SUMMIT HOTEL PROPERTIES,INC. (NYSE:INN) Files An 8-K Material Modification to Rights of Security HoldersItem 3.03. Material Modifications to Rights of Security Holders.
On November8, 2017, Summit Hotel Properties,Inc. (the “Company”) filed, with the State Department of Assessments and Taxation of Maryland, Articles Supplementary (the “Articles Supplementary”) to the Articles of Amendment and Restatement of the Company, as amended and supplemented, classifying and designating 6,400,000 of the Company’s authorized shares of preferred stock, $0.01 par value per share, as 6.250% SeriesE Cumulative Redeemable Preferred Stock, $0.01 par value per share (“SeriesE Preferred Stock”). A summary of the material terms of the SeriesE Preferred Stock is set forth under the caption “Description of the SeriesE Preferred Stock” in the Company’s prospectus supplement, dated November2, 2017 and filed with the U.S. Securities and Exchange Commission (the “SEC”) on November3, 2017 (the “Prospectus Supplement”). The summary of the SeriesE Preferred Stock in the Prospectus Supplement and the following description of the SeriesE Preferred Stock 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 Exhibit3.7 to the Company’s Registration Statement on Form8-A, filed with the SEC on November8, 2017.
The Company filed the Articles Supplementary in connection with its previously announced underwritten public offering of SeriesE Preferred Stock, as further described below.
The SeriesE Preferred Stock rank senior to the Company’s common stock, $0.01 par value per share (“Common Stock”), with respect to distribution rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. The SeriesE Preferred Stock rank on a parity with the Company’s 7.875% SeriesB Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “SeriesB Preferred Stock”), the Company’s 7.125% SeriesC Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “SeriesC Preferred Stock”), and the Company’s 6.45% SeriesD Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “SeriesD Preferred Stock”), 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 shares of SeriesE Preferred Stock is entitled to receive a liquidation preference, which is equal to $25.00 per share of SeriesE Preferred Stock, plus any accrued and unpaid distributions to, but not including, the date of the payment, before the holders of shares of Common Stock, 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 shares of Common Stock, SeriesB Preferred Stock, SeriesC Preferred Stock or SeriesD Preferred Stock or, subject to certain exceptions, redeeming or otherwise acquiring shares of Common Stock, SeriesB Preferred Stock, SeriesC Preferred Stock or SeriesD Preferred Stock, as applicable, unless full cumulative distributions on the SeriesE Preferred Stock 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.
In connection with the anticipated closing of the offering of the SeriesE Preferred Stock, Summit Hotel GP, LLC, a wholly owned subsidiary of the Company and the sole general partner of Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), on its own behalf as general partner of the Operating Partnership and on behalf of the limited partners of the Operating Partnership, on November8, we entered into the Seventh Amendment (the “Seventh Amendment”) to the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended prior to the Seventh Amendment (the “Partnership Agreement”), to provide for the issuance of up to 6,400,000 6.250% SeriesE Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) (the “SeriesE 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 SeriesE Preferred Stock in the Preferred Stock Offering (as defined below) to the Operating Partnership in exchange for the same number of SeriesE Preferred Units. The SeriesE Preferred Units have economic terms that mirror the terms of the SeriesE Preferred Stock. The issuance of the SeriesE Preferred Units will be exempt from registration to Section4(a)(2)of the Securities Act of 1933, as amended (the “Securities Act”).
