7
EXHIBIT "B"
004.105541.4
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 1,502,532 SHARES OF
SERIES 2 CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business Corporation Act
("FBCA"), Regency Realty Corporation, a Florida corporation (the "Corporation"),
does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation by Section 4.2 of the Restated Articles of
Incorporation of the Corporation, as amended (the "Charter") and Section
607.0602 of the FBCA, the Board of Directors of the Corporation, by resolutions
duly adopted on September 23, 1998 has classified 1,502,532 shares of the
authorized but unissued Preferred Stock par value $.01 per share (the "Series 2
Preferred Stock") as a separate class of Preferred Stock, authorized the
issuance of a maximum of 1,502,532 shares of such class of Series 2 Preferred
Stock, set certain of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such class of Series
2 Preferred Stock. Shareholder approval was not required under the Charter with
respect to such designation.
SECOND: The class of Series 2 Preferred Stock of the Corporation
created by the resolutions duly adopted by the Board of Directors of the
Corporation shall have the following designation, number of shares, preferences,
conversion and other rights, voting powers, restrictions and limitation as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions:
Section 1. Number of Shares and Designation. The number of shares of Series 2
Preferred Stock which shall constitute such series shall not be more than
1,502,532 shares, par value $0.01 per share, which number may be decreased (but
not below the number thereof then outstanding plus the number required to
fulfill the Corporation's obligations under certain agreements, options,
warrants or similar rights issued by the Corporation) from time to time by the
Board of Directors of the Corporation. Except as otherwise specifically stated
herein, the Series 2 Preferred Stock shall have the same rights and privileges
as Common Stock under Florida law.
Section 2. Definitions. For purposes of the Series 2 Preferred Stock, the
following terms shall have the eanings indicated:
"Board" shall mean the Board of Directors of the Corporation or any
committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Series 2 Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York City,
New York are not required to be open.
"Call Date" shall mean the date specified in the notice to holders
required under subparagraph (d) of Section 5 as the Call Date.
"Common Stock" shall mean the common capital stock of the Corporation,
par value $0.01 per share.
"Constituent Person" shall have the meaning set forth in paragraph (e)
of Section 6 hereof.
"Conversion Price" shall mean the conversion price per share of Common
Stock for which the Series 2 Preferred Stock is convertible, as such Conversion
Price may be adjusted pursuant to Section 6. The initial conversion price shall
be $20.8333 (equivalent to a conversion rate of one (1) share of Common Stock
for each share of Series 2 Preferred Stock).
"Current Market Price" of publicly traded Common Stock or any other
class of capital stock or other security of the Corporation or any other issuer
for any day shall mean the last reported sales price on such day, regular way,
or, if no sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the New
York Stock Exchange ("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which such
security is listed or admitted for trading or, if not listed or admitted for
trading on any national securities exchange, on the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or, if such security is not quoted on such National Market System,
the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by NASDAQ or, if bid and asked prices for
such security on such day shall not have been reported through NASDAQ, as
reported by the National Quotation Bureau, Incorporated, or, if not so reported,
the average of the closing bid and asked prices as furnished by any member of
the National Association of Securities Dealers, Inc. selected from time to time
by the Corporation for such purpose, or, if no such prices are furnished, the
fair market value of the security as determined in good faith by the Board.
"Dividend Payment Date" shall mean the last calendar day of March,
June, September and December, in each year, commencing on March 31, 1999;
provided, however, that if any Dividend Payment Date falls on any day other than
a Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing on
April 1, July 1, October 1 and January 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend Period
(other than the initial Dividend Period, which shall commence on the Issue
Date).
"Fully Junior Stock" shall mean any class or series of capital stock of
the Corporation now or hereafter issued and outstanding over which the Series 2
Preferred Stock has preference or priority in both (i) the payment of dividends
and (ii) the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
"Funds from Operations per Share" shall mean the amount determined by
dividing (a) the net income of the Corporation before extraordinary items
(determined in accordance with generally accepted accounting principles) as
reported by the Corporation in its year-end audited financial statements, minus
gains (or losses) from debt restructuring and sales of property, plus real
property depreciation and amortization and amortization of capitalized leasing
expenses and tenant allowances or improvements (to the extent such allowances or
improvements are capital items), and after adjustments for unconsolidated
partnerships, corporations and joint ventures (such items of depreciation and
amortization and such gains, losses and adjustments as determined in accordance
with generally accepted accounting principles and as reported by the Corporation
in its year-end audited financial statements) by (b) the weighted average number
of shares of common stock of the Corporation outstanding as reported by the
Corporation in its year-end audited financial statements. Adjustments for
unconsolidated partnerships, corporations and joint ventures shall be calculated
to reflect Funds from Operations per Share on the same basis. If the Corporation
shall after the Issue Date (A) pay a dividend or make a distribution in shares
of common stock on its outstanding shares of common stock, (B) subdivide its
outstanding shares of common stock into a greater number of shares, (C) combine
its outstanding Common Stock into a smaller number of shares or (D) issue any
shares of common stock by reclassification of its outstanding shares of common
stock, the Funds from Operations per Share shall be appropriately adjusted to
give effect to such events.
