Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MEDITRUST CORPORATION
Meditrust Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
1. The Corporation filed its original Certificate of Incorporation with
the Secretary of State of the State of Delaware on August 23, 1979 (the
"Original Certificate of Incorporation") under the name "Santa Anita Realty
Enterprises, Inc." The name of the Corporation was changed to Meditrust
Corporation on November 5, 1997, by way of amendment to the Original Certificate
of Incorporation. A Restated Certificate of Incorporation (the "Second
Certificate") was filed with the Secretary of State of the State of Delaware on
March 2, 1998 restating and integrating the Corporation's certificate of
incorporation as theretofore amended and supplemented.
2. This Amended and Restated Certificate of Incorporation (the
"Certificate") amends, restates and integrates the Corporation's Certificate of
Incorporation as heretofore amended and supplemented. The Certificate was duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Sections 242 and 245 of the Delaware General Corporation Law, as
amended from time to time (the "DGCL"), and was duly adopted by the stockholders
of the Corporation in accordance with the applicable provisions of Sections 242
and 245 of the DGCL.
3. The text of the Second Certificate, as amended to date, is hereby
amended and restated in its entirety to provide as herein set forth in full:
FIRST. NAME. The name of the Corporation is Meditrust Corporation.
SECOND. REGISTERED OFFICE. The address of its registered office in the
State of Delaware is 1013 Centre Road, Suite 300 in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is
Corporation Service Company.
THIRD. PURPOSES. The nature of the business or purposes to be
conducted or promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware and to do all things and
exercise all powers, rights and privileges which a business corporation may now
or hereafter be organized or authorized to do or to exercise under the laws of
the State of Delaware.
FOURTH. CAPITALIZATION.
SECTION 1. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 561,000,000, of which 500,000,000
shares of the par value of $.10 each are to be a class designated Common Stock,
6,000,000 shares of the par value of $.10 each are to be of a class designated
Preferred Stock, 30,000,000 shares of the par value of $.10 each are to be of a
class designated Series Common Stock and 25,000,000 of the par value $.10 each
are to be of a class designated Excess Stock.
SECTION 2. The shares of Preferred Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation, or any
duly authorized committee thereof, is hereby authorized to fix or authorize the
dividend rights, dividend rate, conversion rights, voting rights, rights and
terms of redemption (including sinking fund provisions), the redemption price or
prices, and the liquidation preferences of any wholly unissued series of
Preferred Stock and the number of shares constituting any such series and the
designation thereof, or all or any of them and such other rights specified by
the Board of Directors of the Corporation and not prohibited by law.
SECTION 3. The shares of Series Common Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of Series Common Stock and the number of shares
constituting any such series and the designation thereof, or all or any of them.
SECTION 4. (a) Each holder of Common Stock, as such, shall be entitled
to one vote for each share of Common Stock held of record by such holder on all
matters on which stockholders generally are entitled to vote.
(b) Except as otherwise required by law, holders of a series of
Preferred Stock or Series Common Stock, as such, shall be entitled only to such
voting rights, if any, as shall expressly be granted thereto by this Certificate
of Incorporation (including any Certificate of Designation relating to such
series).
(c) Subject to applicable law and the rights, if any, of the holders of
any outstanding series of Preferred Stock or Series Common Stock or any class or
series of stock having a preference over or the right to participate with the
Common Stock with respect to the payment of dividends, dividends may be declared
and paid on the Common Stock at such times and in such amounts as the Board of
Directors of the Corporation in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the Corporation,
subject to the rights, if any, of the holders of any outstanding series of
Preferred Stock or Series Common Stock or any class or series of stock having a
preference over or the right to participate with the Common Stock with respect
to the distribution of assets of the Corporation upon such dissolution,
liquidation or winding up of the Corporation, the holders of the Common Stock,
as such, shall be entitled to receive the assets of the Corporation available
for distribution to its stockholders ratably in proportion to the number of
shares held by them.
SECTION 5. The terms and conditions applicable to shares of Excess
Stock are set forth in Article Thirteenth hereof.
FIFTH. [DELETED].
SIXTH. BY-LAWS. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is expressly
authorized, without stockholder approval, to make, alter or repeal the by-laws
of the Corporation.
SEVENTH. RIGHT TO AMEND CERTIFICATE. The Corporation reserves the
right to amend, alter, change or repeal any provision contained in this
Certificate, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
EIGHTH. [DELETED].
NINTH:
PART 1. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS
1.1. HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In addition to any
affirmative vote required by law or any other Article of this Certificate of
Incorporation, and except as otherwise expressly provided in Part 2 of this
Article Ninth:
(a) any merger or consolidation of the Corporation or any Subsidiary
with (i) any Interested Stockholder or (ii) any other corporation (whether or
not itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate of an Interested Stockholder;
or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value of $5,000,000 or more; or
(c) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market Value
of $5,000,000 or more, other than the issuance of securities by the Corporation
or any Subsidiary upon the conversion of convertible securities of the
Corporation or any Subsidiary into stock of the Corporation or any Subsidiary;
or
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(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder;
shall require the affirmative vote of the holders of at least (a) 80%
of the combined voting power of the then outstanding shares of stock of all
classes and series of the Corporation entitled to vote in the election of
directors (the "Voting Stock"), and (b) a majority of the combined voting power
of the then outstanding shares of Voting Stock held by persons who are
Disinterested Stockholders, provided, however, that the majority vote
requirement of this clause (b) shall not be applicable if the Business
Combination is approved by the affirmative vote of the holders of not less than
90% of combined voting power of the then outstanding shares of Voting Stock. The
foregoing affirmative vote requirements are hereinafter referred to as the
"Special Vote Requirement." The Special Vote Requirement shall be applicable
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
1.2. DEFINITION OF "BUSINESS COMBINATION." The term "Business
Combination" as used in this Article Ninth shall mean any transaction which is
referred to in any one or more of clauses (a) through (e) of Section 1.1.
PART 2. WHEN SPECIAL VOTE REQUIREMENT IS NOT APPLICABLE
The provisions of Part 1 of this Article Ninth shall not be applicable
to any particular Business Combination, and such Business Combination shall
require only such affirmative vote as is required by law and any other Article
of this Certificate of Incorporation, if all of the conditions specified in
either of the following Sections 2.1 and 2.2 are met:
2.1. APPROVAL BY CONTINUING DIRECTORS. The Business Combination shall
have been approved by a majority of the Continuing Directors.
2.2. PRICE AND PROCEDURAL REQUIREMENTS. All of the following
conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value, as of
the date of the consummation of the Business Combination, of consideration other
than cash to be received per share by holders of Common Stock in such Business
Combination shall be at least equal to the higher of (i) the highest price paid
for any share of Common Stock by any person who is an Interested Stockholder
within the two-year period immediately prior to the time of the first public
announcement of the proposed Business Combination (the "Announcement Date") or
in the transaction in which such person became an Interested Stockholder,
whichever price is the higher; or (ii) the Fair Market Value per share of the
Corporation's Common Stock on the Announcement Date or on the date on which the
Interested Stockholder became an Interested Stockholder (the "Determination
Date"), whichever is higher. The price paid for any share of Common Stock shall
be the amount of cash plus the Fair Market Value of any other consideration to
be received therefor, determined at the time of payment thereof.
(b) The aggregate amount of the cash and the Fair Market Value, as of
the date of the consummation of the Business Combination, of consideration other
than cash to be received in such Business Combination by holders of securities
of the Corporation other than Common Stock shall be at least equal to the higher
of (i) if applicable, the highest preferential amount to which the holders of
such securities are entitled in the event of any voluntary liquidation,
dissolution or winding up of the Corporation, (ii) the highest price paid for
any of such securities by any person who is an Interested Stockholder within the
two-year period immediately prior to the Announcement Date or in the transaction
in which such person became an Interested Stockholder, whichever price is
higher, (iii) the Fair Market Value of such securities on the Announcement Date
or the Determination Date, whichever is higher, or (iv) if such securities are
convertible into or exchangeable for shares of Common Stock, the amount per
share of such Common Stock determined pursuant to the foregoing paragraph (a)
reduced by any amount payable by the holders of such
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securities in accordance with the terms of such securities, per share, upon such
conversion or exchange, multiplied by the total number of shares of Common Stock
into which or for which such securities are convertible or exchangeable.
(c) The consideration to be received by holders of a particular class
of outstanding Voting Stock (including Common Stock) shall be in cash or in the
same forms the Interested Stockholder has previously paid for shares of such
class of Voting Stock. If the Interested Stockholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either cash or the form of
consideration used to acquire the largest number of shares of such class of
Voting Stock previously acquired by it.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (i)
there shall have been (1) no reduction in the annual rate of dividends paid on
the Common Stock (except as necessary to reflect any subdivision of the Common
Stock), except as approved by a majority of the Continuing Directors, and (2) an
increase in such annual rate of dividends necessary to reflect any
reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of reducing the
number of outstanding shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority of the Continuing Directors;
and (ii) such Interested Stockholder shall have not become the beneficial owner
of any additional shares of Voting Stock except as part of the transaction which
results in such Interested Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange Act
of 1934 and the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to all stockholders of
the Corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions).
PART 3. CERTAIN DEFINITIONS
For the purposes of this Article Ninth:
3.1. A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
3.2. "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than 10%
of the combined voting power of the then outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the combined voting power of
the then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period immediately prior
to the date in question beneficially owned by any Interested Stockholder, if
such assignment or succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering within the meaning of
the Securities Act of 1933.
3.3. A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
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(b) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote or to direct the
vote pursuant to any agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
3.4. For the purposes of determining whether a person is an Interested
Stockholder pursuant to Section 3.2, the number of shares of Voting Stock deemed
to be outstanding shall include shares deemed owned through application of
Section 3.3 but shall not include any other shares of Voting Stock which may be
issuable to other persons pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options, or
otherwise.
3.5. "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on January 1, 1984.
3.6. "Subsidiary" means any corporation of which more than a majority
of any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for purposes of the definition of
Interested Stockholder set forth in Section 3.2, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of equity security is
owned by the Corporation, by a Subsidiary, or by the Corporation and one or more
Subsidiaries.
3.7. "Continuing Director" means any member of the Board of Directors
of the Corporation who is unaffiliated with, and not a nominee of, the
Interested Stockholder and was a member of the Board of Directors of the
Corporation prior to the time that the Interested Stockholder became an
Interested Stockholder and any successor of a Continuing Director who is
unaffiliated with, and not a nominee of, the Interested Stockholder and who is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board of Directors of the Corporation.
3.8. "Disinterested Stockholder" means a holder of Voting Stock who is
not an Interested Stockholder or an Affiliate or Associate of an Interested
Stockholder and whose shares are not deemed owned by an Interested Stockholder
through application of Section 3.3.
3.9. "Fair Market Value" means: (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, the Fair Market Value on the date in question of a share of such
stock as determined by a majority of the Continuing Directors in good faith; and
(b) in the case of stock of any class of securities not traded on any securities
exchange or in the over-the-counter market or in the case of property other than
cash or stock, the Fair Market Value of such securities or property on the date
in question as determined by a majority of the Continuing Directors in good
faith. If the stock is paired for purposes of trading with that of any other
corporation, the Fair Market Value of the paired stock shall be determined
pursuant to the pairing or other agreement which provides for the determination
of the relative values of the stock of the Corporation and the stock of such
other corporation, after determining the Fair Market Value of the paired stock
as set forth above.
3.10. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration to be received" as used in Sections 2.2(a),
(b) and (c) shall include the shares of Common Stock and/or the shares of any
other class of outstanding Voting Stock retained by the holders of such shares.
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PART 4. DIRECTORS' DUTY TO DETERMINE CERTAIN FACTS
The majority of the Continuing Directors of the Corporation shall have
the power and duty to determine for the purpose of this Article Ninth, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine the applicability of the various provisions of this Article Ninth,
including (A) whether a person is an Interested Stockholder, (B) the number of
shares of Voting Stock beneficially owned by any person, (C) whether a person is
an Affiliate or Associate of another, (D) whether the requirements of Section
2.2 have been met with respect to any Business Combination, and (E) whether the
assets which are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination has, an aggregate Fair
Market Value of $5,000,000 or more; and the good faith determination of a
majority of the Continuing Directors shall be conclusive and binding for all
purposes of this Article Ninth.
