313,430 Shares
Hospitality Properties Trust
Common Shares of Beneficial Interest
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Selling Shareholders
o The selling shareholders do not have any present intention to sell any
common shares. This prospectus relates to the reoffer and resale of common
shares by Gerard M. Martin and Barry M. Portnoy, the selling shareholders,
for their own account. We will not receive any of the proceeds from the
reoffering and resale of the common shares.
o Depending upon the selling shareholders' continuing review of their
respective investments and various other facts, the selling shareholders
may, subject to any applicable securities laws, sell all or any part of
the offered shares.
o We have not filed the registration statement of which this prospectus
forms a part because of any present intention of the selling shareholders
to sell any of the offered shares. Rather, the selling shareholders intend
to pledge all or a part of the offered shares they hold to one or more
banks or brokerage houses as collateral for loans to them. In the event of
a default under a loan to a selling shareholder which is secured by the
pledge of offered shares, the lender will have the right to cause the sale
of the offered shares under the registration statement relating to this
prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Our common shares are traded on the New York Stock Exchange under the
symbol "HPT." On October 15, 1999, the last sale price for the common shares on
the NYSE was $22.3125.
Our principal place of business is 400 Centre Street, Newton,
Massachusetts 02458 and our telephone number is (617) 964-8389.
The date of this prospectus is November 1, 1999.
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TABLE OF CONTENTS
Page
The Company.............................................................. 3
Use of Proceeds.......................................................... 3
Selling Shareholders..................................................... 3
Description of Shares.................................................... 4
Limitation of Liability; Shareholder Liability........................... 6
Restrictions on Transfer of Shares; Trustees; Business Combinations and 7
Control Share Acquisitions...............................................
Plan of Distribution..................................................... 14
Legal Matters............................................................ 16
Experts.................................................................. 16
About This Prospectus.................................................... 16
Incorporation of Documents by Reference.................................. 17
Where You Can Find More Information...................................... 18
Forward Looking Statements............................................... 18
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THE COMPANY
Hospitality Properties Trust is a real estate investment trust, a REIT,
that acquires, owns and leases hotels. We currently own or have agreed to buy a
total of 210 hotels with 28,449 rooms located in 35 states. References to "we,"
"us," "our" or "HPT" mean Hospitality Properties Trust and its subsidiaries. We
are organized as a Maryland real estate investment trust.
USE OF PROCEEDS
We will receive no proceeds from the sale of the common shares offered
by the selling shareholders. The selling shareholders will receive all proceeds.
SELLING SHAREHOLDERS
The selling shareholders are Gerard M. Martin and Barry M. Portnoy.
Prior to the offering of common shares described in this prospectus, the selling
shareholders owned the following common shares:
<TABLE>
<CAPTION>
Percentage of
Maximum Number of Outstanding Common
Common Shares Owned Common Shares Shares Outstanding
Selling Shareholder Prior to Offering Being Offered Prior to Offering
<S> <C> <C> <C>
Gerard M. Martin 156,715(1) 156,715 0.28%
Barry M. Portnoy 156,715(1) 156,715 0.28%
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<FN>
(1) HRPT Properties Trust, of which Messrs. Martin and Portnoy are each
Managing Trustees, owns 4,000,000 common shares, 7.09% of our
outstanding common shares. Messrs. Martin and Portnoy may be deemed to
have beneficial ownership of the common shares owned by HRPT Properties
Trust. Messrs. Martin and Portnoy disclaim any beneficial ownership of
those common shares.
</FN>
</TABLE>
The selling shareholders are offering the common shares described in
this prospectus. From time to time, depending upon the selling shareholders'
continuing review of their respective investments and various other facts, the
selling shareholders may, subject to any applicable securities laws, sell all or
any part of the common shares offered by this prospectus. However, we have not
filed the registration statement of which this prospectus forms a part because
of any present intention of the selling shareholders to sell any of the offered
shares. Rather, we filed the registration statement to facilitate the pledge by
the selling shareholders of all or a part of the offered shares to one or more
banks or brokerage houses as collateral for loans to the selling shareholders.
Because we are registering the offered shares to facilitate the pledge of those
shares and because this offering is not being underwritten on a firm commitment
basis, we cannot give an estimate as to the number or percentage of common
shares which the selling shareholders will own upon termination of this
offering. More information about the possible distribution of the offered shares
is given in "Plan of Distribution" below.
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Gerard M. Martin and Barry M. Portnoy are our Managing Trustees and are
also Managing Trustees of HRPT Properties Trust. REIT Management & Research,
Inc. is our investment advisor. Messrs. Martin and Portnoy own Reit Management &
Research, Inc. and Messrs. Martin and Portnoy and David J. Hegarty are the
directors of Reit Management & Research, Inc.