"Issue Date" shall mean the first date on which the Series 2 Preferred
Stock is issued.
"Junior Stock" shall mean the Common Stock and any other class or
series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series 2 Preferred Stock has preference or priority
in the payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"Minimum Amount" shall mean the greater of (A) $0.2083 and (B) 65% of
the highest amount of Funds from Operations per Share for any preceding fiscal
year, beginning with the fiscal year ending December 31, 1996, divided by four.
"Non-Electing Share" shall have the meaning set forth in paragraph (e)
of Section 6 hereof.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8.
"Person" shall mean any individual, firm, partnership, corporation, or
trust or other entity, and shall include any successor (by merger or otherwise)
of such entity.
"Securities" and "Security" shall have the meanings set forth in
paragraph (d)(iv) of Section 6 hereof.
"Series 1 Preferred Stock" shall mean the Series 1 Cumulative
Convertible Redeemable Preferred Stock of the Corporation, par value $0.01 per
share.
"Series 2 Preferred Stock" shall have the meaning set forth in Article
FIRST hereof.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board, the allocation of
funds to be so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior Stock,
Fully Junior Stock or any class or series of shares of capital stock ranking on
a parity with the Series 2 Preferred Stock as to the payment of dividends are
placed in a separate account of the Corporation or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with respect to the
Series 2 Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Transaction" shall have the meaning set forth in paragraph (e) of
Section 6 hereof.
"Transfer Agent" means initially the Corporation and shall include such
other agent or agents of the Corporation as may be designated by the Board or
their designee as the transfer agent for the Series 2 Preferred Stock.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
hereof.
Section 3. Dividends.
(a) The holders of Series 2 Preferred Stock shall be entitled to receive, when,
as and if declared by the Board out of funds legally available for that purpose,
quarterly dividends payable in cash in an amount per share equal to the greater
of (i) the Minimum Amount or (ii) an amount equal to the dividend (determined on
each Dividend Payment Date) on a share of Common Stock, or portion thereof, into
which a share of Series 2 Preferred Stock is convertible. For purposes of clause
(ii) of the preceding sentence, such dividends shall equal the number of shares
of Common Stock, or portion thereof, into which a share of Series 2 Preferred
Stock is convertible, multiplied by the most current quarterly dividend paid or
payable on a share of Common Stock on or before the applicable Dividend Payment
Date. Dividends on the Series 2 Preferred Stock shall begin to accrue and shall
be fully cumulative from the Issue Date, whether or not for any Dividend Period
or Periods there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly, when, as and if
declared by the Board, in arrears on Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Accrued and unpaid dividends
on shares of Series 2 Preferred Stock shall include any accrued and unpaid
dividends on the Series B Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest of Pacific Retail Trust which are exchanged by operation of
law into such shares of Series 2 Preferred Stock pursuant to the merger of
Pacific Retail Trust into the Corporation. Each dividend on the Series 2
Preferred Stock shall be payable to the holders of record of Series 2 Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on such record dates as shall be fixed by the Board. Accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time and
for such interim periods, without reference to any regular Dividend Payment
Date, to holders of record on such date as may be fixed by the Board.
