EXHIBIT 3.4
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REVISED 2-10-94
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BY-LAWS
OF
SANTA ANITA OPERATING COMPANY
(a Delaware corporation)
ARTICLE I
Offices
Section 1.1. Registered Office. The registered office shall be in
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the City of Wilmington, County of New Castle, State of Delaware.
Section 1.2. Other Offices. The Corporation may also have offices at
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such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
Meetings of Stockholders
Section 2.1. Place. All meetings of the stockholders for the
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election of directors shall be held at such place either within or without the
State of Delaware as shall be designated from time to time by the Board of
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Directors and stated in the notice of the meeting. Meetings of stockholders for
any other purpose may be held at such time or place, within or without the State
of Delaware, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2.2. Annual Meetings. The annual meetings of stockholders
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shall be held on the third Thursday in May of each year at 10 o'clock A.M. of
said day, the first such meeting to be held on the third Thursday in May 1981;
provided, however, that should said day fall upon a legal holiday, then any such
annual meeting of stockholders shall be held at the same time and place on the
next day thereafter ensuing which is a full business day. At such meetings
directors shall be elected, reports of the affairs of the Corporation shall be
considered, and any other business may be transacted which is within the powers
of the stockholders. If for any annual meeting the Board of Directors shall
fix a different day or hour, such action shall be deemed an amendment of this
Section 2.2 effective until the adjournment of that annual meeting sine die.
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Written notice of each annual meeting shall be given to each
stockholder entitled to vote, either personally or by mail or other means of
written communication, charges prepaid, addressed to such stockholder at his
address appearing on the books of the Corporation or
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given by him to the Corporation for the purpose of notice. If a stockholder
gives no address, notice shall be deemed to have been given him if sent by mail
or other means of written communication addressed to the place where the
principal office of the Corporation is situated, or if published at least once
in some newspaper of general circulation in the county in which said office is
located. All such notices shall be sent to each stockholder entitled thereto
not less than ten nor more than sixty days before each annual meeting. Such
notices shall specify the place, the day and the hour of such meeting and shall
state such other matters if any, as may be expressly required by statute.
Section 2.3. Special Meetings. Special meetings of the stockholders,
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for any purpose or purposes whatsoever, may be called at any time by the Board
of Directors. Except in special cases where other express provision is made by
statute, notice of such special meetings shall be given in the same manner as
for annual meetings of stockholders. Notices of any special meeting shall
specify, in addition to the place, day and hour of such meeting, the general
nature of the business to be transacted.
Section 2.4. List of Stockholders. The officer who has charge of the
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stock ledger of the Corporation shall prepare and make, at least ten days before
every meeting of
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stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
Section 2.5. Quorum. The holders of a majority of the stock issued
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and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute. If, however,
such quorum shall not be present or represented at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally noticed. If
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the adjournment is for more than thirty days or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section 2.6. Questions Before Meeting. When a quorum is present at
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any meeting, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting unless the question is one upon which by express
provision of the statutes, of these By-laws or of the Certificate of
Incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 2.7. Action Without Meeting. Any action required or
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permitted to be taken by holders of stock of the Corporation must be taken at a
meeting of such holders and may not be taken by consent in writing.
Section 2.8. Waiver of Notice. Whenever notice is required to be
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given under the Delaware Corporation Law or the Certificate of Incorporation or
the By-laws, a written waiver, signed by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting,
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except when the person attends a meeting for the express purpose of objecting at
the beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation.
ARTICLE III
Directors
Section 3.1. Size of Board. The Board of Directors shall consist of
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ten members, or as many as shall be determined from time to time by resolution
of the Board.
Section 3.2. Election of Directors. The directors shall be divided
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into three classes, designated Class I, Class II, and Class III, such classes to
be as nearly equal in number as possible. At the annual meeting of stockholders
in 1986, directors of Class I shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of Class II shall be
elected to hold office for a term expiring at the second succeeding annual
meeting, and directors of Class III shall
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be elected to hold office for a term expiring at the third succeeding annual
meeting. Thereafter at each annual meeting of stockholders, directors shall be
chosen for a term of three years to succeed those whose terms then expire and
shall hold office until the third following annual meeting of stockholders and
until the election of their respective successors. Directors need not be
stockholders.