DESCRIPTION OF SHARES
Authorized Capital. Our declaration of trust authorizes us to issue an
aggregate of 200,000,000 shares of beneficial interest in our company, including
(i) 100,000,000 common shares, par value $.01 per share, and (ii) 100,000,000
preferred shares, without par value. Our declaration of trust permits our board
of trustees to amend the declaration of trust to increase or decrease the
authorized shares of beneficial interest of our company without shareholder
approval.
Preferred Shares. Our declaration of trust authorizes the trustees,
without shareholder approval, from time to time to divide the preferred shares
into classes or series and to set, or change, if the class or series has been
previously established, the par value, if any, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
or terms and conditions of redemption of the preferred shares as are not
prohibited by our declaration of trust or applicable law. In connection with the
adoption of our shareholders rights plan, the trustees established an authorized
but unissued class of 1,000,000 preferred shares, par value $.01 per share,
called the "junior participating preferred shares." The junior participating
preferred shares are described more fully below. In April 1999, the trustees
authorized another series of preferred shares, the 9 1/2% Series A Cumulative
Redeemable Preferred Shares, without par value.
Outstanding Shares. As of October 15, 1999, there were 56,449,743
common shares and 3,000,000 Series A Preferred Shares outstanding.
Characteristics of All Shares. The following descriptions are not
complete and are subject to, and qualified in their entirety by reference to,
the more complete descriptions set forth in our declaration of trust.
Except as otherwise determined by the trustees with respect to any
class or series of preferred shares, all shares:
o will participate equally in dividends payable to shareholders
when, as and if declared by the trustees and will participate
ratably in net assets distributed to shareholders on
liquidation or dissolution;
o will have one vote per share on all matters submitted to a
vote of the shareholders;
o will not have cumulative voting rights in the election of
trustees; and
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o will have no preference, conversion, exchange, sinking fund,
redemption rights or preemptive or similar rights.
Upon issuance in accordance with the declaration of trust and
applicable law, the common shares offered by this prospectus will be fully paid
and nonassessable. The holders of shares do not have preemptive rights with
respect to the issuance of additional common shares or other of our securities.
We may, at the sole discretion of our trustees, issue the authorized
but unissued shares from time to time for any proper trust purpose, which could
include raising capital, providing compensation or benefits to employees and
others, paying distributions in shares or acquiring companies, businesses or
properties. The issuance of additional common shares could have the effect of
diluting the earnings per share and book value per share of currently
outstanding common shares.
Junior Participating Preferred Shares
General. In connection with the adoption of our shareholders rights
plan, the trustees authorized a class of 1,000,000 junior participating
preferred shares. The powers, preferences and rights and certain qualifications,
limitations and restrictions of the junior participating preferred shares, when
and if issued, are described below. The statements below with respect to the
junior participating preferred shares are not necessarily complete. You should
read the applicable provisions of our declaration of trust, including the
applicable articles supplementary, and our bylaws for a more complete
description of the junior participating preferred shares.
Dividends. The holder of each junior participating preferred share,
when and if issued, is entitled to quarterly dividends in the greater amount of
$5.00 or 100 times the quarterly per share dividend, whether cash or otherwise,
declared upon the common shares. Dividends on the junior participating preferred
shares are cumulative. Whenever dividends on the junior participating preferred
shares are in arrears, we are prohibited from declaring or paying dividends,
making other distributions on, or redeeming or repurchasing common shares or
other shares ranking junior to the junior participating preferred shares. If we
fail to pay dividends on the junior participating preferred shares for six
quarters, the holders of the junior participating preferred shares will be
entitled to elect two trustees.
Voting. The holder of each junior participating preferred share, when
and if issued, is entitled to 100 votes on all matters submitted to a vote of
the shareholders, voting together with holders of common shares as one class,
unless the declaration of trust or bylaws otherwise provide.
Liquidation Preference. If we liquidate, dissolve or wind up, the
holders of junior participating preferred shares are entitled to a liquidation
preference of $100 per share plus the amount of any accrued and unpaid dividends
and distributions on the junior participating preferred shares, prior to payment
of any distribution in respect of the common shares or any other shares ranking
junior to the junior participating preferred shares. Following payment of the
liquidation preference, the holders of junior participating preferred shares are
not entitled to
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further distributions until the holders of common shares receive an amount per
share (the "Common Share Adjustment") equal to the junior participating
preferred shares liquidation preference divided by 100, adjusted to reflect
events such as share splits, share dividends and recapitalizations affecting the
common shares (the "Adjustment Number"). Following thepayment of the full amount
of the junior participating preferred shares liquidation preference and the
Common Share Adjustment, holders of junior participating preferred shares are
entitled to participate proportionately on a per share basis with holders of
common shares in the distribution of the remaining assets to be distributed in
respect of shares in the ratio of the Adjustment Number to one. The powers,
preferences and rights of the junior participating preferred shares are subject
to the superior powers, preferences and rights of any senior series or class of
preferred shares which the trustees authorize for issuance from time to time.