PART 5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS
Nothing contained in this Article Ninth shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
PART 6. AMENDMENT, REPEAL, INCONSISTENT PROVISIONS
Notwithstanding any other provisions of law or of this Certificate of
Incorporation or the by-laws of the Corporation which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of securities which may be required by law or
by this Certificate of Incorporation, any proposal to amend or repeal, or adopt
any provisions inconsistent with, this Article Ninth of this Certificate of
Incorporation shall require for approval the affirmative vote of at least (a)
80% of the combined voting power of the then outstanding Shares of Voting Stock
and (b) a majority of the combined voting power of the then outstanding shares
of Voting Stock held by persons who are Disinterested Stockholders, provided
that the majority vote requirement of this clause (b) shall not be applicable if
the proposal is approved by the affirmative vote of not less than 90% of the
combined voting power of the then outstanding shares of Voting Stock.
TENTH:
(a) The number of directors shall be as provided in the by-laws. The
Board of Directors of the Corporation shall be divided into three classes,
designated Class I, Class II and Class III, such classes to be as nearly equal
in number as possible and to have the number provided in the by-laws. 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. Any vacancy on the Board of Directors of the
Corporation, whether arising through death, resignation or removal of a director
or through an increase in the number of directors of any class, shall be filled
by a majority vote of all the remaining directors. The term of office of any
director elected to fill such a vacancy shall expire at the expiration of the
term of office of directors of the class in which the vacancy occurred.
Notwithstanding any other provision of this Article, and except as otherwise
required by law, whenever the holders of any one or more series of Preferred
Stock or other securities of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
term of office, the filling of vacancies and other features of such
directorships shall be governed by the terms of this Certificate of
Incorporation applicable thereto, and unless the terms of this Certificate of
Incorporation expressly provide otherwise, such directorships shall be in
addition to the number of directors provided in the by-laws and such directors
shall not be classified pursuant to this Article.
(b) Any action required or 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. The by-laws of the Corporation may be amended by the
stockholders only by the affirmative vote of at least 80% of the voting power of
the Corporation. Notwithstanding any other provision of law or of this
Certificate of Incorporation or the by-laws of the Corporation which might
otherwise permit a lesser vote or no vote, but in addition to any affirmative
vote of the holders of any particular class or series of securities which may be
required by law or by this Certificate of Incorporation, any proposal
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to amend or repeal, or adopt any provisions inconsistent with, this Article
Tenth shall require for approval the affirmative vote of at least 80% of the
voting power of the Corporation.
ELEVENTH:
The Board of Directors of the Corporation shall base the response of
this Corporation to any proposed Business Combination on the evaluation of the
Board of Directors of the Corporation of what is in the best interest of this
Corporation. In evaluating what is in the best interest of this Corporation, the
Board of Directors of the Corporation shall consider:
(a) THE BEST INTEREST OF THE STOCKHOLDERS. For this purpose, the Board
shall consider among other factors, not only the consideration offered in the
proposed Business Combination in relation to the then current market price of
this Corporation's stock, but also in relation to the then current value of this
Corporation in a freely negotiated transaction and in relation to the then
current estimate of the Board of Directors of the Corporation of the future
value of this Corporation as an independent entity; and
(b) Such other factors as the Board of Directors of the Corporation
determines to be relevant, including, among other factors, the social, legal and
economic effects on the communities in which this Corporation and its
subsidiaries operate and are located.
TWELFTH:
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
the Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as director.
Any repeal or modification of this Article shall not result in any
liability for a director with respect to any action or omission occurring prior
to such repeal or modification.
THIRTEENTH:
Section 13.1 RESTRICTIONS ON OWNERSHIP AND TRANSFER OF EQUITY STOCK.
(a) DEFINITIONS. For purposes of this Article Thirteenth and Article
Fourteenth, the following terms shall have the meanings set forth below:
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the shares of Equity
Stock directly or indirectly owned by such Person, (ii) the number of shares of
Equity Stock treated as owned directly or indirectly by such Person through the
application of the constructive ownership rules of Section 544 of the Internal
Revenue Code of 1986, as amended (the "Code"), as modified by Section
856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock which
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided,
however, that for the purposes of calculating the foregoing, no share shall be
counted more than once. The terms "Beneficial Owner," "Beneficially Owns" and
"Beneficially Owned" shall have correlative meanings.
"Beneficiary" shall mean, with respect to any Trust, one or more
organizations described in each of Section 170(b)(1)(A) (other than clauses
(vii) and (viii) thereof) and Section 170(c)(2) of the Code that are named by
the Corporation as the beneficiary or beneficiaries of such Trust, in accordance
with the provisions of Section 13.2(d).
"Common Stock" shall mean the common stock, par value $.10 per share of
the Corporation.
"Constructive Ownership" shall mean ownership of shares of Equity Stock
by a Person who is or would be treated as a direct or indirect owner of such
shares of Equity Stock through the application of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have correlative
meanings.
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"Equity Stock" shall mean the Common Stock and the Preferred Stock, par
value $.10 per share of the Corporation.
"Look-Through Entity" shall mean a Person that is either (i) a trust
described in Section 401(a) of the Code and exempt from tax under Section 501(a)
of the Code as modified by Section 856(h)(3) of the Code or (ii) registered
under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, with respect to a class or
series of Equity Stock, 9.8% of the number of outstanding shares of such Equity
Stock.
"Market Price" on any date shall mean the average of the Closing Price
for the five consecutive Trading Days ending on such date. The "Closing Price"
on any date shall mean the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Equity Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Equity Stock are listed or admitted to trading or, if the shares of Equity Stock
are not listed or admitted to trading on any national securities exchange, the
last quoted price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the Nasdaq Stock
Market, Inc. or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the shares of Equity
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker selected by the
Board of Directors of the Corporation making a market in the shares of Equity
Stock. In the case of Equity Stock that is paired, "Market Price" shall mean the
"Market Price" for paired shares multiplied by a fraction (expressed as a
percentage) determined by dividing the value for such Equity Stock most recently
determined under Section 14.2(c) by the value of a paired share most recently
determined under Section 14.2(c) (the "Valuation Percentage").
"Non-Transfer Event" shall mean an event (other than a purported
Transfer) that would (a) cause any Person (other than a Look-Through Entity) to
Beneficially Own or Constructively Own shares of Equity Stock in excess of the
Ownership Limit, (b) cause any Look-Through Entity to Beneficially Own or
Constructively Own shares of Equity Stock in excess of the Look-Through
Ownership Limit, (c) result in the capital stock of the Corporation being
beneficially owned (within the meaning of Section 856(a)(5) of the Code) by
fewer than 100 persons within the meaning of Section 856(a)(5) of the Code, (d)
result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code, or (e) cause the Corporation to Constructively Own 10% or
more of the ownership interest in a tenant of the Corporation's or a
Subsidiary's real property within the meaning of Section 856(d)(2)(B) of the
Code. Non-Transfer Events include but are not limited to (i) the granting of any
option or entering into any agreement for the sale, transfer or other
disposition of shares of Equity Stock or (ii) the sale, transfer, assignment or
other disposition of interests in any Person or of any securities or rights
convertible into or exchangeable for shares of Equity Stock that results in
changes in Beneficial Ownership or Constructive Ownership of shares of Equity
Stock.
"Operating Company" shall mean Meditrust Operating Company.
"Operating Company Common Stock" shall mean the common stock, par value
$.10 per share of Operating Company.
"Operating Company Equity Stock" shall mean Operating Company Common
Stock and preferred stock of any designation, par value $.10 per share of
Operating Company.
"Ownership Limit" shall mean, with respect to any class or series of
Equity Stock, 9.25% of the number of outstanding shares of such class or series
of Equity Stock. For purposes of computing the percentage of shares of any class
or series of Equity Stock of the Corporation that is Beneficially Owned by any
Person, any shares of Equity Stock of the Corporation which are deemed to be
Beneficially Owned by such Person pursuant to Rule 13d-3 of the Exchange Act but
which are not outstanding shall be deemed to be outstanding.
8
"Pairing Agreement" shall mean the Pairing Agreement, dated as of
December 20, 1979, by and between Santa Anita Realty Enterprises, Inc. (the
predecessor of the Corporation) and Santa Anita Operating Company (the
predecessor of Operating Company), as amended from time to time in accordance
with the provisions thereof.
"Permitted Transferee" shall mean any Person designated as a Permitted
Transferee in accordance with the provisions of Section 13.2(h).
"Person" shall mean (a) an individual or any corporation, partnership,
estate, trust, association, private foundation, joint stock company, limited
liability company or any other entity and (b) a "group" as that term is defined
for purposes of Rule 13d-5 of the Exchange Act.
"Prohibited Owner" shall mean, with respect to any purported Transfer
or Non-Transfer Event, any Person who is prevented from being or becoming the
owner of record title to shares of Equity Stock by the provisions of Section
13.2(a).
"Restriction Termination Date" shall mean the first day on which the
Board of Directors of the Corporation determines that it is no longer in the
best interests of the Corporation to attempt to, or continue to, qualify under
the Code as a real estate investment trust (a "REIT").
"Trading Day" shall mean a day on which the principal national
securities exchange on which shares of Equity Stock are listed or admitted to
trading is open for the transaction of business or, if shares of Equity Stock
are not listed or admitted to trading on any national securities exchange, any
day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
close.
"Transfer" (as a noun) shall mean any sale, transfer, gift, assignment,
devise or other disposition of shares of Equity Stock, whether voluntary or
involuntary, whether of record, constructively or beneficially and whether by
operation of law or otherwise. "Transfer" (as a verb) shall have the correlative
meaning.
"Trust" shall mean any separate trust created and administered in
accordance with the terms of Section 13.2, for the exclusive benefit of any
Beneficiary.
"Trustee" shall mean any Person or entity unaffiliated with both the
Corporation and any Prohibited Owner designated by the Corporation to act as
trustee of any Trust, or any successor trustee thereof. The Trustee shall be
designated by the Corporation and Operating Company in accordance with Article
Fourteenth.
(b) RESTRICTION ON OWNERSHIP AND TRANSFER.
(i) Except as provided in Section 13.1(d), until the
Restriction Termination Date, (i) no Person (other than a Look-Through Entity)
shall Beneficially Own or Constructively Own outstanding shares of Equity Stock
in excess of the Ownership Limit and no Look-Through Entity shall Beneficially
Own or Constructively Own outstanding shares of Equity Stock in excess of the
Look-Through Ownership Limit, (ii) any Transfer (whether or not the result of a
transaction entered into through the facilities of the New York Stock Exchange)
that, if effective, would result in any Person (other than a Look-Through
Entity) Beneficially Owning or Constructively Owning shares of Equity Stock in
excess of the Ownership Limit shall be void ab initio as to the Transfer of that
number of shares of Equity Stock which would be otherwise Beneficially Owned or
Constructively Owned by such Person in excess of the Ownership Limit and the
intended transferee shall acquire no rights in such shares of Equity Stock, and
(iii) any Transfer (whether or not the result of a transaction entered into
through the facilities of the New York Stock Exchange) that, if effective, would
result in any Look-Through Entity Beneficially Owning or Constructively Owning
shares of Equity Stock in excess of the Look-Through Ownership Limit shall be
void ab initio as to the Transfer of that number of shares of Equity Stock which
would be otherwise Beneficially Owned or Constructively Owned by such
Look-Through Entity in excess of the Look- Through Ownership Limit and the
intended transferee shall acquire no rights in such shares of Equity Stock.
(ii) Until the Restriction Termination Date, any Transfer
(whether or not the result of a transaction entered into through the facilities
of the New York Stock Exchange) that, if effective, would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code shall be void ab initio as to the
9
Transfer of that number of shares of Equity Stock that would cause the
Corporation to be "closely held" within the meaning of Section 856(h) of the
Code, and the intended transferee shall acquire no rights in such shares of
Equity Stock.
