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: August 15, 2000
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
<TABLE>
<S> <C>
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or organization) Reckson Operating Partnership, L.P. -
11-3233647
(IRS Employer ID Number)
1-13762
(Commission File Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
(631) 694-6900
(Registrant's telephone number, including area code)
</TABLE>
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Item 5. Other Events
Rights Agreement
----------------
On October 13, 2000, the Board of Directors of Reckson authorized a
dividend distribution of one preferred share purchase right (a "Right") for
each outstanding share of common stock, par value $.01 per share (the "Common
Shares"), of Reckson. The dividend is payable to the stockholders of record on
October 27, 2000 (the "Record Date"), and with respect to Common Shares issued
thereafter until the Distribution Date (as defined below) and, in certain
circumstances, with respect to Common Shares issued after the Distribution
Date. Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from Reckson one one-thousandth of
a share of Series C Junior Participating Preferred Stock, $.01 par value per
share (the "Preferred Shares"), of Reckson at a price of $84.44 per one
one-thousandth of a Preferred 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 Reckson and American Stock Transfer
& Trust Company, as Rights Agent (the "Rights Agent"), dated as of October 12,
2000.
Concurrently with Reckson's declaration of a dividend distribution of
Rights, Reckson's primary subsidiary, Reckson Operating Partnership, L.P.
("ROP") has declared a dividend distribution to its common unitholders
(including Reckson) of preferred unit purchase rights. These preferred unit
purchase rights are analogous to the Rights and carry rights and terms
entitling ROP's common unitholders to similar benefits as those conveyed to
holders of Common Shares upon a "Distribution Date" (as defined below).
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) the date of first public announcement that an Acquiring Person
(as defined below) has become such; or (ii) 10 days (or such later date as the
Board may determine) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in a person or group becoming an Acquiring Person (as defined
below) (the earliest of such dates being called the "Distribution Date").
Subject to certain exceptions, an "Acquiring Person" is any person who or
which together with all affiliates and associates is the beneficial owner of
15% or more of the outstanding Common Shares (except pursuant to a Permitted
Offer (as defined below)). The date of first public announcement that a person
or group has become an Acquiring Person is the "Shares Acquisition Date." The
Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights) new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
representing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution
Date (and to each initial record holder of certain Common Shares issued after
the Distribution Date), and such separate Right Certificates alone will
represent the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 13, 2010, unless earlier redeemed
by Reckson as described below.
In the event that any person becomes an Acquiring Person or an affiliate
or associate thereof (except pursuant to a tender or exchange offer which is
for all outstanding Common Shares at a price and on terms which a majority of
certain members of the Board of Directors determines to be adequate and in the
best interests of Reckson and its stockholders, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of Common Shares or of one one-thousandth of a Preferred
Share (or, in certain circumstances, other securities of Reckson) having a
value (immediately prior to such triggering event) equal to two times the
exercise price of the Right. Notwithstanding the foregoing, following the
occurrence of the event described above, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or any affiliate or associate thereof will be
null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
Reckson is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding Common Shares immediately prior to
the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of Reckson's
assets or earning power is sold or transferred, in either case with or to an
Acquiring Person or any affiliate or associate or any other person in which
such Acquiring Person, affiliate or associate has an interest or any person
acting on behalf of or in concert with such Acquiring Person, affiliate or
associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have
the right (the "Flip-Over Right") to receive, upon exercise, common shares of
the acquiring company (or in certain circumstances, its parent) having a value
equal to two times the exercise price of the Right. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 1,000 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to the greater of (i) a minimum preferential
liquidation payment of $10.00 per share and (ii) an aggregate payment per
share of 1,000 times the aggregate payment made per Common Share. The
Preferred Shares rank junior to all other classes and series of Reckson's
preferred stock with respect to dividends and upon liquidation, unless the
terms of such other series provides otherwise. These rights are protected by
customary antidilution provisions. In the event that the amount of accrued and
unpaid dividends on the Preferred Shares is equivalent to six full quarterly
dividends or more, the holders of the Preferred Shares, subject to certain
limitations, shall have the right, voting as a class, to elect two directors
in addition to the directors elected by the holders of the Common Shares until
all cumulative dividends on the Preferred Shares have been paid through the
last quarterly dividend payment date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of Reckson, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, Reckson may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board of Directors. Additionally, following
the time a person becomes an Acquiring Person and subject to certain other
conditions, Reckson may redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price, in certain circumstances, including
redemption in connection with a merger or other business combination
transaction or series of transactions involving Reckson in which all holders
of Common Shares are treated alike but not involving (other than as a holder
of Common Shares being treated like all other holders) an Acquiring Person or
its affiliates or associates (or certain persons acting on behalf of or in
concert with such persons, affiliates or associates). The payment of the
Redemption Price may be deferred under certain circumstances as contemplated
in the Rights Agreement.