More Information. For more information with respect to the shares, see
"Limitation of Liability; Shareholder Liability" and "Restrictions on Transfer
of Shares; Business Combinations and Control Share Acquisitions" below.
Transfer Agent and Registrar
The Transfer Agent and Registrar for our shares is State Street Bank
and Trust Company, c/o Boston EquiServe, P.O. Box 8200, Boston, Massachusetts
02266-8200, telephone number (800) 426-5523).
LIMITATION OF LIABILITY; SHAREHOLDER LIABILITY
Maryland law permits a REIT to include in its declaration of trust a
provision limiting the liability of its trustees and officers to the trust and
its shareholders for money damages except for liability resulting from (1)
actual receipt of an improper benefit or profit in money, property or services,
or (2) active and deliberate dishonesty established by a final judgment as being
material to the cause of action. Our declaration of trust contains this kind of
provision. The provision in our declaration of trust limits this kind of
liability to the maximum extent permitted by Maryland law. Maryland law also
provides that no shareholder will be liable for any obligation of a Maryland
REIT. Our lawyers have advised us that the State of Texas may not give effect to
the limitation of shareholder liability afforded by Maryland law, but that Texas
law would likely recognize contractual limitations of liability such as those
discussed above. We intend to conduct our business in a manner designed to
minimize potential shareholder liability by, among other things, inserting
appropriate provisions in our written agreements; however, we cannot give any
assurance that you can avoid liability in all instances in all jurisdictions.
Our declaration of trust provides that, upon payment by you of any
liability of the kind described above, you will be entitled to indemnification
by us. We cannot give any assurance that, at the time any liability arises, we
will have assets sufficient to satisfy our indemnification obligation. The
trustees intend to conduct our operations, with the advice of legal counsel, in
such a way as to minimize or avoid, as far as practicable, the ultimate
liability of our shareholders. The trustees do not intend to provide insurance
covering these risks to the shareholders.
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RESTRICTIONS ON TRANSFER OF SHARES;
TRUSTEES; BUSINESS COMBINATIONS AND
CONTROL SHARE ACQUISITIONS
Restrictions on Transfer of Shares
For us to qualify as a REIT under the Internal Revenue Code of 1986, as
amended, in any taxable year not more than 50% in value of our shares of
beneficial interest, after taking into account options to acquire shares, may be
owned, directly or indirectly, by five or fewer individuals during the last half
of a taxable year or during a proportionate part of a shorter taxable year,
other than the first taxable year. The term "individuals" is defined in the
Internal Revenue Code to include various entities and constructive ownership
among specified family members. Our shares must also be beneficially owned by
100 or more persons during at least 335 days of a taxable year or during a
proportionate part of a shorter taxable year, other than the first taxable year.
Our declaration of trust contains restrictions on the acquisition of our shares
intended to ensure compliance with these requirements.
Subject to exceptions specified in our declaration of trust, no holder
may own, directly or indirectly, more than 9.8% in number, value or voting power
of our issued and outstanding shares other than (a) HRPT Properties Trust, HRPT
Advisors, Inc. and their affiliates, including persons who are deemed to have
beneficial ownership of the shares directly owned by HRPT Properties Trust and
HRPT Advisors, Inc. under the attribution provisions of the Internal Revenue
Code and (b) other shareholders exempted by majority vote of our trustees. Any
person must give us written notice no later than the 15th day prior to any
proposed transfer which, if completed, would result in that person owning shares
in excess of the ownership limitation. However, our trustees may waive the prior
notice requirement if they determine that a waiver is in our best interests. Our
declaration of trust does not specify factors to be considered in granting an
exemption or waiver of the prior notice requirement. In deciding whether to
grant an exemption or waiver, our trustees may consider, among other factors,
the general reputation and moral character of the person requesting an
exemption, whether ownership of shares would be direct or through ownership
attributed to that person, whether that person's ownership of shares would
adversely affect our ability to acquire additional hotels or engage in other
transactions and whether granting an exemption for the person requesting an
exemption would adversely affect any of our existing contractual arrangements.
