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Exhibit 3.11
EQUITY RESIDENTIAL PROPERTIES TRUST
ARTICLES SUPPLEMENTARY
TO THE
SECOND AMENDED AND RESTATED DECLARATION OF TRUST
Equity Residential Properties Trust, a Maryland real estate investment
trust (the "Trust"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, pursuant to section 8-203(b) of the Corporations and
Associations Article of the Annotated Code of Maryland, that:
FIRST: Pursuant to the authority granted by the Second Amended and
Restated Declaration of Trust of the Trust, as amended and supplemented (the
"Declaration of Trust"), the Board of Trustees adopted a resolution classifying
and designating up to 190,000 preferred shares of beneficial interest of the
Trust, $.01 par value per share (the "Preferred Shares"), as 7.625% Series M-5
Convertible Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01
par value per share (Liquidation Preference $50.00 Per Share) (the "Series M-5
Preferred Shares"), with the following preferences, rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption, which, upon any
restatement of the Declaration of Trust, may be made a part of Article XIII of
the Declaration of Trust, with any appropriate changes in the enumeration or
lettering of any section or subsection hereof:
SERIES M-5 PREFERRED SHARES
1. A. CERTAIN DEFINITIONS.
Unless the context otherwise requires, the terms defined in
this subparagraph A of paragraph 1 shall have, for all purposes of these terms
of the Series M-5 Preferred Shares, the meanings herein specified (with terms
defined in the singular having comparable meanings when used in the plural).
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City are authorized or required by law, regulation or executive
order to close.
"Closing Date of the Series M-5 Preferred Shares Offering"
shall have the meaning set forth in subparagraph (1) of paragraph C below.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
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"Common Shares" shall mean the common shares of beneficial
interest, $.01 par value per share, of the Trust.
"Constituent Person" shall have the meaning set forth in
subparagraph (7)(e) of paragraph B below.
"Conversion Price" shall mean the conversion price per Common
Share for which the Series M-5 Preferred Shares are convertible, as such
Conversion Price may be adjusted pursuant to subparagraph (7)(d) of paragraph
(B) below. The initial conversion price shall be $ 66.19 per Common Share
(equivalent to a conversion rate of 0.7554 Common Shares for each Series M-5
Preferred Share, with such Series M-5 Preferred Shares being ascribed their
$50.00 liquidation value).
"Current Market Price" shall mean the current market price of
publicly traded common shares or any other class of shares of beneficial
interest or other security of the Trust or any other issuer for any day shall
mean the last reported sales-price, regular way on such day or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the New York Stock Exchange
("NYSE") or, if such security is not listed or admitted for trading on the NYSE,
on the principal national securities exchange on which such security is listed
or admitted for trading or, if not listed or admitted for trading on any
national securities exchange, on the NASDAQ National Market, or, if such
security is not quoted on such NASDAQ National Market, the average of the
closing bid and asked prices on such day in the over-the-counter-market as
reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices on such day as furnished by any NYSE member firm regularly making a
market in such security selected for such purpose by the Chief Executive Officer
or the Board of Trustees, or, if such security is not then currently traded on
any established market and no bid and asked prices for such security on such day
shall be available, the Current Market Price shall be as determined in good
faith by the Chief Executive Officer or the Board of Trustees.
"Declaration of Trust" shall have the meaning set forth in
Article First of these Articles Supplementary.
"Distribution Period" shall have the meaning set forth in
subparagraph (3) of paragraph B below.
"Event" shall have the meaning set forth in subparagraph
(6)(c) of paragraph B below.
"Fair Market Value" shall mean the average of the daily
Current Market Prices for a Common Share during the five (5) consecutive Trading
Days selected by the Trust commencing not more than twenty (20) Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with
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respect to the issuance or distribution requiring such computation. The term "ex
date" when used with respect to any issuance or distribution means the first day
on which the Common Shares trade regular way, without the right to receive such
issuance or distribution, on the exchange or in the market, as the case may be,
used to determine that day's Current Market Price.
"Issue Date" shall mean the first date on which the Series H
Preference Units are issued.
"Junior Shares" shall have the meaning set forth in
subparagraph (2) of paragraph B.
"Non-Electing Share" shall have the meaning set forth in
subparagraph (7)(e) of paragraph B below.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity, and also includes a group as that
term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, but does not include an underwriter which participates in a
public offering of the Series M-5 Preferred Shares; provided, that the ownership
of Series M-5 Preferred Shares by such Underwriter would not result in the Trust
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Trust failing to qualify as a REIT.
"Preferred Shares" shall mean shares of beneficial interest of
the Trust designated as or otherwise on a parity with the Series M-5 Preferred
Shares as to distributions and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Trust as may be issued and outstanding from
time to time, including Series A Preferred Shares, Series B Preferred Shares,
Series C Preferred Shares, Series D Preferred Shares, Series E Preferred Shares,
Series F Preferred Shares, Series G Preferred Shares, Series H Preferred Shares,
Series K Preferred Shares, Series L Preferred Shares, Series M Preferred Shares,
Series M-1 Preferred Shares, Series M-2 Preferred Shares, Series M-3 Preferred
Shares and Series M-4 Preferred Shares and any other shares so designated.
"Quarterly Distribution Date" shall have the meaning set forth
in subparagraph (3) of paragraph B below.
