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 2, 2003
CAPITAL TRUST, INC.
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(Exact Name of Registrant as specified in its charter)
Maryland 1-14788 94-6181186
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
410 Park Avenue, 14th Floor, New York, NY 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 655-0220
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N/A
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(Former name or former address, if changed since last report):
Item 5. Other Events.
The charter of Capital Trust, Inc. (the "Company") was amended and
restated effective April 2, 2003. In view of the foregoing, set forth below is a
description of the capital stock of the Company which is disclosed herein for
purposes of updating the Company's description of capital stock for future
incorporation by reference into registration statements filed under the
Securities Act of 1933, as amended. The following description of the Company's
common and preferred stock, provisions of its charter and bylaws and specific
provisions of the Maryland General Corporation Law are only summaries, and are
qualified in their entirety by reference to the Maryland General Corporation Law
and to the Company's charter and bylaws which are filed as exhibits hereto.
General
Under our charter, we may issue up to 200,000,000 shares of stock
comprised of the following:
o 100,000,000 shares of class A common stock, par value $.01 per share;
and
o 100,000,000 shares of preferred stock, par value $.01 per share.
As of the date hereof, 6,500,734 shares of class A common stock were
issued and outstanding and no shares of preferred stock were designated as a
particular class or series or are outstanding. Under Maryland law, our
shareholders generally are not liable for our debts or obligations. The class A
common stock is listed on the New York Stock Exchange under the symbol "CT".
Common Stock
Holders of our common stock are entitled to receive dividends when
authorized by our board of directors out of assets legally available for the
payment of dividends. They are also entitled to share ratably in our assets
legally available for distribution to our shareholders in the event of our
liquidation, dissolution or winding up, after payment of, or adequate provision
for, all of our known debts and liabilities. These rights are subject to the
preferential rights of any other class or series of our stock. All shares of
class A common stock have equal dividend and liquidation rights.
Subject to our charter restrictions on ownership and transfer of our
stock, each outstanding share of class A common stock is entitled to one vote on
all matters to be submitted to a vote of the shareholders. There is no
cumulative voting in the election of our directors and our directors are elected
by a plurality of the votes cast, so the holders of a simple majority of the
outstanding class A common stock, voting at a shareholders meeting at which a
quorum is present, can elect all of the directors nominated for election at the
meeting. Holders of our common stock have no exchange, sinking fund, redemption
or appraisal rights and have no preemptive rights to subscribe for any of our
securities. Because holders of common stock do not have preemptive rights, we
may issue additional shares of stock that may reduce each
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shareholder's proportionate voting and financial interest in our company. Rights
to receive dividends on our class A common stock may be restricted by the terms
of any future classified and issued shares of our preferred stock.
Under Maryland law, a Maryland corporation generally cannot dissolve,
amend its charter, merge, sell all or substantially all of its assets, engage in
a share exchange or engage in similar transactions outside the ordinary course
of business unless approved by the affirmative vote of shareholders holding at
least two-thirds of the shares entitled to vote on the matter. However, a
Maryland corporation may provide in its charter for approval of these matters by
a lesser percentage, but not less than a majority of all of the votes entitled
to be cast on the matter. Our charter provides for approval of these matters by
a majority of all votes entitled to be cast on the matter.
Power to Reclassify Shares of Our Stock and to Increase the Number of Shares
of Our Stock
Our charter authorizes our board of directors, without shareholder
approval, to:
o classify and reclassify any unissued shares of our common stock and
preferred stock into other classes or series of stock, and
o increase or decrease the aggregate number of shares of stock of any
class or series that may be issued.
Prior to the issuance of shares of each class or series, the board is
required by Maryland law and by our charter to set, subject to our charter
restrictions on transfers of stock, the terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption for each
class or series. Thus, the board could authorize the issuance of shares of
preferred stock with terms and conditions which could have the effect of
delaying, deferring or preventing a transaction or a change in control of our
company that might involve a premium price for holders of our common stock or
otherwise be in their best interest.
Power to Issue Additional Shares of Common Stock and Preferred Stock
We believe that the power to issue additional shares of our common stock
or preferred stock, increase the aggregate number of shares of stock of any
class or series that we have the authority to issue and to classify or
reclassify unissued shares of our common or preferred stock and thereafter to
issue the classified or reclassified shares provides us with increased
flexibility in structuring possible future financings and acquisitions and in
meeting other needs which might arise. These actions can be taken without
shareholder approval, unless shareholder approval is required by applicable law
or the rules of any stock exchange or automated quotation system on which our
securities may be listed or traded. Although we have no present intention of
doing so, we could issue a class or series of stock that could delay, defer or
prevent a transaction or a change in control of our company that might involve a
premium price for holders of common stock or otherwise be in their best
interest.
