UNITED
STATES
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) December 16,
2005
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Capital
Automotive REIT
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(Exact
name of registrant as specified in its
charter)
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Maryland
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000-23733
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54-1870224
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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8270
Greensboro Dr., Suite 950, McLean, Virginia
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22102
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (703)
288-3075
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(Former
name or former address, if changed since last
report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Introductory
Note
On
December 16, 2005 (the “Closing”
or the
“Closing
Date”),
Capital Automotive REIT, a Maryland real estate investment trust (the
“Company”),
completed the mergers pursuant to the Agreement and Plan of Merger, dated
as of
September 2, 2005 (the “Merger
Agreement”),
among
the Company, Capital Automotive L.P. (the “Partnership”),
Flag
Fund V LLC, a Delaware limited liability company (“Parent”)
and
affiliate of certain funds advised by DRA Advisors LLC (“DRA”),
CA
Acquisition REIT, a Maryland real estate investment trust (“Merger
Sub”),
and
CALP Merger LP, a Delaware limited partnership (“Merger
Partnership”).
Pursuant to the terms of the Merger Agreement, Parent acquired the Company
and
its subsidiaries through the mergers of Merger Sub with and into the Company
with the Company continuing as the surviving REIT (the “REIT
Merger”),
and
Merger Partnership with and into the Partnership with the Partnership continuing
as the surviving partnership (the “Partnership
Merger,”
and
together with the REIT Merger, the “Mergers”).
Under
the terms of the Merger Agreement, holders of each issued and outstanding
common
share of beneficial interest of the Company, par value $0.01 per share (each
such share, a “Company
Common Share”),
received $38.75 in cash, without interest, for each Company Common Share
held.
In addition, holders of each issued and outstanding common unit of limited
partnership interest in the Partnership (each such unit, an “OP
Unit”),
at
their election, either (i) received $38.75 in cash, without interest, for
each
OP Unit held, or (ii) exchanged all or a portion of such holder’s existing OP
Units for membership interests in OP LP LLC, a Delaware limited liability
company and affiliate of Parent, which owns as its sole asset, as of the
consummation of the Partnership Merger, OP Units of the Partnership.
The
issued and outstanding 7.5% Series A Cumulative Redeemable Preferred
Shares, par value $0.01 per share, and 8% Series B Cumulative Redeemable
Preferred Shares, par value $0.01 per share, of the Company (collectively,
the
“Preferred
Shares”)
remain
issued and outstanding as Preferred Shares of the Company as the surviving
REIT.
The Company will continue to pay the required quarterly dividends on the
Preferred Shares. The Company may delist all of the Preferred Shares from
the
Nasdaq National Market following the Closing and does not plan to seek to
list
the Preferred Shares on another trading market.
The
Company has proposed to consummate a forward merger on or about December
30,
2005 in which the Company will be merged into a Delaware limited liability
company. In such restructuring, all of the Company’s outstanding Preferred
Shares will be converted into Series A and Series B preferred units of the
new
Delaware limited liability company with their rights, preferences, restrictions,
qualifications, limitations, terms and conditions materially
unchanged.
Following
the restructuring of the Company into a Delaware limited liability company,
in
early January 2006, the Company’s successor expects to commence a cash tender
offer for any and all of its then outstanding Series A and Series B preferred
units at a price of $25.00 per unit.
Item
1.01 Entry into a Material Definitive Agreement.
1.
Senior
Secured Credit Facility
Overview
On
the
Closing Date, in connection with the consummation of the Mergers, Merger
Sub and
Merger Partnership entered into a senior secured credit agreement with Lehman
Commercial Paper Inc., as administrative agent, Lehman Brothers Inc., as
arranger, and Banc of America Securities LLC, JPMorgan Chase Bank, N.A.,
Wachovia Bank, National Association and Wells Fargo Bank, National Association,
as co-syndication agents. Upon the effectiveness of the Mergers, by operation
of
law and as contemplated in the senior secured credit agreement, the Company
and
the Partnership succeeded to the rights and obligations, respectively, of
Merger
Sub and Merger Partnership under the senior secured credit
agreement.
The
Partnership is the borrower under the senior secured credit agreement and
the
credit facilities provided thereunder.