"Record Date" shall have the meaning set forth in subparagraph
(3) of paragraph B below.
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"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Securities" shall have the meaning set forth in subparagraph
(7)(d)(iii) of paragraph B below.
"Series H Preference Units" shall mean the 7.625% Series H
Cumulative Convertible Redeemable Preference Units of Lexford Properties, L.P.
"Series M-5 Preferred Shares" shall have the meaning set forth
in Article First of these Articles Supplementary.
"Series M-5 Redemption Date" shall have the meaning set forth
in subparagraph (5) of paragraph B below.
"Series M-5 Redemption Price" shall have the meaning set forth
in subparagraph (5) of paragraph B below.
"Special Triggering Event" shall have the meaning set forth in
subparagraph (1) of paragraph C below.
"Trading Day" shall mean any day on which the securities in
question are traded on the NYSE, or if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National Market,
or if such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in subparagraph
(7)(e) of paragraph B below.
"Transfer Agent" shall mean Fleet National Bank, which may act
through its affiliate, EquiServe Limited Partnership, or such other agent or
agents of the Trust as may be designated by the Board of Trustees or their
designee as the transfer agent for the Series M-5 Preferred Shares.
"Trust" shall have the meaning set forth in Article First of
these Articles Supplementary.
All other capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Declaration of Trust.
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B. SERIES M-5 PREFERRED SHARES
(1) NUMBER AND DESIGNATION. A series of Preferred Shares,
consisting of 190,000 Preferred Shares designated as 7.625% Series M-5
Convertible Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01
par value per share (liquidation preference $50.00 per share) (the "Series M-5
Preferred Shares"), is hereby established.
(2) RANKING. In respect of rights to receive distributions and to
participate in distributions or payments in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Trust, the Series M-5
Preferred Shares shall rank pari passu with any other Preferred Shares of the
Trust, and will rank senior to the Common Shares and any other class or series
of shares of beneficial interest of the Trust ranking, as to distributions and
upon liquidation, junior (collectively, the "Junior Shares") to the Preferred
Shares.
(3) DISTRIBUTIONS. The holders of the then outstanding Series M-5
Preferred Shares shall be entitled to receive, when and as authorized by the
Board of Trustees and declared by the Trust out of any funds legally available
therefor, cumulative distributions at the rate of $3.8125 per share per year,
payable in equal amounts of $.953125 per share quarterly in arrears in cash on
the fifteenth day, or if not a Business Day, the next succeeding Business Day,
of January, April, July and October in each year (each such day being
hereinafter called a "Quarterly Distribution Date" and each period ending on a
Quarterly Distribution Date being hereinafter called a "Distribution Period"),
beginning on the first Quarterly Distribution Date following the issuance of the
Series M-5 Preferred Shares, to shareholders of record at the close of business
on such date as shall be fixed by the Board of Trustees at the time of
declaration of the distribution (the "Record Date"), which shall not be less
than 10 nor more than 30 days preceding the Quarterly Distribution Date. The
amount of any distribution payable for the initial Distribution Period and for
any other Distribution Period shorter than a full Distribution Period shall be
pro-rated and computed on the basis of a 360-day year of twelve 30-day months.
Distributions on each Series M-5 Preferred Share shall accrue and be cumulative
from and including the date of original issue thereof, whether or not (i)
distributions on such shares are earned or declared or (ii) on any Quarterly
Distribution Date there shall be funds legally available for the payment of
distributions. Distributions paid on the Series M-5 Preferred Shares in an
amount less than the total amount of such distributions at the time accrued and
payable on such shares shall be allocated pro rata on a per share basis among
all such shares at the time outstanding.
The amount of any distributions accrued on any Series M-5
Preferred Shares at any Quarterly Distribution Date shall be the amount of any
unpaid distributions accumulated thereon, to and including such Quarterly
Distribution Date, whether or not earned or declared, and the amount of
distributions accrued on any Series M-5 Preferred Shares at any date other than
a Quarterly Distribution Date shall be equal to the sum of the amount of any
unpaid distributions accumulated thereon, to
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and including the last preceding Quarterly Distribution Date, whether or not
earned or declared, plus an amount calculated on the basis of the annual
distribution rate of $3.8125 for the period after such last preceding Quarterly
Distribution Date to and including the date as of which the calculation is made
based on a 360-day year of twelve 30-day months.
In determining whether a distribution (other than upon
voluntary or involuntary liquidation), by dividend, redemption or other
acquisition of shares of beneficial interest of the Trust or otherwise, is
permitted under Maryland law, amounts that would be needed, if the Trust were to
be dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of holders of Series M-5 Preferred Shares will not be added to
the Trust's total liabilities.
Except as provided in these terms of the Series M-5 Preferred
Shares, the Series M-5 Preferred Shares shall not be entitled to participate in
the earnings or assets of the Trust.
(4) LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Trust, the holders of the
Series M-5 Preferred Shares then outstanding shall be entitled
to receive and to be paid out of the assets of the Trust
available for distribution to its shareholders, before any
payment or distribution shall be made on any Junior Shares,
the amount of $50.00 per Series M-5 Preferred Share, plus
accrued and unpaid distributions thereon.
(b) After the payment to the holders of the Series M-5
Preferred Shares of the full preferential amounts provided for
in this paragraph B, the holders of the Series M-5 Preferred
Shares as such shall have no right or claim to any of the
remaining assets of the Trust.