(b) The amount of dividends payable for any dividend period shorter or longer
than a full Dividend Period, on the Series 2 Preferred Stock shall be computed
on the basis of twelve 30-day months and a 360-day year. Holders of Series 2
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of current and cumulative but unpaid dividends, as
herein provided, on the Series 2 Preferred Stock. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series 2 Preferred Stock that may be in arrears. (c) So long as
any Series 2 Preferred Stock is outstanding, no dividends, except as described
in the immediately following sentence, shall be declared or paid or set apart
for payment on any class or series of Parity Stock for any period unless full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on the Series 2 Preferred Stock for all Dividend Periods terminating on or prior
to the Dividend Payment Date on such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not set
apart, as aforesaid, all dividends declared upon Series 2 Preferred Stock and
all dividends declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series 2 Preferred Stock and accumulated and
unpaid on such Parity Stock. (d) So long as any Series 2 Preferred Stock is
outstanding, no dividends (other than dividends or distributions paid solely in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Fully Junior Stock) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Stock, nor shall any Junior
Stock be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Stock made for purposes of an employee
incentive or benefit plan of the Corporation or any subsidiary) for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Fully Junior Stock),
unless in each case (i) the full cumulative dividends on all outstanding Series
2 Preferred Stock and any other Parity Stock of the Corporation shall have been
paid or declared and set apart for payment for all past Dividend Periods with
respect to the Series 2 Preferred Stock and all past dividend periods with
respect to such Parity Stock and (ii) sufficient funds shall have been paid or
declared and set apart for the payment of the dividend for the current Dividend
Period with respect to the Series 2 Preferred Stock and the current dividend
period with respect to such Parity Stock. Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for payment to the holders of Junior Stock or Fully
Junior Stock, the holders of the Series 2 Preferred Stock shall be entitled to
receive $20.8333 per share of Series 2 Preferred Stock plus an amount equal to
all dividends declared but unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of the
Series 2 Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series 2 Preferred Stock and any such other
Parity Stock ratably in accordance with the respective amounts that would be
payable on such Series 2 Preferred Stock and any such other Parity Stock if all
amounts payable thereon were paid in full. For the purposes of this Section 4,
(i) a consolidation or merger of the Corporation with one or more Persons, (ii)
a sale or transfer of all or substantially all of the Corporation's assets or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or class or
classes of shares of capital stock ranking on a parity with or prior to the
Series 2 Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of the Series 2 Preferred Stock, as
provided in this Section 4, any other series or class or classes of Junior Stock
or Fully Junior Stock shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the Series 2 Preferred Stock shall not
be entitled to share therein. Section 5. Redemption at the Option of the
Corporation.
(a) The Series 2 Preferred Stock shall not be redeemable by the Corporation
prior to October 20, 2010. On and after October 20, 2010, the Corporation, at
its option, may redeem the Series 2 Preferred Stock, in whole at any time or
from time to time in part, at the option of the Corporation at a redemption
price of $20.8333 per share of Series 2 Preferred Stock, plus the amounts
indicated in Section 5(b).
(b) Upon any redemption of Series 2 Preferred Stock pursuant to this Section 5,
the Corporation shall pay in full any and all accrued and unpaid dividends
(without interest or sum of money in lieu of interest) for any and all Dividend
Periods ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend Payment
Date, then each holder of Series 2 Preferred Stock at the close of business on
such dividend payment record date shall be entitled to the dividend payable on
such shares on the corresponding dividend payment date notwithstanding the
redemption of such shares before such Dividend Payment Date. (c) If full
cumulative dividends on the Series 2 Preferred Stock and any other class or
series of Parity Stock of the Corporation have not been paid or declared and set
apart for payment, the Series 2 Preferred Stock may not be redeemed under this
Section 5 in part and the Corporation may not purchase or acquire shares of
Series 2 Preferred Stock, otherwise than pursuant to a voluntary purchase or
exchange offer made on the same terms to all holders of Series 2 Preferred
Stock. (d) Notice of the redemption of any Series 2 Preferred Stock under this
Section 5 shall be mailed by first-class mail to each holder of record of Series
2 Preferred Stock to be redeemed at the address of each such holder as shown on
the Corporation's record, not less than 30 nor more than 90 days prior to the
Call Date. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such mailed notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series 2 Preferred Stock to be redeemed and, if fewer than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the place or places at which certificates
for such shares are to be surrendered; and (4) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise provided
herein. Notice having been mailed as aforesaid, from and after the Call Date
(unless the Corporation shall fail to make available an amount of cash necessary
to effect such redemption), (i) except as otherwise provided herein, dividends
on the Series 2 Preferred Stock so called for redemption shall cease to accrue,
(ii) said shares shall no longer be deemed to be outstanding and (iii) all
rights of the holders thereof as holders of Series 2 Preferred Stock of the
Corporation shall cease (except the rights to convert and to receive cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to provide cash in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the Call
Date, the Corporation shall deposit with a bank or trust company (which may be
an affiliate of the Corporation) that has an office in the Borough of Manhattan,
City of New York, and that has, or is an affiliate of a bank or trust company
that has, capital and surplus of at least $50,000,000, sufficient cash necessary
for such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the Series 2 Preferred Stock so called for
redemption. No interest shall accrue for the benefit of the holders of Series 2
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws and other unclaimed property laws, any such
cash unclaimed at the end of two years from the Call Date shall revert to the
general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash. Notwithstanding the above, at any time
after such redemption notice is received and on or prior to the Call Date, any
holder may exercise its conversion rights under Section 6 below.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and if the notice
shall so state), such shares shall be exchanged for any cash (including
accumulated and unpaid dividends but without interest thereon) for which such
shares have been redeemed. If fewer than all the outstanding shares of Series 2
Preferred Stock are to be redeemed, shares to be redeemed shall be selected by
the Corporation from outstanding Series 2 Preferred Stock not previously called
for redemption by lot or pro rata (as nearly as may be) or by any other method
determined by the Corporation in its sole discretion to be equitable. If fewer
than all shares of the Series 2 Preferred Stock represented by any certificate
are redeemed, then new certificates representing the unredeemed shares shall be
issued without cost to the holder thereof.