All of the provisions of the Rights Agreement may be amended by the Board
of Directors of Reckson prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board of
Directors in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of Reckson, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of Reckson, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
Joint Venture
-------------
On September 28, 2000, a subsidiary of Teachers Insurance and Annuity
Association of America ("TIAA") purchased from a subsidiary of ROP for
approximately $136,000,000, a 49% interest in RT Tri-State LLC ("RT
Tri-State"), the owner of all of the interests in the following properties
(collectively, the "Properties"): 680 Washington Boulevard and 750 Washington
Boulevard, Stamford, Connecticut; 51 JFK Parkway, Short Hills, New Jersey; 400
Garden City Plaza, Garden City, New York; 120 White Plains Road, Tarrytown,
New York (which Property includes 100 White Plains Road); 1305 Walt Whitman
Road, Melville, New York; 90 Merrick Avenue, East Meadow, New York (a ground
leasehold interest); and 275 Broadhollow Road, Melville, New York.
A Reckson subsidiary ("Operating Member") will serve as the operating
member of RT Tri-State, maintaining responsibility for the day-to-day
operations of RT Tri-State. TIAA maintains certain protective rights relative
to its investment whereby its consent may be required for certain transactions
(e.g., affiliated transactions and financings which do not meet certain
guidelines). If the Operating Member transfers its interest in RT Tri-State,
or a change of control occurs with respect to the Operating Member or certain
affiliates of the Operating Member, under certain limited circumstances TIAA
may elect to cause the Operating Member to purchase TIAA's interest in RT
Tri-State.
Each Property will be managed by Reckson Management Group, Inc. ("RMG")
in accordance with a management agreement by and between RMG and the owner of
each Property, pursuant to which RMG shall receive market rate management fees.
RMG shall also be entitled to receive leasing commissions, and Reckson
Construction Group, Inc. shall be entitled to receive construction supervisory
fees and architectural and engineering fees, unless certain limited conditions
set forth in the applicable management agreement occur.
Credit Facility
---------------
ROP has entered into an unsecured revolving credit facility with The
Chase Manhattan Bank ("Chase"), as Administrative Agent, UBS Warburg LLC
("UBS"), as Syndication Agent, Deutsche Bank, as Documentation Agent, and
Chase Securities Inc. and UBS as Joint Lead Arrangers and Joint Book Managers
(the "Credit Facility"). The Credit Facility matures on September 7, 2003.
This Credit Facility amends and restates a revolving credit agreement that was
entered into by ROP, an affiliate of ROP, Chase, UBS, Deutsche Bank and
certain of the Lenders on July 23, 1998 and amended on August 31, 1999 and
September 27, 1999. The Credit Facility is unconditionally guaranteed by
Reckson and certain other entities owned by ROP. The Credit Facility provides
for a maximum borrowing amount of up to $575 million at any time outstanding.
ROP's ability to borrow under the Credit Facility will be subject to the
satisfaction of, among other things, certain financial covenants, including
covenants relating to limitations on unsecured and secured borrowings, a
minimum fixed charge coverage ratio, a minimum combined equity value, a
minimum unsecured interest coverage ratio, a minimum adjusted unencumbered net
operating income, a maximum dividend payout ratio, and a minimum total
interest coverage ratio. Borrowings under the Credit Facility will bear
interest, at the option of ROP, at (i) the Base Rate or (ii) the Eurodollar
Rate plus the Applicable Margin (as defined in the Credit Facility), ranging
from 0.75%-1.25%, depending upon certain terms of the Credit Facility.
(Currently, the Applicable Margin for Eurodollar loans is 1.05%). The Base
Rate is defined as the fluctuating rate equal to the higher of: (i) the rate
of interest announced publicly by Chase in New York, New York from time to
time, as Chase's prime rate; and (ii) the sum of (A) one-half of one percent
(0.50%) per annum plus (B) the federal funds rate in effect from time to time
during such period. The Eurodollar Rate is generally the rate for U.S. dollar
deposits for one, two, three or six months which appears on Telerate Page 3750
as of 11:00 A.M. London time, three business days prior to the beginning of
the applicable interest period, as adjusted for applicable reserve
requirements.