The
senior secured credit agreement provides for committed senior secured credit
facilities totaling $2.2 billion (“Committed
Facilities”)
consisting of:
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a
$1.950 billion five year term loan facility
and
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a
$250 million four year revolving credit
facility.
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The
full
amount of these Committed Facilities was available upon Closing. The full
amount
of the committed term loan facility was funded on the Closing Date. The proceeds
of such term loans were used to finance the Mergers, repay certain outstanding
borrowed indebtedness of the Company and the Partnership and pay certain
of the
costs and expenses of the Mergers and of the credit facilities contemplated
by
the senior secured credit agreement.
In
addition to these Committed Facilities, the senior secured credit agreement
provides for a currently uncommitted incremental term loan facility in an
amount
not to exceed $350 million. Such additional term loans are not presently
committed but may be made in the future when and if requested by the Partnership
upon the agreement of one or more financial institutions (either members
of the
existing lending syndicate or new lenders) to make such additional term
loans.
The
revolving credit facility includes a $25 million letter of credit subfacility
for the issuance of standby letters of credit and a $50 million subfacility
for
revolving credit loans to be made on same-day notice referred to as the
“swingline” facility. As of the Closing Date, no amounts were drawn under the
credit facility.
Interest
Rate and Fees
Borrowings
under both the term loan facilities and the revolving credit facility bear
interest at rates equal to an applicable margin plus a base rate consisting
of
(at the election and option of the Partnership) either (a) a LIBOR rate
determined by reference to the costs of funds for deposits in dollars for
the
interest period relevant to such borrowing (which may be a one month, two
month,
three month or six month period) adjusted for certain reserve requirements
established by the Federal Reserve or (b) the greater of (i) the prime rate
reported by the British Banking Association Telerate or (ii) the federal
funds
rate plus ½ of 1%. The initial applicable margin for borrowings accruing
interest at a rate based on LIBOR is 1.75% and for borrowings accruing interest
based on the prime rate/federal funds rate is 0.75%. These applicable margins
may be increased (up to a maximum of 2.00% for LIBOR-based borrowings and
1.00%
for prime rate/federal funds rate borrowings) or decreased (down to a minimum
of
1.50% for LIBOR-based borrowings and 0.50% for prime rate/federal funds rate
borrowings) depending on the total leverage ratio of the Company, the
Partnership and their consolidated subsidiaries and businesses from time
to
time. The first adjustment to the applicable margin will occur after the
end of
the second fiscal quarter of the Partnership in 2006.
Other
Significant Provisions
There
is
no required amortization of either the term loan facility or the revolving
credit facility prior to their respective maturities, at which time payment
in
full will be due and payable. The term loan facility will mature on the fifth
anniversary of the Closing Date and the revolving credit facility will mature
on
the fourth anniversary of the Closing Date.
The
senior secured credit agreement requires the Company to make mandatory
prepayments of the loans under certain circumstances and allows the Company
to
make voluntary prepayments, in each case, subject to the payment of certain
premiums during the first three years after the Closing Date, subject to
certain
exceptions, and the payment of breakage costs.
All
obligations of the Partnership as the borrower under the senior secured credit
agreement are fully and unconditionally guaranteed by the Company and the
Partnership’s and Company’s wholly-owned subsidiaries, subject to certain
exceptions. All of the obligations of the Partnership, the Company and their
respective guarantor subsidiaries under the senior secured credit agreement
are
and will be secured by substantially all of their now owned or hereafter
acquired assets, subject to certain exceptions.
The
senior secured credit agreement contains a number of affirmative and negative
covenants and events of default customary for transactions of this
nature.
2.
Series
C Preferred
Limited Partnership Units
General
On
the
Closing Date, in connection with the Mergers, the Partnership issued and
sold
1.5 million preferred limited partnership units in the Partnership (the
“Series
C Preferred Units”)
to an
assignee (the “Purchaser”)
of The
Prudential Insurance Company of America (“Prudential”)
pursuant to a Purchase Agreement among the Company, the Partnership and
Prudential (the “Purchase
Agreement”).
The
Purchaser paid $150 million as consideration for such Series C Preferred
Units.
