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): June 1, 2003
Franklin Street Properties Corp.
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(Exact name of registrant as specified in charter)
Maryland 000-32615 04-3578653
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(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification No.)
401 Edgewater Place, Suite 200
Wakefield, MA 01880
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 557-1300
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On June 1, 2003 (the "Effective Date"), Franklin Street Properties Corp.
("FSP Corp."), a Maryland corporation, completed its acquisition of thirteen
real estate investment trusts (collectively, the "Target REITs"), each a
Delaware corporation. The acquisitions were completed pursuant to an Agreement
and Plan of Merger, dated as of January 14, 2003 (the "Merger Agreement"), by
and among FSP Corp. and the Target REITs.
Upon consummation of the transactions contemplated by the Merger
Agreement, each Target REIT was merged with and into FSP Corp., with FSP Corp.
as the surviving corporation. Under the terms of the Merger Agreement each
outstanding share of preferred stock, $0.01 par value per share ("Target
Stock"), of each respective Target REIT, as of the Effective Date, was converted
into that number of shares of FSP Corp. common stock, $0.0001 par value per
share (the "FSP Common Stock"), set forth in the table below. Under the terms of
the Merger Agreement each outstanding share of common stock, $0.01 par value per
share, of each respective Target REIT, as of the Effective Date, was cancelled.
In connection with the Mergers, FSP Corp. reserved for issuance an aggregate of
approximately 25,000,091 shares of FSP Common Stock.
Shares of FSP Common
Stock Issuable in
Exchange for Each Total Shares of FSP
Share of Preferred Common Stock Issuable
Stock of the to Target REIT
Name Target REIT Stockholders
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FSP Forest Park IV Corp. 7,299.59 569,368.02
FSP Gael Apartments Corp. 6,975.59 1,482,312.88
FSP Goldentop Technology
Center Corp. 7,302.58 1,690,547.27
FSP Centennial Technology
Center Corp. 6,905.56 1,091,078.48
FSP Meadow Point Corp. 6,983.25 1,798,186.88
FSP Timberlake Corp. 6,787.12 3,495,366.80
FSP Federal Way Corp. 6,779.66 1,355,932.00
FSP Fair Lakes Corp. 6,805.36 3,266,572.80
FSP Northwest Point Corp. 6,779.66 2,525,423.35
FSP Timberlake East Corp. 6,830.85 1,707,712.50
FSP Merrywood Apartments Corp. 6,854.51 1,412,029.06
FSP Plaza Ridge I Corp. 6,822.03 2,728,812.00
FSP Park Ten Corp. 6,824.54 1,876,748.50
Based upon the capitalization of FSP Corp. as of the Effective Date, the
25,000,091 shares of FSP Common Stock reserved for issuance to Target REIT
stockholders represent approximately 50.3% of the outstanding shares of FSP
Common Stock as of the Effective Date. FSP Common Stock is not publicly traded
on any exchange.
The Mergers are intended to qualify as a tax-free reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
FSP Corp. used authorized but previously unissued shares of FSP Common Stock as
consideration in the Mergers, which FSP expects to treat as a purchase for
accounting purposes.
Prior to the Mergers, each Target REIT held and managed real property. FSP
Corp. intends to continue each Target REIT's business substantially in the
manner conducted by such Target REIT prior to the respective Merger.
The Merger Agreement was approved by the board of directors and
stockholders of FSP Corp. and the board of directors and stockholders of each
Target REIT. A number of conflicts of interest are inherent in the relationships
among the Target REITs, the boards of directors of the Target REITs, FSP Corp.,
FSP Corp.'s board of directors and their respective affiliates. These conflicts
of interest include, among others:
o George J. Carter, the President, Chief Executive Officer and a
director of FSP Corp., is the President and a director of each
Target REIT;
o Barry Silverstein and Dennis J. McGillicuddy, each a director of FSP
Corp., owned an aggregate of 601.25 and 229 shares of Target
Stock, respectively. Such shares of Target Stock converted into
4,130,961.11 and 1,586,343.29 shares of FSP Common Stock,
respectively, upon consummation of the Mergers;
o Richard R. Norris, an Executive Vice President and a director of FSP
Corp., is also a director and an Executive Vice President of each
Target REIT;
o Barbara J. Corinha, Vice President, Chief Operating Officer,
Treasurer, Secretary and a director of FSP Corp. is also Vice
President, Chief Operating Officer, Treasurer, Secretary and a
director of each Target REIT;
o Janet P. Notopoulos, Vice President and a director of FSP Corp., is
also a Vice President of each Target REIT; and
o Each of R. Scott MacPhee and William W. Gribbell, each an Executive
Vice President of FSP Corp., is also each a director and an
Executive Vice President of each Target REIT.
No unaffiliated representatives were appointed to negotiate the terms of the
mergers on behalf of FSP Corp. Moreover, no committee of independent
representatives was established to evaluate and approve the Mergers on behalf of
FSP Corp. Under Maryland law, the board of directors of FSP Corp. cannot
delegate to a third party its fiduciary duties relating to the determination to
approve or not approve the mergers. Because all of the members of the board of
directors of FSP Corp. have significant conflicts of interest and none are,
therefore, considered "independent", the board determined it could not establish
a committee of independent representatives to evaluate and approve the mergers
on behalf of FSP Corp. The board determined that appointing independent
representatives to negotiate the terms of the mergers and to make
recommendations to the board would not be worth the anticipated cost, since the
board would still be obligated to make its own independent determinations.
Mr. Silverstein and Mr. McGillicuddy are the only officers or directors of
FSP Corp. who are not also officers or directors of any Target REIT. The
remainder of the officers and directors of FSP Corp. serve as a director and/or
officer, in the positions listed above, of each Target REIT.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement, which is included as Exhibit 2.1 to this Current Report on
Form 8-K and incorporated herein by reference from the FSP Corp. Current Report
on Form 8-K filed with the Securities and Exchange Commission on January 15,
2003.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for FSP Corp. to provide the financial information
required by this Item 7(a). In accordance with item 7(a)(4) of Form
8-K, such financial
information will be filed by amendment to this Form 8-K no later
than August 15, 2003.
(b) Pro Forma Financial Information.
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for FSP Corp. to provide the financial information
required by this Item 7(b). In accordance with item 7(b)(2) of Form
8-K, such financial information will be filed by amendment to this
Form 8-K no later than August 15, 2003.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of January 14, 2003,
among Franklin Street Properties Corp. and thirteen real
estate investment trusts, incorporated by reference from
Exhibit 2.1 to FSP Corp.'s Form 8-K filed with the Securities
and Exchange Commission on January 15, 2003. (1)
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(1) The exhibits and schedules to the Agreement have been omitted from this
filing pursuant to Item 601(b)(2) of Regulation S-K. FSP Corp. will furnish
copies of any of the exhibits and schedules to the U.S. Securities and Exchange
Commission upon request.
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.
Date: June 2, 2003 FRANKLIN STREET PROPERTIES CORP.
By: /s/ George J. Carter
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George J. Carter
President and Chief Executive
Officer