UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): December 27, 2004
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or Reckson Operating Partnership, L.P. -
organization) 11-3233647
(IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrants under any of
the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On December 27, 2004, Reckson Operating Partnership, L.P. (the
"Operating Partnership") entered into definitive agreements with certain
senior officers of Reckson Associates Realty Corp. (the "Company") to revise
the 2003 incentive awards under their Amended and Restated Long-Term Incentive
Award Agreements pursuant to the Reckson Associates Realty Corp. 2003
Long-Term Incentive Plan (the "2003 LTIP"). The revised agreements provide for
(i) the rescission of the unvested portion of their core awards of shares of
restricted stock of the Company (the "Core Awards") and (ii) the award in
exchange for the rescinded Core Awards of an equal number of units of a new
class of limited partnership interests ("LTIP Units") of the Operating
Partnership. The 2003 LTIP consists of (i) the Core Award, which provides for
annual stock-based compensation based on attaining certain annual performance
measures and in part upon continued service with the Company, and (ii) an
outperformance award, which provides for compensation to be earned at the end
of a four-year period if the Company attains certain cumulative performance
measures.
The revised 2003 LTIP was designed to provide the potential for
executives to retain a greater equity interest in the Company by eliminating
the need for executives to sell a portion of their Core Awards immediately
upon vesting in order to satisfy personal income taxes which are due upon
vesting under the original Core Awards.
The terms of each award of LTIP Units are substantially similar to those
of the Core Awards. The vesting, performance hurdles and timing for vesting
remain unchanged. However, an LTIP Unit represents an equity interest in the
Operating Partnership, rather than the Company. At issuance, the LTIP Unit has
no value but may over time accrete to a value equal to (but never greater
than) the value of one share of common stock of the Company (a "REIT Share").
Initially, LTIP Units will not have full parity with common units of the
Operating Partnership with respect to liquidating distributions. Upon the
occurrence of certain "triggering events," the Operating Partnership will
revalue its assets for the purpose of the capital accounts of its partners and
any increase in valuation of the Operating Partnership's assets from the date
of the issuance of the LTIP Units through the "triggering event" will be
allocated to the capital accounts of holders of LTIP Units until their capital
accounts are equivalent to the capital accounts of holders of common units. If
such equivalence is reached, LTIP Units would achieve full parity with common
units for all purposes, and therefore accrete to an economic value equivalent
to REIT Shares on a one-for-one basis. If such parity is reached, vested LTIP
Units may be redeemed for cash in an amount equal to the then fair market
value of an equal number of REIT Shares or converted into an equal number of
common units of the Operating Partnership, as determined by the Company's
Compensation Committee. However, there are circumstances under which such
economic equivalence would not be reached. Until and unless such economic
equivalence is reached, the value that the senior officers will realize for
vested LTIP Units will be less than the value of an equal number of REIT
Shares. In addition, unlike Core Awards (wherein dividends that accumulate
during the 2003 LTIP are paid upon vesting), LTIP Units will receive the same
quarterly distributions as common units of the Operating Partnership on a
current basis, thus providing full dividend equivalence with REIT Shares. When
the executives first vest under their respective Long-Term Incentive OP Unit
Award Agreements in accordance with the specified performance hurdles, they
will receive a one-time cash payment that will represent payment of the full
amount of the accrued unpaid dividends under the Core Award through the
issuance date of the LTIP Units. In order to more closely replicate the terms
of the Core Awards
being rescinded, on December 27, 2004, the Company also entered into
agreements with Messrs. Rechler, Maturo and Barnett, which provide that in the
event of a change of control the executive shall receive the equivalent value
of one REIT Share for each LTIP Unit.
Each senior officer participating in the 2003 LTIP was offered the
option to retain all or a portion of his or her Core Awards or to rescind them
in exchange for new awards of LTIP Units. Effective December 27, 2004, each of
the senior officers named below accepted such offer and thereby amended his or
her Amended and Restated Long-Term Incentive Award Agreement to cancel his or
her unvested Core Award, and received an equal number of LTIP Units, as
specified in each respective Long-Term Incentive OP Unit Award Agreement. The
following chart sets forth the senior officers who elected to rescind all or a
portion of their Core Awards and the number of LTIP Units received pursuant to
each Long-Term Incentive OP Unit Award Agreement:
Relinquished Replacement
Senior Officer Core Award Partnership Units
---------------- ---------- -----------------
Scott H. Rechler 104,167 104,167
Michael Maturo 104,167 104,167
Jason M. Barnett 104,167 104,167
Todd Rechler 33,333 33,333
Richard Conniff 16,666 16,666
A copy of a form of the First Amendment to Amended and Restated
Long-Term Incentive Award Agreement is filed as Exhibit 10.1 hereto. A copy of
a form of Reckson Associates Realty Corp. Long-Term Incentive Plan OP Unit
Award Agreement for senior officers is filed as Exhibit 10.2 hereto. A copy
of the form of the Change-in-Control Agreement is filed as Exhibit 10.3
hereto.
Item 3.02 - Unregistered Sales of Equity Securities
On December 27, 2004, the Operating Partnership issued 362,500 LTIP
Units of the Operating Partnership pursuant to the Long-Term Incentive Plan OP
Unit Award Agreements. The partnership units were issued in reliance on the
exemption provided by Rule 506 promulgated by the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended. Each senior officer
who received an award of LTIP Units in exchange for his or her unvested
portion of the Core Awards is an accredited investor, and had access, through
employment and other relationships, to adequate information about the Company
and the Operating Partnership, L.P.
Item 5.03 - Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
On December 27, 2004, the Operating Partnership amended its limited
partnership agreement to allow for the issuance of LTIP Units to the
recipients of the Long-Term Incentive Plan OP Unit Award Agreements. The
Supplement to the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership is filed as Exhibit 10.4 hereto.
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Item 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Form of the First Amendment to Amended and Restated Long-Term
Incentive Award Agreement
10.2 Form of Reckson Associates Realty Corp. Long-Term Incentive Plan
OP Unit Award Agreement
10.3 Form of Reckson Associates Realty Corp. Change-In-Control
Agreement
10.4 Supplement to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
---------------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
---------------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: December 29, 2004
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