Section 3.3. Vacancies. Vacancies and newly created directorships
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resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office for the
unexpired term of the vacant directorship, or, in the case of any increase in
the number of directors, as designated by the directors then in office,
consistent with the provisions of Section 3.2. If there are no directors in
office, then an election of directors may be held in the manner provided by
statute. If, at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole Board (as constituted immediately prior to any such increase), the
Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any
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such vacancies or newly created directorships, or to replace the directors
chosen by the directors then in office.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.
Section 3.4. Powers. The business of the Corporation shall be
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managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-laws directed or required to be
exercised or done by the stockholders.
Section 3.5. Meetings. The Board of Directors of the Corporation may
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hold meetings, both regular and special, either within or without the State of
Delaware.
Section 3.6. First Meeting. The first meeting of each newly elected
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Board of Directors shall be held immediately following the annual meeting of
stockholders at which such directors are elected and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided a quorum shall be present; or the meeting may be held at
such time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors, or
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as shall be specified in a written waiver signed by all of the directors.
Section 3.7. Regular Meetings. Regular meetings of the Board may be
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held without notice at such time and at such place as shall from time to time be
determined by the Board.
Section 3.8. Special Meetings. Special meetings of the Board may be
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called by the Secretary at the request of the Chairman of the Board or President
on two business days' notice to each director, either personally or by mail, by
telegram or by telephone; special meetings shall be called by the Chairman of
the Board or Secretary in like manner and on like notice on the written request
of two directors.
Section 3.9. Quorum. At all meetings of the Board a majority of the
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total number of directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than
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announcement at the meeting, until a quorum shall be present.
Section 3.10. Conference Telephone. Unless otherwise restricted by
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the Certificate of Incorporation or these By-laws, members of the Board of
Directors (or any committee designated by the Board) may participate in a
meeting of the Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
Section 3.11. Unanimous Consent. Unless otherwise restricted by the
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Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.
Section 3.12. Committees. The Board of Directors may, by resolution
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passed by a majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or
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disqualified member at any meeting of the committee. Any such committee, to the
extent provided in the resolution, shall have and may exercise the power of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; provided, however, that in the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 3.13. Minutes. Each committee shall keep regular minutes of
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its meetings and report the same to the Board of Directors when required.
Section 3.14. Fees and Compensation. Directors and members of
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committees may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by resolution of the
Board.
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ARTICLE IV
Notices
Section 4.1. Methods of Notice. Whenever, under the provisions of
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the Laws of the State of Delaware or of the Certificate of Incorporation or of
these By-laws, notice is required to be given to any director or stockholder, it
shall not be construed to mean personal notice, but notice may be given in
writing, by mail, addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram or telephone.
Section 4.2. Waiver. Whenever any notice is required to be given
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under the provisions of the statutes or of the Certificate of Incorporation or
of these By-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
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ARTICLE V
Officers
Section 5.1. Officers. The Officers of the Corporation shall be a
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Chairman of the Board, a President, a Secretary and a Treasurer. The
Corporation may also have, at the discretion of the Board of Directors, one or
more Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 5.3 and Section 5.5 of this Article. The Board of
Directors may also choose, at its discretion, one or more Vice Chairmen of the
Board, who shall not constitute officers of the Corporation. One person may
hold two or more offices.
Section 5.2. Election. The officers of the Corporation, except such
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officers as may be appointed in accordance with the provisions of Section 5.3 or
Section 5.5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold his office until he shall resign or shall be removed or
otherwise disqualified to serve, or his successor shall be elected and
qualified.
Section 5.3. Subordinate Officers, etc. The Board of Directors may
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appoint, and may empower the Chairman of the Board to appoint, such other
officers as the business of the Corporation may require, each of whom shall hold
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office for such period, have such authority and perform such duties as are
provided in the By-laws or as the Board of Directors may from time to time
determine.
