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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) April 10, 1995
RPS REALTY TRUST
(Exact name of registrant as specified in its charter)
MASSACHUSETTS
(State or other jurisdiction of incorporation)
1-10093 13-6908486
(Commission File Number) (IRS Employer Identification No.)
747 Third Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 702-8585
733 Third Avenue, New York, New York 10017
(Former name or former address, if changed since last report)
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Item 1(b) Changes of Control of Registrant
Item 5 Other Events
On April 10, 1995, the Registrant, Ramco-Gershenson, Inc. ("Ramco"),
the sole stockholders of Ramco and certain affiliates of Ramco entered into a
Master Agreement, as well as certain other related agreements (collectively, the
"Ramco Transaction Agreements") relating to the acquisition by the Registrant of
certain stock interests in Ramco and substantially all of the real estate assets
of Ramco's affiliates (the "Ramco Transaction"). Pursuant to the Ramco
Transaction Agreements, Ramco, the Ramco Principals (as hereinafter defined) and
certain of their respective affiliates (collectively, the "Ramco Group") have
transferred or will transfer (via contribution or merger) to a Delaware limited
partnership (the "Operating Partnership") 23 shopping center properties (or
interests therein) (the "Ramco Properties"), containing approximately 5,270,000
leasable square feet, as well as 100% of the non-voting stock and 5% of the
voting stock in Ramco (representing in excess of 99% of the economic interests
in Ramco). Following the closing, Ramco will manage the Ramco Properties, the
RPS Properties (as defined below) and the properties of certain third parties
and other Ramco affiliates. The Registrant will contribute to the Operating
Partnership (directly or through merger) six retail properties, containing
approximately 930,000 leasable square feet (the "RPS Properties"), and
$75,000,000 in cash (less expenses paid by the Registrant in connection with the
proposed transactions). Upon consummation of the Ramco Transaction, the
Registrant will be the sole general partner and a limited partner of, and
members of the Ramco Group will be limited partners of, the Operating
Partnership. The exact number of units of limited partnership interest
(collectively, the "OP Units") to be received by the Registrant and the members
of the Ramco Group will be determined based upon the relative agreed upon values
of the assets to be contributed by the parties; based upon estimated current
values, it is anticipated that the Registrant would initially receive OP Units
equal to an approximately 74.5% interest in the Operating Partnership, and the
members of the Ramco Group would initially receive OP Units equal, in the
aggregate, to an approximately 25.5% interest in the Operating Partnership. The
Ramco Group's OP Units will be exchangeable for shares of beneficial interest of
the Registrant (after taking into account the reverse stock split described
below) (the "New Shares") commencing one year after the consummation of the
Ramco Transaction, subject to purchase of such OP Units for cash by the
Registrant, at the Registrant's option. If members of the Ramco Group earned the
maximum number of OP Units which they are eligible to receive pursuant to
certain performance related earnouts provided for under the Ramco Transaction
Agreements, and if all of such OP Units were so exchanged, it is currently
anticipated that the members of the Ramco Group would receive New
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Shares equal, in the aggregate, to approximately 29% of the New Shares which
will be outstanding immediately after such conversion.
As part of the Ramco Transaction, it is anticipated that (a) the
Registrant's state of organization will be changed from Massachusetts to
Maryland and the Registrant will change its name to Ramco-Gershenson Properties
Trust and (b) the Registrant will implement a reverse stock split, pursuant to
which each four existing shares of beneficial interest, par value $.10 per
share, of the Registrant will be converted into one New Share.
Consummation of the Ramco Transaction is conditioned upon, among other
things, (i) approval of the Ramco Transaction (and certain related transactions)
by the Registrant's shareholders, who will receive a proxy statement describing
the Ramco Transaction and such related transactions, (ii) the Ramco Group's
ability to obtain the requisite consents of the limited partners in the
partnerships which currently own certain of the Ramco Properties to the transfer
of such properties to the Operating Partnership, (iii) the receipt of all
required material consents of third parties, including receipt of consents from
the applicable utilities that would permit the Operating Partnership to resell
electricity to the tenants of the Ramco Properties located in Michigan in
accordance with past practice, (iv) execution of a "closing agreement" with the
Internal Revenue Service (the "IRS"), which, among other things, will confirm
the Registrant's continuing eligibility to qualify as a real estate investment
trust ("REIT"), as described in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994 (the "Form 10-K"), (v) receipt of an opinion
from Dean Witter Reynolds, Inc., the Registrant's financial advisor, relating to
the fairness of the Ramco Transaction, from a financial point of view, to the
Registrant's shareholders, (vi) indebtedness of certain of the Ramco Properties
having been refinanced in accordance with certain terms described in the Ramco
Transaction Agreements, (vii) satisfaction of the employment agreements between
the Registrant and its two principal executive officers, as described below and
(viii) receipt by the Ramco Group of no less than 25.5% of the interests in the
Operating Partnership (assuming the Ramco Group received the maximum number of
OP Units issuable under the performance related earnouts).