In addition, if any preferred equity of the Partnership that was existing
immediately before the Closing (“Existing
PE”)
and
was not retired at Closing is retired or repurchased by the Partnership at
any
time prior to April 30, 2006, then upon not less than thirty (30) calendar
days’
written notice to the holders of the Series C Preferred Units, such holders
will
purchase additional Series C Preferred Units sufficient to replace such retired
or repurchased Existing PE up to an aggregate amount invested in Series C
Preferred Units of $315 million.
Cumulative
Preferred Return
The
Series C Preferred Units issued at Closing and any Series C Preferred Units
issued after Closing up until March 31, 2006 will accrue a cumulative preferred
return at an annual rate (compounded monthly) equal to (i) 7.0% for the period
from the date that any such Series C Preferred Units were purchased until
the
first (1st)
anniversary of such date, (ii) 7.5% for the period from the first (1st)
anniversary of the date that such Series C Preferred Units were purchased
until
the fifth (5th)
anniversary of the Closing, (iii) 8.5% for the period from the fifth
(5th)
anniversary of the Closing until the seventh (7th)
anniversary of the Closing, and (iv) from and after the seventh (7th)
anniversary of the Closing the greater of (x) 12% and (y) the then yield
on
10-year U.S. Treasury securities plus 6.5%. In addition to the foregoing,
on the
first (1st)
anniversary of the date that any such Series C Preferred Units were purchased,
the Partnership will pay to the Series C Preferred Unit holders a fee in
an
amount that, when added to the preferred return otherwise accruing on such
Series C Preferred Units, would be sufficient to provide the Series C Preferred
Unit holders with an aggregate return of 7.5% per annum, compounded monthly,
for
the period from the date that such Series C Preferred Units were purchased
until
the first (1st)
anniversary of such date. The Series C Preferred Units purchased after March
31,
2006 up until April 30, 2006 in connection with the retirement or redemption
of
Existing PE will earn a preferred return determined in accordance with the
procedures for determination of the preferred return accruing on Additional
Units, as defined and described in the next paragraph immediately
below.
Additional
Issuance of Preferred Limited Partnership Interests
If
the
Partnership (a) retires any Existing PE after April 30, 2006, or (b) from
time
to time wishes to directly or indirectly acquire an asset and the amount
of
fixed and variable rate debt of the Company, whether secured or unsecured
(excluding trade payables and short term trade debt in immaterial amounts
incurred in the ordinary course of business) (“Debt”)
that
would be required for it to acquire such asset would cause such Debt to exceed
65% of the purchase price for such asset, then the Series C Preferred Unit
holders shall have the option, but not the obligation, to purchase additional
Series C Preferred Units (“Additional
Units”),
the
proceeds of which would be applied toward the purchase price of such Existing
PE
or asset, in such amount as would cause the
aggregate amount of Debt and preferred equity incurred or issued by the
Partnership in connection with any asset acquisition (including all Additional
Units to be issued in connection with such acquisition)
to not
exceed 75% of the purchase price for such asset. Additional Units will earn
a
preferred return equal to (i) during the period commencing on the date such
Additional Units are purchased until the fifth (5th)
anniversary of the Closing, an annual rate (compounded monthly) equal to
the
greater of (x) 3.10% over the yield on 10-year U.S. Treasury securities as
of
the date that is five (5) business days prior to the date that such Additional
Units are purchased and (y) 7.5%, (ii) during the period from and after the
fifth (5th)
anniversary of the Closing until the seventh (7th)
anniversary of the Closing, an annual rate equal to the preferred return
rate
accruing on such Additional Units immediately prior to the fifth (5th)
anniversary of the Closing plus
1.0%,
and (iii) from and after the seventh (7th)
anniversary of the Closing, an annual rate (compounded and adjusted monthly)
equal to the greater of (x) 12% and (y) the yield on 10-year U.S. Treasury
securities plus 6.5%. All Additional Units will be otherwise treated the
same as
the Series C Preferred Units issued at the Closing.
Monetary
Defaults by the Partnership
or any of its Subsidiaries
In
addition to the foregoing, upon the occurrence of any monetary default by
the
Partnership (or its subsidiary) in connection with any Debt and/or contractual
arrangement entered into by the Partnership (or its subsidiary) which is
not
cured within the applicable cure period (if any) under such contractual
arrangement, which default may result in the loss of any assets of the
Partnership (by foreclosure or otherwise) or have any other material adverse
effect on the Partnership or its business operations, the Series C Preferred
Unit holders may cure such defaults, and all sums expended by the Series
C
Preferred Unit holders in connection with such cure will be treated as capital
contributions to the Partnership (“Default
Contributions”).