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Transfer Agent and Registrar
Our transfer agent and registrar is American Stock Transfer & Trust
Company located in Brooklyn, New York.
Certain Provisions of Maryland Law and Our Charter and Bylaws
REIT Qualification Restrictions on Ownership and Transfer
Our charter contains restrictions on the number of shares of our stock
that a person may own. No individual may acquire or hold, directly or
indirectly, in excess of 2.5% in value or number of our stock unless they
receive an exemption from our board of directors.
Our charter further prohibits (a) any person from owning shares of our
stock that would result in our being "closely held" under Section 856(h) of the
Internal Revenue Code or otherwise cause us to fail to qualify as a REIT and (b)
any person from transferring shares of our stock if the transfer would result in
our stock being owned by fewer than 100 persons. Any person who acquires or
intends to acquire shares of our stock that may violate any of these
restrictions, or who is the intended transferee of shares of our stock which are
transferred to the Trust, as defined below, is required to give us immediate
written notice and provide us with such information as we may request in order
to determine the effect of the transfer on our status as a REIT. The above
restrictions will not apply if our board of directors determines that it is no
longer in our best interests to continue to qualify as a REIT.
Our board of directors, in its sole discretion, may exempt a person from,
or modify, these limits, subject to such terms, conditions, representations and
undertakings as it may determine. Our board of directors has granted limited
exemptions to certain persons who directly or indirectly own our stock,
including officers and directors and shareholders controlled by them or trusts
for the benefit of their families.
Any attempted transfer of our stock which, if effective, would result in
violation of the above limitations, will cause the number of shares causing the
violation (rounded to the nearest whole share) to be automatically transferred
to a trust, which we refer to as the Trust, for the exclusive benefit of one or
more charitable beneficiaries, which we refer to as the Charitable Beneficiary,
and the proposed transferee will not acquire any rights in the shares. The
automatic transfer will be deemed to be effective as of the close of business on
the business day (as defined in our charter) prior to the date of the transfer.
The shares transferred to the Trust will generally be selected so as to minimize
the aggregate value of shares transferred to the Trust. Shares of our stock held
in the Trust will be issued and outstanding shares. The proposed transferee will
not benefit economically from ownership of any shares of stock held in the
Trust, will have no rights to dividends and no rights to vote or other rights
attributable to the shares of stock held in the Trust. The trustee of the Trust
will have all voting rights and rights to dividends or other distributions with
respect to shares held in the Trust. These rights will be exercised for the
exclusive benefit of the Charitable Beneficiary. Any dividend or other
distribution paid prior to our discovery that shares of stock have been
transferred to the Trust will be paid by the recipient to the Trustee upon
demand. Any dividend or other distribution authorized but unpaid will be
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paid when due to the Trustee. Any dividend or distribution paid to the Trustee
will be held in trust for the Charitable Beneficiary. Subject to Maryland law,
the Trustee will have the authority (i) to rescind as void any vote cast by the
proposed transferee prior to our discovery that the shares have been transferred
to the Trust and (ii) to recast the vote in accordance with the desires of the
Trustee acting for the benefit of the Charitable Beneficiary. However, if we
have already taken irreversible corporate action, then the Trustee will not have
the authority to rescind and recast the vote. If necessary to protect our status
as a REIT, we may establish additional Trusts with distinct Trustees and
Charitable Beneficiaries to which shares may be transferred.
Within 20 days of receiving notice from us that shares of our stock have
been transferred to the Trust, the Trustee will sell the shares to a person
designated by the Trustee, whose ownership of the shares will not violate the
above ownership limitations. Upon the sale, the interest of the Charitable
Beneficiary in the shares sold will terminate and the Trustee will distribute
the net proceeds of the sale to the proposed transferee and to the Charitable
Beneficiary as follows. The proposed transferee will receive the lesser of (i)
the price paid by the proposed transferee for the shares or, if the proposed
transferee did not give value for the shares in connection with the event
causing the shares to be held in the Trust (e.g., a gift, devise or other
similar transaction), the Market Price (as defined in our charter) of the shares
on the day of the event causing the shares to be held in the Trust and (ii) the
price received by the Trustee from the sale or other disposition of the shares.
