ASHFORD HOSPITALITY TRUST,INC. (NYSE:AHT) Files An 8-K Material Modification to Rights of Security HoldersItem 3.03.Material Modification to Rights of Security Holders.
On November8, 2017, Ashford Hospitality Trust,Inc., a Maryland corporation (the “Company”) agreed to issue 5,400,000 shares of the Company’s newly created 7.50% SeriesI Cumulative Preferred Stock (the “SeriesI Preferred Stock”) and all or any part of the 810,000 shares of SeriesI Preferred Stock subject to the Over-Allotment Option (as defined below) of the Underwriters (as defined below). As set forth in Articles Supplementary Establishing and Fixing the Rights and Preferences of a Seriesof Preferred Stock (the “Articles Supplementary”), filed with the Maryland State Department of Assessments and Taxation on November14, 2017, the SeriesI Preferred Stock ranks: (i)senior to all classes or series of the Company’s common stock and future junior securities; (ii)on a parity with each series of the Company’s outstanding preferred stock (the 8.45% SeriesD Cumulative Preferred Stock (the “SeriesD Preferred Stock”), 7.375% SeriesF Cumulative Preferred Stock, 7.375% SeriesG Cumulative Preferred Stock and the 7.50% SeriesH Cumulative Preferred Stock), and with any future parity securities and (iii)junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.
The Company will pay cumulative dividends on the SeriesI Preferred Stock in the amount of $1.875 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of SeriesI Preferred Stock. Dividends on the SeriesI Preferred Stock are payable quarterly in arrears on the 15th day of January, April, Julyand Octoberof each year (or, if not on a business day, on the next succeeding business day). The first dividend on the SeriesI Preferred Stock sold in this offering will be paid on January16, 2018 and will be in the amount of $0.229167 per share.
On and after November17, 2022, the Company may, at its option, redeem the SeriesI Preferred Stock, in whole or in part, by paying $25.00 per share, plus all accrued and unpaid dividends to, but not including, the date of redemption. Except with respect to the special optional redemption described below, and in certain limited circumstances relating to the ownership limitation necessary to preserve the Company’s qualification as a REIT, the SeriesI Preferred Stock will not be redeemable prior to November17, 2022. Upon the occurrence of a Change of Control (as defined below), the Company may, at its option, redeem the SeriesI Preferred Stock, in whole or in part within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per share, plus any accrued and unpaid dividends to, but not including, the date of redemption. If, prior to the Change of Control Conversion Date (as defined below), the Company has provided or provides notice of redemption with respect to the SeriesI Preferred Stock (whether to the Company’s optional redemption right or the Company’s special optional redemption right), the holders of SeriesI Preferred Stock will not have the conversion right described below.
A “Change of Control” is when, after the original issuance of the SeriesI Preferred Stock, the following have occurred and are continuing:
subject, in each case, to provisions for the receipt of alternative consideration.
If, prior to the Change of Control Conversion Date, the Company has provided or provides notice of redemption with respect to the SeriesI Preferred Stock, whether to the Company’s optional redemption right or the Company’s special optional redemption right, the holders of SeriesI Preferred Stock will not have any right to convert the SeriesI Preferred Stock in connection with the Change of Control Conversion Right (as defined below), and any shares of SeriesI Preferred Stock subsequently selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date. Except as provided above in connection with a Change of Control, the SeriesI Preferred Stock is not convertible into or exchangeable for any other securities or property.
The “Change of Control Conversion Right” is the right of each holder of SeriesI Preferred Stock to convert some or all of the SeriesI Preferred Stock held by such holder upon the occurrence of a Change of Control.
The “Change of Control Conversion Date” is the date the SeriesI Preferred Stock is to be converted, which will be a business day that is no fewer than 20 days nor more than 35 days after the date on which the Company provides the notice described above to the holders of SeriesI Preferred Stock.
The “Common Stock Price” will be: (i)the amount of cash consideration per share of the Company’s common stock, if the consideration to be received in the Change of Control by the holders of the Company’s common stock is solely cash; or (ii)the average of the closing prices for the Company’s common stock on the NYSE for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of the Company’s common stock is other than solely cash.
The description of the SeriesI Preferred Stock in this report does not purport to be complete and is qualified in its entirety by reference to the full text of the Articles Supplementary, which is filed as Exhibit3.1 hereto and is incorporated herein by reference.
Item 5.03.Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On November13, 2017, the Company executed the Articles Supplementary for the purpose of establishing the terms of the SeriesI Preferred Stock and classifying and designating 6,210,000 shares of authorized, but unissued, preferred stock as SeriesI Preferred Stock. The information about the Articles Supplementary contained under Item 3.03 of this Current Report on Form8-K, including the summary description of the rights and preferences of the SeriesI Preferred Stock, is incorporated into this Item 5.03 by reference.
The description of the Articles Supplementary contained in this Item 5.03 is qualified in its entirety by reference to the full text of the Articles Supplementary, which is filed as Exhibit3.1 hereto and is incorporated by reference herein.