All
Default Contributions made by the Series C Preferred Unit holders will accrue
a
cumulative preferred return (compounded monthly) at an annual rate equal
to the
greater of (x) 12% and (y) 5% over the Prime Rate published in The Wall Street
Journal.
Series
C Preferred Manager
A
single
Series C Preferred Unit holder (the “Series
C Manager”)
will
be authorized to make certain decisions and take certain actions on behalf
of
the other Series C Preferred Unit Holders, including the right to approve
certain major decisions of the Partnership and assume management and dispose
of
the assets of the Partnership upon the occurrence of certain events.
Covenants
The
amendment to the Partnership’s limited partnership agreement setting forth the
rights and preferences of the Series C Preferred Units contains
provisions:
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limiting
and/or requiring redemptions of the Series C Preferred Units;
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limiting
transfers of interests in the
Partnership;
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for
the transfer of management of the Partnership to the Series C Manager
upon
the occurrence of certain events;
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for
the Series C Manager to force the sale of the Partnership’s assets upon
the occurrence of certain events;
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limiting
the Partnership’s ability to incur debt;
and
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limiting
the Partnership’s ability to make distributions to its common equity
holders.
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Subordination
The
Series C Preferred Unit holders have subordinated their right to distributions
and proceeds of any assets of the Partnership to the rights of the holders
of
certain senior Debt of the Partnership pursuant to a Subordination Agreement
among the Company, the Partnership, the Purchaser and Lehman Commercial Paper
Inc.
3.
Amendments
to Partnership Agreement
Pursuant
to the Merger Agreement, the Partnership Agreement was amended by a Seventh
Amendment thereto to account for the issuance of (i) a number of common units
of
limited partnership interest of the Partnership (“Common
Units”)
to
Thomas D. Eckert, David S. Kay, John M. Weaver and Jay Ferriero, as more
fully
described in Section 5 herein, (ii) an aggregate of 1,000 performance units
to
Messrs. Eckert, Kay, Weaver and Ferriero, (iii) a number of Common Units
and
preferred units of limited partnership interest of the Partnership to the
Company, as more fully described in Section 5 herein, and (iv) Common Units
to
OP LP LLC, as more fully described in Section 5 herein. Messrs. Eckert, Kay,
Weaver and Ferriero paid an aggregate of $3,000,000 for their Common Units
($38.75 per Common Unit). Upon certain conditions, the holders of the
performance units of the Partnership will be entitled to receive a preferred
return of 10% after the other holders of Common Units have received their
contribution plus an IRR (as defined in the Seventh Amendment to the Partnership
Agreement) of 17% and a preferred return of 20% after the other holders of
Common Units have received their contribution plus an IRR of 19%. Such rights
of
these holders of performance units are subject to certain tag-along rights
and
rights of first refusal.
Pursuant
to the Purchase Agreement and the terms and conditions of the Eighth Amendment
to the Partnership Agreement, PREI will be admitted as a limited partner
to the
Partnership and has the option, but not the obligation to acquire Additional
PE.
4.
Employment
Agreements
In
connection with the Merger Agreement, the Partnership and Thomas D. Eckert,
David S. Kay, John M. Weaver, Jay M. Ferriero and Lisa M. Clements (each,
an
“Executive”)
have
entered into employment agreements with the Partnership providing terms of
employment with the Partnership for the three-year period (and in the case
of
Ms. Clements for the one-year period) following the Closing Date. The employment
agreements with Messrs. Eckert, Kay, Weaver, Ferriero, and
Ms. Clements provide for initial base salaries of $640,000, $412,000,
$276,000, $412,000 and $230,000, respectively, and the opportunity for each
Executive to earn annual bonus compensation based upon certain performance
criteria set forth in each Executive’s employment agreement of up to an annual
target amount of $660,000, $360,000, $300,000, $390,000 and $180,000,
respectively. Each of the Executives will also receive a long term incentive
award payable in the case of Messrs. Eckert, Kay, Weaver and Ferriero
in
equal quarterly installments (based on a maximum of 12 installments)
on the
last day of each quarter in which they are employed by the Partnership pursuant
to their new three-year employment agreements and in the case of
Ms. Clements in equal quarterly installments (based on a maximum of
4 installments) on the last day of each quarter in which she is employed
by
the Partnership pursuant to her new one-year employment agreement. These
long
term incentive awards are intended to substitute for the equity component
of the
Executives’ compensation under their prior employment agreements with the
Company. The maximum aggregate amount of the long term incentive award payable
to each of Messrs. Eckert, Kay, Weaver and Ferriero and Ms. Clements
under
his or her new employment agreement (assuming he or she remains employed
by the
Partnership for the full term of his or her employment agreement) is $5,760,000,
$2,520,000, $2,160,000, $2,880,000 and $300,000, respectively.