In addition to the failure to satisfy a material condition, the Ramco
Transaction may be terminated prior to the closing upon, among other things, the
receipt by the Registrant of a proposal for an alternative transaction which the
Board of Trustees of the Registrant determines is on terms superior to the terms
of the Ramco Transaction.
Upon consummation of the Ramco Transaction, it is contemplated that
four of the nine current members of the RPS
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Board will resign, and will be replaced by four individuals designated by the
Ramco Group, two of whom will be independent of Ramco, the Registrant and their
respective affiliates. In addition, the five current principal executive
officers of Ramco (the "Ramco Principals") will become executive officers of the
Registrant, and will be responsible for the management of the Registrant's real
estate operations. In addition, it is contemplated that Joel Pashcow, the
current Chairman of the Board of the Registrant, will become the Vice Chairman
of the Registrant upon consummation of the Ramco Transaction.
In connection with (and as a condition to) the consummation of the
Ramco Transaction, the Registrant agreed that the employment agreements between
the Registrant and each of Herbert Liechtung, President of the Registrant, and
Joel Pashcow, Chairman of the Board of the Registrant would be satisfied by the
Registrant prior to the consummation of the Ramco Transaction. Each of such
contracts contains a provision which enables the employee thereunder, upon the
occurrence of certain events ("triggering events"), to terminate such contract,
and to receive a payment equal to four times such employee's average annual
salary and bonuses for the three years prior to the occurrence of such events.
The Registrant and Mr. Liechtung have entered into a termination agreement, the
material provisions of which are described in the Registrant's Form 10-K (the
"Liechtung Termination Agreement"); pursuant to such agreement, among other
things, (a) the Registrant and Mr. Liechtung have agreed that consummation of
the Ramco Transaction would constitute a "triggering event" under the applicable
provisions of his employment agreement and (b) Mr. Liechtung has agreed, subject
to earlier termination as set forth in his employment agreement, to continue in
the employment of the Registrant through the date of consummation of the
proposed Ramco Transaction. The Registrant and Mr. Pashcow have been negotiating
the terms of a termination agreement, and the Board of Trustees of the
Registrant (the "RPS Board") has approved the material terms of such an
agreement (which are substantially similar to the material terms of the
Liechtung Termination Agreement, except that Mr. Pashcow will not receive a
one-time bonus payment similar to the payment to be received by Mr. Liechtung);
however, as of the date hereof, the Trust and Mr. Pashcow have not entered into
a definitive termination agreement.
Upon consummation of the Ramco Transaction, it is anticipated that the
Registrant will enter into a new employment agreement with Mr. Pashcow, pursuant
to which, among other things, Mr. Pashcow will be granted, pursuant to a new
option plan to be adopted by the Registrant (with the approval of the
Registrant's shareholders), options to purchase 187,500 New Shares. In addition,
in connection with the proposed Ramco Transaction, the RPS Board has agreed to
recommend to the Registrant's shareholders certain amendments to its 1989
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Employees' Stock Option Plan, including an extension of the term of the existing
options granted to Messrs. Pashcow and Liechtung (as well as the options held by
other employees of the Registrant). The RPS Board has also determined to
recommend that the Registrant's shareholders approve certain amendments to the
Registrant's 1989 Trustees' Stock Option Plan, including an extended exercise
period. Lastly, in connection with the Ramco Transaction, the Registrant has
agreed to certain severance and other "bonus" arrangements with certain other
executive officers and other key employees of the Registrant, to induce such
individuals to remain in the employ of the Registrant at least through the
consummation of the Ramco Transaction; the terms of such arrangements are
described in the Form 10-K.
As a condition to the consummation of the Ramco Transaction, and in an
effort to complete the transformation of the Registrant from primarily a
mortgage REIT to an equity REIT, the Registrant has agreed to transfer out of
the Registrant the remaining loans in the Registrant's mortgage loan portfolio,
as well as certain other assets, which may include cash and/or interests in two
real properties which are not being contributed to the Operating Partnership
(such mortgage loans and other assets are hereinafter collectively referred to
as the "Transfer Assets"). Accordingly, the Registrant intends to transfer the
Transfer Assets to a newly-formed REIT ("RPS Mortgage"). Thereafter, the
Registrant will make a ratable distribution to its Shareholders (the
"Distribution") of all of the shares of beneficial interest in RPS Mortgage
("RPS Mortgage Shares") at a distribution rate to be determined by the RPS Board
prior to the Distribution. The distribution rate is currently expected to be one
RPS Mortgage Share for every outstanding New Share.
