HOSPITALITY PROPERTIES TRUST (NASDAQ:HPT) Files An 8-K Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
On April 20, 2017, the Companys Board of Trustees, or the Board, by
unanimous vote elected to become subject to Title 3, Subtitle 8 of
the Maryland General Corporation Law, as applicable to real estate
investment trusts organized under Maryland law, so that henceforth
the Board will be classified and approximately one-third of the
Board will be elected at each annual meeting of the Companys
shareholders for three year terms and that members of the Board may
only be removed for cause. Shortly thereafter, Articles
Supplementary to the Companys Amended and Restated Declaration of
Trust were filed with the State Department of Assessments and
Taxation of Maryland to implement these changes. The Articles
Supplementary were effective upon filing. The foregoing description
of the Articles Supplementary is subject to and qualified in its
entirety by reference to the Articles Supplementary, a copy of
which is attached as Exhibit 3.1, and incorporated herein by
reference.
unanimous vote elected to become subject to Title 3, Subtitle 8 of
the Maryland General Corporation Law, as applicable to real estate
investment trusts organized under Maryland law, so that henceforth
the Board will be classified and approximately one-third of the
Board will be elected at each annual meeting of the Companys
shareholders for three year terms and that members of the Board may
only be removed for cause. Shortly thereafter, Articles
Supplementary to the Companys Amended and Restated Declaration of
Trust were filed with the State Department of Assessments and
Taxation of Maryland to implement these changes. The Articles
Supplementary were effective upon filing. The foregoing description
of the Articles Supplementary is subject to and qualified in its
entirety by reference to the Articles Supplementary, a copy of
which is attached as Exhibit 3.1, and incorporated herein by
reference.
The Boards decision to adopt a classified board was not taken in
response to any known takeover attempt or threat. This action was
taken because the Board believed it is in the best interest of the
Company to promote its operating stability and clarify that the
Board will be properly constituted and able to continue to function
despite a persistent campaign by a labor union to disrupt the
Companys operations, as described below.
response to any known takeover attempt or threat. This action was
taken because the Board believed it is in the best interest of the
Company to promote its operating stability and clarify that the
Board will be properly constituted and able to continue to function
despite a persistent campaign by a labor union to disrupt the
Companys operations, as described below.
In making the decision to classify, the Board considered various
arguments for and against having a classified Board. The Board
determined that having a classified Board will promote the
stability of the Companys business strategies. The Board noted that
the Companys business primarily consists of entering long term
management contracts and leases with hotel management companies and
tenants and that these long term contracts require historical,
institutionalized knowledge of contract terms as circumstances
change over time and as amendments and changes need to be
considered during the contracts terms. The Board considered the
often stated argument against a classified board, that it permits
shareholders to evidence their view of an entire board rather than
only some of a board annually, and other arguments against a
classified board; but the Board determined that these
considerations do not outweigh the benefits to the Company of
classification at this time. The Board also considered that its
long term strategies that are promoted by having a classified Board
have produced total returns for shareholders greater than most
other hospitality real estate investment trusts, as reported by SNL
Financial, a division of SP Global Inc.:
arguments for and against having a classified Board. The Board
determined that having a classified Board will promote the
stability of the Companys business strategies. The Board noted that
the Companys business primarily consists of entering long term
management contracts and leases with hotel management companies and
tenants and that these long term contracts require historical,
institutionalized knowledge of contract terms as circumstances
change over time and as amendments and changes need to be
considered during the contracts terms. The Board considered the
often stated argument against a classified board, that it permits
shareholders to evidence their view of an entire board rather than
only some of a board annually, and other arguments against a
classified board; but the Board determined that these
considerations do not outweigh the benefits to the Company of
classification at this time. The Board also considered that its
long term strategies that are promoted by having a classified Board
have produced total returns for shareholders greater than most
other hospitality real estate investment trusts, as reported by SNL
Financial, a division of SP Global Inc.:
|
|
Total Returns Through March 31, 2017
|
|||||||
|
|
|
|
|
|
|
|
||
|
|
|
HPT
(1) |
|
SNL U.S. REIT Hotel Index
|
|
|
||
|
1 year
|
28.7
|
%
|
|
18.5
|
%
|
|
|
|
|
3 years
|
36.2
|
%
|
|
15.6
|
%
|
|
|
|
|
5 years
|
70.3
|
%
|
|
56.0
|
%
|
|
|
|
|
Since HPT’s IPO
|
697.3
|
%
|
|
214.6
|
%
|
|
|
|
|
(August 17, 1995)
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