(c) If, upon any voluntary or involuntary dissolution,
liquidation or winding up of the Trust, the amounts payable
with respect to the preference value of the Series M-5
Preferred Shares and any other shares of beneficial interest
of the Trust ranking as to any such distribution on parity
with the Series M-5 Preferred Shares are not paid in full, the
holders of the Series M-5 Preferred Shares and of such other
shares will share ratably in any such distribution of assets
of the Trust in proportion to the full respective preference
amounts to which they are entitled.
(d) Neither the sale of all or substantially all of the
property or business of the Trust, nor the merger or
consolidation of the Trust into or with any other entity or
the merger or consolidation of any other entity into or with
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the Trust, shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for purposes of this
paragraph B.
(5) REDEMPTION.
(a) OPTIONAL REDEMPTION. On and after March 23, 2006, the
Trust may, at its option, redeem at any time all or, from time
to time, part of the Series M-5 Preferred Shares at a price
per share (the "Series M-5 Redemption Price"), payable in
cash, of $50.00 per Series M-5 Preferred Share, together with
all accrued and unpaid distributions to and including the date
fixed for redemption (the "Series M-5 Redemption Date"),
subject to the provisions of paragraph 7 herein.
(b) PROCEDURES FOR REDEMPTION.
(i) Notice of any redemption will be mailed by
the Trust, postage prepaid, or sent via overnight delivery
service, not less than 30 days nor more than 60 days prior to
the Series M-5 Redemption Date, addressed to the holders of
record of the Series M-5 Preferred Shares to be redeemed at
their addresses as they appear on the share transfer records
of the Trust. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity of
the proceedings for the redemption of any Series M-5 Preferred
Shares except as to the holder to whom the Trust has failed to
give notice or except as to the holder to whom notice was
defective. In addition to any information required by law or
by the applicable rules of any exchange upon which Series M-5
Preferred Shares may be listed or admitted to trading, such
notice shall state: (a) the Series M-5 Redemption Date; (b)
the Series M-5 Redemption Price; (c) the number of Series M-5
Preferred Shares to be redeemed; (d) the place or places where
certificates for such shares are to be surrendered for payment
of the Series M-5 Redemption Price; and (e) that distributions
on the shares to be redeemed will cease to accumulate on the
Series M-5 Redemption Date.
(ii) If notice has been mailed in accordance with
subparagraph (5)(b)(i) above and provided that on or before
the Series M-5 Redemption Date specified in such notice all
funds necessary for such redemption shall have been
irrevocably set aside by the Trust, separate and apart from
its other funds in trust for the pro rata benefit of the
holders of the Series M-5 Preferred Shares so called for
redemption, so as to be, and to continue to be available
therefor, then, from and after the Series M-5 Redemption Date
(unless the Trust defaults in the payment of the Series M-5
Redemption Price), distributions on the Series M-5 Preferred
Shares so called for redemption shall cease to accumulate, and
said shares shall no longer be deemed to be outstanding and
shall not have the status of
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Series M-5 Preferred Shares and all rights of the holders
thereof as shareholders of the Trust (except the right to
receive the Series M-5 Redemption Price) shall cease. If
payment of the Series M-5 Preferred Shares is improperly
withheld or refused and not paid by the Trust, distributions
on such Series M-5 Preferred Shares will continue to
accumulate from the original redemption date to the date of
payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of
calculating the applicable Series M-5 Redemption Price. Upon
surrender, in accordance with said notice, of the certificates
for any Series M-5 Preferred Shares so redeemed (properly
endorsed or assigned for transfer, if the Trust shall so
require and the notice shall so state), such Series M-5
Preferred Shares shall be redeemed by the Trust at the Series
M-5 Redemption Price. In case fewer than all the Series M-5
Preferred Shares evidenced by any such certificate are
redeemed, a new certificate or certificates shall be issued
evidencing the unredeemed Series M-5 Preferred Shares without
cost to the holder thereof.
(iii) Any funds deposited with a bank or trust
company for the purpose of redeeming Series M-5 Preferred
Shares shall be irrevocable except that:
(A) the Trust shall be entitled to
receive from such bank or trust
company the interest or other
earnings, if any, earned on any
money so deposited in trust, and
the holders of any shares redeemed
shall have no claim to such
interest or other earnings; and
(B) any balance of monies so deposited
by the Trust and unclaimed by the
holders of the Series M-5 Preferred
Shares entitled thereto at the
expiration of two years from the
applicable Series M-5 Redemption
Date shall be repaid, together with
any interest or other earnings
earned thereon, to the Trust, and
after any such repayment, the
holders of the shares entitled to
the funds so repaid to the Trust
shall look only to the Trust for
payment without interest or other
earnings.
(iv) No Series M-5 Preferred Shares may be
redeemed except with funds legally available for the payment
of the Series M-5 Redemption Price.
(v) Unless full accumulated distributions on all
Series M-5 Preferred Shares shall have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for
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payment for all past Distribution Periods and the then current
Distribution Period, no Series M-5 Preferred Shares shall be
redeemed (unless all outstanding Series M-5 Preferred Shares
are simultaneously redeemed) or purchased or otherwise
acquired directly or indirectly (except by conversion into or
exchange for shares of beneficial interest of the Trust
ranking junior to the Series M-5 Preferred Shares as to
distributions and upon liquidation); provided, however, that
the foregoing shall not prevent the redemption of Series M-5
Preferred Shares pursuant to Article VII of the Declaration of
Trust or the purchase or acquisition of Series M-5 Preferred
Shares.