Section 5.4. Removal and Resignation. Any officer may be removed,
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either with or without cause, by the Board of Directors, at any regular or
special meeting thereof, or, except in the case of an officer chosen by the
Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Board of Directors or to the Chairman of the Board, or to the Secretary of the
Corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 5.5. Vacancies. A vacancy in any office because of death,
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resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By-laws for regular appointments to such office.
Section 5.6. Salaries. The salaries and other compensation of all
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officers of the Corporation shall be fixed by the Board of Directors.
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Section 5.7. Chairman of the Board. The Chairman of the Board shall
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preside at all meetings of the stockholders and all meetings of the Board of
Directors. He shall be an ex-officio member of all standing committees,
including the Executive Committee, if any, and shall have such other powers and
duties as may be prescribed by the Board of Directors or the By-laws.
Section 5.7A. Vice Chairman of the Board. In the absence of the
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Chairman of the Board, the Vice Chairman of the Board designated by the Board of
Directors shall preside at meetings of the Board of Directors.
Section 5.8. President. The President shall be the Chief Executive
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Officer of the Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the Corporation.
He shall be an ex-officio member of all standing committees, including the
Executive Committee, if any, shall have the general powers and duties of
management usually vested in the office of the chief executive officer of a
corporation, and shall have such other powers and perform such other duties as
from time to time may be prescribed for him by the Board of Directors or the By-
laws.
Section 5.9. Vice President. In the absence or disability of the
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Chairman of the Board and the President,
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the Vice Presidents in order of their rank as fixed by the Board of Directors
or, if not ranked, the Vice President designated by the Board of Directors,
shall perform all the duties of the Chairman of the Board and the President, and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the Chairman of the Board and the President. The Vice
Presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them respectively by the Board of Directors
or the By-laws.
Section 5.10. Secretary. The Secretary shall keep or cause to be
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kept, at the principal office or such other place as the Board of Directors may
order, a book of minutes of all meetings of directors and stockholders, with the
time and place of holding, whether regular or special, and, if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at stockholders' meetings,
and the proceedings thereof. The Secretary shall keep, or cause to be kept, at
the principal office or at the office of the Corporation's transfer agent, a
share register, or a duplicate share register, showing the names of the
stockholders and their addresses, the number and class of shares held by each,
the number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
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The Secretary shall give, or cause to be given, notice of all the
meetings of the stockholders and of the Board of Directors required by the By-
laws or by law to be given, and he shall keep the seal of the Corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors or by the By-laws.
Section 5.11. Treasurer. The Treasurer shall keep and maintain, or
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cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the Corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all
reasonable times be open to inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name
and to the credit of the Corporation with such depositories as may be designated
by the Board of Directors. He shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, shall render to the Chairman of the
Board and directors, whenever they request it, an account of all of his
transactions as
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Treasurer and of the financial condition of the Corporation, and shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or the By-laws.
ARTICLE VI
Stock and Stock Certificates
Section 6.1. Right to Certificate. Every holder of stock in the
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Corporation shall be entitled to have a certificate, signed by or in the name of
the Corporation, by the Chairman of the Board of Directors or the President or a
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by him in the Corporation.
Section 6.2. Statements Setting Forth Rights. If the Corporation
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shall be authorized to issue more than one class of stock or more than one
series of any class, the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and rights
shall be set forth in full or summarized on the face or back of the certificate
which the Corporation shall issue to represent
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such class or series of stock, provided that,except as otherwise provided in
Section 202 of the Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock, a
statement that the Corporation will furnish without charge to each stockholder
who so requests the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations and restrictions of such preferences and rights.
Section 6.3 Facsimile Signatures. Any of or all the signatures on
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the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
Section 6.4. Lost Certificates. Except as hereinafter in this
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section provided, no new certificate for shares shall be issued in lieu of an
old one unless the latter is surrendered and cancelled at the same time. The
Board of Directors may, however, in case any certificate for
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shares is lost, stolen, mutilated or destroyed, authorize the issuance of a new
certificate in lieu thereof, upon such terms and conditions, including
reasonable indemnification of the Corporation, as the Board shall determine.
Section 6.5 Transfers of Stock.