(iii) Until the Restriction Termination Date, any Transfer
(whether or not the result of a transaction entered into through the facilities
of the New York Stock Exchange) of shares of Equity Stock that, if effective,
would cause the Corporation to Constructively Own 10% or more of the ownership
interests in a tenant of the real property of the Corporation or any direct or
indirect subsidiary (whether a corporation, partnership, limited liability
company or other entity) of the Corporation (a "Subsidiary"), within the meaning
of Section 856(d)(2)(B) of the Code, shall be void ab initio as to the Transfer
of that number of shares of Equity Stock that would cause the Corporation to
Constructively Own 10% or more of the ownership interests in a tenant of the
real property of the Corporation or a Subsidiary within the meaning of Section
856(d)(2)(B) of the Code, and the intended transferee shall acquire no rights in
such shares of Equity Stock.
(iv) Until the Restriction Termination Date, any Transfer
(whether or not the result of a transaction entered into through the facilities
of the New York Stock Exchange) that, if effective, would result in the shares
of capital stock of the Corporation being beneficially owned (within the meaning
of Section 856(a)(5) of the Code) by fewer than 100 persons within the meaning
of Section 856(a)(5) of the Code shall be void ab initio and the intended
transferee shall acquire no rights in such shares of Equity Stock.
(c) OWNERS REQUIRED TO PROVIDE INFORMATION. Until the Restriction
Termination Date:
(i) Every Beneficial Owner or Constructive Owner of more than
5%, or such lower percentages as required pursuant to regulations under the
Code, of the outstanding shares of any class or series of Equity Stock of the
Corporation shall, within 30 days after January 1 of each year, provide to the
Corporation a written statement or affidavit stating the name and address of
such Beneficial Owner or Constructive Owner, the number of shares of Equity
Stock Beneficially Owned or Constructively Owned, and a description of how such
shares are held. Each such Beneficial Owner or Constructive Owner shall provide
to the Corporation such additional information as the Corporation may request to
ensure compliance with the restrictions in this Section 13.1.
(ii) Each Person who is a Beneficial Owner or Constructive
Owner of shares of Equity Stock and each Person (including the stockholder of
record) who is holding shares of Equity Stock for a Beneficial Owner or
Constructive Owner shall provide to the Corporation a written statement or
affidavit stating such information as the Corporation may request in order to
determine the Corporation's status as a REIT and to ensure compliance with the
Ownership Limit or the Look-Through Ownership Limit, as the case may be.
(d) EXCEPTION. The Board of Directors of the Corporation, upon receipt
of a ruling from the Internal Revenue Service or an opinion of counsel in each
case to the effect that the restrictions contained in subsections (b)(ii)
through (iv) of this Section 13.1 would not be violated, may exempt a Person
from the Ownership Limit or Look-Through Ownership Limit, provided that (A) the
Board of Directors of the Corporation obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that no
Person's Beneficial Ownership or Constructive Ownership of shares of Equity
Stock will (i) result in the capital stock of the Corporation being beneficially
owned (within the meaning of Section 856(a)(5) of the Code) by fewer than 100
persons within the meaning of Section 856(a)(5) of the Code, (ii) result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code or (iii) cause the Corporation to Constructively Own 10% or more of the
ownership interests in the real property of a tenant of the Corporation or a
Subsidiary within the meaning of Section 856(d)(2)(B) of the Code and (B) such
Person agrees in writing that any violation or attempted violation of the
Ownership Limit or Look-Through Ownership Limit will result in the conversion of
such shares into shares of Excess Stock pursuant to Section 13.2(a).
(e) NEW YORK STOCK EXCHANGE TRANSACTIONS. Notwithstanding any provision
contained herein to the contrary, nothing in this Certificate of Incorporation
shall preclude the settlement of any transaction entered into through the
facilities of the New York Stock Exchange.
10
Section 13.2. EXCESS STOCK.
(a) CONVERSION INTO EXCESS STOCK.
(i) If, notwithstanding the other provisions contained in this
Article Thirteenth, prior to the Restriction Termination Date, there is a
purported Transfer or Non-Transfer Event such that any Person (other than a
Look-Through Entity) would either Beneficially Own or Constructively Own shares
of Equity Stock in excess of the Ownership Limit or such that any Person that is
a Look-Through Entity would either Beneficially Own or Constructively Own shares
of Equity Stock in excess of the Look-Through Ownership Limit, then, (i) except
as otherwise provided in Section 13.1(d), the purported transferee shall be
deemed to be a Prohibited Owner and shall acquire no right or interest (or, in
the case of a Non-Transfer Event, the Person holding record title to the shares
of Equity Stock Beneficially Owned or Constructively Owned by such Beneficial
Owner or Constructive Owner, shall cease to own any right or interest) in such
number of shares of Equity Stock which would cause such Beneficial Owner or
Constructive Owner to Beneficially Own or Constructively Own shares of Equity
Stock in excess of the Ownership Limit or the Look-Through Ownership Limit, as
the case may be, (ii) such number of shares of Equity Stock in excess of the
Ownership Limit or the Look- Through Ownership Limit, as the case may be,
(rounded up to the nearest whole share) shall be automatically converted into an
equal number of shares of Excess Stock and transferred to a Trust in accordance
with Section 13.2(d) and (iii) the Prohibited Owner shall submit such number of
shares of Equity Stock to the Corporation for registration in the name of the
Trustee of the Trust. Such conversion into Excess Stock and transfer to a Trust
shall be effective as of the close of trading on the Trading Day prior to the
date of the Transfer or Non-Transfer Event, as the case may be.
(ii) If, notwithstanding the other provisions contained in
this Article Thirteenth, prior to the Restriction Termination Date, there is a
purported Transfer or Non-Transfer Event that, if effective, would (i) result in
the capital stock of the Corporation being beneficially owned (within the
meaning of Section 856(a)(5) of the Code) by fewer than 100 persons within the
meaning of Section 856(a)(5) of the Code, (ii) result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code or (iii) cause
the Corporation to Constructively Own 10% or more of the ownership interest in a
tenant of the Corporation's or a Subsidiary's real property within the meaning
of Section 856(d)(2)(B) of the Code, then (x) the purported transferee shall be
deemed to be a Prohibited Owner and shall acquire no right or interest (or, in
the case of a Non-Transfer Event, the Person holding record title of the shares
of Equity Stock with respect to which such Non-Transfer Event occurred, shall be
deemed to be a Prohibited Owner and shall cease to own any right or interest) in
such number of shares of Equity Stock, the ownership of which by such purported
transferee or record holder would (A) result in the shares of capital stock of
the Corporation being beneficially owned (within the meaning of Section
856(a)(5) of the Code) by fewer than 100 persons within the meaning of Section
856(a)(5) of the Code, (B) result in the Corporation being "closely held" within
the meaning of Section 856(h) of the Code or (C) cause the Corporation to
Constructively Own 10% or more of the ownership interests in a tenant of the
Corporation's or a Subsidiary's real property within the meaning of Section
856(d)(2)(B) of the Code, (y) such number of shares of Equity Stock (rounded up
to the nearest whole share) shall be automatically converted into an equal
number of shares of Excess Stock and transferred to a Trust in accordance with
Section 13.2(d) and (z) the Prohibited Owner shall submit such number of shares
of Equity Stock to the Corporation for registration in the name of the Trustee
of the Trust. Such conversion into Excess Stock and transfer to a Trust shall be
effective as of the close of trading on the Trading Day prior to the date of the
Transfer or Non-Transfer Event, as the case may be.
(iii) Upon the occurrence of such a conversion of shares of
any class or series of Equity Stock into an equal number of shares of Excess
Stock, such shares of Equity Stock shall be automatically retired and canceled,
without any action required by the Board of Directors of the Corporation, and
shall thereupon be restored to the status of authorized but unissued shares of
the particular class or series of Equity Stock from which such Excess Stock was
converted and may be reissued by the Corporation as that particular class or
series of Equity Stock.
(iv) Upon the conversion into Excess Shares (pursuant to the
Certificate of Incorporation of Operating Company) of any shares of any class or
series of Operating Company stock that are paired with a class or series of
shares of Equity Stock, pursuant to Article Fourteenth, such shares of Equity
Stock shall likewise be converted into an equal number of shares of Excess Stock
and be paired with such converted shares of Operating Company, pursuant to
Article Fourteenth.
11
(b) REMEDIES FOR BREACH. If the Corporation, or its designees, shall at
any time determine in good faith that a Transfer has taken place in violation of
Section 13.1(b) or that a Person intends to acquire or has attempted to acquire
Beneficial Ownership or Constructive Ownership of any shares of Equity Stock in
violation of Section 13.1(b), the Corporation shall take such action as it deems
advisable to refuse to give effect to or to prevent such Transfer or
acquisition, including, but not limited to, refusing to give effect to such
Transfer on the stock transfer books of the Corporation or instituting
proceedings to enjoin such Transfer or acquisition.
(c) NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or attempts
to acquire shares of Equity Stock in violation of Section 13.1(b), or any Person
who owns shares of Equity Stock that were converted into shares of Excess Stock
and transferred to a Trust pursuant to subsections (a) and (d) of this Section
13.2, shall immediately give written notice to the Corporation of such event and
shall provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or Non-
Transfer Event, as the case may be, on the Corporation's status as a REIT.
(d) OWNERSHIP IN TRUST. Upon any Transfer or Non-Transfer Event that
results in Excess Stock pursuant to Section 13.2(a), such Excess Stock shall be
automatically transferred to a Trust to be held for the exclusive benefit of the
Beneficiary. The Corporation and the Operating Company shall name a Beneficiary
for each Trust. Any conversion of shares of Equity Stock into shares of Excess
Stock and transfer to a Trust shall be effective as of the close of trading on
the Trading Day prior to the date of the Transfer or Non-Transfer Event that
results in the conversion. Shares of Excess Stock so held in trust shall remain
issued and outstanding shares of stock of the Corporation.
(e) DIVIDEND RIGHTS. Each share of Excess Stock shall be entitled to
the same dividends and distributions (as to both timing and amount) as may be
declared by the Board of Directors of the Corporation as shares of the class or
series of Equity Stock from which such Excess Stock was converted. The Trustee,
as record holder of the shares of Excess Stock, shall be entitled to receive all
dividends and distributions and shall hold all such dividends or distributions
in trust for the benefit of the Beneficiary. The Prohibited Owner with respect
to such shares of Excess Stock shall repay to the Trust the amount of any
dividends or distributions received by it (i) that are attributable to any
shares of Equity Stock that have been converted into shares of Excess Stock and
(ii) the record date of which was on or after the date that such shares were
converted into shares of Excess Stock. The Corporation shall take all measures
that it determines reasonably necessary to recover the amount of any such
dividend or distribution paid to a Prohibited Owner, including, if necessary,
withholding any portion of future dividends or distributions payable on shares
of Equity Stock Beneficially Owned or Constructively Owned by the Person who,
but for the provisions of this Article Thirteenth, would Constructively Own or
Beneficially Own the shares of Equity Stock that were converted into shares of
Excess Stock; and, as soon as reasonably practicable following the Corporation's
receipt or withholding thereof, shall pay over to the Trust for the benefit of
the Beneficiary the dividends so received or withheld, as the case may be.
(f) RIGHTS UPON LIQUIDATION. In the event of any voluntary or
involuntary liquidation of, or winding up of, or any distribution of the assets
of, the Corporation, each holder of shares of Excess Stock shall be entitled to
receive, ratably with each other holder of shares of Equity Stock of the same
class or series from which the Equity Stock was converted, that portion of the
assets of the Corporation that is available for distribution to the holders of
such class or series of Equity Stock. The Trust shall distribute to the
Prohibited Owner the amounts received upon such liquidation, dissolution, or
winding up, or distribution; provided, however, that the Prohibited Owner shall
not be entitled to receive amounts in excess of, in the case of a purported
Transfer in which the Prohibited Owner gave value for shares of Equity Stock and
which Transfer resulted in the conversion of the shares into shares of Excess
Stock, the price per share, if any, such Prohibited Owner paid for the shares of
Equity Stock (which, in the case of Equity Stock that is paired, shall equal the
price per paired share multiplied by the most recent Valuation Percentage) and,
in the case of a Non- Transfer Event or Transfer in which the Prohibited Owner
did not give value for such shares (e.g., if the shares were received through a
gift or devise) and which Non-Transfer Event or Transfer, as the case may be,
resulted in the conversion of the shares into shares of Excess Stock, the price
per share equal to the Market Price on the date of such Non-Transfer Event or
Transfer. Any remaining amount in such Trust shall be distributed to the
Beneficiary.