Any net sale proceeds in excess of the amount payable to the proposed transferee
will be paid immediately to the Charitable Beneficiary. If, prior to our
discovery that shares of our stock have been transferred to the Trust, the
shares are sold by the proposed transferee, then (i) the shares shall be deemed
to have been sold on behalf of the Trust and (ii) to the extent that the
proposed transferee received an amount for the shares that exceeds the amount he
was entitled to receive, the excess shall be paid to the Trustee upon demand.
In addition, shares of our stock held in the Trust will be deemed to have
been offered for sale to us, or our designee, at a price per share equal to the
lesser of (i) the price per share in the transaction that resulted in the
transfer to the Trust (or, in the case of a devise or gift, the Market Price at
the time of the devise or gift) and (ii) the Market Price on the date we, or our
designee, accept the offer. We will have the right to accept the offer until the
Trustee has sold the shares. Upon a sale to us, the interest of the Charitable
Beneficiary in the shares sold will terminate and the Trustee will distribute
the net proceeds of the sale to the proposed transferee.
All certificates representing shares of our stock issued in the future
will bear a legend referring to the restrictions described above.
Every owner of more than such percentage as may from time to time be
established by our board of directors (or such lower percentage as required by
the Internal Revenue Code or the regulations promulgated thereunder) of our
stock, within 30 days after the end of each taxable year, is required to give us
written notice, stating his name and address, the number of shares of each class
and series of our stock which he beneficially owns and a description of the
manner in which the shares are held. Each such owner shall provide us with such
additional information as we may request in order to determine the effect, if
any, of his beneficial ownership on our status as a REIT and to ensure
compliance with the ownership limits. In addition, each shareholder
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shall upon demand be required to provide us with such information as we may
request in good faith in order to determine our status as a REIT and to comply
with the requirements of any taxing authority or governmental authority or to
determine such compliance.
These ownership limits could delay, defer or prevent a transaction or a
change in control that might involve a premium price for the common stock or
otherwise be in the best interest of the stockholders.
Business Combinations
Under Maryland law, "business combinations" between a Maryland corporation
and an interested shareholder or an affiliate of an interested shareholder are
prohibited for five years after the most recent date on which the interested
shareholder becomes an interested shareholder. These business combinations
include a merger, consolidation, share exchange, or, in circumstances specified
in the statute, an asset transfer or issuance or reclassification of equity
securities. An interested shareholder is defined as:
o any person who beneficially owns 10% or more of the voting power of the
corporation's shares; or
o an affiliate or associate of the corporation 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
stock of the corporation.
A person is not an interested shareholder under the statute if the board
of directors approved in advance the transaction by which he or she otherwise
would have become an interested shareholder. However, in approving a
transaction, our board of directors may provide that its approval is subject to
compliance, at or after the time of approval, with any terms and conditions
determined by the board.
After the five-year prohibition, any business combination between the
Maryland corporation and an interested shareholder generally must be recommended
by the board of directors of the corporation and approved by the affirmative
vote of at least:
o 80% of the votes entitled to be cast by holders of outstanding shares
of voting stock of the corporation; and
o two-thirds of the votes entitled to be cast by holders of voting stock
of the corporation other than shares held by the interested shareholder
with whom or with whose affiliate the business combination is to be
effected or the shares held by any affiliate or associate of the
interested shareholder.
These super-majority vote requirements do not apply if the corporation's
common shareholders receive a minimum price, as defined under Maryland law, for
their shares in the form of cash or other consideration in the same form as
previously paid by the interested shareholder for its shares.
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The statute permits various exemptions from its provisions, including
business combinations that are exempted by the board of directors prior to the
time that the interested shareholder became an interested shareholder.
Our board of directors has adopted resolutions which exempt Veqtor Finance
Company, L.L.C., JRK Investment Partnership LP and CMH Investment Partnership LP
from the five-year prohibition and the super-majority vote requirement. The
business combination statute may discourage others from trying to acquire
control of us and may increase the difficulty of consummating any offer relating
to the same.
Control Share Acquisitions
Maryland law provides that "control shares" of a Maryland corporation
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. A control share acquisition means the acquisition of control shares,
subject to certain exceptions. Shares owned by the acquiror, by officers of the
target corporation or by directors of the target corporation who are also
employees are excluded from shares entitled to vote on the matter. Control
shares are voting shares of stock which, if aggregated with all other shares of
stock owned by the acquiror or in respect of which the acquiror is able to
exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), would entitle the acquiror to exercise voting power in
electing directors within one of the following ranges of voting power:
o one-tenth or more but less than one-third;
o one-third or more but less than a majority; or
o a majority or more of all voting power.