(vi) If the Series M-5 Redemption Date is after a
Record Date and before the related Quarterly Distribution
Date, the distribution payable on such Quarterly Distribution
Date shall be paid to the holder in whose name the Series M-5
Preferred Shares to be redeemed are registered at the close of
business on such Record Date notwithstanding the redemption
thereof between such Record Date and the related Quarterly
Distribution Date or the Trust's default in the payment of the
distribution due.
(vii) In case of redemption of less than all
Series M-5 Preferred Shares at the time outstanding, the
Series M-5 Preferred Shares to be redeemed shall be selected
pro rata from the holders of record of such shares in
proportion to the number of Series M-5 Preferred Shares held
by such holders (with adjustments to avoid redemption of
fractional shares) or by any other equitable method determined
by the Trust.
(6) VOTING RIGHTS. Except as provided in these terms of the Series
M-5 Preferred Shares, the holders of the Series M-5 Preferred Shares shall not
be entitled to vote at any meeting of the shareholders for election of trustees
or for any other purposes or otherwise to participate in any action taken by the
Trust or the shareholders thereof, or to receive notice (except for such notice
as required by law) of any meeting of shareholders.
(a) In any matter in which the Series M-5 Preferred
Shares are entitled to vote (as expressly provided herein),
including any action by written consent, each Series M-5
Preferred Share shall be entitled to 10 votes, each of which
10 votes may be directed separately by the holder thereof (or
by any proxy or proxies of such holder). With respect to each
Series M-5 Preferred Share, the holder thereof may designate
up to 10 proxies, with each such proxy having the right to
vote a whole number of votes (totaling 10 votes per Series M-5
Preferred Share).
(b) Whenever distributions on any Series M-5 Preferred
Shares shall be in arrears for six or more quarterly periods,
the holders of such Series
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M-5 Preferred Shares, voting separately as a class with all
other series of Preferred Shares upon which like voting rights
have been conferred and are exercisable, will be entitled to
vote for the election of two additional Trustees of the Trust
at a special meeting called by the holders of record of at
least ten percent (10%) of any series of Preferred Shares so
in arrears (unless such request is received less than 90 days
before the date fixed for the next annual or special meeting
of the shareholders) or at the next annual meeting of
shareholders, and at each subsequent annual meeting until all
distributions accumulated on such Series M-5 Preferred Shares
for the past distribution periods and the then current
distribution period shall have been fully paid or declared and
a sum sufficient for the payment thereof set aside for
payment. In such case, the entire Board of Trustees of the
Trust will be increased by two Trustees.
(c) So long as any Series M-5 Preferred Shares remain
outstanding, the Trust will not, without the affirmative vote
or consent of the holders of at least two-thirds of the Series
M-5 Preferred Shares outstanding at the time, given in person
or by proxy, either in writing or at a meeting (such series
voting separately as a class), (i) authorize or create, or
increase the authorized or issued amount of, any class or
series of shares of beneficial interest ranking senior to the
Series M-5 Preferred Shares with respect to the payment of
distributions or the distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized shares
of beneficial interest of the Trust into such shares, or
create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such
shares; or (ii) amend, alter or repeal the provisions of the
Trust's Declaration of Trust or the terms of the Series M-5
Preferred Shares whether by merger, consolidation or otherwise
(an "Event"), so as to materially and adversely affect any
right, preference, privilege or voting power of the Series M-5
Preferred Shares or the holders thereof; provided, however,
with respect to the occurrence of any Events set forth in (ii)
above, so long as the Series M-5 Preferred Shares remain
outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event, the
Trust may not be the surviving entity or the Series M-5
Preferred Shares that remain outstanding may bear a new title,
designation and/or be issued by a different issuer, the
occurrence of any such Event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or
voting power of holders of Series M-5 Preferred Shares and
provided further that (x) any increase in the amount of the
authorized Preferred Shares or the creation or issuance of any
other Series M-5 Preferred Shares, or (y) any increase in the
amount of authorized Series M-5 Preferred Shares or any other
Preferred Shares, in each case ranking on a parity with or
junior to the Series M-5 Preferred Shares with respect to
payment of distributions or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
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materially and adversely affect such rights, preferences,
privileges or voting powers.