Section 6. Conversion. Holders of Series 2 Preferred Stock shall
have the right, at any time and from time to time, to convert all or a portion
of such shares into Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this Section 6, a
holder of Series 2 Preferred Stock shall have the right, at such holder's
option, at any time to convert each share of Series 2 Preferred Stock into the
number of fully paid and non-assessable shares of Common Stock obtained by
dividing the aggregate liquidation preference of such shares by the Conversion
Price (as in effect at the time and on the date provided for in the last
paragraph of paragraph (b) of this Section 6) by surrendering such shares to be
converted, such surrender to be made in the manner provided in paragraph (b) of
this Section 6.
(b) In order to exercise the conversion right, each holder of shares of Series 2
Preferred Stock to be converted shall surrender the certificate representing
such shares, duly endorsed or assigned to the Corporation or in blank, at the
office of the Transfer Agent, accompanied by written notice to the Corporation
that the holder thereof elects to convert such Series 2 Preferred Stock. Unless
the shares issuable on conversion are to be issued in the same name as the name
in which such Series 2 Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
Holders of Series 2 Preferred Stock at the close of business on a
dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding dividend payment date notwithstanding the
conversion thereof following such dividend payment record date and on or prior
to such dividend payment date. In no event shall a holder of Series 2 Preferred
Stock be entitled to receive a dividend payment on Common Stock issued or
issuable upon conversion of Series 2 Preferred Stock if such holder is entitled
to receive a dividend in respect of the Series 2 Preferred Stock surrendered for
conversion. The Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series 2 Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or such holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with provisions of
this Section 6, and any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph (c)
of this Section 6.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for Series 2
Preferred Stock shall have been surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares represented thereby at such time on such date and such conversion shall
be at the Conversion Price in effect at such time on such date unless the stock
transfer books of the Corporation shall be closed on that date, in which event
such person or persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price in
effect on the date on which such shares shall have been surrendered and such
notice received by the Corporation.
(c) No fractional shares or scrip representing fractions of a share of Common
Stock shall be issued upon conversion of the Series 2 Preferred Stock. Instead
of any fractional interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of a share of Series 2 Preferred Stock, the
Corporation shall pay to the holder of such share an amount in cash based upon
the Current Market Price of Common Stock on the Business Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion at one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of Series 2 Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as follows:
(i)If the Corporation shall after the Issue Date (A) pay a dividend or make
a distribution in shares of Common Stock on its Common Stock, (B) subdivide
its outstanding shares of Common Stock into a greater number of shares, (C)
combine its outstanding shares of Common Stock into a smaller number of shares
or (D) issue any shares of Common Stock by reclassification of its Common
Stock, the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of shareholders
entitled to receive such dividend or distribution or at the opening of
business on the Business Day next following the day on which such subdivision,
combination or reclassification becomes effective, as the case may be, shall
be adjusted so that the holder of any shares of Series 2 Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number
of shares of Common Stock that such holder would have owned or have been
entitled to receive after the happening of any of the events described above
as if such shares of Series 2 Preferred Stock had been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (g) below) in the case of a
dividend or distribution and shall become effective immediately after the
opening of business on the Business Day next following the effective date in the
case of a subdivision, combination or reclassification.