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(a) Subject to paragraphs (b), (c) and (d) of this Section 6.5, upon
surrender to any transfer agent of the Corporation of a certificate for shares
of the Corporation duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
(b) Beginning at the time that (A) the merger of Santa Anita
Consolidated, Inc. ("Santa Anita") into Santa Anita Realty Enterprises, Inc., a
Delaware corporation ("Realty"), and (B) the payment by Realty of the dividend
in kind of the shares of the Corporation (the "Distribution") shall have both
occurred (hereinafter called the "effective time of the restriction"), and
continuing thereafter until such time as the limitation on transfer provided for
in the Pairing Agreement between Realty and the Corporation shall be terminated
in the manner therein provided:
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(i) The shares of common stock of the Corporation shall not be
transferable, and shall not be transferred on the books of the Corporation,
unless (1) a simultaneous transfer is made by the same transferor to the same
transferee, or (2) such transferor has previously arranged with Realty for the
transfer to the transferee, of a like number of shares of common stock of Realty
and such shares are paired with one another.
(ii) Except for certificates representing shares of common stock of
Realty referred to in subparagraph (vi) below, each certificate evidencing
ownership of shares of common stock of Realty (including certificates issued by
Santa Anita) issued and not cancelled prior to the effective time of the
restriction shall be deemed to evidence a like number of shares of common stock
of the Corporation.
(iii) Except for certificates representing common stock of Realty
referred to in subparagraph (vi) below, any registered holder of a certificate
evidencing ownership of shares of common stock of Realty (including certificates
issued by Santa Anita) issued prior to the effective time of the restriction
may, upon request and presentation of said certificate to the Corporation's
transfer agent, obtain in substitution therefor a certificate or certificates
registered in such holder's name evidencing the same number of
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common shares of the Corporation and a like number of shares of common stock of
Realty.
(iv) A conspicuous legend shall be placed on the face of each
certificate evidencing ownership of shares of common stock of the Corporation
issued after the effective time of the restrictions, referring to the
restrictions on transfer set forth in the Corporation's By-laws.
(v) For purposes of this paragraph (b) only, the terms "common stock"
and "common shares" shall include preferred stock which is convertible into
shares of common stock.
(vi) Notwithstanding the other provisions of this paragraph (b), any
stockholder whose ownership of the common stock of the Corporation at the
effective time of the restriction would be deemed, after application of the
attribution rules of the Internal Revenue Code of 1954 (the "Code"), to result
in Realty owning, directly or indirectly, more than 9.25% of the common stock of
the Corporation will not be subject to the restrictions imposed by this
paragraph (b) to the extent that such ownership would cause Realty, directly or
indirectly, to be deemed to own, after application of the attribution rules of
the Code, more than 9.25% of the total number of the outstanding shares of the
Corporation, provided that (1) a sufficient amount of the common
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stock of the Corporation (or the right to receive such common stock) which would
otherwise be paired with stock of Realty is sold to third parties so that
Realty, directly or indirectly, after application of the attribution rules of
the Code, will not own in excess of 9.25% of the common stock of the
Corporation, (2) all holders of the unpaired shares enter into an agreement,
satisfactory to the Boards of Directors of Realty, the Corporation and Santa
Anita, providing that such shares not be transferable by sale or any other
means, without arranging for such shares to be paired with an equal number of
shares of Realty, unless such sale is made to the Corporation or Realty and (3)
such stockholder and any transferee of such stockholder executes a waiver of any
claims he or she may have arising out of the close business relationship between
the Corporation and Realty and claims arising out of conflicts of interest
inherent in such business relationship. The other provisions of this paragraph
(b) shall apply to all shares of the Corporation otherwise held by any
stockholder unless they are specifically exempted by this subparagraph (vi).