||
|
(1)
|
HPT total returns appear to be understated by SNL
Financial because they do not include the value of in-kind distributions paid to HPT shareholders in the form of common shares of TravelCenters of America LLC (Nasdaq: TA) distributed to HPT shareholders in 2007 and the value of common shares of The RMR Group Inc. (Nasdaq: RMR) distributed to HPT shareholders in 2015. |
For the past three years, UNITE HERE, a labor union which regularly
seeks to represent employees at the Companys owned hotels, has
presented a shareholder proposal requesting that the Company
forswear the adoption of a classified Board and certain other
rights provided to the Company under Maryland law. This labor union
reportedly owns 190 shares of the approximately 164,268,199 Company
shares outstanding (i.e., 0.0001%), but under current rules of the
Securities and Exchange Commission, or the SEC, this labor union is
allowed to have its proposal presented to Company shareholders in
the Company paid proxy statement. The Board believes the labor
unions proposals are an obvious effort to pressure the Company to
encourage employees at the Company owned hotels to join the union
disguised as a governance initiative. Nonetheless, the unions
proposals have received support from a for-profit proxy advisory
business and from Company shareholders. The Board believes that the
unions proposed governance policy is not in the Companys best
interest, and, because the Company has not adopted the proposed
policy or otherwise bowed to this union pressure, Company Trustees
have been targeted for votes against their re-election by the union
and the for-profit proxy advisory busines
seeks to represent employees at the Companys owned hotels, has
presented a shareholder proposal requesting that the Company
forswear the adoption of a classified Board and certain other
rights provided to the Company under Maryland law. This labor union
reportedly owns 190 shares of the approximately 164,268,199 Company
shares outstanding (i.e., 0.0001%), but under current rules of the
Securities and Exchange Commission, or the SEC, this labor union is
allowed to have its proposal presented to Company shareholders in
the Company paid proxy statement. The Board believes the labor
unions proposals are an obvious effort to pressure the Company to
encourage employees at the Company owned hotels to join the union
disguised as a governance initiative. Nonetheless, the unions
proposals have received support from a for-profit proxy advisory
business and from Company shareholders. The Board believes that the
unions proposed governance policy is not in the Companys best
interest, and, because the Company has not adopted the proposed
policy or otherwise bowed to this union pressure, Company Trustees
have been targeted for votes against their re-election by the union
and the for-profit proxy advisory busines
s. In these circumstances, the Board is concerned that its
ability to continue to exercise all Board powers may become
subject to legal challenge in the event all of its Trustees
continue in office as holdover Trustees following any single
election in which all of the Companys Trustees are subject to
annual election. By electing to classify the Board at this
time, the Board believes that the expense, distraction and
uncertainty arising from any such challenge to the Boards
continuing authority may be avoided.
ability to continue to exercise all Board powers may become
subject to legal challenge in the event all of its Trustees
continue in office as holdover Trustees following any single
election in which all of the Companys Trustees are subject to
annual election. By electing to classify the Board at this
time, the Board believes that the expense, distraction and
uncertainty arising from any such challenge to the Boards
continuing authority may be avoided.
Also on April 20, 2017, the Board approved an amendment to
Article II, Section 2.14.1(c) of the Companys Amended and
Restated Bylaws, or the Bylaws, to set the deadline for
shareholders to submit nominations and proposals of other
business for consideration at the Companys 2018 annual meeting of
shareholders. Under the Bylaws, to be timely, a qualifying
shareholder must submit its nomination or proposal of other
business by not later than 5:00 p.m. Eastern Time on November 2,
2017 and not earlier than October 3, 2017. If the 2018 annual
meeting of shareholders is called for a date that is more than 30
days earlier or later than the first anniversary of the 2017
annual meeting of shareholders, then a shareholders notice must
be delivered not later than 5:00 p.m. Eastern Time on the 10th
day following the earlier of the day on which (i) notice of the
date of the 2018 annual meeting of shareholders is mailed or
otherwise made available or (ii) public announcement of the date
of the 2018 annual meeting of shareholders is first made by the
Company. Other requirements under the Bylaws for submitting
nominations and proposals of other business were not affected.
Prior to this amendment, the Bylaws required that nominations and
proposals of other business be submitted not later than 5:00 p.m.
Eastern Time on the 120th day nor earlier than the 150th day
prior to the first anniversary of the date of the proxy statement
for the 2017 annual meeting of shareholders. The foregoing
description of the amendment to the Bylaws is subject to and
qualified in its entirety by reference to the amendment, a copy
of which is attached as Exhibit 3.2, and incorporated herein by
reference.