(ii) If the Corporation shall issue after the Issue Date rights, options or
warrants to subscribe for or purchase Common Stock, or to subscribe for or
purchase any security convertible into Common Stock, and the price per share for
which Common Stock is issuable upon exercise of such rights, options or
warrants, or upon the conversion or exchange of such convertible securities, is
less than the lesser of the Conversion Price then in effect and the Current
Market Price per share of Common Stock on the date such rights, options or
warrants are issued, then the Conversion Price in effect at the opening of
business on the Business Day next following such issue date shall be adjusted to
equal the price determined by multiplying (A) the Conversion Price in effect
immediately prior to the opening of business on the date for such issuance by
(B) a fraction, the numerator of which shall be the sum of (I) the number of
shares of Common Stock outstanding immediately prior to such issuance and (II)
the number of shares that the aggregate proceeds to the Corporation from the
exercise of such rights, options or warrants for Common Stock, or in the case of
rights to purchase convertible securities, the aggregate proceeds from the
exercise of such rights, options or warrants and the subsequent conversion of
such convertible securities, would purchase at such Conversion Price or Current
Market Price, as applicable, and the denominator of which shall be the sum of
(A) the number of shares of Common Stock outstanding immediately prior to such
issuance and (B) the number of additional shares of Common Stock offered for
subscription or purchase pursuant to such rights, options or warrants. Such
adjustment shall become effective immediately after the opening of business on
the day next following such issue date (except as provided in paragraph (g)
below). In determining whether any rights, options or warrants entitle the
holders of Common Stock to subscribe for or purchase Common Stock or any
security convertible into or exchangeable for Common Stock at less than such
Conversion Price or Current Market Price, as applicable, there shall be taken
into account any consideration received by the Corporation upon issuance and
upon exercise of such rights, options or warrants, and in the case of rights,
options or warrants to subscribe for or purchase convertible securities, upon
the subsequent conversion of such securities, the value of such consideration,
if other than cash, to be determined in good faith by the Board. In the event
that the securities referenced in this subparagraph (ii) are only issued to all
holders of Common Stock, no adjustment shall be made to the Conversion Price
under this subparagraph (ii) if the Corporation shall issue to all holders of
Series 2 Preferred Stock, the same number of rights, options or warrants to
subscribe for or purchase Common Stock or any security convertible into or
exchangeable for Common Stock, as those issued to holders of Common Stock, based
upon the number of shares of Common Stock into which each share of Series 2
Preferred Stock is then convertible. (iii) If the Corporation shall issue after
the Issue Date any shares of capital stock or security convertible or
exchangeable for Common Stock (excluding rights, options or warrants referred to
in subparagraph (ii) above) and the price per share for which Common Stock is
issuable upon the conversion or exchange of such convertible or exchangeable
securities is less than the lesser of the Conversion Price then in effect and
the Current Market Price per share of Common Stock on the date such convertible
or exchangeable securities are issued, then the Conversion Price in effect at
the opening of business on the Business Day next following such issue date shall
be adjusted to equal the price determined by multiplying (A) the Conversion
Price in effect immediately prior to the opening of business on the Business Day
next following the issue date by (B) a fraction, the numerator of which shall be
the sum of (I) the number of shares of Common Stock outstanding on the close of
business on the Business Day immediately preceding the issue date and (II) the
number of shares of Common Stock that the aggregate proceeds to the Corporation
from the conversion into or in exchange for Common Stock would purchase at such
Conversion Price or Current Market Price, as applicable, and the denominator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
on the close of business on the Business Day immediately preceding the issue
date and (B) the number of additional shares of Common Stock issuable upon
conversion or exchange of such convertible or exchangeable securities. Such
adjustment shall become effective immediately after the opening of business on
the day next following such issue date (except as provided in paragraph (g)
below). In determining whether any securities are convertible for or
exchangeable into Common Stock at less than such Conversion Price or Current
Market Price, as applicable, there shall be taken into account any consideration
received by the Corporation upon issuance and upon conversion or exchange of
such convertible or exchangeable securities, the value of such consideration, if
other than cash, to be determined in good faith by the Board. (iv) If the
Corporation shall distribute to all holders of its Common Stock any shares of
capital stock of the Corporation (other than Common Stock) or evidence of its
indebtedness or assets (excluding cash dividends or distributions) or rights,
options or warrants to subscribe for or purchase any of its securities
(excluding those rights, options and warrants referred to in subparagraph (ii)
above and excluding those convertible or exchangeable securities referred to in
subparagraph (iii) above (any of the foregoing being hereinafter in this
subparagraph (iv) collectively called the "Securities" and individually a
"Security"), then in each such case the Conversion Price shall be adjusted so
that it shall equal the price determined by multiplying (A) the Conversion Price
in effect immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by (B) a
fraction, the numerator of which shall be the lesser of the Conversion Price
then in effect and the Current Market Price per share of Common Stock on the
record date mentioned below less the then fair market value (as determined in
good faith by the Board) of the portion of the shares of capital stock or assets