In addition, if they deem it necessary or advisable in order to determine or
ensure our status as a REIT or otherwise, the trustees may require opinions of
counsel, affidavits, undertakings or arrangements.
Our declaration of trust contains provisions designed to ensure that a
transferee attempting to acquire shares in violation of the ownership limitation
will not acquire rights or economic interests in the shares purportedly
transferred. The declaration of trust defines a transfer to include any sale,
transfer, gift, assignment, devise or other disposition of shares, whether
voluntary or involuntary, whether of record or beneficial ownership and whether
effected constructively, by operation of law or otherwise. Under the declaration
of trust, any transfer of shares that could, in the opinion of our trustees,
result in a violation of the ownership limitation and that is not otherwise
permitted under the declaration of trust will result in the
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designation of excess shares. This procedure also applies to any transfer which
could, in theopinion of the trustees, cause us to be treated as "closely held"
under Section 856(h) of the Internal Revenue Code or cause our shares to be held
by fewer than 100 persons.
Our declaration of trust provides that excess shares will be
transferred by operation of law to a person that is unaffiliated with us and
unaffiliated with the intended transferee as trustee of a trust for the
exclusive benefit of one or more organizations described in Sections
170(b)(1)(a) and 170(c) of the Internal Revenue Code that we designate. The
trustee of the charitable trust will be deemed to own these excess shares for
the benefit of the charitable beneficiary on the day prior to the date of the
violative transfer. Any dividends or distributions paid prior to our discovering
that the excess shares were held in the charitable trust must be repaid by the
intended transferee to us and any dividend declared but unpaid will be rescinded
as void from the beginning with respect to the intended transferee. Our
declaration of trust provides that any dividends so disgorged or rescinded will
then be paid over to the charitable trustee and held in trust for the charitable
beneficiary, that any vote taken by an intended transferee prior to the
discovery by us that the excess shares were held in a charitable trust will be
rescinded as void from the beginning, and the intended transferee will be deemed
to have given an irrevocable proxy to the charitable trustee to vote the excess
shares for the benefit of the charitable beneficiary.
At our direction, the trustee of the charitable trust is required to
transfer the excess shares held in the charitable trust to a person whose
ownership of the shares will not violate the ownership limitation. If this type
of transfer is made, the interest of the charitable beneficiary would terminate
and proceeds of the sale would be payable to the intended transferee and to the
charitable beneficiary. The intended transferee would receive the lesser of (a)
the price paid by the intended transferee for the excess shares, or if the
intended transferee did not give value for the excess shares, the market price
of the shares on the day of the event causing the shares to be held in trust and
(b) the price per share received by the charitable trustee from the sale or
other disposition of the shares held in the charitable trust. Any proceeds in
excess of the amount payable to the intended transferee will be payable to the
charitable beneficiary.
Our declaration of trust also provides that all shares held in the
charitable trust for the benefit of the charitable beneficiary will be offered
for sale to us or our designee for a 90-day period, at the lesser of the price
paid for the shares by the intended transferee and the market price of the
shares on the date that we accept the offer. This period will commence on the
date we receive notice of the event causing the shares to be held in trust. All
certificates evidencing shares are required to bear a legend referring to the
restrictions described above. Under the Internal Revenue Code, all persons who
own, directly or by virtue of the attribution provisions of the Internal Revenue
Code, 5% or more, or such other percentage between 1/2 of 1% and 5%, as provided
in the rules and regulations promulgated under the Internal Revenue Code, of the
number or value of the outstanding shares must give written notice to us by
January 31 of each year. In addition, our declaration of trust provides that
each shareholder is required upon demand to disclose to us in writing any
information with respect to the ownership of shares that the Trustees deem
reasonably necessary to comply with the provisions of the Internal Revenue Code
applicable to a REIT, to comply with the requirements of any taxing authority or
governmental agency or to determine such compliance.
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These restrictions will not preclude settlement of transactions through
the New York Stock Exchange.
Shareholder Proposals
Our bylaws establish an advance notice procedure with regard to
shareholder proposals to be brought before an annual or special meeting of
shareholders. This procedure provides that shareholder proposals, other than
proposals timely submitted for inclusion in our proxy statement, must be
submitted in writing in a timely manner in order to be considered at the
meeting. To be timely, we must, with limited exceptions, receive the notice of a
shareholder proposal with respect to an annual meeting not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding
annual meeting. Nothing in this procedure will preclude discussion by any
shareholder of any proposal properly made or brought before an annual meeting in
accordance with the procedure.