(g) VOTING RIGHTS. Each share of Excess Stock shall entitle the holder
to the number of votes the holder would have, if such share of Excess Stock was
a share of Equity Stock of the same class or series from which such Excess Stock
was converted, on all matters submitted to a vote at any meeting of
stockholders. The holders of shares of Excess Stock converted from the same
class or series of Equity Stock shall vote together with the holders of such
Equity Stock as a single class on all such matters. The Trustee, as record
holder of the Excess Stock, shall be entitled
12
to vote all shares of Excess Stock. Any vote by a Prohibited Owner as a
purported holder of shares of Equity Stock prior to the discovery by the
Corporation that the shares of Equity Stock have been converted into shares of
Excess Stock shall, subject to applicable law, be rescinded and shall be void ab
initio with respect to such shares of Excess Stock, and the Prohibited Owner
shall be deemed to have given, as of the close of trading on the Trading Day
prior to the date of the purported Transfer or Non-Transfer Event that results
in the conversion of the shares of Equity Stock into shares of Excess Stock and
the transfer of such shares to a Trust pursuant to subsections (a) and (d) of
this Section 13.2, an irrevocable proxy to the Trustee to vote the shares of
Excess Stock in the manner in which the Trustee, in its sole and absolute
discretion, desires.
(h) DESIGNATION OF PERMITTED TRANSFEREE.
(i) The Trustee shall have the exclusive and absolute right to
designate one or more Permitted Transferees of any and all shares of Excess
Stock if the Corporation fails to exercise its option with respect to such
shares pursuant to Section 13.2(j) hereof within the time period set forth
therein. As soon as practicable, but in an orderly fashion so as not to
materially adversely affect the Market Price of the shares of Excess Stock, the
Trustee shall designate any one or more Persons as Permitted Transferees;
provided, however, that (i) the Permitted Transferee so designated purchases for
valuable consideration (whether in a public or private sale) the shares of
Excess Stock (which, in the case of paired Excess Stock, shall be determined
based on the Valuation Percentage) and (ii) the Permitted Transferee so
designated may acquire such shares of Excess Stock without violating any of the
restrictions set forth in Section 13.1(b) and without such acquisition resulting
in the conversion of the shares of Equity Stock so acquired into shares of
Excess Stock and the transfer of such shares to a Trust pursuant to subsections
(a) and (d) of this Section 13.2.
(ii) Upon the designation by the Trustee of a Permitted
Transferee in accordance with the provisions of this Section 13.2(h), the
Trustee shall cause to be transferred to the Permitted Transferee that number of
shares of Excess Stock acquired by the Permitted Transferee. Upon such transfer
of the shares of Excess Stock to the Permitted Transferee, such shares of Excess
Stock shall be automatically converted into an equal number of shares of Equity
Stock of the same class and series from which such Excess Stock was converted.
Upon the occurrence of such a conversion of shares of Excess Stock into an equal
number of shares of Equity Stock, such shares of Excess Stock shall be
automatically retired and canceled, without any action required by the Board of
Directors of the Corporation, and shall thereupon be restored to the status of
authorized but unissued shares of Excess Stock and may be reissued by the
Corporation as Excess Stock.
(iii) The Trustee shall (i) cause to be recorded on the stock
transfer books of the Corporation that the Permitted Transferee is the holder of
record of such number of shares of Equity Stock, and (ii) distribute to the
Beneficiary any and all amounts held with respect to the shares of Excess Stock
after making payment to the Prohibited Owner pursuant to Section 13.2(i).
(iv) If the Transfer of shares of Excess Stock to a purported
Permitted Transferee shall violate any of the transfer restrictions set forth in
Section 13.1(b), such Transfer shall be void ab initio as to that number of
shares of Excess Stock that cause the violation of any such restriction when
such shares are converted into shares of Equity Stock (as described in
subsection (h)(ii) above) and the purported Permitted Transferee shall be deemed
to be a Prohibited Owner and shall acquire no rights in such shares of Excess
Stock or Equity Stock. Such shares of Equity Stock shall be automatically
reconverted into Excess Stock and transferred to the Trust from which they were
originally Transferred. Such conversion and transfer to the Trust shall be
effective as of the close of trading on the Trading Day prior to the date of the
Transfer to the purported Permitted Transferee and the provisions of this
Article Thirteenth shall apply to such shares, including, without limitation,
the provisions of subsections (h) through (j) of this Section 13.2 with respect
to any future Transfer of such shares by the Trust.
(i) COMPENSATION TO RECORD HOLDER OF SHARES OF EQUITY STOCK THAT ARE
CONVERTED INTO SHARES OF EXCESS STOCK. Any Prohibited Owner shall be entitled
(following discovery of the shares of Excess Stock and subsequent
designation of the Permitted Transferee in accordance with Section 13.2(h) or
following the acceptance of the offer to purchase such shares in accordance with
Section 13.2(j) to receive from the Trustee following the sale or other
disposition of such shares of Excess Stock the lesser of (i)(a) in the case of a
purported Transfer in which the Prohibited Owner gave value for shares of Equity
Stock and which Transfer resulted in the conversion of such shares into shares
of Excess Stock, the price per share, if any, such Prohibited Owner paid for the
shares of Equity Stock (which, in the case of paired Excess Stock, shall be
determined based on the Valuation Percentage) and (b) in the case of a Non-
13
Transfer Event or Transfer in which the Prohibited Owner did not give value
for such shares (e.g., if the shares were received through a gift or devise) and
which Non-Transfer Event or Transfer, as the case may be, resulted in the
conversion of such shares into shares of Excess Stock, the price per share equal
to the Market Price on the date of such Non-Transfer Event or Transfer or (ii)
the price per share (which, in the case of paired Excess Stock, shall be
determined based on the Valuation Percentage) received by the Trustee from the
sale or other disposition of such shares of Excess Stock in accordance with this
Section 13.2(i) or Section 13.2(j). Any amounts received by the Trustee in
respect of such shares of Excess Stock and in excess of such amounts to be paid
the Prohibited Owner pursuant to this Section 13.2(i) shall be distributed to
the Beneficiary in accordance with the provisions of Section 13.2(h). Each
Beneficiary and Prohibited Owner shall waive any and all claims that it may have
against the Trustee and the Trust arising out of the disposition of shares of
Excess Stock, except for claims arising out of the gross negligence or willful
misconduct of, or any failure to make payments in accordance with this Section
13.2 by, such Trustee or the Corporation.
(j) PURCHASE RIGHT IN EXCESS STOCK. Shares of Excess Stock
shall be deemed to have been offered for sale to the Corporation or its
designee, at a price per share equal to the lesser of (i) the price per share
(which, in the case of paired Excess Stock, shall be determined based on the
Valuation Percentage) in the transaction that created such shares of Excess
Stock (or, in the case of devise, gift or Non-Transfer Event, the Market Price
at the time of such devise, gift or Non-Transfer Event) or (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of 90 days
following the later of (a) the date of the Non- Transfer Event or purported
Transfer which results in such shares of Excess Stock or (b) the date on which
the Corporation determines in good faith that a Transfer or Non-Transfer Event
resulting in shares of Excess Stock previously has occurred, if the Corporation
does not receive a notice of such Transfer or Non-Transfer Event pursuant to
Section 13.2(c).
Section 13.3. REMEDIES NOT LIMITED. Nothing contained in this Article
Thirteenth shall limit the authority of the Corporation to take such other
action as it deems necessary or advisable to protect the Corporation and the
interests of its stockholders by preservation of the Corporation's status as a
REIT and to ensure compliance with the requirements of Article Fourteenth and
Section 13.1.
Section 13.4. AMBIGUITY. In the case of an ambiguity in the application
of any of the provisions of this Article Thirteenth, including any definition
contained in Section 13.1(a), the Board of Directors of the Corporation shall
have the power to determine the application of the provisions of this Article
Thirteenth with respect to any situation based on the facts known to it.
Section 13.5. LEGEND. Each certificate for shares of Equity Stock
shall bear the following legend:
"The shares of Meditrust Corporation and Meditrust Operating Company
represented by this combined certificate are subject to restrictions in the
respective Certificates of Incorporation of each company which prohibit (a) any
Person (other than a Look-Through Entity) (as such terms are defined in the
respective Certificates of Incorporation of each company) from Beneficially
Owning or Constructively Owning (as these terms are defined in the respective
Certificates of Incorporation of each company) in excess of 9.25% of the number
of outstanding shares of any class or series of Equity Stock (as that term is
defined in the respective Certificates of Incorporation of each company), (b)
any Look-Through Entity from Beneficially Owning or Constructively Owning in
excess of 9.8% of the number of outstanding shares of any class or series of
Equity Stock, (c) any Person from acquiring or maintaining any ownership
interest in the stock of either company that is inconsistent with (i) the
requirements of the Internal Revenue Code of 1986, as amended, pertaining to
real estate investment trusts or (ii) Article Thirteenth of the respective
Certificates of Incorporation of each company and (d) any transfer of shares of
any class or series of Equity Stock of either company that are paired pursuant
to Article Fourteenth of the respective Certificates of Incorporation of each
company, except in combination with an equal number of shares of the other
company in accordance with the respective Certificates of Incorporation of each
company, copies of which are on file with the transfer agent named on the face
hereof, and the holder of this certificate by his acceptance hereof consents to
be bound by such restrictions.
Meditrust Corporation and Meditrust Operating Company will furnish
without charge to each stockholder who so requests a copy of the relevant
provisions of the respective Certificates of Incorporation of each company and a
copy of the provisions setting forth the designations, preferences, privileges
and rights of each class of stock or series thereof that each company is
authorized to issue and the qualifications, limitations and restrictions of such
preferences and/or
14
rights. Any such request may be addressed to the Secretary of either company or
to the transfer agent named on the face hereof."
Section 13.6 SEVERABILITY. Each provision of this Article Thirteenth
shall be severable and an adverse determination as to any such provision shall
be in no way affect the validity of any other provision.
FOURTEENTH:
Section 14.1 TRANSFER OF SHARES. Until the restrictions and limitations
set forth in this Article Fourteenth shall have been terminated in the manner
hereinafter provided:
(a) Except as provided herein, no shares of Equity Stock shall be
transferable, and they shall not be transferred on the books of the Corporation,
unless (i) a simultaneous transfer is made by the same transferor to the same
transferee, or (ii) such transferor has previously arranged with Operating
Company for the transfer to the transferee, of the same number of shares of
Operating Company Equity Stock, except that Operating Company may transfer
shares of Equity Stock acquired by it from the Corporation to a person to whom
Operating Company simultaneously issues the same number of shares of Operating
Company Equity Stock.
(b) Except as provided herein, each certificate evidencing ownership of
shares of Equity Stock shall be deemed to evidence, in addition, the same number
of shares of Operating Company Equity Stock.
(c) Notwithstanding the foregoing, any shares of Equity Stock issued
after the date of the filing of this Certificate, which are issued on an
unpaired basis by the Corporation pursuant to the terms of Section 14.7 of this
Certificate may be transferred without compliance with Section 14.1(a) or
Section 14.3 and may be evidenced solely by a certificate which is not deemed to
evidence a like number of shares of Operating Company Equity Stock as required
by Section 14.1(b).
Section 14.2 ISSUANCE OF SHARES. Until such time as the pairing of the
outstanding shares of Common Stock and the outstanding shares of Operating
Company Common Stock in accordance with this Article Fourteenth (the "Pairing"
and each paired share a "Paired Share") shall have been terminated in the manner
herein provided:
(a) Except as provided herein, the Corporation shall not issue or agree
to issue any shares of Equity Stock to any person except Operating Company
unless effective provision has been made for the simultaneous issuance or
transfer to the same person of the same number of shares of Operating Company
Equity Stock and for the pairing of such shares of the Corporation and Operating
Company and unless the Corporation and Operating Company have agreed on the
manner and basis of allocating the consideration to be received upon such
issuance between the Corporation and Operating Company or, if allocation of such
consideration between them is not practicable, on the payment by one company to
the other of cash or other consideration in lieu thereof. Any such allocation or
payment shall be based on the respective fair market values of Equity Stock and
Operating Company Equity Stock.