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 M-5 Preferred Shares shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
(7) CONVERSION. Holders of Series M-5 Preferred Shares shall have
the right to convert all or a portion of such shares into Common Shares, as
follows:
(a) Subject to and upon compliance with the provisions of
this subparagraph (7), a holder of Series M-5 Preferred Shares
shall have the right, at his or her option, at any time after
March 23, 2011 to convert such shares into the number of fully
paid and non-assessable Common Shares obtained by dividing the
aggregate liquidation preference of such shares by the
Conversion Price (as in effect at the time and on the date
provided for in the last paragraph of subsection (b) of this
subparagraph (7)) by surrendering such shares to be converted,
such surrender to be made in the manner provided in subsection
(b) of this subparagraph (7); PROVIDED, HOWEVER, that a holder
of Series M-5 Preferred Shares shall have the right to convert
such shares as provided above, at his or her option, at any
time subsequent to such shares being called for redemption
pursuant to subparagraph (5), which right to convert such
shares upon a call for redemption shall terminate at the close
of business on the fifth Business Day preceding the Series M-5
Redemption Date fixed for such redemption, unless the Trust
shall default in making payment of the Common Shares and any
cash payable upon such redemption under subparagraph (5)
hereof, in which case the holders will retain the conversion
rights provided herein, and PROVIDED FURTHER that, prior to
such time as the Series M-5 Preferred Shares have been
registered for resale with the United States Securities and
Exchange Commission and listed for trading on the NYSE or the
NASDAQ National Market, the Series M-5 Preferred Shares shall
be convertible in whole, but not in part, with respect to all
of the outstanding Series M-5 Preferred Shares.
(b) In order to exercise the conversion right, the holder
of each Series M-5 Preferred Share to be converted shall
surrender the certificate representing such share, duly
endorsed or assigned to the Trust or in blank, at the office
of the Transfer Agent, accompanied by written notice to the
Trust that the holder thereof elects to convert such Series
M-5 Preferred Share delivered to the Trust by (a) fax and (b)
certified mail postage prepaid or overnight delivery to:
Equity Residential Properties
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Trust, Two North Riverside Plaza, Suite 400, Chicago, Illinois
60606, Attention: Bruce C. Strohm, facsimile number (312)
454-0039. Unless the shares issuable on conversion are to be
issued in the same name as the name in which such Series M-5
Preferred Share is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Trust, duly executed by the holder or
such holder's duly authorized attorney and an amount
sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Trust demonstrating that such
taxes have been paid).
Holders of Series M-5 Preferred Shares at the close of
business on a distribution payment record date shall be
entitled to receive the distribution payable on such shares on
the corresponding Quarterly Distribution Date notwithstanding
the conversion thereof following such distribution payment
record date and prior to such Quarterly Distribution Date.
However, Series M-5 Preferred Shares surrendered for
conversion during the period between the close of business on
any distribution payment record date and the opening of
business on the corresponding Quarterly Distribution Date
(except shares converted after the issuance of notice of
redemption with respect to a Series M-5 Redemption Date during
such period or coinciding with such Quarterly Distribution
Date, such Series M-5 Preferred Shares being entitled to such
distribution on the Quarterly Distribution Date) must be
accompanied by payment of a pro rata portion of the
distribution payable on such shares on such Quarterly
Distribution Date equal to the product of (i) the amount of
the quarterly distribution multiplied by (ii) a fraction, the
numerator of which is the number of days beginning on the date
of surrender of such Series M-5 Preferred Shares as provided
in the preceding paragraph and ending on the Quarterly
Distribution Date, and the denominator of which is 90. A
holder of Series M-5 Preferred Shares on a distribution
payment record date who (or whose transferees) tenders any
such shares for conversion into Common Shares on such
Quarterly Distribution Date will receive the distribution
payable by the Trust on such Series M-5 Preferred Shares on
such date, and the converting holder need not include payment
of the amount of such distribution upon surrender of Series
M-5 Preferred Shares for conversion. Except as provided above,
the Trust shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on converted shares
or for distributions on the Common Shares issued upon such
conversion.
As promptly as practicable after the surrender of certificates
representing Series M-5 Preferred Shares as aforesaid, the
Trust shall issue and shall deliver at such office to such
holder, or on his or her written order, a certificate or
certificates for the number of full Common Shares issuable
upon the conversion of such shares in accordance with the
provisions of this subparagraph (7), and any fractional
interest in respect of a Common
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Share arising upon such conversion shall be settled as
provided in subsection (c) of this subparagraph (7).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on
which the certificates for Series M-5 Preferred Shares shall
have been surrendered and such notice (and if applicable,
payment of an amount equal to the distribution payable on such
shares) received by the Trust as aforesaid, and the person or
persons in whose name or names any certificate or certificates
for Common Shares shall be issuable upon such conversion shall
be deemed to have become the holder or holders of record of
the shares represented thereby at such time on such date, and
such conversion shall be at the Conversion Price in effect at
such time and on such date unless the share transfer books of
the Trust shall be closed on that date, in which event such
person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next
succeeding day on which such share transfer books are open,
but such conversion shall be at the Conversion Price in effect
on the date on which such shares have been surrendered and
such notice received by the Trust.
(c) No fractional shares or scrip representing fractions
of Common Shares shall be issued upon conversion of the Series
M-5 Preferred Shares. Instead of any fractional interest in a
Common Share that would otherwise be deliverable upon the
conversion of a share of Series M-5 Preferred Shares, the
Trust shall pay to the holder of such share an amount in cash
based upon the Current Market Price of the Common Shares on
the Trading Day immediately preceding the date of conversion.
If more than one Series M-5 Preferred Share shall be
surrendered for conversion at one time by the same holder, the
number of full Common Shares issuable upon conversion thereof
shall be computed on the basis of the aggregate number of
Series M-5 Preferred Shares so surrendered.