Trustees
Under the our declaration of trust, the number of trustees may be fixed
from time to time by two thirds of the trustees or by amendment of the
declaration of trust duly adopted by holders of two thirds of the outstanding
shares entitled to vote thereon, with a minimum of three and a maximum of seven
trustees. The declaration of trust provides that a majority of the trustees must
be independent trustees, as defined in the declaration of trust. The terms of
the trustees are staggered. As the trustees' terms expire, replacements are
elected by a majority of the votes entitled to be cast. The declaration of trust
provides that a majority of the trustees then in office will have the authority
to fill any vacancies on the board, including vacancies created by an increase
in the number of trustees. In addition, the declaration of trust provides that a
new trustee elected to fill a vacancy will serve for the remainder of the full
term of his or her class and that no decrease in the number of trustees will
shorten the term of an incumbent. Moreover, the declaration of trust provides
that trustees may be removed with or without cause only by the affirmative vote
of all the remaining trustees or by holders of shares representing two-thirds of
the total votes authorized to be cast by shares then outstanding and entitled to
vote thereon, voting as a single class.
Our bylaws establish an advance notice procedure with regard to the
nomination, other than by the board of trustees, of candidates for election as
trustees which are not included in our proxy statement. This nomination
procedure provides that only persons who are nominated by or at the direction of
the board of trustees, or by a shareholder of record on the date of the giving
of the notice who has given timely prior written notice to our secretary prior
to the meeting at which trustees are to be elected, will be eligible for
election as trustees. To be timely, we must, with limited exceptions, receive
notice of a shareholder's nomination in the case of an annual meeting must not
less than 90 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting. Nothing in this nomination procedure will
preclude discussion by any shareholder of any nomination properly made or
brought before an annual or special meeting in accordance with the procedures
described above.
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Indemnification of Trustees and Officers
Our declaration of trust obligates us to indemnify (1) our trustees and
officers to the full extent permitted by Maryland law, including in respect of
the advancement of expenses, and (2) other employees and agents to the extent
authorized by the trustees or the bylaws and permitted by Maryland law. The
Maryland REIT law permits a Maryland real estate investment trust to indemnify
and advance expenses to its trustees, officers, employees and agents to the same
extent as permitted by the Maryland General Corporation Law for directors and
officers of Maryland corporations. The Maryland General Corporation Law permits
a corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that:
(a) the act or omission of the director or officer was material to
the matter giving rise to the proceeding and (1) was committed
in bad faith or (2) was the result of active and deliberate
dishonesty;
(b) the director or officer actually received an improper personal
benefit in money, property or services; or
(c) in the case of any criminal proceeding, the director or
officer had reasonable cause to believe that the act or
omission was unlawful.
However, under the Maryland General Corporation Law, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, the Maryland General
Corporation Law permits a corporation to advance reasonable expenses to a
director or officer upon the corporation's receipt of (a) a written affirmation
by the director or officer of his good faith belief that he has met the standard
of conduct necessary for indemnification by the corporation and (b) a written
undertaking by him or on his behalf to repay the amount paid or reimbursed by
the corporation if it is ultimately determined that the standard of conduct was
not met. We have the right but have no obligation to obtain insurance including
general liability, securities liability, trustee and officer liability and other
insurance in amounts and with carriers we reasonably deem appropriate in order
to support the indemnity described above.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers or persons controlling our
company in connection with the foregoing provisions, we have been informed that
in the opinion of the SEC this type of indemnification is against public policy
as expressed in the Securities Act of 1933 and is therefore unenforceable.
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Business Combinations
Under the Maryland General Corporation Law, as applicable to Maryland
REITs, certain "business combinations," including certain mergers,
consolidations, share exchanges, asset transfers, issuances and
reclassifications of equity securities, between a Maryland REIT and any
interested shareholder are prohibited for five years after the most recent date
on which the interested shareholder becomes an interested shareholder. For
purposes of the Maryland General Corporation Law, an "interested shareholder" is
a person who beneficially owns 10% or more of the voting power of the trust's
shares or an affiliate or associate of the trust who, at any time within the
two-year period prior to the date in question, was the beneficial owner of 10%
or more of the voting power of the then outstanding voting shares of beneficial
interest of the trust or an affiliate of the interested shareholder. Our
declaration of trust states that we have elected not to be governed by these
provisions of the Maryland General Corporation Law.
Control Share Acquisitions
The Maryland General Corporation Law, applicable to Maryland REITs,
provides that "control shares" of a Maryland REIT acquired in a "control share
acquisition" have no voting rights except to the extent approved by a vote of
two-thirds of the votes entitled to be cast on the matter, excluding shares of
beneficial interest owned by the acquiror, by officers or by trustees who are
employees of the trust. Our declaration of trust states that we have elected not
to be governed by the control share acquisition provisions of the Maryland
General Corporation Law.