(b) As desired from time to time, but not less often than once each
calendar year, the Corporation and Operating Company shall jointly arrange for
the determination of the fair market value as of a date specified by the
Corporation and Operating Company (the "valuation date") of the shares of
Operating Company Common Stock outstanding on the valuation date. The amount so
determined (the "fair market value of the Operating Company Shares") shall
thereafter be used in all calculations pursuant to this Section 14.2 until a new
determination is made. The fair market value of each share of Common Stock shall
be determined by subtracting the fair market value of one Operating Company
Common Stock from the average of the closing sale prices of a Paired Share over
the principal exchange on which the Paired Shares are listed, or if not listed,
then the average of the last bid prices in the over-the-counter market during
the ten business days prior to any date of determination of the fair market
value of Common Stock.
Section 14.3 STOCK CERTIFICATES; TRANSFER AGENTS AND REGISTRARS. Until
such time as the Pairing shall have been terminated in the manner herein
provided, except in the case of shares of Equity Stock issued to Operating
Company or Equity Stock issued pursuant to Section 14.7, each certificate which
is issued evidencing shares of Equity Stock shall be printed "back-to-back" with
a certificate evidencing the same number of Operating Company Equity Stock,
shall bear a conspicuous legend (on the face thereof) referring to the
restrictions on the transfer of the shares evidenced thereby
15
contained in this Certificate and the by-laws of the Corporation, and shall be
in a form which satisfies the requirements of the laws of Delaware and which has
been approved by the Board of Directors of the Corporation.
Section 14.4 STOCK DIVIDENDS, RECLASSIFICATIONS, ETC. Until such time
as the Pairing shall have been terminated in the manner herein provided, the
Corporation shall not declare or pay any stock dividend consisting in whole or
in part of Equity Stock, issue any rights or warrants to purchase any shares of
Stock, or subdivide, combine or otherwise reclassify the shares of Equity Stock,
unless Operating Company simultaneously takes the same or equivalent action with
respect to the Operating Company Equity Stock, to the end that the outstanding
shares of Equity Stock and Operating Company Equity Stock will at all times be
effectively paired on a one-for-one basis as contemplated herein.
Section 14.5 SHARES IN EXCESS OF THE OWNERSHIP LIMIT OR IN VIOLATION OF
THE TRANSFER RESTRICTIONS; DESIGNATION OF TRUSTEE AND BENEFICIARIES. Until such
time as the Board of Directors of the Corporation determines that it is no
longer in the best interests of the Corporation to attempt to, or continue to,
qualify under the Code, as a REIT:
(a) Upon the conversion of a share of any class or series of Equity
Stock of the Corporation into a share of Excess Stock of the Corporation in
accordance with the provisions of Article Thirteenth, if such share of Equity
Stock was paired prior to its conversion into Excess Stock, the corresponding
paired share of that same class or series of Equity Stock of Operating Company
shall be simultaneously converted into a share of Excess Stock of Operating
Company; such shares of Excess Stock of the Corporation and Operating Company
shall be paired and shall be simultaneously transferred to a trust established
by the Corporation and Operating Company for such purpose (a "Trust").
(b) Upon the conversion of a share of Excess Stock of the Corporation
into a share of Equity Stock of the Corporation of the same class or series from
which such Excess Stock was converted in accordance with the provisions of
Article Thirteenth, if such share of Excess Stock was paired prior to its
conversion from Equity Stock into Excess Stock, the corresponding paired share
of Excess Stock of Operating Company shall be simultaneously converted into a
share of Equity Stock of Operating Company of the same class or series from
which such Excess Stock was converted and such shares of Equity Stock shall be
paired.
(c) With respect to an offer made by the Trust to the Corporation to
purchase shares of Excess Stock from a Trust pursuant to Article Thirteenth, in
the case of shares of Excess Stock that are paired, the Corporation shall accept
such offer with respect to its shares of Excess Stock without the agreement of
Operating Company to accept such offer with respect to the corresponding paired
shares of its Excess Stock.
(d) The Trustee of each Trust shall be designated by mutual agreement
of the Board of Directors of the Corporation and the Board of Directors of
Operating Company.
(e) The Beneficiary with respect to each Trust shall be designated by
mutual agreement of the Board of Directors of the Corporation and the Board of
Directors of Operating Company.
(f) At such time that the Board of Directors of the Corporation no
longer deems it in the best interests of the Corporation to attempt to, or
continue to, qualify under the Code as a REIT, it shall notify the Board of
Directors of Operating Company in writing of such determination and the
Ownership Limit and the Transfer Restrictions shall cease to have effect, as
provided in Article Thirteenth.
Section 14.7 UNPAIRED SHARES.
(a) Shares of capital stock of any class or series, irrespective of
whether such shares are convertible into Paired Shares, may be issued by the
Corporation to any person without effective provision for the simultaneous
issuance or transfer to the same person of the same number of shares of that
same class or series of capital stock of Operating Company and without effective
provision for the pairing of such shares of capital stock of the Corporation and
Operating Company, as the Board of Directors of the Corporation shall in its
sole discretion determine (any such shares of capital stock of any class or
series issued by the Corporation pursuant to this Section 14.7 are referred to
herein as "Unpaired Shares").
(b) Unpaired Shares may be transferred on the books of the Corporation
without a simultaneous transfer to the same transferee of any shares of any
other class or series of capital stock of Operating Company.
16
Section 14.8 MERGER, SALE OF ASSETS, ETC. Commencing at the Effective
Time and continuing until such time as the Pairing shall have been terminated in
the manner provided herein, the Corporation will not be a party to any merger,
consolidation, sale of assets, liquidation or other form or reorganization
purchase to which shares of Equity Stock are converted, redeemed, exchanged or
otherwise changed unless Operating Company is also a party to such transaction.
Section 14.9 WAIVER AND TERMINATION. The Board of Directors of the
Corporation is hereby authorized to waive, repeal or make inapplicable the
restrictions and limitations set forth in this Article Fourteenth in its
entirety or in any provision of this Article Fourteenth.
Section 14.10 SEVERABILITY. Each provision of this Article Fourteenth
shall be severable and an adverse determination as to any provision shall in no
way affect the validity of any other provision.
17
CERTIFICATE OF POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS
OF
JUNIOR PARTICIPATING PREFERRED STOCK
I. DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Junior Participating
Preferred Stock" (the "Junior Preferred Stock") and the number of shares
constituting the Junior Preferred Stock shall be 200,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors of the
Corporation; provided, that no decrease shall reduce the number of shares of
Junior Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
II. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Junior
Preferred Stock with respect to dividends, the holders of shares of Junior
Preferred Stock, in preference to the holders of Common Stock, par value $.10
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors of the Corporation out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Junior Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Junior Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Junior Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Junior Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Junior Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share
18
basis among all such shares at the time outstanding. The Board of Directors of
the Corporation may fix a record date for the determination of holders of shares
of Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
III. VOTING RIGHTS
The holders of shares of Junior Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Junior Preferred Stock shall entitle the holder thereof to 100 votes on
all matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Junior Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, in the Corporation's Certificate of
Incorporation or as otherwise provided by law, holders of Junior Preferred Stock
shall have no voting rights.
IV. CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section II are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except dividends paid ratably on the Junior
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock ranking on
a parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors of the Corporation) to all holders of such shares
upon such terms as the Board of Directors of the Corporation, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section IV
purchase or otherwise acquire such shares at such time and in such manner.
19
V. REACQUIRED SHARES
Any shares of Junior Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation,
in any other Certificate of Designations creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Junior
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VII. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VIII. REDEMPTION
The shares of Junior Preferred Stock shall not be redeemable.
IX. RANK
The Junior Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
20
X. AMENDMENT
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Junior Preferred Stock, voting together as a single
series.
21
CERTIFICATE OF POWERS, DESIGNATIONS, PREFERENCES AND
RIGHTS OF SERIES A NON-VOTING CONVERTIBLE COMMON STOCK
1. DESIGNATION AND AMOUNT. There shall be a series of undesignated
Series Common Stock of the Corporation designated as "Series A Non-Voting
Convertible Common Stock" and the number of shares constituting such series
shall be ten million (10,000,000). The number of shares designated as shares of
Series A Non-Voting Convertible Common Stock may be increased or decreased by
the Board of Directors of the Corporation without a vote of stockholders. Except
as otherwise expressly provided herein, all shares of Series A Non-Voting
Convertible Common Stock shall be identical to shares of Common Stock (as
defined in Article FOURTH of the Certificate of Incorporation of the
Corporation, as amended (the "Certificate of Incorporation")) and shall entitle
the holders thereof to the same rights and privileges.
2. VOTING. The holders of Series A Non-Voting Convertible Common Stock
shall not have any right to vote, except as required under applicable law and,
except as required by law, the holders of Common Stock and Series A Non-Voting
Convertible Common Stock shall vote together as a single class on all matters as
to which holders of Series A Non-Voting Convertible Common Stock are entitled to
vote as set forth herein. Except as required by law or as set forth herein, the
holders of Series A Non-Voting Convertible Common Stock (to the extent permitted
by this Section 2), Common Stock (to the extent permitted by the Certificate of
Incorporation), Preferred Stock (to the extent permitted by the Certificate of
Incorporation) and Series Common Stock (to the extent permitted by the
Certificate of Incorporation) shall vote together as a single class on all
matters submitted to the stockholders for a vote.
3. DIVIDENDS. Subject to applicable law, the holders of Series A
Non-Voting Convertible Common Stock shall be entitled to receive such dividends
out of funds legally available therefor at such times and in such amounts as the
Board of Directors of the Corporation may determine in its sole discretion shall
be paid with respect to the Common Stock, with each share of Common Stock and
each share of Series A Non-Voting Convertible Common Stock sharing
share-for-share in such dividends (with each share of Series A Non-Voting
Convertible Common Stock being equal to the number of shares of Common Stock
into which it would then be convertible on the record date for such dividend)
except that if dividends are declared which are payable in shares of Common
Stock or Series A Non-Voting Convertible Common Stock, dividends shall be
declared which are payable at the equivalent rate in both classes of stock and
the dividends payable in shares of Common Stock shall be payable to the holders
of that class of stock and the dividends payable in shares of Series A
Non-Voting Convertible Common Stock shall be payable to the holders of that
class of stock.
4. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(a "Liquidation Event"), after the payment or provision for payment of all debts
and liabilities of the Corporation and all preferential amounts to which the
holders of Preferred Stock or Series Common Stock, if any, are entitled with
respect to the distribution of assets in liquidation, the holders of Series A
NonVoting Convertible Common Stock shall be entitled to share ratably with the
holders of Common Stock (with each share of Series A Non-Voting Convertible
Common Stock being equal to the number of shares of Common Stock into which it
would then be convertible on the effective date of such Liquidation Event) in
the remaining assets of the Corporation available for distribution.
5. CONVERSION OF SERIES A NON-VOTING CONVERTIBLE COMMON STOCK.
(a) AUTOMATIC CONVERSION. Each share of Series A Non-Voting
Convertible Common Stock shall be automatically converted, without the payment
of any additional consideration, into fully paid and non-assessable shares of
Common Stock at the rate of one share of Common Stock for each share of Series A
Non-Voting Convertible Common Stock so converted (the "Series A Non-Voting
Conversion Rate") as of the date (the "Conversion Date") that is the earlier to
occur of (i) the next Business Day (as defined below) following the date on
which the shareholders of the Corporation and of Operating Company shall have
approved the merger transaction (the "Merger") among La Quinta Inns, Inc. ("La
Quinta"), Operating Company and the Corporation, and (ii) the date of any
termination of the Agreement and Plan of Merger dated as of January 3, 1998 and
among La Quinta, Operating Company and the Corporation relating to the Merger in
accordance with the terms thereof. As used herein, the term "Business Day" means
any day other than Saturday, Sunday, or any other day on which banking
institutions in the States of Delaware or New York are not open for business.
