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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) November 12, 1998
(November 10, 1998)
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KRANZCO REALTY TRUST
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(Exact Name of Registrant as Specified in Charter)
Maryland 001-11478 23-2691327
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
128 Fayette Street, Conshohocken, Pennsylvania 19428
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (610) 941-9292
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On November 10, 1998, the Board of Trustees of the Company declared
a distribution of one preferred share purchase right (a "Right") for each
outstanding common share of beneficial interest, $.01 par value per share, of
the Company (the "Common Shares"). The distribution is payable as of
November 24, 1998 (the "Record Date") to shareholders of record on that date.
Each Right entitles the registered holder thereof to purchase from the
Company one one-hundredth of a Series E Junior Participating Preferred Share
of the Company, $.01 par value per share (the "Preferred Shares), at a price
of $55.00 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to certain adjustments. The description and terms of the Rights are
set forth in a Rights Agreement, as the same may be amended from time to time
(the "Rights Agreement"), between the Company and First Union National Bank,
as rights agent (the "Rights Agent").
Until the earlier of (i) the tenth day following either a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person"), with certain exceptions, has acquired beneficial
ownership of 15% or more of the outstanding Common Shares of the Company, or
the public disclosure of facts indicating that an Acquiring Person has become
such, and (ii) the tenth business day (or such later date as determined by
the Board of Trustees prior to any person or group of affiliated or
associated persons becoming an Acquiring Person) after the date of the
commencement or public announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the acquisition of beneficial ownership of 15% or more of the Company's
outstanding Common Shares (each, a "Distribution Date"), the Rights relating
to any Common Share certificates outstanding as of the Record Date will be
evidenced by such Common Share certificates together with a copy of the
Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Common Share certificates
issued after the Record Date but prior to the Distribution Date (or earlier
redemption, exchange or expiration date) will contain a legend incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer
of any Common Share certificates outstanding as of the Record Date, with or
without a copy of the Summary of Rights attached thereto, also will
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 evidencing 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 such separate Right
Certificates alone will evidence the Rights from and after the Distribution
Date.
On the Distribution Date, proper provision will be made by the
Company to provide each holder of shares of beneficial interest of the
Company (other than the holders of the Common Shares) which, pursuant to the
Company's Amended and Restated Declaration Trust, dated as of November 4,
1992, as amended (the "Declaration of Trust"), would be entitled to receive
the Rights (such shares, the "Common Share Equivalents") with such number of
Rights, evidenced by Right Certificates, as would have been issued to such
holder had such holder exchanged its shares of Common Share Equivalents for
Common Shares prior to the Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on November 10, 2008 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company as described below.
The Purchase Price payable and the number of Preferred Shares or
other securities or property issuable upon exercise of the Rights is subject
to certain adjustments from time to time to prevent dilution in the event of
distributions, share splits, reclassifications or certain distributions with
respect to the Preferred Shares. The number of outstanding Rights and the
number of one one-hundredths of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment if, prior to the Distribution Date,
there is a share split of the Common Shares or a share distribution on the
Common Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares.
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 integral multiples of one one-hundreths of a
Preferred Share, which may, at the election of the Company, 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.
Unless the Rights are earlier redeemed or exchanged, in the event
that a person or group of affiliated or associated persons become an
Acquiring Person, the Rights Agreement provides that each holder of a Right,
other than the Acquiring Person (whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the
Purchase Price, that number Common Shares having a market value equal to two
times the Purchase Price.
In addition, unless the Rights are earlier redeemed or exchanged,
in the event that, after the time that a person or group of affiliated or
associated persons becomes an Acquiring Person, the Company is acquired in a
merger or other business combination, or 50% or more of its consolidated
assets or earning power are sold, proper provision will be made so that each
holder of record of a Right, other than the Acquiring Person (whose rights
will thereupon become null and void), will thereafter have the right to
receive, upon payment of the Purchase Price, that number of shares of common
stock of the acquiring company which at the time of such transaction have a
market value equal to two times the Purchase Price.
The Rights Agreement provides that, notwithstanding any provision
of the Rights Agreement to the contrary, no Right will be exercisable for a
number of Common Shares that would cause the ownership limit set forth in the
Company's Declaration of Trust to be exceeded.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such Acquiring Person of 50% or more of the
Company's outstanding Common Shares, the Board of Trustees may exchange the
Rights (other than Rights owned by the Acquiring Person which will have
become null and void), in whole or in part, at an exchange ratio of one
Common Share or one one-hundredth of a Preferred Share (subject to
adjustment) per Right.
At any time prior to any person or group becoming an Acquiring
Person, the Board of Trustees may redeem the Rights in whole, but not in
part, at a price of $.01 per Right ("Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Trustees in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be
to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Trustees
without the consent of the holders of the Rights, including an amendment to
lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated persons becomes
an Acquiring Person no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or receive distributions.
Preferred Shares purchasable upon the exercise of the Rights will
be nonredeemable and will rank junior to any other series of Preferred Shares
the Company may issue. Each Preferred Share will be entitled to a minimum
preferential quarterly distribution payment of $1 per share but will be
entitled to an aggregate distribution of 100 times the distribution declared
per Common Share. In the event of liquidation, the holders of the Preferred
Shares will receive a preferential liquidation payment of $100 per share.
Each Preferred Share will have 100 votes, voting together with the Common
Shares. In the event of any merger, consolidation or other transaction in
which Common shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group of affiliated or associated
persons that attempts to acquire the Company without conditioning the offer
on the Rights being redeemed or a substantial number of rights being
acquired. However, the Rights generally should not interfere with any merger
or other business combination approved by the Board of Trustees.
A copy of the Rights Agreement between the Company and the Rights
Agent, specifying the terms of the Rights, which includes as Exhibit A the
form of Articles Supplementary for the Preferred Shares, as Exhibit B the
form of Right Certificate and as Exhibit C the form of Summary of Rights to
Purchase Preferred Shares, is attached hereto as an exhibit and incorporated
herein by reference. The foregoing description of the Rights is qualified by
reference to such exhibit.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits
10.1 Rights Agreement dated as of November 10, 1998 between Kranzco
Realty Trust and First Union National Bank, as Rights Agent. The
Rights Agreement includes as Exhbit A the form of Articles
Supplementary for the Preferred Shares, as Exhibit B the form of
Right Certificate and as Exhibit C the form of Summary of Rights to
Purchase Preferred Shares.
99.1 Press Release, dated November 10, 1998.
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.
Date: November 12, 1998
KRANZCO REALTY TRUST
By:/s/ Robert H. Dennis
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Name: Robert H. Dennis
Title: Chief Financial Officer
EXHIBIT INDEX
10.1 Rights Agreement dated as of November 10, 1998 between Kranzco
Realty Trust and First Union National Bank, as Rights Agent. The
Rights Agreement includes as Exhibit A the Articles Supplementary
for the Preferred Shares, as Exhibit B the form of Right
Certificate and as Exhibit C the form of Summary of Rights to
Purchase Preferred Shares.
99.1 Press Release, dated November 10, 1998.