Rights Plan
General. In May 1997, the trustees adopted a shareholder rights plan.
The shareholder rights plan provides for the distribution of one junior
participating preferred share purchase right for each common share. Each right
entitles the holder to buy 1/100th of a junior participating preferred share,
or, in some circumstances, to receive cash, property, common shares or our other
securities, at an exercise price of $100 per 1/100th of a junior participating
preferred share.
Distribution Date. Initially, the junior participating preferred share
purchase rights are attached to certificates evidencing common shares. The
junior participating preferred share purchase rights will separate from the
common shares and a so-called "distribution date" will occur upon earlier of the
following:
o 10 business days, or on a later date that the trustees may
determine before a distribution date occurs, following a
public announcement by us that a person or group of affiliated
or associated persons, an "acquiring person," has acquired, or
has obtained the right to acquire, beneficial ownership of 10%
or more of the outstanding common shares, or
o 10 business days, or on a later date that the trustees may
determine before a distribution date occurs, following the
commencement of a tender offer or exchange offer that would
result in a person becoming an acquiring person.
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Prior to the Distribution Date. Until the distribution date:
o the junior participating preferred share purchase rights will
be evidenced by the certificates for common shares and will be
transferred with and only with the common share certificates;
o common share certificates will contain a notation
incorporating the rights agreement under which the junior
participating preferred share purchase rights were issued; and
o the surrender for transfer of any certificates for outstanding
common shares will also constitute the transfer of the junior
participating preferred share purchase rights associated with
the common shares evidenced by the certificates.
Exercise and Expiration. The junior participating preferred share
purchase rights are not exercisable until the distribution date and will expire
at the close of business on April 30, 2007, unless earlier redeemed or exchanged
by us as described below. Until a right is exercised, the holder has no rights
as a shareholder, including, without limitation, the right to vote or to receive
dividends.
Flip-In Event. In the event a person becomes as so-called "acquiring
person" by acquiring or obtaining the right to acquire beneficial ownership of
10% or more of our outstanding common shares, each holder of a right will
thereafter have the right to receive, upon exercise of the right, common shares,
or, in certain circumstances, cash, property or our other securities, having a
current market price equal to two times the exercise price of the right. This
type of event is known as a "flip-in event." A flip-in event does not occur when
a person becomes an acquiring person in connection with a tender or exchange
offer for all outstanding common shares at a price and on terms which a majority
of our outside trustees determines to be fair to and otherwise in the best
interests of HPT and its shareholders. An offer which is approved by the outside
trustees in this manner is known as a "fair offer." Notwithstanding the
foregoing, following the occurrence of any flip-in event, all junior
participating preferred share purchase rights that are, or in the circumstances
specified in the junior participating preferred share purchase rights agreement
were, beneficially owned by any acquiring person or by related parties will be
void in the circumstances set forth in the junior participating preferred share
purchase rights agreement. However, junior participating preferred share
purchase rights will not be exercisable following the occurrence of any flip-in
event until such time as the junior participating preferred share purchase
rights are no longer redeemable by us as set forth below.
Flip-Over Event. In the event that, at any time on or after the share
acquisition date, (1) we take part in a merger or other business combination
transaction, other than various mergers that follow a fair offer, and HPT is not
the surviving entity, (2) HPT takes part in a merger or other business
combination transaction in which the common shares are changed or exchanged,
other than some types of mergers that follow a fair offer, or (3) 50% or more of
our assets or earning power is sold or transferred, each holder of a right,
except junior participating preferred share purchase rights which previously
have been voided, as set forth above, thereafter has the
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right to receive, upon exercise, a number of shares of common stock of the
acquiring company having a current market price equal to two times the exercise
price of the right.
Purchase Price. The purchase price payable and the number of junior
participating preferred shares, or the amount of cash, property or other
securities issuable upon exercise of the junior participating preferred share
purchase rights are subject to adjustment from time to time to prevent dilution
in the following circumstances:
o in the event of a share dividend on, or a subdivision,
combination or reclassification of, the junior participating
preferred shares;
o if holders of the junior participating preferred shares are
granted various rights or warrants to subscribe for junior
participating preferred shares or convertible securities at
less than the current market price of the junior participating
preferred shares; or
o upon the distribution to holders of the junior participating
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.
Subject to various exceptions, no adjustment in the purchase price will be
required until cumulative adjustments amount to at least 1% of the purchase
price. We are not required to issue fractional shares upon the exercise of any
right, and we will make a cash payment in lieu of any fractional shares.