(d) The Conversion Price shall be adjusted from time to
time as follows:
(i) If the Trust shall after the Issue Date (A)
pay a distribution or make a distribution on its shares of
beneficial interest in Common Shares, (B) subdivide its
outstanding Common Shares into a greater number of shares, (C)
combine its outstanding Common Shares into a smaller number of
shares, or (D) issue any shares of beneficial interest by
reclassification of its Common Shares, the Conversion Price in
effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to
receive such distribution or at the opening of business on the
day following the day on which such
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subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the
holder of any Series M-5 Preferred Shares thereafter
surrendered for conversion shall be entitled to receive the
number of Common Shares that such holder would have owned or
have been entitled to receive after the happening of any of
the events described above had such shares been converted
immediately prior to the record date in the case of a
distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment
made pursuant to this subsection (i) shall become effective
immediately after the opening of business on the day next
following the record date (except as provided in paragraph (h)
below) in the case of a distribution and shall become
effective immediately after the opening of business on the day
next following the effective date in the case of a
subdivision, combination or reclassification.
(ii) If the Trust shall issue after the Issue
Date rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or
purchase Common Shares at a price per share less than the Fair
Market Value per Common Share on the record date for the
determination of shareholders entitled to receive such rights,
options or warrants, then the Conversion Price in effect at
the opening of business on the day next following such record
date shall be adjusted to equal the price determined by
multiplying (I) the Conversion Price in effect immediately
prior to the opening of business on the day following the date
fixed for such determination by (II) a fraction, the numerator
of which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the date fixed for
such determination and (B) the number of shares that the
aggregate proceeds to the Trust from the exercise of such
rights, options or warrants for Common Shares would purchase
at such Fair Market Value, and the denominator of which shall
be the sum of (A) the number of Common Shares outstanding on
the close of business on the date fixed for such determination
and (B) the number of additional Common Shares offered for
subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such
record date (except as provided in subsection (h) below). In
determining whether any rights, options or warrants entitle
the holders of Common Shares to subscribe for or purchase
Common Shares at less than the Fair Market Value, there shall
be taken into account any consideration received by the Trust
upon issuance and upon exercise of such rights, options or
warrants, the value of such consideration, if other than cash,
to be determined by the Chief Executive Officer or the Board
of Trustees.
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(iii) If the Trust shall distribute to all holders
of its Common Shares any shares of beneficial interest of the
Trust (other than Common Shares) or evidence of its
indebtedness or assets (excluding cash distributions paid out
of the total equity applicable to Common Shares, including
revaluation equity, less the amount of stated capital
attributable to Common Shares, determined on the basis of the
most recent annual and quarterly consolidated cost basis
balance sheets of the Trust and its consolidated subsidiaries
available at the time of the declaration of the distribution)
or rights or warrants to subscribe for or purchase any of its
securities (excluding those rights and warrants issued to all
holders of Common Shares entitling them for a period expiring
within 45 days after the record date referred to in subsection
(ii) above to subscribe for or purchase Common Shares, which
rights and warrants are referred to in and treated under
subsection (ii) above) (any of the foregoing being hereinafter
in this subsection (iii) called the "Securities"), then in
each case the Conversion Price shall be adjusted so that it
shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of
shareholders entitled to receive such distribution by (II) a
fraction, the numerator of which shall be the Fair Market
Value per Common Share on the record date mentioned below less
the then fair market value (as determined by the Chief
Executive Officer or the Board of Trustees, whose
determination shall be conclusive) of the portion of the
shares of beneficial interest or assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one Common Share, and the denominator of which
shall be the Fair Market Value per Common Share on the record
date mentioned below. Such adjustment shall become effective
immediately at the opening of business on the Business Day
next following (except as provided in subsection (h) below)
the record date for the determination of shareholders entitled
to receive such distribution. For the purposes of this
subsection (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Shares on
the date fixed for the determination of shareholders entitled
to such distribution of such Security, but also is distributed
with each Common Share delivered to a Person converting a
Series M-5 Preferred Share after such determination date,
shall not require an adjustment of the Conversion Price
pursuant to this subsection (iii); PROVIDED that on the date,
if any, on which a person converting a Series M-5 Preferred
Share would no longer be entitled to receive such Security
with a Common Share (other than as a result of the termination
of all such Securities), a distribution of such Securities
shall be deemed to have occurred, and the Conversion Price
shall be adjusted as provided in this subsection (iii) (and
such day shall be deemed to be "the date fixed for the
determination of the shareholders entitled to receive such
distribution" and "the record date" within the meaning of the
two preceding sentences).
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(iv) No adjustment in the Conversion Price shall
be required unless such adjustment would require a cumulative
increase or decrease of at least 1% in such price; PROVIDED,
HOWEVER, that any adjustments that by reason of this
subsection (iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
until made; and PROVIDED, FURTHER, that any adjustment shall
be required and made in accordance with the provisions of this
subparagraph (7) (other than this subsection (iv)) not later
than such time as may be required to order to preserve the
tax-free nature of a distribution to the holders of Common
Shares. Notwithstanding any other provisions of this
subparagraph (7), the Trust shall not be required to make any
adjustment of the Conversion Price for the issuance of any
Common Shares pursuant to any plan providing for the
reinvestment of distributions or interest payable on
securities of the Trust and the investment of additional
optional amounts in Common Shares under such plan. All
calculations under this subparagraph (7) shall be made to the
nearest cent with ($.005 being rounded upward) or to the
nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this
subsection (d) to the contrary notwithstanding, the Trust
shall be entitled, to the extent permitted by law, to make
such reductions in the Conversion Price, in addition to those
required by this subsection (d), as it in its discretion shall
determine to be advisable in order that any share
distributions, subdivision of shares, reclassification or
combination of shares, distribution of rights, options or
warrants to purchase shares or securities, or a distribution
of other assets (other than cash distributions) hereafter made
by the Trust to its shareholders shall not be taxable.