22
(b) PROCEDURE FOR CONVERSION. As of the Conversion Date, all
outstanding shares of Series A Non-Voting Convertible Common Stock shall be
converted automatically without any further action by the holders of Series A
Non-Voting Convertible Common Stock and whether or not the certificates
representing such shares of Series A Non-Voting Convertible Common Stock are
surrendered to the Corporation or its transfer agent. On the Conversion Date,
all rights with respect to the Series A Non-Voting Convertible Common Stock so
converted shall terminate, except any of the rights of the holders thereof, in
accordance with the procedures herein, to receive certificates for the number of
shares of Common Stock into which such Series A Non-Voting Convertible Common
Stock has been converted. The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable on the Conversion
Date unless certificates evidencing such shares of the Series A Non-Voting
Convertible Common Stock being converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers relating
thereto), are surrendered at the principal executive office of the Corporation
(or the offices of the transfer agent for the Series A Non-Voting Convertible
Common Stock or such office or offices of an agent for conversion as may from
time to time be designated by notice to the holders of the Series A Non-Voting
Convertible Common Stock by the Corporation), together with written notice by
the holder of such Series A Non-Voting Convertible Common Stock stating the name
or names (with addresses) and denominations in which the certificate or
certificates for Common Stock shall be issued and shall include instructions for
delivery thereof. Upon such surrender of a certificate representing Series A
Non-Voting Convertible Common Stock following its automatic conversion, the
Corporation shall issue and send by hand delivery, by courier or by first class
mail (postage prepaid) to the holder thereof or to such holder's designee, at
the address designated by such holder, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled upon
conversion. In the event that there shall have been surrendered a certificate or
certificates representing Series A Non-Voting Convertible Common Stock, only
part of which are to be converted, the Corporation shall issue and send to such
holder or such holder's designee, in the manner set forth in the preceding
sentence, a new certificate or certificates representing the number of shares of
Series A Non-Voting Convertible Common Stock which shall not have been
converted. If the certificate or certificates for Common Stock are to be issued
in a name other than the name of the registered holder of the Series A
Non-Voting Convertible Common Stock surrendered for conversion, the Corporation
shall not be obligated to issue or deliver any certificate unless and until the
holder of the Series A NonVoting Convertible Common Stock surrendered has paid
to the Corporation the amount of any tax that may be payable in respect of any
transfer involved in such issuance or has established to the satisfaction of the
Corporation that such tax has been paid.
(c) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of Series A Non-Voting Convertible Common Stock such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A Non-Voting
Convertible Common Stock.
6. ADJUSTMENTS.
(a) CHANGES IN COMMON STOCK. In the event the Corporation
shall (i) pay a dividend in or make a distribution in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its shares of Common Stock any shares of the
Corporation, the Series A Non-Voting Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of a share of Series A Non-Voting
Convertible Common Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock which it would have owned or
have been entitled to receive after the happening of any of the events described
above had such share of Series A Non-Voting Convertible Common Stock been
converted on or immediately prior to the record date for such dividend or the
effective date of such subdivision, combination or reclassification, as the case
may be.
(b) CHANGES IN SERIES A NON-VOTING CONVERTIBLE COMMON STOCK.
In the event that the Corporation shall (i) pay a dividend in or make a
distribution in shares of its Series A Non-Voting Convertible Common Stock, (ii)
subdivide its outstanding shares of Series A Non-Voting Convertible Common
Stock, (iii) combine its outstanding shares of Series A Non-Voting Convertible
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its shares of Series A Non-Voting Convertible Common Stock any shares of the
Corporation, the Series A Non-Voting Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of a share of Series A Non-Voting
Convertible Common Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock which it would have owned or
have been entitled to receive after the happening
23
of any of the events described above had such share of Series A Non-Voting
Convertible Common Stock been converted on or immediately prior to the record
date for such dividend or the effective date of such subdivision, combination or
reclassification, as the case may be.
(c) GENERAL. An adjustment made pursuant to this Section 6
shall become effective immediately after the record date (in the case of a
dividend or distribution in shares of capital stock) and shall become effective
immediately after the effective date (in the case of a subdivision, combination
or reclassification). No adjustment in accordance with this Section 6 shall be
required unless such adjustment would require an increase or decrease in any
conversion rate of at least 0.1%; provided, however, that any adjustments which
by reason of this clause are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
7. NOTICES. In the event that the Corporation provides any notice,
report or statement to the holders of Common Stock or Series A Non-Voting
Convertible Common Stock (in their capacity as such), the Corporation shall at
the same time provide a copy of any such notice, report or statement to each
record holder of outstanding Series A Non-Voting Convertible Common Stock.
8. STATUS OF ACQUIRED SHARES. Shares of Series A Non-Voting Convertible
Common Stock acquired by the Corporation (upon conversion or otherwise) will be
restored to the status of authorized but unissued shares of undesignated Series
Common Stock.
24
MEDITRUST CORPORATION
CERTIFICATE OF THE POWERS, DESIGNATIONS
PREFERENCES AND RIGHTS OF THE
9% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
PAR VALUE $.10 PER SHARE
LIQUIDATION VALUE $250 PER SHARE
I.
(a) TITLE. The Series of Preferred Stock is hereby designated as the
"9% Series A Cumulative Redeemable Preferred Stock" (the "Series A Preferred
Stock").
(b) NUMBER. The number of authorized shares of Series A Preferred Stock
shall be 805,000.
(c) RANKING. In respect of rights to the payment of dividends and the
distribution of assets in the event of any liquidation, dissolution or winding
up of the Corporation, the Series A Preferred Stock shall rank (i) senior to the
Corporation's Common stock, par value $.10 per share (the "Common Stock"),
senior to the Corporation's Series A NonVoting Convertible Common Stock, par
value $.10 per share (the "Series A Common Stock"), senior to the Corporation's
Junior Participating Preferred Stock, par value $.10 per share (the "Junior
Preferred Stock"), and senior to any other class or series of capital stock of
the Corporation other than capital stock referred to in clauses (ii) and (iii)
of this sentence, (ii) on a parity with any class or series of capital stock of
the Corporation the terms of which specifically provide that such class or
series of capital stock ranks on a parity with the Series A Preferred Stock in
respect of rights to the payment of dividends and the distribution of assets in
the event of any liquidation, dissolution or winding up of the Corporation, and
(iii) junior to any class or series of capital stock of the Corporation the
terms of which specifically provide that such class or series of capital stock
ranks senior to the Series A Preferred Stock in respect of rights to the payment
of dividends and the distribution of assets in the event of any liquidation,
dissolution or winding up of the Corporation. The term "capital stock" does not
include convertible debt securities.
Without limitation to the provisions of the preceding paragraph, the
Series A Preferred Stock shall rank, in respect of rights to the payment of
dividends and the distribution of assets in the event of any liquidation,
dissolution or winding up of the Corporation, (a) senior to any shares of Excess
Stock (as defined below) issued upon conversion of any capital stock referred to
in clause (i) of the preceding paragraph, (b) on a parity with any shares of
Excess Stock issued upon conversion of any capital stock referred to in clause
(ii) of the preceding paragraph and (c) junior to any shares of Excess Stock
issued upon conversion of any capital stock referred to in clause (iii) of the
preceding paragraph.
(d) DIVIDENDS.
(i) Subject to the preferential rights of the holders of any
class or series of capital stock of the Corporation ranking prior to the Series
A Preferred Stock as to dividends, the holders of the then outstanding shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors of the Corporation or any duly authorized committee
thereof (collectively, the "Board of Directors of the Corporation"), out of
funds legally available for the payment of dividends, cumulative cash dividends
at the rate of 9% per annum of the $250.00 per share liquidation preference of
the Series A Preferred Stock (equivalent to an annual rate of $22.50 per share).
Such dividends shall accrue daily, shall accrue and the cumulative from June 17,
1998 (the "Original Issue Date") and shall be payable quarterly in arrears in
cash on March 31, June 30, September 30 and December 31 (each, a "Dividend
Payment Date") of each year, commencing September 30, 1998; provided that if any
Dividend Payment Date is not a Business Day (as hereinafter defined), then the
dividend which would otherwise have been payable on such Dividend Payment Date
may be paid on the next succeeding Business Day with the same force and effect
as if paid on such Dividend Payment Date and no interest or additional dividends
or other sum shall accrue on the amount so payable for the period from and after
such Dividend Payment Date to such next succeeding Business Date. The period
from and including the Original Issue Date to but excluding the first Dividend
Payment Date, and each subsequent period from and including a Dividend Payment
Date to but excluding the next succeeding Dividend Payment Date, is hereinafter
called a "Dividend Period". Dividends shall be payable to holders of record as
they appear in the stock transfer books of the Corporation at the close of
business on the applicable record date (each, a "Record Date"), which shall be
the 15th day of the calendar month in which the applicable Dividend Payment Date
falls or such other date designated by the
25
Board of Directors of the Corporation for the payment of dividends that is not
more than thirty (30) nor less than ten (10) days prior to such Dividend Payment
Date. The amount of any dividend payable for any Dividend Period, or portion
thereof, shall be computed on the basis of a 360-day year consisting of twelve
30-day months, it being understood that the amount of the dividend payable per
share of Series A Preferred Stock for each full Dividend Period shall be
computed by dividing the annual dividend rate of $22.50 per share by four (it
being further understood that the dividend payable on September 30, 1998 shall
be for more than a full Dividend Period). The dividends payable on any Dividend
Payment Date or any other date shall include dividends accrued to but excluding
such Dividend Payment Date or other date, as the case may be.
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in The City of New York are
authorized or required by law, regulation or executive order to close. All
references herein to "accrued and unpaid" dividends on the Series A Preferred
Stock (and all references of like import) shall include, unless otherwise
expressly stated or the context otherwise requires, accumulated dividends, if
any, on the Series A Preferred Stock; and all references herein to "accrued and
unpaid" dividends on any other class or series of capital stock of the
Corporation shall include, if (and only if) such class or series of capital
stock provides for cumulative dividends and unless otherwise expressly stated or
the context otherwise requires, accumulated dividends, if any, thereon.
(ii) If any shares of Series A Preferred Stock are
outstanding, no full dividends will be declared or paid or set apart for payment
on any capital stock of the Corporation of any other class or series ranking, as
to dividends, on a parity with or junior to the Series A Preferred 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 A Preferred Stock for all past Dividend
Periods (including, without limitation, any Dividend Period terminating on the
date upon which the dividends on such other capital stock are declared or paid
or set apart for payment, as the case may be). When dividends are not paid in
full (or a sum sufficient for such full payment is not set apart therefor) upon
the Series A Preferred Stock and the shares of any other class or series of
capital stock of the Corporation ranking on a parity as to dividends with the
Series A Preferred Stock, all dividends declared upon the Series A Preferred
Stock and any other class or series of capital stock of the Corporation ranking
on a parity as to dividends with the Series A Preferred Stock shall be declared
pro rata so that the amount of dividends declared per share of Series A
Preferred Stock and such other class or series of capital stock of the
Corporation shall in all cases bear to each other the same ratio that accrued
and unpaid dividends per share on the shares of Series A Preferred Stock and
such other class or series of capital stock of the Corporation bear to each
other.
Except as provided in the immediately preceding paragraph, unless full
cumulative dividends on the Series A Preferred Stock 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 A Preferred Stock for
all past Dividend Periods (including, without limitation, any Dividend Period
terminating on the applicable Subject (as defined below)), (A) no dividends
(other than in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Common Stock or any other class or series of capital stock
of the Corporation ranking junior to the Series A Preferred Stock as to
dividends and as to the distribution of assets upon liquidation, dissolution and
winding up of the Corporation) shall be declared or paid or set apart for
payment or other distribution declared or made upon the Common Stock of the
Corporation or any other class or series of capital stock of the Corporation
ranking junior to or on a parity with the Series A Preferred Stock as to
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up of the Corporation, nor shall any shares of Common Stock of the
Corporation or shares of any other class or series of capital stock of the
Corporation ranking junior to or on a parity with the Series A Preferred Stock
as to dividends or as to the distribution of assets upon liquidation,
dissolution or winding up of the Corporation be redeemed, purchased or otherwise
acquired for any consideration (or any monies paid to or made available for a
sinking fund for the redemption of any such shares of junior or parity stock) by
the Corporation (except by conversion into or exchange for shares of any other
class or series of capital stock of the Corporation ranking junior to the Series
A Preferred Stock as to dividends and as to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation, except for the
purchase of capital stock of the Corporation pursuant to Section 7.5 of the
Corporation's by-laws (so long as such purchase is made in accordance with the
terms of such Section 7.5), and except for, if the Amendments (as hereinafter
defined) to the Certificate of Incorporation become effective in accordance with
the DGCL as contemplated by Section I(j) hereof, the purchase or conversion of
Excess Stock (as hereinafter defined) in accordance with the provisions of
Article Thirteenth (as hereinafter defined). As used in this paragraph, the term
"Subject Date" means any date on which any dividends shall be declared or paid
or set apart for payment or other distribution declared or made upon the Common
Stock of the
26
Corporation or any other class or series of capital stock of the Corporation
ranking junior to on a parity with the Series A Preferred Stock as to dividends
or as to the distribution of assets upon liquidation, dissolution or winding up
of the Corporation or on which any shares of Common Stock of the Corporation or
any shares of any other class or series of capital stock of the Corporation
ranking junior to or on a parity with the Series A Preferred Stock as to
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up of the Corporation shall be redeemed, purchased or otherwise acquired
for any consideration (or any moneys paid to or made available for a sinking
fund for the redemption of any such shares of junior or parity stock) by the
Corporation.