Redemption. At any time until 10 business days following the share
acquisition date, we may redeem the junior participating preferred share
purchase rights in whole, but not in part, at a price of $.01 per right,
payable, at our option, in cash, common shares or other consideration as the
trustees may determine. Immediately upon the effectiveness of the action of the
trustees ordering redemption of the junior participating preferred share
purchase rights, the junior participating preferred share purchase rights will
terminate and the only right of the holders of junior participating preferred
share purchase rights will be to receive the $.01 per right redemption price.
Amendment. Prior to the distribution date, the trustees may amend the
terms of the junior participating preferred share purchase rights, other than
key financial terms and the date on which the junior participating preferred
share purchase rights expire. Thereafter, the trustees may amend the provisions
of the junior participating preferred share purchase rights agreement only in
order to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of junior participating preferred
share purchase rights, excluding the interests of any acquiring person and other
related parties, or to shorten or lengthen any time period under the junior
participating preferred share purchase rights agreement; provided, however, that
no amendment to lengthen the time period governing redemption is permitted to be
made when the junior participating preferred share purchase rights are not
redeemable.
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Antitakeover Effect of Several Provisions
As discussed above and in documents incorporated in this prospectus by
reference, our declaration of trust and bylaws contain several provisions that
will make it difficult to acquire control of our company by means of a tender
offer, open market purchases, a proxy fight or otherwise, if the acquisition is
not approved by our board of trustees. These provisions will also make it
difficult to change the composition of our board of trustees in a relatively
short period of time. These provisions are designed to reduce our vulnerability
to an unsolicited proposal for a takeover or an unsolicited proposal for the
restructuring or sale of our company and to encourage persons seeking to acquire
control of us to consult first with our board of trustees to negotiate the terms
of any proposed business combination or offer. These provisions may have the
effect of delaying, deferring or preventing a third party from making a tender
offer or otherwise attempting to obtain control of us, even though this attempt
might be beneficial to our company and our shareholders.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the offered shares.
Depending upon the selling shareholders' continuing review of their respective
investments and various other facts, the selling shareholders may, subject to
any applicable securities laws, sell all or any part of the offered shares.
However, we have not filed the registration statement of which this prospectus
forms a part because of any present intention of the selling shareholders to
sell any of the offered shares. Rather, the selling shareholders intend to
pledge all or a part of the offered shares held by them to one or more banks or
brokerage houses as collateral for loans to the selling shareholders. In the
event of a default under a loan to a selling shareholder which is secured by the
pledge of offered shares, the lender will have the right to cause the sale of
the offered shares under the registration statement of which this prospectus
forms a part.
One or both of the selling shareholders, at the direction of a lender
or otherwise, or any lender may sell offered shares from time to time to
purchasers directly. Alternatively, one or both of the selling shareholders, at
the direction of a lender or otherwise, or any lender may from time to time
offer the offered shares through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling shareholders and/or the purchasers of offered shares for whom
they may act as agent. The selling shareholders and any underwriters, dealers or
agents who participate in the distribution of the offered shares may be deemed
to be underwriters, and any profits on the sale of the offered shares by them
and any discounts, commissions or concessions received by any underwriters,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended.
To the extent the selling shareholders may be deemed to be
underwriters, the selling shareholders may be subject to certain statutory
liabilities of the Securities Act of 1933, as amended, including but not limited
to, Sections 11, 12 and 17 of that act and Rule 10b-5 under the Securities
Exchange Act of 1934, as amended. At any time a selling shareholder or
underwriter makes a particular offer of the offered shares under this
prospectus, if required, the selling shareholder or underwriter will distribute
a prospectus supplement that will identify the
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aggregate amount of the shares being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, any
discounts, commissions and other items constituting compensation from the
selling shareholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers. We will file the prospectus supplement and, if
necessary, a post-effective amendment to the registration statement of which
this prospectus is a part with the SEC to reflect the disclosure of additional
information with respect to the distribution of the offered shares.
The offered shares may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The offered
shares may be sold in transactions in which this prospectus is delivered or, for
selling shareholders who are not underwriters and who are not affiliates of us,
in which this prospectus is not delivered. The selling shareholders will
determine those prices, or those prices will be determined by agreement between
the selling shareholders and underwriters or dealers.
The selling shareholders and any other person participating in a
distribution may be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including without limitation Rules 10b-3,
10b-6 or 10b-7, which provisions may limit the timing or purchases and sales of
any of the offered shares by the selling shareholders and any other such person.
Furthermore, under Rule 10b-6 under the Exchange Act to the extent applicable,
any person engaged in a distribution of the offered shares may not
simultaneously engage in market making activities with respect to the particular
offered shares being distributed for a period of nine business days prior to the
commencement of the distribution. All of the foregoing may affect the
marketability of the offered shares and the ability of any person or entity to
engage in market making activities with respect to the offered shares.