The
Executives’ employment agreements contain terms substantially similar to those
of their prior employment agreements with respect to, among other things,
the
termination rights of the Partnership and the Executives, health benefits,
confidentiality obligations as well as non-competition and non-solicitation
restrictions on the Executives during their employment and for a two-year
period
after termination of employment.
On
January 1, 2006, the Executives’ employment agreements will be assigned by the
Partnership to CARS Real Estate Investment Services Inc., a Delaware corporation
and wholly-owned subsidiary of the Partnership (the “Manager”),
on
substantially similar terms. The Manager was formed to manage the affairs
of the
Company and its subsidiaries and has the authority to act, under the direction
of the Company’s board of trustees (currently the same trustees as those of the
Company) and through its duly appointed officers (Thomas D. Eckert, President
and Chief Executive Officer, David S. Kay, Senior Vice President, Chief
Financial Officer and Treasurer, John M. Weaver, Senior Vice President,
Secretary & General Counsel, Jay M. Ferriero, Senior Vice President and
Director of Acquisitions, and Lisa M. Clements, Vice President and Chief
Accounting Officer), on behalf of the Company itself, on behalf of the Company
as general partner of the Partnership and on behalf of any corporate subsidiary
of the Company.
5.
6.75%
Monthly Income Notes
On
April
15, 2004, the Company issued $125 million aggregate principal amount of its
6.75% monthly income notes pursuant to that certain First Supplemental Trust
Indenture dated April 15, 2005 between the Company and Wells Fargo Bank,
National Association. On November 2, 2005, the Company commenced a tender
offer
and consent solicitation in which it solicited the tender of all such monthly
income notes and the waiver of certain covenants contained in such notes.
The
tender offer, following extensions, terminated on the Closing Date. $120,921,575
aggregate principal amount of its 6.75% monthly income notes were tendered
as of
the Closing Date with $4,078,425 aggregate principal amount of notes remaining
outstanding.
On
the
Closing Date, the Fifth Supplemental Indenture entered into among the Company,
the Partnership and Wells Fargo Bank, National Association, dated as of December
9, 2005 became effective. The supplemental indenture amends the indenture
under
which the notes were issued to eliminate substantially all of the restrictive
covenants relating to the notes. These amendments are binding on all
non-tendering holders and affect the notes that remain outstanding.
6.
6%
Convertible Notes
On
May
12, 2004, the Company issued $110 million aggregate principal amount of its
6%
convertible notes due May 15, 2024 pursuant to that certain Second Supplemental
Trust Indenture dated May 12, 2004 between the Company and Wells Fargo Bank,
National Association.
On
the
Closing Date, the Company, the Partnership and Wells Fargo Bank, National
Association entered into a Sixth Supplemental Indenture confirming certain
rights of the holders of the notes upon conversion of the notes following
the
Mergers.
Item
1.02 Termination of a Material Definitive Agreement.
1.
Employment
Agreements
The
employment agreements existing at the time of the Mergers between the
Partnership and each of the Executives have been terminated and replaced
by the
employment agreements between the Partnership and each of the Executives,
as
more fully described in Item 1.01 above.
2.
Revolving
Credit and Term Loan Agreement
On
August
20, 2004 and as amended on May 10, 2005, the Company and the Partnership
entered
into a certain revolving credit and term loan agreement with JPMorgan Chase
Bank
(“JPM”)
under
which JPM provided (i) a term loan facility in an aggregate of $150 million,
(ii) a revolving credit facility in an initial aggregate amount of up to
$250
million with the option to increase the aggregate amount to $350 million,
(iii)
letters of credit, (iv) swing loans and (v) competitive borrowings ((i) -
(v)
collectively, the “JPM
Loan”).