(iii) No dividends on the Series A Preferred Stock shall be
declared by the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such times as any agreement of the Corporation,
including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
Anything in the Certificate of Designation to the contrary
notwithstanding, dividends on the Series A Preferred Stock will accrue and be
cumulative from the Original Issue Date whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared.
(iv) No interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend or payments on the Series A Preferred
Stock which may be in arrears, and holders of the Series A Preferred Stock will
not be entitled to any dividends (within the meaning of the Code), whether
payable in cash, securities or other property, in excess of the full cumulative
dividends described herein.
(v) Any dividend payment made on the Series A Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to such shares.
(vi) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code of 1986, as amended (the "Code")), any portion (the "Capital Gains
Amount") of the dividends (within the meaning of the Code) paid or made
available for the year to holders of all classes and series of the Corporation's
capital stock (the "Total Dividends"), then the portion of the Capital Gains
Amount that shall be allocable to the holders of the Series A Preferred Stock
shall be an amount equal to (A) the total Capital Gains Amount multiplied by (B)
a fraction (1) the numerator of which is equal to the total dividends (within
the meaning of the Code), paid or made available to the holders of the Series A
Preferred Stock for that year and (2) the denominator of which is the Total
Dividends for that year.
(e) LIQUIDATION PREFERENCE.
(i) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, then, before any distribution or payment shall
be made to the holders of any Common Stock of the Corporation or shares of any
other class or series of capital stock of the Corporation ranking junior to the
Series A Preferred Stock with respect to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, but subject to the
preferential rights of the holders of shares of any class or series of capital
stock of the Corporation ranking prior to the Series A Preferred Stock with
respect to such distribution of assets upon liquidation, dissolution or winding
up, the holders of the shares of Series A Preferred Stock then outstanding shall
be entitled to receive and be paid out of the assets of the Corporation legally
available for distribution to it stockholders liquidating distributions in cash
or property at its fair market value as determined by the Board of Directors of
the Corporation in the amount of $250.00 per share, plus an amount equal to all
accrued and unpaid dividends thereon to the date of payment.
(ii) After payment to the holders of the Series A Preferred
Stock of the full amount of the liquidating distributions (including accrued and
unpaid dividends) to which they are entitled, the holders of Series A Preferred
Stock, as such, shall have no right or claim to any of the remaining assets of
the Corporation.
(iii) If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
legally available therefor are insufficient to pay the full amount of
liquidating distributions on all outstanding shares of Series A Preferred
Stock and the full amount of the liquidating distributions
27
payable on all outstanding shares of any other classes or series of capital
stock of the Corporation ranking on a parity with the Series A Preferred
Stock with respect to the distribution of assets upon liquidation,
dissolution or winding up of the Corporation, then the holders of the Series
A Preferred Stock and all such other classes or series of capital stock will
share ratably in any such distribution of assets in proportion to the full
liquidating distributions (including, if applicable, accrued and unpaid
dividends) to which they would otherwise respectively be entitled.
(iv) If liquidating distributions shall have been made in full
to all holders of Series A Preferred Stock, the remaining assets of the
Corporation shall be distributed among the holders of any other classes or
series of capital stock of the Corporation ranking junior to the Series A
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up, according to their respective rights and preferences.
(v) For purposes of this Section I(e), neither the
consolidation or merger of the Corporation with or into any other corporation,
trust or other entity, nor the sale, lease or conveyance of all or substantially
all of the property or business of the Corporation, shall be deemed to
constitute a liquidation, dissolution or winding up of the Corporation.
(f) REDEMPTION.
(i) The Series A Preferred Stock is not redeemable prior to
June 17, 2003. However, the Company is entitled, irrespective of any provision
of this Certificate of Designation to the contrary, pursuant to Section 7.5 of
its by-laws, to call for purchase and purchase from the holders thereof shares
of Series A Preferred Stock on the terms and subject to the conditions set forth
in such Section 7.5.
(ii) On and after June 17, 2003, the Corporation may, at its
option, upon not less than thirty (30) nor more than sixty (60) days' prior
written notice to the holders of record of the Series A Preferred Stock, redeem
the Series A Preferred Stock, in whole or from time to time in part, for a cash
redemption price equal to $250.00 per share, together with (except as provided
in Section I(g)(vi) below) all accrued and unpaid dividends to the date fixed
for redemption (the "Redemption Price"). Any date fixed for the redemption of
shares of Series A Preferred Stock is hereinafter called a "Redemption Date".
(iii) The Redemption Price of the Series A Preferred Stock
(other than the portion thereof consisting of accrued and unpaid dividends)
shall be payable solely out of the proceeds received by the Corporation from the
sale of other capital stock of the Corporation and not from any other source.
For purposes of the preceding sentence, the term "capital stock" means any
equity securities (including Common Stock of the Corporation, series common
stock, par value $.10 per share ("Series Common Stock"), of the Corporation, and
any other series of Preferred Stock of the Corporation), shares, interest,
participations or other ownership interests (however designated), depositary
shares representing interests in any of the foregoing, and any rights (other
than debt securities convertible into or exchangeable for equity securities) or
options to purchase any of the foregoing.
(g) PROCEDURES FOR REDEMPTION; LIMITATIONS ON REDEMPTION.
(i) If fewer than all of the outstanding shares of Series A
Preferred Stock are to be redeemed at the option of the Corporation, the number
of shares to be redeemed will be determined by the Corporation and such shares
may be redeemed pro rata from the holders of record of such shares in proportion
to the number of such shares held by such holders (with adjustments to avoid
redemption of fractional shares or, if fractional shares are outstanding, with
such additional adjustments as the Corporation may elect in order to effect the
redemption of fractional shares) or by lot or any other equitable manner
determined by the Corporation (a) that will not give the Corporation the right
to purchase shares of Series A Preferred Stock pursuant to Section 7.5 of its
by-laws and (b) if the Amendments to the Certificate of Incorporation become
effective in accordance with the DGCL as contemplated by Section I(j) hereof,
that will not result in the conversion of any Series A Preferred Stock into
Excess Stock.
(ii) Notice of redemption will be given by publication in The
Wall Street Journal or, if such newspaper is not then being published, another
newspaper of general circulation in The City of New York, such publication to be
made once a week for two successive weeks commencing not less than thirty (30)
or more than sixty (60) days prior to the Redemption Date. Notice of any
redemption will also be mailed by or on behalf of the Corporation, first class
postage prepaid, not less than thirty (30) nor more than sixty (60) days prior
to the applicable
28
Redemption Date, addressed to each holder of record of the Series A Preferred
Stock to be redeemed at the address set forth in the share transfer records of
the Corporation. In addition to any information required by law or by the
applicable rules of any exchange upon which Series A Preferred Stock may be
listed or admitted to trading, such notice shall state: (1) the Redemption Date;
(2) the Redemption Price; (3) the number of shares of Series A Preferred Stock
to be redeemed; (4) the place or places (which shall include a place in the
Borough of Manhattan, The City of New York) where certificates for such shares
are to be surrendered for payment of the Redemption Price; and (5) that
dividends on the shares of Series A Preferred Stock to be redeemed will cease to
accrue on such Redemption Date. If fewer than all of the outstanding shares of
Series A Preferred Stock are to be redeemed, the notice mailed to each holder of
shares to be redeemed shall also specify the number of Series A Preferred Stock
to be redeemed from such holder. No failure to give or defect in such notice or
defect in the mailing thereof shall affect the validity of the proceedings for
the redemption of any shares of Series A Preferred Stock except as to the holder
to whom notice was defective or not given.
(iii) If notice has been published and mailed in accordance
with Section I(g)(ii) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption have been
irrevocably set aside by the Corporation, separate and apart from its other
funds, in trust for the benefit of the holders of the Series A Preferred Stock
so called for redemption, so as to be, and to continue to be, available
therefor, then, from and after the Redemption Date, dividends on the shares of
Series A Preferred Stock so called for redemption shall cease to accrue, such
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as holders of such shares (except the right to receive the
Redemption Price) shall terminate. In the event any Redemption Date shall not be
a Business Day, then payment of the Redemption Price need not be made on such
Redemption Date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Redemption Date and no interest,
additional dividends or other sum shall accrue on the amount payable for the
period from and after such Redemption Date to such next succeeding Business
Date.
(iv) Upon surrender, in accordance with such notice, of the
certificates for any shares of Series A Preferred Stock to be so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so require
and the notice shall so state), such shares of Series A Preferred Stock shall be
redeemed by the Corporation at the Redemption Price. In case fewer than all the
shares of Series A Preferred Stock represented by any such certificate are
redeemed, a new certificate or certificates shall be issued representing the
unredeemed shares of Series A Preferred Stock without cost to the holder
thereof.
(v) Any deposit of monies with a bank or trust company for the
purpose of redeeming Series A Preferred Stock shall be irrevocable and such
monies shall be held in trust for the benefit of the holders of Series A
Preferred Stock entitled thereto, except that (1) the Corporation shall be
entitled to receive from such bank or trust company the interest or other
earnings, if any, earned on the monies so deposited in trust; and (2) any
balance of the monies so deposited by the Corporation and unclaimed by the
holders of the Series A Preferred Stock entitled thereto at the expiration of
two years from the applicable Redemption Date shall be repaid, together with any
interest or other earnings earned thereon, to the Corporation and, after any
such repayment, the holders of the shares entitled to the funds so repaid to the
Corporation shall look only to the Corporation for payment without interest or
other earnings thereon.
(vi) Anything in this Certificate of Designation to the
contrary notwithstanding, the holders of record of shares of Series A Preferred
Stock at the close of business on a Record Date will be entitled to receive the
dividend payable with respect to such shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such shares after such Record
Date and on or prior to such Dividend Payment Date or the Corporation's default
in the payment of the dividend due on such Dividend Payment Date, in which case
the amount payable upon redemption of such shares (including fractional shares)
of Series A Preferred Stock will not include such dividend (and the full amount
of the dividend payable for the applicable Dividend Period shall instead be paid
on such Dividend Payment Date to the holders of record on such Record Date as
aforesaid). Except as provided in this Section I(g)(vi) and except to the extent
that accrued and unpaid dividends are payable as part of the Redemption Price
pursuant to Section I(f)(ii), the Corporation will make no payment or allowance
for unpaid dividends, regardless of whether or not in arrears, on shares of
Series A Preferred Stock or Depositary Shares called for redemption.