Our estimated expenses aggregate to approximately $6,900.
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LEGAL MATTERS
Sullivan & Worcester LLP, Boston, Massachusetts, our lawyers, have
issued an opinion about the legality of our common shares. Sullivan & Worcester
LLP relied, as to certain matters of Maryland law, upon one or more opinions of
Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland. Barry M. Portnoy
was a partner and chairman of the firm of Sullivan & Worcester LLP until March
31, 1997 and is one of our managing trustees. Mr. Portnoy is also a managing
trustee of HRPT Properties Trust, a director and 50% owner of Reit Management &
Research, Inc., our investment advisor. Jennifer B. Clark, a vice president at
Reit Management and Research, Inc., was a partner of Sullivan & Worcester LLP
until July 1, 1999. Sullivan & Worcester LLP also represents HRPT Properties
Trust, Reit Management & Research, Inc. and their affiliates on various matters.
EXPERTS
Our consolidated financial statements and related schedule for the
years ended December 31, 1998, 1997 and 1996 and the financial statements of HMH
HPT Courtyard LLC for the fiscal years ended December 31, 1998, January 2, 1998
and January 3, 1997 have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and appear in
our Annual Report on Form 10-K for the year ended December 31, 1998. The
financial statements referred to above are incorporated herein by reference in
reliance upon such reports given upon the authority of said firm as experts in
accounting and auditing.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we
have filed with the Securities and Exchange Commission. This prospectus does not
contain all of the information that you will find in the registration statement.
Statements in this prospectus about the contents of any contract or other
document are not necessarily complete. In addition to reading this prospectus,
you should read the copies of the contracts and other documents that we have
filed as exhibits to the registration statement. The statements we make in this
prospectus are qualified in all respects by the information contained in the
exhibits to the registration statement. The section called "Where You Can Find
More Information" below contains information about how you can obtain copies of
the registration statement and additional information about us.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the selling shareholders have
not, authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not, and the selling shareholders are not, making an offer to
sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus,
as well as the information we have previously filed with the SEC and
incorporated by reference, is accurate only as of the date on the front cover of
this prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below which were filed with the
SEC under the Securities Exchange Act of 1934, as amended:
o Annual Report on Form 10-K for the year ended December 31, 1998;
o Quarterly Reports on Form 10-Q for the quarterly periods ended March 31,
1999 and June 30, 1999;
o Current Reports on Form 8-K dated February 11, 1999, March 23, 1999, April
7, 1999, April 30, 1999 and May 5, 1999; and
o the description of our common shares contained in our Registration
Statement on Form 8-A dated August 14, 1995.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus but before the end of
the offering of the offered common shares:
o Reports filed under Sections 13(a) and (c) of the Exchange Act;
o Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting; and
o Any reports filed under Section 15(d) of the Exchange Act.
We also incorporate by reference each of the reports and statements
described in the preceding paragraph which we will file with the SEC after the
date of the registration statement of which this prospectus is a part but before
the effectiveness of that registration statement.
You may request a copy of any of the filings (excluding exhibits), at no
cost, by writing or telephoning us at the following address:
Investor Relations
Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
(617) 964-8389
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WHERE YOU CAN FIND MORE INFORMATION
You may read and copy any material that we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC- 0330. You may access our electronic filings on the SEC's
Internet site, http://www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC.
FORWARD LOOKING STATEMENTS
This prospectus contains statements which constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Those statements appear in a number of places in this prospectus and
include statements regarding the intent, belief or expectations of HPT its
trustees or its officers with respect to the policies and plans of HPT. We
caution you that these forward looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those contained in the forward looking statements as a
result of various factors. These factors include, without limitation, changes in
financing terms, our ability or inability to complete acquisitions and financing
transactions, results of operations of our properties and general changes in
economic conditions not presently contemplated. The information contained in our
Annual Report on Form 10-K for the year ended December 31, 1998, including the
information under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations," identifies other important factors that
could cause these differences.
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The Declaration of Trust of HPT, amended and restated on August 21, 1995,
a copy of which, together with all amendments thereto, is duly filed in the
office of the Department of Assessments and Taxation of the State of Maryland,
provides that the name "Hospitality Properties Trust" refers to the trustees
under the declaration of trust, collectively as trustees, but not individually
or personally, and that no trustee, officer, shareholder, employee or agent of
HPT shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against, HPT. All persons dealing with Hospitality
Properties, in any way, shall look only to the assets of HPT for the payment of
any sum or the performance of any obligation.
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