(e) If the Trust shall be a party to any transaction
(including, without limitation, a merger, consolidation,
statutory share exchange, self tender offer for all or
substantially all of the Common Shares, sale of all or
substantially all of the Trust's assets or recapitalization of
the Common Shares and excluding any transaction as to which
subsection (d)(i) of this subparagraph (7) applied) (each of
the foregoing being referred to herein as a "Transaction"), in
each case as a result of which Common Shares shall be
converted into the right to receive shares, stock, securities
or other property (including cash or any combination thereof),
each Series M-5 Preferred Share which is not converted into
the right to receive shares, stock, securities or other
property in connection with such Transaction shall thereafter
be convertible into the kind and amount of shares, stock,
securities and other property (including cash or any
combination thereof) receivable upon the consummation of such
Transaction by a holder of that number of Common Shares into
which one Series M-5 Preferred Share was convertible
immediately prior to such Transaction, assuming such holder of
Common Shares (i) is not a Person with which the Trust
consolidated or into which the Trust merged or which merged
into the
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Trust or to which such sale or transfer was made, as the case
may be (a "Constituent Person"), or an affiliate of a
Constituent Person and (ii) failed to exercise his or her
rights of the election, if any, as to the kind or amount of
shares, stock, securities and other property (including cash)
receivable upon such Transaction (provided that if the kind or
amount of shares, stock, securities and other property
(including cash) receivable upon such Transaction is not the
same for each Common Share of the Trust held immediately prior
to such Transaction by other than a Constituent Person or an
affiliate thereof and in respect of which such rights of
election shall not have been exercised (the "Non-Electing
Share"), then for purposes of this paragraph (e) the kind and
amount of shares, securities and other property (including
cash) receivable upon such Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares). The
Trust shall not be a party to any Transaction unless the terms
of such Transaction are consistent with the provisions of this
subsection (e), and it shall not consent or agree to the
occurrence of any Transaction until the Trust has entered into
an agreement with the successor or purchasing entity, as the
case may be, for the benefit of the holders of the Series M-5
Preferred Shares that will contain provisions enabling the
holders of the Series M-5 Preferred Shares that remain
outstanding after such Transaction to convert into the
consideration received by holders of Common Shares at the
Conversion Price in effect immediately prior to such
Transaction. The provisions of this subsection (e) shall
similarly apply to successive Transactions.
(f) If:
(i) the Trust shall declare a distribution on
the Common Shares (other than in cash out of the total equity
applicable to Common Shares, including revaluation equity,
less the amount of stated capital attributable to Common
Shares, determined on the basis of the most recent annual and
quarterly consolidated cost basis balance sheets of the Trust
and its consolidated subsidiaries available at the time of the
declaration of the distribution); or
(ii) the Trust shall authorize the granting to
the holders of the Common Shares of rights or warrants to
subscribe for or purchase any shares of any class or any other
rights or warrants; or
(iii) there shall be any reclassifications of the
Common Shares (other than an event to which subsection (d)(i)
of this subparagraph (7) applied) or any consolidation or
merger to which the Trust is a party and for which approval of
any shareholders of the Trust is required, or a
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statutory share exchange involving the conversion or exchange
of Common Shares into securities or other property, or a self
tender offer by the Trust for all or substantially all of its
outstanding Common Shares, or the sale or transfer of all or
substantially all of the assets of the Trust as an entity and
for which approval of any stockholder of the Trust is
required; or
(iv) there shall occur the voluntary or
involuntary liquidation, dissolution or winding up of the
Trust,
then the Trust shall cause to be filed with the Transfer Agent
and shall cause to be mailed to the holders of the Series M-5
Preferred Shares at their addresses as shown on the share
records of the Trust, as promptly as possible, but at least 15
days prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be taken
for the purpose of such distribution or rights or warrants,
or, if a record is not to be taken, the date as of which the
holders of Common Shares of record to be entitled to such
distribution or rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation,
dissolution or winding up is expected to become effective, and
the date as of which it is expected that holders of Common
Shares of record shall be entitled to exchange their Common
Shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or
winding up. Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of
the proceedings described in this subparagraph (7).
(g) Whenever the Conversion Price is adjusted as herein
provided, the Trust shall promptly file with the Transfer
Agent and the Depository an officer's certificate setting
forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of
the correctness of such adjustment absent manifest error.
Promptly after delivery of such certificate, the Trust shall
prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective
date such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the
holder of each Series M-5 Preferred Share at such holder's
last address as shown on the share records of the Trust.
(h) In any case in which subsection (d) of this
subparagraph (7) provides that an adjustment shall become
effective on the date next following the record date for an
event, the Trust may defer until the
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occurrence of such event (A) issuing to the holder of any
Series M-5 Preferred Shares converted after such record date
and before the occurrence of such event the additional Common
Shares issuable upon such conversion by reason of the
adjustment required by such event over and above the Common
Shares issuable upon such conversion before giving effect to
such adjustment and (B) fractionalizing any Series M-5
Preferred Share and/or paying to such holder any amount of
cash in lieu of any fraction pursuant to subsection (c) of
this subparagraph (7).