(c) If the Board of Directors shall at any time and in good faith be
of the opinion that direct or indirect ownership of shares of either common
stock or preferred stock, or both, of the Corporation has or may become
concentrated to an extent which would cause Realty to fail to qualify or be
disqualified as a real estate investment trust
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by virtue of Section 856(a)(5) and (6) of the Code, or similar provisions of
successor statutes, pertaining to the qualification of Realty as a real estate
investment trust, the Board of Directors shall have the power (i) by lot or
other means deemed equitable by them to call for purchase from any stockholder
of the Corporation such number of shares sufficient in the opinion of the Board
of Directors to maintain or bring the direct or indirect ownership of shares of
stock of the Corporation into conformity with the requirements of said Section
856(a)(5) and (6) pertaining to Realty and (ii) to refuse to register the
transfer of shares of stock to any person whose acquisition of such shares
would, in the opinion of the Board of Directors, result in Realty being unable
to conform to the requirements of said Section 856(a)(5) and (6). The purchase
price for the shares of stock purchased pursuant hereto shall be equal to the
fair market value of such shares as reflected in the closing price for such
shares on the principal stock exchange on which such shares are listed or, if
such shares are not listed, then the last bid quotation for shares of stock as
of the close of business on the date fixed by the Board of Directors for such
purchase or, if no quotation for the shares is available, as determined in good
faith by the Board of Directors. From and after the date fixed for purchase by
the Board of Directors, the holder of any shares so called for purchase shall
cease to be entitled to dividends, voting rights and other benefits with respect
to
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such shares excepting only the right to payment of the purchase price fixed as
aforesaid. In order to further assure that ownership of the shares of stock
does not become so concentrated, any transfer of shares that would prevent
Realty from continuing to be qualified as a real estate investment trust by
virtue of the application of Section 856(a)(5) and (6) of the Code shall be void
ab initio and the intended transferee of such shares shall be deemed never to
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have had an interest therein. If the foregoing provision is determined to be
void or invalid by virtue of any legal decision, statute, rule or regulation,
then the transferee of such shares shall be deemed to have acted as agent on
behalf of the Corporation in acquiring such shares and to hold such shares on
behalf of the Corporation. For purposes of determining whether the Corporation
is in compliance with Section 856(a)(5) and (6), Section 542(a)(2) and Section
544 of the Code, or similar provisions of successor statutes, shall be applied.
(d) In addition to the requirements of subparagraph (c) above, if
the Board of Directors shall at any time and in good faith be of the opinion
that direct or indirect ownership of shares of either common stock or preferred
stock, or both, of the Corporation has or may become concentrated to an extent
which would cause any rent to be paid to Realty to fail to qualify or be
disqualified as rent from real property by virtue of Section 856(d)(2)(B) of the
Code,
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or similar provisions of successor statutes, pertaining to the qualification of
Realty as a real estate investment trust, the Board of Directors shall have the
power (i) by lot or other means deemed equitable by them to call for purchase
from any stockholder of the Corporation such number of shares sufficient in the
opinion of the Board of Directors to maintain or bring the direct or indirect
ownership of shares of stock of the Corporation into conformity with the
requirements of Section 856(d)(2)(B) pertaining to Realty and (ii) to refuse to
register the transfer of shares of stock to any person whose acquisition of such
shares would, in the opinion of the Board of Directors, result in Realty being
unable to conform to the requirements of said Section 856(d)(2)(B). The
purchase price for the shares of stock purchased pursuant hereto shall be equal
to the fair market value of such shares as reflected in the closing price for
such shares on the principal stock exchange on which such shares are listed, or
if such shares are not listed, then the last bid quotation for shares of stock,
as of the close of business on the date fixed by the Board of Directors for such
purchase or, if no quotation for the shares is available, as determined in good
faith by the Board of Directors. From and after the date fixed for purchase by
the Board of Directors, the holders of any shares so called for purchase shall
cease to be entitled to dividends, voting rights and other benefits with respect
to such shares, excepting only the right to payment of the
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purchase price fixed as aforesaid. In order to further assure that ownership of
the shares of stock does not become so concentrated, any transfer of shares that
would prevent Realty from continuing to be qualified as a real estate investment
trust by virtue of the application of Section 856(d)(2)(B) of the Code shall be
void ab initio and the intended transferee of such shares shall be deemed never
-- ------
to have had an interest therein. If the foregoing provision is determined to be
void or invalid by virtue of any legal decision, statute, rule or regulation,
then the transferee of such shares shall be deemed to have acted as agent on
behalf of the Corporation in acquiring such shares and to hold such shares on
behalf of the Corporation. For purposes of determining whether this Corporation
is in compliance with Section 856(d)(2)(B), Section 856(d)(5) of the Code, or
similar provisions of successor statutes, shall be applied.