Employment and Noncompetition Agreements and Severance Agreements
-----------------------------------------------------------------
Reckson has entered into employment and noncompetition agreements and
severance agreements with its executive officers (collectively, the "Executive
Officers"). Each of the agreements has a 5 year term. However, in the event of
a "change of control" (as such term is defined in the applicable agreement),
each severance agreement automatically extends the term of the corresponding
employment agreement until the later of (i) the date on which the employment
and noncompetition agreement otherwise would have expired and (ii) the date
which is 60 months after the end of the calendar year in which such change in
control occurs. Each agreement provides for certain benefits in the event of
termination of the Executive Officer by Reckson without "good reason" (as such
term is defined in the applicable agreement), resignation by the Executive
Officer upon a material breach of the agreement by Reckson or a change in
control of Reckson. These benefits include the continued payment of the
Executive Officer's base salary during the remaining term of the agreement,
immediate vesting of all equity awards as well as continued entitlement to
receive other benefits conferred under the applicable agreement for such
remaining term. The agreements also provide certain specified benefits in the
event of the death or disability of the Executive Officer.
In addition, such employment and noncompetition agreements, subject to
certain exceptions, prohibit each such Executive Officer from engaging,
directly or indirectly, during the term of his employment, in any business
(other than FrontLine Capital Group and its affiliates) which engages or
attempts to engage in, directly or indirectly, the acquisition, development,
construction, operation, management or leasing of any industrial or office
real estate property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which Reckson
operates ("Competitive Activities"). These employment and noncompetition
agreements also prohibit such persons from engaging, directly or indirectly,
during a specified noncompetition period in any Competitive Activities,
subject to certain limited exceptions. The noncompetition period for each such
Executive Officer is the period beginning on the date of the termination of
employment and ending on the later of (i) the first anniversary of such
person's termination of employment with the Company and (ii) the third
anniversary of the person's prior employment and noncompetition agreement.
Amendment to Bylaws
-------------------
The Board of Directors of Reckson has also adopted a new bylaw provision
that permits the directors, in considering a potential acquisition of control of
Reckson, to consider the effect of the potential acquisition of control on
(i) stockholders of Reckson and unitholders of ROP, and employees, suppliers,
customers and creditors of Reckson and its subsidiaries and (ii) communities
in which offices or other establishments of Reckson or its subsidiaries are
located.
Item 7. Financial Statements and Exhibits
(c) Exhibits
4 Rights Agreement, dated as of October 13, 2000, between Reckson
Associates Realty Corp. and American Stock Transfer & Trust
Company, as Rights Agent, which includes, as Exhibit A thereto, the
Form of Articles Supplementary, as Exhibit B thereto, the Form of
Right Certificate, and as Exhibit C thereto, the Summary of Rights
to Purchase Preferred Shares.
10.1 $575 Credit Facility dated as of September 7, 2000 among Reckson
Operating Partnership, L.P., The Chase Manhattan Bank, UBS Warburg
Dillon Read, Deutsche Bank and Chase Securities Inc.
10.2 Guaranty Agreement dated as of September 7, 2000 among Reckson
Associates Realty Corp., The Chase Manhattan Bank and UBS Warburg
LLC.
10.3 Operating Agreement, dated as of September 28, 2000, between Reckson
Tri-State Member LLC (together with its permitted successors and
assigns) and TIAA Tri-State LLC.
10.4 Form of Property Management and Leasing Agreement.
10.5 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Donald J. Rechler and
Reckson Associates Realty Corp.
10.6 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Donald J. Rechler and Reckson
Associates Realty Corp.
10.7 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Gregg Rechler and Reckson
Associates Realty Corp.
10.8 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Gregg Rechler and Reckson Associates
Realty Corp.
10.9 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Michael Maturo and Reckson
Associates Realty Corp.
10.10 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Michael Maturo and Reckson Associates
Realty Corp.
10.11 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Mitchell Rechler and
Reckson Associates Realty Corp.
10.12 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Mitchell Rechler and Reckson Associates
Realty Corp.
10.13 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Scott Rechler and Reckson
Associates Realty Corp.
10.14 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Scott Rechler and Reckson Associates
Realty Corp.
10.15 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Roger Rechler and Reckson
Associates Realty Corp.
10.16 Amendment and Restatement of Severance Agreement dated as of
August 15, 2000, between Roger Rechler and Reckson Associates
Realty Corp.
10.17 Amendment and Restatement of Employee and Noncompetition Agreement,
dated as of August 15, 2000, between Jason Barnett and Reckson
Associates Realty Corp.
10.18 Amendment and Restatement of Severance Agreement, dated as of
August 15, 2000, between Jason Barnett and Reckson Associates
Realty Corp.
10.19 Amended and Restated Bylaws of Reckson Associates Realty Corp.
99 Press release dated October 16, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: October 17, 2000