or evidences of indebtedness so distributed or of such rights, options or
warrants applicable to one share of Common Stock, and the denominator of which
shall be the lesser of the Conversion Price then in effect and the Current
Market Price per share of Common Stock on the record date mentioned below. Such
adjustment shall become effective immediately at the opening of business on the
Business Day next following (except as provided in paragraph (g) below) the
record date for the determination of shareholders entitled to receive such
distribution. For the purposes of this clause (iv), the distribution of a
Security, which is distributed not only to the holders of the Common Stock on
the date fixed for the determination of shareholders entitled to such
distribution of such Security, but also is distributed with each share of Common
Stock delivered to a Person converting Series 2 Preferred Stock after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this clause (iv); provided that on the date, if any, on which a
Person converting a share of Series 2 Preferred Stock would no longer be
entitled to receive such Security with a share of Common Stock (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred and the Conversion Price shall be
adjusted as provided in this clause (iv) (and such day shall be deemed to be
"the date fixed for the determination of the shareholders entitled to receive
such distribution" and "the record date" within the meaning of the two preceding
sentences). (v) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
subparagraph (v) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Section 6 (other than this subparagraph (v)) not later than such time as
may be required in order to preserve the tax-free nature of a distribution to
the holders of Common Stock. Notwithstanding any other provisions of this
Section 6, the Corporation shall not be required to make any adjustment of the
Conversion Price for the issuance of any Common Stock pursuant to (A) any plan
providing for the reinvestment of dividends or interest payable on securities of
the Corporation and the investment of additional optional amounts in Common
Stock under such plan or (B) any right, option or warrant to acquire Common
Stock granted to any employee (as such term is defined in General Instruction A
to Form S-8 under the Securities Act) of the Corporation under a plan providing
for the granting of such securities to employees; provided, however, that such
plan is approved by the shareholders and the aggregate amount of Common Stock
issuable under the rights, options and warrants granted under such plan shall
not exceed 20% of the shares of Common Stock issued and outstanding on the date
such plan is approved by shareholders. In addition, the Corporation shall not be
required to make any adjustment of the Conversion Price for the issuance of any
Common Stock or any other class or series of shares of capital stock pursuant to
the terms of that certain Shareholders' Agreement among Pacific Retail Trust (to
which the Corporation is successor by merger), Security Capital Holdings S.A.
and Opportunity Capital Partners Limited Partnership. All calculations under
this Section 6 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in addition
to those required by this paragraph (d), as it in its discretion shall determine
to be advisable in order that any share dividends, subdivision of shares,
reclassification or combination of shares, distribution of rights, options or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
shareholders shall not be taxable. (e) If the Corporation shall be a party to
any transaction (including without limitation a merger, consolidation, statutory
share exchange, self tender offer for all or substantially all Common Stock,
sale of all or substantially all of the Corporation's assets or recapitalization
of the Common Stock and excluding any transaction as to which subparagraph
(d)(i) of this Section 6 applies) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which all or
substantially all shares of Common Stock are converted into the right to receive
stock, securities or other property (including cash or any combination thereof)
of another Person, each share of Series 2 Preferred Stock, which is not
converted into the right to receive stock, securities or other property of such
Person prior to such Transaction (and each share of Series 2 Preferred Stock
issuable after such Transaction upon conversion of securities convertible into
Series 2 Preferred Stock), shall thereafter be convertible into the kind and
amount of shares of stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction by a
holder of that number of shares of Common Stock into which one share of Series 2
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-Electing Share"), then for the
purpose of this paragraph (e) the kind and amount of stock, securities and other
property (including cash) receivable upon such Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). The Corporation shall not be a party to
any Transaction unless the terms of such Transaction are consistent with the
provisions of this paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Series 2 Preferred Stock (and securities
convertible into Series 2 Preferred Stock) that will contain provisions enabling
the holders of the Series 2 Preferred Stock that remain outstanding (or are
issuable upon conversion of securities convertible into Series 2 Preferred
Stock) after such Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly mail notice of such adjustment of the Conversion
Price to each holder of Series 2 Preferred Stock at such holder's last address
as shown on the share records of the Corporation. (g) In any case in which
paragraph (d) of this Section 6 provides that an adjustment shall become
effective on the day next following the record date for an event, the
Corporation may defer until the occurrence of such event (A) issuing to the
holder of any Series 2 Preferred Stock converted after such record date and
before the occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such conversion before
giving effect to such adjustment and (B) paying to such holder any amount of
cash in lieu of any fraction pursuant to paragraph (c) of this Section 6. (h)
There shall be no adjustment of the Conversion Price in case of the issuance of
any shares of capital stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this Section 6.
