EXHIBIT 3.4
REVISED 1/15/97
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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. Business To Be Brought Before Meeting. In order to be
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properly brought before any meeting of stockholders held pursuant to this
Article II, business
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(including the election of directors) must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a stockholder. In order for any such business to be properly
brought before the meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. In order
to be timely, a stockholder's notice must be received at the principal executive
offices of the Corporation not less than 60 days nor more than 90 days prior to
the meeting; provided, however, that in the event that a meeting is called for a
date other than that specified in the By-laws, and less than 75 days' prior
public disclosure of such date is given, notice by the stockholder in order to
be timely must be received by the Secretary of the Corporation not later than
the close of business on the fifteenth (15) calendar day following the day on
which such public disclosure of the date of the meeting was made. If a
stockholder intends to nominate a candidate or candidates for director at any
meeting of stockholders, such stockholder's notice to the Secretary shall set
forth the name, age, address and principal occupation of each such nominee and
the amount and type of the Corporation's stock held by each such nominee,
together with any additional information reasonably necessary to
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determine the eligibility of each such nominee and any information required to
be disclosed in the solicitation of proxies in respect of each such nominee by
Schedule 14A, as amended from time to time, or other applicable Rules and
Regulations of the Securities and Exchange Commission. The notice to the
Secretary shall also set forth the name, address and the amount and type of
beneficial ownership of the Corporation's stock of the stockholder intending to
nominate the candidate or candidates identified in the notice to the Secretary.
Any stockholder desiring to bring any other business before any annual meeting
of stockholders shall set forth in such stockholder's notice to the Secretary
(i) a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the meeting, (ii) the
name and record address of the stockholder proposing such business, (iii) the
class and number of shares of the Corporation's stock that are beneficially
owned by such stockholder, and (iv) any material interest of such stockholder in
such business. In order to be properly brought before any special meeting of
stockholders (other than any special meeting held for the purpose of electing
directors), business must be specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors.
Notwithstanding anything in the By-laws to the contrary, no business
(including the election of directors)
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shall be conducted at the meeting except in accordance with the procedures set
forth in this Section 2.4; provided, however, that nothing in this Section 2.4
shall preclude or be deemed or construed to preclude discussion by any
stockholder of any business properly brought before the annual meeting of
stockholders.
The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the meeting
in accordance with the provisions of this Section 2.4, and if he should so
determine, he shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted.
Section 2.5. 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 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
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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 2.6. 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 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 2.7. 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
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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 2.8. 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 2.9. 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, 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.
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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 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
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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 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
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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 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
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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 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
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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 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
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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.
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
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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.
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.
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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
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
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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.
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.
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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, 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
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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.
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
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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 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
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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 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.
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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 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
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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:
(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
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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 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.
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(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 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
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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 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
26
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 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 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
27
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 concen trated 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, 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
28
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 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
29
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.
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
30
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.
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.
31
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 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 represen-
32
tative, 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 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
33
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 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
34
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 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.
35
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 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.
36
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.
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.
37
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
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.
38
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 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
39
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
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
40
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.
41