In
connection with the Mergers and pursuant to notice given to JPM, the Company
paid all amounts outstanding under the JPM Loan as of the Closing
Date.
3.
5.46%
Guaranteed Senior Notes
On
February 24, 2005, the Company and the Partnership entered into a note purchase
agreement with certain purchasers under which the Company issued $175 million
aggregate principal amount of its 5.46% guaranteed senior notes. In connection
with the Mergers and pursuant to a consent and waiver of notice received
from
each purchaser, the Company prepaid all amounts due under the 5.46% guaranteed
senior notes, including a make-whole premium.
4.
Equity
Incentive Plans
By
operation of the REIT Merger, the Company’s Second Amended and Restated 1998
Equity Incentive Plan (the “Company
Share Option Plan”)
and
Company’s
Phantom Share Purchase Program
(“Phantom
Plan”)
terminated pursuant
to the terms of the Merger Agreement.
The
Company Share Option Plan provided options (“Company
Share Options”)
to
purchase Company Common Shares, direct grants or sales of Company Common
Shares,
restricted shares (“Restricted
Shares”)
or
phantom shares (“Phantom
Shares”)
to
eligible Trustees, employees and consultants.
Pursuant
to the terms of the Merger Agreement
and in
connection with the REIT Merger, each Company Share Option, whether
or not then vested or exercisable and regardless of the exercise price or
purchase price, as the case may be, thereof, was cancelled in exchange for
the
holder’s right to receive
a single
lump sum cash payment from
the
Company equal
to
the product of (x) the number
of
Company Common Shares subject to such Company Share Option immediately prior
to
cancellation, whether or not vested or exercisable, and (y) the excess, if
any,
of $38.75
over
the
exercise price or purchase price per share of such Company Share Option.
If the
exercise price or purchase price per share of any such Company Share Option
was
equal to or greater than $38.75,
such
Company Share Option was cancelled without any cash payment being made in
respect thereof.
Pursuant
to the terms of the Merger Agreement, each Restricted Share, Phantom Share
and
Restricted Share deferred under a Restricted Share Deferral Agreement
(“Deferred
Restricted Shares”)
was
also made fully vested, non-forfeitable and payable to each participant in
full,
and all Company Common Shares which the Company had the option of issuing
in
settlement of the Phantom Shares was considered outstanding for all purposes
of
the REIT Merger, including the
right
to receive an amount in cash equal to $38.75 per common share of beneficial
interest, par value $0.01 per share.
5.
Deferred
Compensation and Stock Plan for Trustees
By
operation of the REIT Merger,
the
Company’s Deferred Compensation and Stock Plan for Trustees (the “Trustees
Deferred Compensation Plan”)
terminated pursuant to the terms of the Merger Agreement.
Pursuant
to the terms of the Merger Agreement and in connection with the REIT Merger,
each phantom share (the “Fee
Shares”)
under
the Trustees Deferred Compensation Plan was made fully vested, non-forfeitable
and payable to each participant in full, and all Company Common Shares which
the
Company had the option of issuing in settlement of the Fee Shares was considered
outstanding for all purposes of Merger, including the
right
to receive an amount in cash equal to $38.75 per common share of beneficial
interest, par value $0.01 per share.
Item
2.01 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
description of the senior secured credit agreement described in Item 1.01.
“1.
Senior Secured Credit Facility” is incorporated herein by
reference.
Item
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In
connection with the Closing, the Company notified The NASDAQ Stock Market
on the
Closing Date that each Company Common Share (other than those owned by Parent)
was canceled and automatically converted into the right to receive $38.75
in
cash, without interest, and requested that the Company Common Shares be removed
from quotation on the Nasdaq National Market.
Item
3.03 Material Modification to the Rights of Security Holders.
The
description of the supplemental indentures described in Item 1.01. “5. 5.75%
Monthly Income Notes” and “6. 6% Convertible Notes” is incorporated herein by
reference.
Item
5.01 Changes in Control of Registrant.
On
the
Closing Date, pursuant to the terms of the Merger Agreement, Parent completed
the acquisition of the Company and the Partnership through the REIT Merger
and
Partnership Merger. The Company and the Partnership were the surviving entities
in the Mergers. As a result of the REIT Merger, the Company’s voting shares are
100% owned by Parent. Parent is owned indirectly by funds advised by DRA.