(e) The stockholders of the Corporation shall upon demand disclose to
the Board of Directors in writing such information with respect to their direct
and indirect ownership of the stock of the Corporation as the Board of Directors
deems necessary to determine whether Realty satisfies the provisions of Section
856(a)(5) and (6) and 856(d) of the Code and the regulations thereunder as the
same shall be from time to time amended, or to comply with the requirements of
any other taxing authority.
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Section 6.6. Form of Consideration. In purchasing such shares from
---------------------
any shareholder in accordance with the foregoing provisions, the Corporation may
pay consideration in the form of cash or, at the option of the Board of
Directors, in the form of subordinated indebtedness of the Corporation. The
principal amount of such subordinated indebtedness shall be equal to the
purchase price of the shares (less amounts paid in cash, if any) and it shall
have such other terms as may be determined by the Board of Directors at the time
of issuance.
Section 6.7. Record Date. In order that the Corporation may
-----------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereto, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
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Section 6.8. Registered Stockholders. The Corporation shall be
-----------------------
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
Section 6.9. Transfer Agents and Registrars. The Board of Directors
------------------------------
may appoint one or more corporate transfer agents and registrars.
Section 6.10. Dividends. Dividends upon the capital stock of the
---------
Corporation may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock.
Section 6.11. Reserves. Before payment of any dividend, there may be
--------
set aside out of any funds of the Corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose
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as the directors shall think conducive to the interest of the Corporation, and
the directors may modify or abolish any such reserve in the manner in which it
was created.
ARTICLE VII
Indemnification and Insurance
Section 7.1. Right to Indemnification. Each person who was or is a
------------------------
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
or inaction in an official capacity or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent permitted by the laws of Delaware, as the
same exist or may hereafter be amended, against all costs, charges, expenses,
liabilities and losses (including attorneys' fees, judgments, fines, ERISA
excise
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taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith, and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
Section 7.2 hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred
in this Article shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action
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of its Board of Directors, provide indemnification to employees and agents of
the Corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
Section 7.2. Right of Claimant to Bring Suit. If a claim under
-------------------------------
Section 7.1 of this Article is not paid in full by the Corporation within thirty
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has failed to meet a standard of
conduct which makes it permissible under Delaware law for the Corporation to
indemnify the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is permissible in the circumstances
because he or she has met such standard of conduct, nor an actual determination
by the Corporation (including its Board
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of Directors, independent legal counsel, or its stockholders) that the claimant
has not met such standard of conduct, shall be a defense to the action or create
a presumption that the claimant has failed to meet such standard of conduct.
Section 7.3. Non-Exclusivity of Rights. The right to indemnification
-------------------------
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 7.4. Insurance. The Corporation may maintain insurance, at
---------
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under Delaware law.
Section 7.5. Expenses as a Witness. To the extent that any director,
---------------------
officer, employee or agent of the Corporation is by reason of such position, or
a position
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with another entity at the request of the Corporation, a witness in any action,
suit or proceeding, he or she shall be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.
Section 7.6. Indemnity Agreements. The Corporation may enter into
--------------------
agreements with any director, officer, employee or agent of the Corporation
providing for indemnification to the full extent permitted by Delaware law.
ARTICLE VIII
General Provisions
Section 8.1. Annual Reports. Not later than one hundred twenty (120)
--------------
days after the close of each fiscal year of the Corporation, the Board of
Directors shall mail a report of the business and operation of the Corporation
during such fiscal year to the stockholders. The report shall be in such form
and have such content as the Board deems proper. This report shall include a
balance sheet and a statement of income and surplus and a statement of changes
in financial position of the Corporation. Such financial statements shall be
accompanied by the report of an independent certified public accountant
thereon.