(vii) Unless full cumulative dividends on all outstanding
shares of Series A Preferred Stock shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past Dividend Periods (including, without limitation,
any Dividend Period terminating on the date of the redemption of shares of
Series A Preferred Stock referred to below), no shares of Series A Preferred
Stock shall
29
be redeemed unless all outstanding shares of Series A Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing shall not prevent
(a) the purchase or acquisition of Series A Preferred Stock pursuant to Section
7.5 of the by-laws of the Corporation (so long as such purchase is made in
accordance with the terms of such Section 7.5) or pursuant to a purchase or
exchange offer made on the same terms to the holders of all outstanding shares
of Series A Preferred Stock or (b) if the Amendments to the Certificate of
Incorporation become effective in accordance with the DGCL as contemplated by
Section I(j) hereof, the purchase or conversion of Excess Stock of the
Corporation in accordance with the provisions of Article Thirteenth. In
addition, unless full cumulative dividends on all outstanding shares of Series A
Preferred Stock have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods (including, without limitation, any Dividend Period terminating
on the date of the direct or indirect purchase or other acquisition of shares of
Series A Preferred Stock by the Corporation referred to below) the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A Preferred Stock (except by conversion into or exchange for capital
stock of the Corporation ranking junior to the Series A Preferred Stock as to
the payment of dividends and with respect to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation); provided, however,
that the foregoing shall not prevent (a) the purchase or acquisition of Series A
Preferred Stock pursuant to Section 7.5 of the by-laws of the Corporation (so
long as such purchase is made in accordance with the terms of such Section 7.5)
or pursuant to a purchase or exchange offer made on the same terms to the
holders of all outstanding shares of Series A Preferred Stock or (b) if the
Amendments to the Certificate of Incorporation become effective in accordance
with the DGCL as contemplated by Section I(j) hereof, the purchase or conversion
of Excess Stock of the Corporation in accordance with the provisions of Article
Thirteenth.
(h) VOTING RIGHTS. Except as required by laws and as set forth below in
this Section I(h), the holders of the Series A Preferred Stock shall not have
any voting rights.
(i) Whenever dividends on any shares of Series A Preferred
Stock shall be in arrears for six or more Dividend Periods, whether or not such
Dividend Periods are consecutive, the number of directors then constituting the
Board of Directors of the Corporation shall be automatically increased by two
(if not already increased by two by reason of the election of directors by the
holders of any other class or series of capital stock of the Corporation upon
which like voting rights have been conferred and are exercisable and with which
the Series A Preferred Stock is entitled to vote as a class with respect to the
election of such two directors) and the holders of shares of Series A Preferred
Stock (voting separately as a class with all other classes or series of capital
stock of the Corporation upon which like voting rights have been conferred and
are exercisable and which are entitled to vote as a class with the Series A
Preferred Stock in the election of such two directors) will be entitled to vote
for the election of such two directors of the Corporation at a special meeting
called by an officer of the Corporation at the request of the holders of record
of at least 10% of the outstanding shares of Series A Preferred Stock or by
holders of any other class or series of capital stock of the Corporation upon
which like voting rights have been conferred and are exercisable and which is
entitled to vote as a class with the Series A Preferred Stock in the election of
such two directors (unless such request is received less than ninety (90) days
before the date fixed for the next annual or special meeting of stockholders, in
which case the vote for such two directors shall be held at the earlier of the
next such annual or special meeting of stockholders), and at each subsequent
annual meeting of stockholders until all dividends accumulated on the Series A
Preferred Stock for all past Dividend Periods and the then current Dividend
Period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment, whereupon the right of the holders of
Series A Preferred Stock to elect such two directors shall cease and (unless
there are one or more other classes or series of capital stock of the
Corporation upon which like voting rights have been conferred and are
exercisable) the term of office of such directors previously so elected shall
terminate and the authorized number of directors of the Corporation shall
thereupon return to the number of authorized directors otherwise in effect, but
subject always to the same provisions for the reinstatement and divestment of
the right to elect such two additional directors in the case of any such future
dividend arrearage.
In the case of any such request for a special meeting (unless such
request is received less than ninety (90) days before the date fixed for the
next annual or special meeting of stockholders), such meeting shall be held on
the earliest practicable date at the place designated by the holders of capital
stock requesting such meeting or, if none, at a place
designated by the Secretary of the Corporation, upon notice similar to that
required for an annual meeting of stockholders. If such special meeting is not
called by an officer of the Corporation within thirty (30) days after such
request, then the holders of record of at least 10% of the outstanding shares of
Series A Preferred Stock may designate in writing a holder of Series A Preferred
Stock to call such meeting at the expense of the Corporation, and such meeting
may be called by the holder so designated upon notice similar to that required
for annual meetings of stockholders and
30
shall be held at the place designated by the holder calling such meeting. The
holders of Series A Preferred Stock shall have access to the stock transfer
records of the Corporation for the purpose of causing a meeting of stockholders
to be called pursuant to the provisions of this paragraph.
The procedures in this Section I(h) for the calling of meetings and the
election of directors shall, to the extent permitted by law, supersede anything
inconsistent contained in the by-laws of the Corporation.
So long as any Series A Preferred Stock are outstanding, the number of
directors constituting the entire Board of Directors of the Corporation shall at
all times be such so that the exercise, by the holders of the Series A Preferred
Stock and the holders of any other classes or series of capital stock of the
Corporation upon which like voting rights have been conferred, of the right to
elect directors under the circumstances provided above will not contravene any
provision of the Corporation's Certificate of Incorporation or by-laws
restricting the number of directors which may constitute the entire Board of
Directors of the Corporation.
If at any time when the voting rights conferred upon the Series A
Preferred Stock pursuant to this Section I(h)(i) are exercisable any vacancy in
the office of a director elected pursuant to this Section I(h)(i) shall occur,
then such vacancy may be filled only by the remaining such director or by vote
of the holders of record of the outstanding Series A Preferred Stock and any
other classes or series of capital stock of the Corporation upon which like
voting rights have been conferred and are exercisable and which are entitled to
vote as a class with the Series A Preferred Stock in the election of directors
pursuant to this Section I(h)(i).
(ii) So long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least two-thirds of the shares of Series A Preferred Stock
outstanding at the time, given in person or by proxy (with the Series A
Preferred Stock voting separately as a class), (A) authorize or create, or
increase the authorized or issued amount of, any class or series of capital
stock of the Corporation ranking prior to the Series A Preferred Stock with
respect to the payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the Corporation or reclassify any
authorized capital stock of the Corporation into such shares, or create,
authorize or issue any obligation or security convertible into, exchangeable or
exercisable for, or evidencing the right to purchase, any such shares, or (B)
amend, alter or repeal the provisions of the Certificate of Incorporation
(including, without limitation, the certificate of powers, designations,
preferences and rights of the Series A Preferred Stock (the "Certificate of
Designation")), whether by merger or consolidation (an "Event") or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series A Preferred Stock or the holders thereof; provided, however,
with respect to the occurrence of any of the Events set forth in (B) above, so
long as the Series A Preferred Stock remains outstanding or is converted into
like securities of the surviving entity, in each case with the terms thereof
materially unchanged, taking into account that upon the occurrence of such an
Event the Corporation may not be the surviving entity, the occurrence of any
such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of the Series A Preferred Stock or the
holders thereof; and provided, further, that the Amendments to the Certificate
of Incorporation shall not be deemed, with respect to the Series A Preferred
Stock, to be an amendment, alteration or repeal which materially and adversely
affects such rights, preferences, privileges or voting powers; and provided,
further, that any amendment to the Certificate of Incorporation to authorize any
increase in the amount of the authorized Excess Stock, Preferred Stock or Series
Common Stock or the creation or issuance of any other series of Preferred Stock
or any shares or series of Excess Stock or Series Common Stock, or any increase
in the amount of authorized or outstanding shares of Series A Preferred Stock or
any other series of Preferred Stock or any shares or series of Excess Stock or
Series Common Stock, in each case ranking on a parity with or junior to the
Series A Preferred Stock with respect to payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers. For purposes of this paragraph, the
filing in accordance with applicable law of a certificate of designations
setting forth the designations, preferences and relative, participating,
optional or other special rights of a class or series of capital stock of the
Corporation shall be deemed an amendment to the Certificate of Incorporation.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series A Preferred Stock shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust in accordance with the terms of Section I(g)(v) hereof to effect such
redemption.
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(iii) On each matter submitted to a vote of the holders of
Series A Preferred Stock, including any action by written consent, in accordance
with this Section I(h) or as otherwise required by law, each whole share of
Series A Preferred Stock shall be entitled to ten votes, each of which ten votes
may be directed separately by the holder thereof (or by any proxy or proxies of
such holder). With respect to each whole share of Series A Preferred Stock, the
holder thereof may designate up to ten proxies, with each such proxy having the
right to vote a whole number of votes (totaling ten per share of Series A
Preferred Stock). In the event that fractional shares of Series A Preferred
Stock are issued, then each such fractional share shall be entitled to a
proportionate number of votes and, if any such fractional share is entitled to
more than one vote, such votes may be directed separately and proxies may be
designated as in the case of whole shares of Series A Preferred Stock.
(i) CONVERSION. The Series A Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation, except
that, if the Amendments to the Certificate of Incorporation become effective in
accordance with the DGCL as contemplated by Section I(j) hereof, the Series A
Preferred Stock shall be convertible into Excess Stock on the terms and subject
to the conditions set forth in Article Thirteenth.
(j) RESTRICTIONS ON OWNERSHIP AND TRANSFER. In the event that the
Corporation shall purchase any shares of Series A Preferred Stock pursuant to
Section 7.5 of its by-laws, then the purchase price paid by the Corporation for
any such shares of Series A Preferred Stock shall be the price specified in its
by-laws plus accrued and unpaid dividends on such shares to the date of
purchase.
As set forth in the Joint Proxy Statement/Prospectus dated May 19, 1998
(the "Proxy Statement") of The Meditrust Companies and La Quinta Inns, Inc., the
Corporation is soliciting the vote of its stockholders in favor of amendments
(the "Amendments") to its Certificate of Incorporation which would (i) add a new
Article Thirteenth to such Certificate of Incorporation in the form set forth as
Annex E to the Proxy Statement ("Article Thirteenth") and (ii) authorize a new
class of capital stock of the Corporation to be known as Excess Stock ("Excess
Stock"). If the Amendments are approved and become effective in accordance with
the DGCL, then, from and after the date on which the Amendments shall have
become effective in accordance with the DGCL, the Series A Preferred Stock shall
be subject to all of the terms and provisions of Article Thirteenth and, without
limitation to the foregoing, shall be convertible into Excess Stock on the terms
and subject to the conditions, and shall be subject to the limitations on
ownership and transfer, set forth in Article Thirteenth.
(k) FRACTIONAL SHARES. Series A Preferred Stock may be issued in
fractional shares equal to 1/10th of a whole share of Series A Preferred Stock
and any integral multiple of 1/10th of a whole share of Series A Preferred
Stock.
(l) OFFICE OR AGENCY IN NEW YORK CITY. The Corporation will at all
times maintain an office or agency in the Borough of Manhattan, The City of New
York, where shares of Series A Preferred Stock may be surrendered for payment
(including upon redemption or repurchase, if any), registration of transfer or
exchange.
If any shares of Series A Preferred Stock are purchased by the
Corporation in accordance with Section 7.5 of its by-laws or if the Amendments
shall have become effective as contemplated by this Section I(j) and thereafter
any shares of Series A Preferred Stock are converted into Excess Stock and, in
either such case, if fewer than all the shares of Series A Preferred Stock
evidenced by any stock certificate are so purchased or converted, a new
certificate or certificates shall be issued representing the remaining shares of
Series A Preferred Stock evidenced by such certificate without cost to the
holder thereof.
II.
The Series A Preferred Stock shall have no preemptive rights.
III.
If any power, preference or relative, participating, optional and other
special right of the Series A Preferred Stock, or qualification or restriction
thereof, set forth in the Certificate of Designation is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy, then,
to the extent permitted by law, all other powers, preferences and relative,
participating, optional and other special rights of the Series A Preferred Stock
and
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qualifications and restrictions thereof set forth in the Certificate of
Designation which can be given effect without the invalid, unlawful or
unenforceable powers, preferences or relative, participating, optional or other
special rights of the Series A Preferred Stock or the qualifications or
restriction thereof shall remain in full force and effect and shall not be
deemed dependent upon any other such powers, preferences or relative,
participating, optional or other special right of the Series A Preferred Stock
or qualifications or restrictions thereof unless so expressed herein.
[End of Text]
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I, Michael S. Benjamim, Secretary of the Corporation, for the purpose
of amending and restating the Corporation's Certificate of Incorporation
pursuant to the General Corporation Law of the State of Delaware, do execute
this certificate, hereby declaring and certifying that this is my act and deed
on behalf of the Corporation this 21st day of June, 1999.
By: /s/ MICHAEL S. BENJAMIN
Name: Michael S. Benjamin
Title: Secretary
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