As a
result of the Partnership Merger, the Partnership’s voting units are owned by
each of the Company (approximately 83% of the OP Units), OP LP LLC
(approximately 17% of the OP Units), and Messrs. Eckert, Kay, Weaver and
Ferriero (in the aggregate, less than 1% of the OP Units).
The
aggregate purchase price paid for all of the Company Common Shares, Company
Share Options, Restricted Shares, Phantom Shares, Deferred Restricted Shares
and
OP Units exchanged for cash in the Mergers was approximately $2,013,272,331
billion.
There was also an additional approximately $103,788,000 million
in related fees and expenses paid in connection with the Mergers and the
financing arrangements described in Item 1.01 above. The aggregate purchase
price and related fees and expenses were funded by the new credit facilities
described in Item 1.01 above, as well as by equity financing from affiliated
funds advised by DRA.
A
copy of
the press release issued by the Company on the Closing Date announcing the
completed acquisition by DRA of the Company is attached as an exhibit hereto
and
is incorporated herein by reference.
Item
5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Trustees/Directors
In
connection with the Mergers, each of Thomas D. Eckert, Craig L. Fuller, Paul
M.
Higbee, William E. Hoglund, David B. Kay, R. Michael McCullough, John J.
Pohanka, Robert M. Rosenthal, and Vincent A. Sheehy voluntarily resigned
from
the board of trustees of the Company and as a member of any governing body
of
all subsidiaries of the Company on the Closing Date. In addition, each of
John
M. Weaver and Thomas D. Eckert voluntarily resigned from the board of directors
of each of the corporate subsidiaries of the Company.
Following
such resignations, the following persons were elected to the Company’s board of
trustees: Francis X. Tansey, President and Chief Executive Officer of DRA,
David
Luski, Vice President and Chief Operating Officer of DRA, Paul McEvoy, Senior
Managing Director of DRA, Andrew E. Peltz, a Managing Director of DRA, Brian
Summers, a Managing Director of DRA, and Jean Marie Apruzzese, a Managing
Director of DRA. In addition, the same such six individuals were elected
as
directors to the boards of directors of each of the corporate subsidiaries
of
the Company.
Principal
Officers
In
connection with the Mergers, the following principal officers resigned effective
as of the Closing Date: (i) Thomas D. Eckert resigned as President and Chief
Executive Officer of the Company, (ii) John M. Weaver resigned as Senior
Vice
President, General Counsel and Secretary, (iii) David S. Kay resigned as
Senior
Vice President, Chief Financial Officer and Treasurer, (iv) Jay Ferriero
resigned as Senior Vice President and Director of Acquisitions, and (v) Lisa
M.
Clements resigned as Vice President and Chief Accounting Officer. In addition,
each such individual resigned from all other offices he or she held with
any of
the subsidiaries of the Company.
Following
such resignations, six new officers were appointed as principal officers
of the
Company and any subsidiaries of the Company which employed officers in the
following capacities: Francis X. Tansey, President; David Luski, Executive
Vice
President and Secretary; Paul McEvoy, Senior Vice President and Assistant
Secretary; Andrew E. Peltz, Vice President and Assistant Secretary; Brian
Summers, Vice President and Treasurer; and Jean Marie Apruzzese, Vice President
and Assistant Secretary.
Item
5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On
the
Closing Date and immediately following the closing of the Mergers, the bylaws
of
the Company were amended to reduce the minimum number of members of the board
of
trustees from seven to six.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits
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99.1
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Press
Release, dated December 16, 2005, of Capital Automotive REIT announcing
the completed acquisition by DRA Advisors LLC of Capital Automotive
REIT.
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SIGNATURE
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.
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CAPITAL
AUTOMOTIVE REIT
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Date:
December 22, 2005
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By:
/s/ Paul
McEvoy
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Name:
Paul McEvoy
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Title:
Senior Vice President
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EXHIBIT
INDEX
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Exhibit No.
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Description
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99.1
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Press
Release, dated December 16, 2005, of Capital Automotive REIT announcing
the completed acquisition by DRA Advisors LLC of Capital Automotive
REIT.
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