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Section 8.2. Quarterly Reports. Within 90 days after the close of
-----------------
each of the first three quarters of each fiscal year of the Corporation, the
Board of Directors shall send interim reports to the stockholders, having such
form and content as the Board of Directors deems proper.
Section 8.3. Fiscal Year. The fiscal year of the Corporation shall be
-----------
fixed by resolution of the Board of Directors.
Section 8.4. Seal. The corporate seal shall have inscribed thereon
----
the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 8.5. Checks, Drafts, etc. All checks, drafts or other orders
--------------------
for payment of money, notes or other evidences of indebtedness, issued in the
name of or payable to the Corporation, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Board of Directors.
Section 8.6. Representation of Shares of Other Corporations. The
----------------------------------------------
Chairman of the Board, the President or any Vice President and the Secretary or
Assistant Secretary of this Corporation are authorized to vote, represent and
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exercise on behalf of this Corporation all rights incident to any and all shares
of any other corporation or corporations standing in the name of this
Corporation. The authority herein granted to said officers to vote or
represent on behalf of this Corporation any and all shares held by this
Corporation in any other corporation or corporations may be exercised either by
such officers in person or by any other person authorized so to do by proxy or
power of attorney duly executed by said officers.
Section 8.7. Employee Stock Purchase Plans. The Corporation may,
-----------------------------
upon terms and conditions herein authorized, provide and carry out an employee
stock purchase plan or plans providing for the issue and sale, or for the
granting of options for the purchase, of its unissued shares, or of issued
shares purchased or to be purchased or acquired, to employees of the Corporation
or of any subsidiary or to a trustee on their behalf. Such plan may provide for
such consideration as may be fixed therein, for the payment of such shares in
installments or at one time and for aiding any such employees in paying for such
shares by compensation for services or by loans from the Corporation or
otherwise. Any such plan before becoming effective must be approved or
authorized by the Board of Directors of the Corporation.
Such plan may include, among other things, provisions determining or
providing for the determination by the
-36-
Board of Directors, or any committee thereof designated by the Board of
Directors, of: (a) eligibility of employees (including officers and directors)
to participate therein, (b) the number and class of shares which may be
subscribed for or for which options may be granted under the plan, (c) the time
and method of payment therefor, (d) the price or prices at which such shares
shall be issued or sold, (e) whether or not title to the shares shall be
reserved to the Corporation until full payment therefor, (f) the effect of the
death of an employee participating in the plan or termination of his employment,
including whether there shall be any option or obligation on the part of the
Corporation to repurchase the shares thereupon, (g) restrictions, if any, upon
the transfer of the shares, and the time limits and termination of the plan, (h)
termination, continuation or adjustments of the rights of participating
employees upon the happening of specified contingencies, including increase or
decrease in the number of issued shares of the class covered by the plan without
receipt of consideration by the Corporation or any exchange of shares of such
class for stock or securities of another corporation pursuant to a
reorganization or merger, consolidation or dissolution of the Corporation, (i)
amendment, termination, interpretation and administration of such plan by the
Board of Directors or any committee thereof designated by the Board of
Directors, and (j) any other matters, not repugnant to law, as may be
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included in the plan as approved or authorized by the Board of Directors or any
such committee.
ARTICLE IX
Amendments
Section 9.1. Power of Stockholders. New By-laws may be adopted or
---------------------
these By-laws may be amended or repealed by the stockholders only by the
affirmative vote of at least 80% of the voting power of the Corporation, except
as otherwise provided by law. Any proposal to amend or repeal, or adopt any
provisions inconsistent with, Article Tenth of the Certificate of Incorporation
shall require for approval the affirmative vote of at least 80% of the voting
power of the Corporation.
Section 9.2. Power of Directors. Subject to the right of
------------------
stockholders as provided in Section 9.1 of this Article IX to adopt, amend or
repeal By-laws, By-laws may be adopted, amended or repealed by the Board of
Directors; provided, however, that Section 6.5 of these By-laws may not be
amended or repealed except with the approval of the holders of 80% of the
outstanding common stock of the Corporation.
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