Prior to the Distribution, RPS Mortgage will register the RPS Mortgage
Shares under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act"), and will file a registration statement on Form 10 with the Securities and
Exchange Commission. RPS Mortgage will also send to the Registrant's
shareholders an information statement which will substantially comply with the
requirements of Regulation 14(c) under the Exchange Act, and contain financial
as well as other material information with respect to the business and
management of RPS Mortgage and the Distribution.
Following the Distribution, it is expected that the Registrant and RPS
Mortgage will conduct their respective businesses as independent companies with
their own separate employees. The Registrant will retain no ownership interest
in RPS Mortgage following the Distribution. It is possible, however, that the
Registrant and RPS Mortgage will enter into various agreements prior to the
Distribution, including agreements under which responsibility for specified
liabilities will be allocated between the Registrant and RPS Mortgage. It is
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also possible that one or more of the current trustees of the Registrant will
serve as trustees of RPS Mortgage following the Distribution and that certain
current officers and employees of the Registrant will serve as officers or
employees of RPS Mortgage. Following the Distribution, the board of trustees of
RPS Mortgage may choose to liquidate the Transfer Assets over a period of time
and then either distribute such liquidation proceeds to the holders of RPS
Mortgage Shares, or cause RPS Mortgage to enter into a merger or other business
combination with a third party.
The RPS Board has approved the Ramco Transaction as being in the best
interests of the Registrant and its Shareholders. Upon consummation of the Ramco
Transaction, the Registrant will own a significant controlling interest in an
entity that the RPS Board believes will own an attractive portfolio of retail
properties managed by a well-respected experienced organization which has
exhibited significant development capabilities. As a result of the Ramco
Transaction and the Distribution, the Registrant's shareholders will own shares
in two separate companies -- the Registrant, an equity REIT, and RPS Mortgage,
which is expected to be substantially a mortgage REIT. In connection with the
consummation of the Ramco Transaction, on March 29, 1995 the Board of Trustees
adopted an amendment to the Registrant's Rights Agreement with American Stock
Transfer & Trust Company to provide that the issuance of OP Units and New Shares
to members of the Ramco Group in connection with the Ramco Transaction would not
trigger the shareholder rights set forth in such Agreement.
Additional information with respect to the Ramco Transaction will be
included in a Proxy Statement to be distributed to the Registrant's
shareholders, pursuant to which the Registrant will seek the approval of its
shareholders of the Ramco Transaction and certain related transactions.
Notwithstanding the filing of this Form 8-K under Item 1(b) hereof,
the Registrant does not believe that the transaction contemplated by the Ramco
Transaction Agreements will result in a change of control of the Registrant.
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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 thereunto duly authorized.
RPS REALTY TRUST
(Registrant)
Date: April 24, 1995 By: /s/ Joel Pashcow
_______________________
Joel Pashcow,
Chairman
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EXHIBIT INDEX
Sequential
Exhibit Page No.
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2.1 Master Agreement dated as of April 10, 1995 among
Registrant, Ramco- Gershenson, Inc., Dennis Gershenson,
Joel Gershenson, Bruce Gershenson, Richard Gershenson,
Michael A. Ward, Michael A. Ward U/T/A, dated 2/22/77,
as amended, Ramco-Gershenson Properties, L.P. and the
Ramco Contributing Parties, together with schedules
thereto.
2.2 Agreement dated as of April 10, 1995 by and between
Chester Plaza Shops, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
2.3 Agreement dated as of April 10, 1995 by and between
Crofton Plaza, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
2.4 Agreement dated as of April 10, 1995 by and between
Trinity Shops, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
2.5 Agreement dated as of April 10, 1995 by and between
Lantana Plaza Shops, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
2.6 Agreement dated as of April 10, 1995 by and between
Sunshine Plaza Shops, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
2.7 Agreement dated as of April 10, 1995 by and between The
Commack Site, Inc., a wholly-owned subsidiary of
Registrant, and Ramco-Gershenson Properties, L.P.
4.1 Amendment dated as of March 29, 1995 to the Rights
Agreement dated as of December 6, 1989 between the
Registrant and American Stock Transfer & Trust Company.
99.1 Press Release of Registrant dated April 10, 1995.