to Exhibit 3.1 of Summit
Properties Partnership, L.P.'s Current Report on Form
8-K filed on September 17, 1999, File No. 0-22411).
99.1 Press release announcing the private placement of
2,200,000 8.75% Series C Cumulative Redeemable
Perpetual Preferred Units to an Institutional
Investor, dated September 7, 1999 (Incorporated by
reference to Exhibit 99.2 of Summit Properties
Partnership, L.P.'s Current Report on Form 8-K filed
on September 17, 1999, File No. 0-22411).
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