Article II, Section 2.14.1(c) of the Companys Amended and
Restated Bylaws, or the Bylaws, to set the deadline for
shareholders to submit nominations and proposals of other
business for consideration at the Companys 2018 annual meeting of
shareholders. Under the Bylaws, to be timely, a qualifying
shareholder must submit its nomination or proposal of other
business by not later than 5:00 p.m. Eastern Time on November 2,
2017 and not earlier than October 3, 2017. If the 2018 annual
meeting of shareholders is called for a date that is more than 30
days earlier or later than the first anniversary of the 2017
annual meeting of shareholders, then a shareholders notice must
be delivered not later than 5:00 p.m. Eastern Time on the 10th
day following the earlier of the day on which (i) notice of the
date of the 2018 annual meeting of shareholders is mailed or
otherwise made available or (ii) public announcement of the date
of the 2018 annual meeting of shareholders is first made by the
Company. Other requirements under the Bylaws for submitting
nominations and proposals of other business were not affected.
Prior to this amendment, the Bylaws required that nominations and
proposals of other business be submitted not later than 5:00 p.m.
Eastern Time on the 120th day nor earlier than the 150th day
prior to the first anniversary of the date of the proxy statement
for the 2017 annual meeting of shareholders. The foregoing
description of the amendment to the Bylaws is subject to and
qualified in its entirety by reference to the amendment, a copy
of which is attached as Exhibit 3.2, and incorporated herein by
reference.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS CURRENT REPORT ON FORM 8-K CONTAINS STATEMENTS THAT
CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER
SECURITIES LAWS. ALSO, WHENEVER THE COMPANY USES WORDS SUCH AS
BELIEVE, EXPECT, ANTICIPATE, INTEND, PLAN, ESTIMATE, WILL, MAY
AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, THE
COMPANY IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD
LOOKING STATEMENTS ARE BASED UPON THE COMPANYS PRESENT INTENT,
BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THE COMPANYS
FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. THE
INFORMATION CONTAINED IN THE COMPANYS FILINGS WITH THE SEC,
INCLUDING UNDER RISK FACTORS IN THE COMPANYS PERIODIC REPORTS, OR
INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT
COULD CAUSE THE COMPANYS ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE STATED IN OR IMPLIED BY THE COMPANYS FORWARD LOOKING
STATEMENTS. THE COMPANYS FILINGS WITH THE SEC ARE AVAILABLE ON
THE SECS WEBSITE AT WWW.SEC.GOV. YOU SHOULD NOT PLACE UNDUE
RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY
LAW, THE COMPANY DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER
SECURITIES LAWS. ALSO, WHENEVER THE COMPANY USES WORDS SUCH AS
BELIEVE, EXPECT, ANTICIPATE, INTEND, PLAN, ESTIMATE, WILL, MAY
AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, THE
COMPANY IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD
LOOKING STATEMENTS ARE BASED UPON THE COMPANYS PRESENT INTENT,
BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THE COMPANYS
FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. THE
INFORMATION CONTAINED IN THE COMPANYS FILINGS WITH THE SEC,
INCLUDING UNDER RISK FACTORS IN THE COMPANYS PERIODIC REPORTS, OR
INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT
COULD CAUSE THE COMPANYS ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE STATED IN OR IMPLIED BY THE COMPANYS FORWARD LOOKING
STATEMENTS. THE COMPANYS FILINGS WITH THE SEC ARE AVAILABLE ON
THE SECS WEBSITE AT WWW.SEC.GOV. YOU SHOULD NOT PLACE UNDUE
RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY
LAW, THE COMPANY DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
3.1
|
Articles Supplementary to Amended and Restated Declaration
of Trust, dated April 20, 2017. |
|
3.2
|
Amendment to Amended and Restated Bylaws, adopted April 20,
2017. |
About HOSPITALITY PROPERTIES TRUST (NASDAQ:HPT)
Hospitality Properties Trust is a real estate investment trust. The Company owns approximately 300 hotels with over 45,860 rooms or suites, and approximately 190 travel centers. The Company’s segments include hotel investments, travel center investments and corporate. The Company’s properties are located in approximately 50 states in the United States, Canada and Puerto Rico. The Company’s hotels are operated as Courtyard by Marriott, Royal Sonesta, Sonesta Hotels & Resorts, Candlewood Suites, Residence Inn by Marriott, Sonesta ES Suites, Crowne Plaza Hotels & Resorts, Staybridge Suites, Hyatt Place, Wyndham Grand, Wyndham Hotels & Resorts, InterContinental Hotels & Resorts, Marriott Hotels and Resorts, the Clift Hotel, Radisson Hotels & Resorts, TownePlace Suites by Marriott, Hawthorn Suites, Country Inns & Suites by Carlson, Holiday Inn Hotels & Resorts, SpringHill Suites by Marriott, and Park Plaza Hotels & Resorts. HOSPITALITY PROPERTIES TRUST (NASDAQ:HPT) Recent Trading Information
HOSPITALITY PROPERTIES TRUST (NASDAQ:HPT) closed its last trading session 00.00 at 32.00 with 392,965 shares trading hands.