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 6, only one adjustment shall
be made and such adjustment shall be the adjustment that yields the highest
absolute value. (i) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock, for the purpose of effecting conversion of
the Series 2 Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding Series 2 Preferred Stock not
theretofore converted. For purposes of this paragraph (i), the number of shares
of Common Stock that shall be deliverable upon the conversion of all outstanding
Series 2 Preferred Stock shall be computed as if at the time of computation all
such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series 2 Preferred Stock shall be validly issued, fully paid
and non-assessable. Before taking any action that would cause an adjustment
reducing the Conversion Price below the then-par value of the Common Stock
deliverable upon conversion of the Series 2 Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted Conversion Price.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series 2 Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(j) The Corporation will pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of Common Stock or
other securities or property on conversion of the Series 2 Preferred Stock
pursuant hereto; provided, however, that the Corporation shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of Common Stock or other securities or property in a name
other than that of the holder of the Series 2 Preferred Stock to be converted,
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
Section 7. Shares to Be Retired. All shares of Series 2 Preferred Stock which
shall have been issued and reacquired in any manner by the Corporation shall be
restored to the status of authorized but unissued shares of Preferred Stock of
the Corporation, without designation as to class or series.
Section 8. Ranking. Any class or series of shares of capital stock of the
Corporation shall be deemed to rank: (a) prior to the Series 2 Preferred Stock,
as to the payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series 2 Preferred Stock;
(b) on a parity with the Series 2 Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
liquidation prices per share thereof shall be different from those of the Series
2 Preferred Stock, if the holders of such class or series and the Series 2
Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other ("Parity Stock");
(c) junior to the Series 2 Preferred Stock, as to the payment of dividends or as
to the distribution of assets upon liquidation, dissolution or winding up, if
such class or series shall be Junior Stock; and (d) junior to the Series 2
Preferred Stock, as to the payment of dividends and as to the distribution of
assets upon liquidation, dissolution or winding up, if such class or series
shall be Fully Junior Stock.
The Corporation's Series 1 Cumulative Convertible Redeemable Preferred
Stock and the Corporation's 8.125% Series A Cumulative Redeemable Preferred
Stock shall constitute Parity Stock.
Section 9. Voting.
(a) Each issued and outstanding share of Series 2 Preferred Stock shall entitle
the holder thereof to the number of votes per share of Common Stock into which
such share of Series 2 Preferred Stock is convertible (as of the close of
business on the record date for determination of shareholders entitled to vote
on a matter) on all matters presented for a vote of shareholders of the
Corporation and, except as required by applicable law and subject to the further
provisions of this Section 9, the Series 2 Preferred Stock shall be voted
together with all issued and outstanding Common Stock and Series 1 Preferred
Stock voting as a single class.
(b) If and whenever twelve consecutive quarterly dividends payable on the Series
2 Preferred Stock or any series or class of Parity Stock shall be in arrears
(which shall, with respect to any such quarterly dividend, mean that any such
dividend has not been paid in full), whether or not earned or declared, the
number of directors then constituting the Board shall be increased by one and
the holders of Series 2 Preferred Stock, together with the holders of shares of
every other series of Parity Stock, including the Series 1 Preferred Stock (any
such other series, the "Voting Preferred Stock"), voting as a single class
regardless of series, shall be entitled to elect, at a special meeting of the
holders of the Series 2 Preferred Stock and the Voting Preferred Stock called as
hereinafter provided, the additional director to serve on the Board. Whenever
all arrearages in dividends on the Series 2 Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Series 2 Preferred Stock
and the Voting Preferred Stock to elect such additional director shall cease
(but subject always to the same provision for the vesting of such voting rights
in the case of any similar future arrearages in twelve quarterly dividends), and
the terms of office of the person elected as director by the holders of the
Series 2 Preferred Stock and the Voting Preferred Stock shall forthwith
terminate and the number of members of the Board shall be reduced accordingly.
