INVESTORS REAL ESTATE TRUST (NYSE:IRET) Files An 8-K Material Modification to Rights of Security HoldersItem 3.03. Material Modifications to Rights of Security Holders.
On September28, 2017,Investors Real Estate Trust (the “Company”) adopted Articles Supplementary (the “Articles Supplementary”) to the Company’s Articles of Amendment and Third Restated Declaration of Trust, as amended and supplemented, classifying and designating 8,000,000 of the Company’s authorized shares of beneficial interest, no par value per share, as 6.625% SeriesC Cumulative Redeemable Preferred Shares (Liquidation Preference $25.00 Per Share), no par value per share (“SeriesC Preferred Shares”). A summary of the material terms of the SeriesC Preferred Shares is set forth under the caption “Description of the SeriesC Preferred Shares” in the Company’s prospectus supplement, dated September26, 2017 and filed with the Securities and Exchange Commission (the “SEC”) on September26, 2017 (the “Prospectus Supplement”). The summary of the SeriesC Preferred Shares in the Prospectus Supplement and the following description of the SeriesC Preferred Shares are qualified in their entirety by reference to the Articles Supplementary, which are hereby incorporated by reference into this Item 3.03 and which were filed as Exhibit3.2 to the Company’s Registration Statement on Form8-A, filed with the SEC on September28, 2017.
The Company adopted the Articles Supplementary in connection with its previously announced underwritten public offering of SeriesC Preferred Shares, as further described below.
The SeriesC Preferred Shares rank senior to the Company’s common shares of beneficial interest, no par value per share (“Common Shares”), with respect to distribution rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. The SeriesC Preferred Shares rank on a parity with the Company’s 7.95% SeriesB Cumulative Redeemable Preferred Shares of Beneficial Interest, no par value per share (the “SeriesB Preferred Shares”), with respect to distribution rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company.
In addition to other preferential rights, each holder of SeriesC Preferred Shares is entitled to receive a liquidation preference, which is equal to $25.00 per SeriesC Preferred Share, plus any accrued and unpaid distributions to, but not including, the date of the payment, before the holders of Common Shares, in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company. Furthermore, the Company is restricted from declaring or paying any distributions, or setting aside any funds for the payment of distributions, on the Common Shares or SeriesB Preferred Shares or, subject to certain exceptions, redeeming or otherwise acquiring Common Shares or SeriesB Preferred Shares, as applicable, unless full cumulative distributions on the SeriesC Preferred Shares have been declared and either paid or set aside for payment in full for all past distribution periods.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information about the Articles Supplementary set forth under Item 3.03 of this Current Report on Form8-K is hereby incorporated by reference into this Item 5.03.
IRET,Inc. (the “General Partner”), as the general partner of IRET Properties, A North Dakota Limited Partnership (the “Operating Partnership”), has amended the Agreement of Limited Partnership of the Operating Partnership (the “Partnership Agreement”) to provide for the issuance of up to 8,000,000 6.625% SeriesC Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) (the “SeriesC Preferred Units”). Such amendment is filed as Exhibit3.2 to this Current Report on Form8-K and incorporated by reference herein. The Company expects to contribute the net proceeds from the sale of the SeriesC Preferred Shares in the Preferred Shares Offering (as defined below) to the Operating Partnership in exchange for a like number of SeriesC Preferred Units. The SeriesC Preferred Units have economic terms that mirror the terms of the SeriesC Preferred Shares. The issuance of the SeriesC Preferred Units will be exempt from registration to Section4(a)(2)of the Securities Act of 1933, as amended.
The SeriesC Preferred Units will rank, as to distributions and upon liquidation, senior to the Partnership Units and on a parity with the Operating Partnership’s 7.95% SeriesB Cumulative Redeemable Preferred Units and other parity units the Operating Partnership may issue in the future.