Control shares do not include shares the acquiror is entitled to vote as a
result of having previously obtained shareholder approval.
A person who has made or proposes to make a control share acquisition may
compel the board of directors of the corporation to call a special meeting of
shareholders to be held within 50 days of demand to consider the voting rights
of the shares. The right to compel the calling of a special meeting is subject
to the satisfaction of certain conditions, including an undertaking to pay the
expenses of the meeting. If no request for a meeting is made, the corporation
may itself present the question at any shareholders meeting.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then the corporation may redeem for fair value any or all of the
control shares, except those for which voting rights have previously been
approved. The right of the corporation to redeem control shares is subject to
certain conditions and limitations. Fair value is determined, without regard to
the absence of voting rights for the control shares, as of the date of the last
control share acquisition by the acquiror or of any meeting of shareholders at
which the voting rights of the shares are considered and not approved.
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If voting rights for control shares are approved at a shareholders meeting and
the acquiror becomes entitled to vote a majority of the shares entitled to vote,
all other shareholders may exercise appraisal rights. The fair value of the
shares as determined for purposes of appraisal rights may not be less than the
highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (a) to shares
acquired in a merger, consolidation or share exchange if the corporation is a
party to the transaction, or (b) to acquisitions approved or exempted by the
charter or bylaws of the corporation.
Maryland Unsolicited Takeovers Act
The Maryland Unsolicited Takeovers Act applies to any Maryland corporation
that has a class of securities registered under the Securities Exchange Act of
1934 and at least three independent directors. Pursuant to such act, the board
of directors of any Maryland corporation fitting such description, without
obtaining shareholder approval and notwithstanding a contrary provision in its
charter or bylaws, may elect to:
o classify the board;
o increase the required shareholder vote to remove a director to
two-thirds of all the votes entitled to be cast by the shareholders
generally in the election of directors; and
o require that a shareholder requested special meeting need be called
only upon the written request of the shareholders entitled to cast a
majority of all the votes entitled to be cast at the meeting.
Additionally, the board could provide that:
o the number of directors may be fixed only by a vote of the board of
directors,
o each vacancy on the board of directors (including a vacancy resulting
from the removal of a director by the shareholders) may be filled only
by the affirmative vote of a majority of the remaining directors in
office, even if the remaining directors do not constitute a quorum; and
o any director elected to fill a vacancy will hold office for the full
remainder of the term, rather than until the next election of
directors.
The Maryland Unsolicited Takeovers Act does not limit the power of a
corporation to confer on the holders of any class or series of preferred stock
the right to elect one or more directors. We currently have more than three
independent directors and therefore our board of directors could elect to
provide for any of the foregoing provisions. As of the date hereof, our board of
directors has not made any such election.
Advance Notice of Director Nominations and New Business
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Our bylaws provide that with respect to an annual meeting of shareholders,
nominations of individuals for election to the board of directors and the
proposal of business to be considered by shareholders may be made only:
o pursuant to our notice of the meeting;
o by or at the direction of the board of directors; or
o by a shareholder who was a shareholder of record both at the time of
giving of notice and at the time of the annual meeting, who is entitled
to vote at the meeting and who has complied with the advance notice
procedures of the bylaws.
With respect to special meetings of shareholders, only the business
specified in our notice of the meeting may be brought before the meeting.
Nominations of individuals for election to the board of directors at a special
meeting may only be made:
o pursuant to our notice of the meeting;
o by or at the direction of the board of directors; or
o provided that the board of directors has determined that directors will
be elected at the meeting, by a shareholder who is a shareholder of
record both at the time of giving of notice and at the time of the
special meeting and who is entitled to vote at the meeting and has
complied with the advance notice provisions of the bylaws.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No.
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3.1 Charter of Capital Trust, Filed as Exhibit 3.1 to
Inc. Registration Statement on Form
S-3 (File No. 333-103662) filed
on March 7, 2003 and
incorporated herein by reference
3.2 Amended and Restated Filed as Exhibit 3.2 to Current
Bylaws of Capital Trust, Report on Form 8-K (File No.
Inc., as amended 001-14788) filed on January 29,
1999 and incorporated herein by
reference
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL TRUST, INC.
By:/s/ John R. Klopp
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Name: John R. Klopp
Title: Chief Executive Officer
Date: July 9, 2003