At any time after such voting power shall have been so vested in the holders of
Series 2 Preferred Stock and the Voting Preferred Stock (or if any vacancy shall
occur in respect of the director previously elected by the holders of the Series
2 Preferred Stock and the Voting Preferred Stock), the secretary of the
Corporation shall call a special meeting of the holders of the Series 2
Preferred Stock and of the Voting Preferred Stock for the election of the
director to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the shareholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the secretary
within 30 days after the end of the most recent Dividend Period during which the
right to elect such additional director arose or such vacancy occurred, then any
holder of Series 2 Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock records of the
Corporation. The director elected at any such special meeting shall hold office
until the next annual meeting of the shareholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided. (c) So long as any Series 2 Preferred Stock is outstanding, in
addition to any other vote or consent of shareholders required by law or by the
Charter, the affirmative vote of at least 66 2/3% of the votes entitled to be
cast by the holders of the Series 2 Preferred Stock, together with the holders
of Voting Preferred Stock, at the time outstanding, acting as a single class
regardless of series, given in person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall be necessary for
effecting or validating: (i) Any amendment, alteration or repeal of any of the
provisions of the Charter or these Articles of
Amendment that materially and adversely affects the voting powers,
rights or preferences of the holders of the Series 2 Preferred Stock or
the Voting Preferred Stock; provided, however, that the amendment of
the provisions of the Charter so as to authorize or create or to
increase the authorized amount of, any Fully Junior Stock, Junior Stock
that is not senior in any respect to the Series 2 Preferred Stock, or
any stock of any class ranking on a parity with the Series 2 Preferred
Stock or the Voting Preferred Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the
holders of Series 2 Preferred Stock; and provided, further, that if any
such amendment, alteration or repeal would materially and adversely
affect any voting powers, rights or preferences of the Series 2
Preferred Stock or another series of Voting Preferred Stock that are
not enjoyed by some or all of the other series otherwise entitled to
vote in accordance herewith, the affirmative vote of at least 66 2/3%
of the votes entitled to be cast by the holders of all series similarly
affected, similarly given, shall be required in lieu of the affirmative
vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the Series 2 Preferred Stock and the Voting Preferred Stock
otherwise entitled to vote in accordance herewith; or
(ii) A share exchange that affects the Series 2 Preferred Stock, a consolidation
with or merger of the Corporation into another Person, or a consolidation with
or merger of another Person into the Corporation, unless in each such case each
share of Series 2 Preferred Stock (A) shall remain outstanding without a
material and adverse change to its terms and rights or (B) shall be converted
into or exchanged for convertible preferred stock of the surviving entity having
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or conditions of
redemption thereof identical to that of a share of Series 2 Preferred Stock
(except for changes that do not materially and adversely affect the holders of
the Series 2 Preferred Stock); or (iii) The authorization or creation of, or the
increase in the authorized amount of, any shares of any class or any security
convertible into shares of any class ranking prior to the Series 2 Preferred
Stock in the distribution of assets on any liquidation, dissolution or winding
up of the Corporation or in the payment of dividends. (d) For purposes of voting
in respect to those matters referred to in subparagraphs (b) and (c) of this
Section 9, unless otherwise provided under applicable law, each Series 2
Preferred Stock shall have one (1) vote per share, except that when any other
series of Preferred Stock shall have the right to vote with the Series 2
Preferred Stock as a single class on any matter, then the Series 2 Preferred
Stock and such other series shall have with respect to such matters one (1) vote
per $20.8333 of stated liquidation preference. Except as otherwise required by
applicable law or as set forth herein, the Series 2 Preferred Stock shall not
have any relative, participating, optional or other special voting rights and
powers other than as set forth herein, and the consent of the holders thereof
shall not be required for the taking of any corporate action.
Section 10. Record Holders. The Corporation and the Transfer Agent may deem and
treat the record holder of any shares of Series 2 Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series 2 Preferred Stock shall not be entitled to
the benefits of any retirement or sinking fund.
THIRD: The Series 2 Preferred Stock has been classified and designated
by the Board of Directors under the authority contained in Section 4.2 of the
Charter.
FOURTH: These Articles of Amendment have been approved by the
Board of Directors in the manner and by the vote required by law.
FIFTH: The undersigned President of the Corporation acknowledges these
Articles of Amendment to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of her knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
[Signature Page Follows]
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 26th day of February, 1999.
REGENCY REALTY CORPORATION
By:
Name: Mary Lou Rogers
Title: President
[SEAL]
ATTEST:
Name: J. Christian Leavitt
Title: Secretary