(i) There shall be no adjustment of the Conversion Price
in case of the issuance of any shares of beneficial interest
of the Trust in a reorganization, acquisition or other similar
transaction except as specifically set forth in this
subparagraph (7). If any action or Transaction would require
adjustment of the Conversion Price pursuant to more than one
subsection of this subparagraph (7), only one adjustment shall
be made, and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(j) If the Trust shall take any action affecting the
Common Shares, other than action described in this
subparagraph (7), that in the opinion of the Board of Trustees
would materially adversely affect the conversion rights of the
holders of the Series M-5 Preferred Shares, the Conversion
Price for the Series M-5 Preferred Shares may be adjusted, to
the extent permitted by law, in such manner, if any, and at
such time, as the Board of Trustees, in its sole discretion,
may determine to be equitable in the circumstances.
(k) The Trust covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the
aggregate of its authorized but issued Common Shares, for the
purpose of affecting conversion of the Series M-5 Preferred
Shares, the full number of Common Shares deliverable upon the
conversion of all outstanding Series M-5 Preferred Shares not
theretofore converted. For purposes of this subsection (k),
the number of Common Shares that shall be deliverable upon the
conversion of all outstanding Series M-5 Preferred Shares
shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
The Trust covenants that any Common Shares issued upon
conversion of the Series M-5 Preferred Shares shall be validly
issued, fully paid and non-assessable. Before taking any
action that would cause an adjustment reducing the Conversion
Price below the then-par value of the Common Shares
deliverable upon conversion of the Series M-5 Preferred
Shares, the Trust will take any action that, in the opinion of
its counsel, may be
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necessary in order that the Trust may validly and legally
issue fully paid and nonassessable Common Shares at such
adjusted Conversion Price.
The Trust shall endeavor to list the Common Shares required to
be delivered upon conversion of the Series M-5 Preferred
Shares, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding Common Shares are
listed at the time of such delivery.
Prior to the delivery of any securities that the Trust shall
be obligated to deliver upon conversion of the Series M-5
Preferred Shares, the Trust shall endeavor to comply with all
federal and state laws and regulations thereunder requiring
the registration of such securities with, or any approval of
or consent to the delivery thereof by any governmental
authority.
(l) The Trust will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the
issue or delivery of Common Shares or other securities or
property on conversion of the Series M-5 Preferred Shares
pursuant hereto; PROVIDED, HOWEVER, that the Trust shall not
be required to pay any tax that may be payable in respect of
any transfer involved in the issue or delivery of Common
Shares or other securities or property in a name other than
that of title holder of the Series M-5 Preferred Shares to be
converted, and no such issue or delivery shall be made unless
and until the person requesting such issue or delivery has
paid to the Trust the amount of any such tax or established,
to the reasonable satisfaction of the Trust, that such tax has
been paid.
(m) In addition to the foregoing adjustments, the Company
will be permitted to make such reductions in the Conversion
Price as it considers to be advisable in order that any event
treated for federal income tax purposes as a dividend of stock
or stock rights will not be taxable to the holders of the
Common Shares.
C. RESTRICTIONS ON TRANSFER. The Series M-5 Preferred Shares
shall be subject to the restrictions on transfer and ownership of Shares in
Article VII of the Declaration of Trust, as supplemented below.
(1) CERTAIN DEFINITIONS.
For purposes of the Series M-5 Preferred Shares the
following terms shall have the following meanings:
"Closing Date of the Series M-5 Preferred Shares
Offering" shall mean the time and date of payment for and
delivery of Series M-5
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Preferred Shares issued pursuant to the conversion of Series H
Preference Units.
"Special Triggering Event" shall mean either (i) the
redemption or purchase by the Trust of all or a portion of the
outstanding shares of beneficial interest in the Trust, or
(ii) a change in the value of the Series M-5 Preferred Shares
relative to any other class of beneficial interest in the
Trust.
(2) SPECIAL TRIGGERING EVENT. If during the period
commencing on the Closing Date of the Series M-5 Preferred Shares
Offering and prior to the Restriction Termination Date, a Special
Triggering Event (if effective) or other event or occurrence (if
effective) would result in any violation of section 7.2(a) of the
Trust's Declaration of Trust (or would result in the Trust being
"closely held" within the meaning of Section 856(h) of the Code or
would otherwise cause the Trust to fail to qualify as a REIT), then (i)
the number of Series M-5 Preferred Shares (rounded up to the nearest
whole share) that would (but for this section) cause any Person to
Beneficially Own either Series M-5 Preferred Shares, or to Beneficially
Own Series M-5 Preferred Shares and any other shares of beneficial
interest in the Trust, in violation of section 7.2(a) (or would result
in the Trust being "closely held" or otherwise fail to qualify as a
REIT) shall constitute "Excess Shares" and shall be treated as provided
in Article VII. Such designation and treatment shall be effective as of
the close of business on the Business Day prior to the date of the
Special Triggering Event or other event or occurrence.
(3) AMBIGUITY. In the case of an ambiguity in the
application of any of the provisions of this section, including any
definition contained in paragraph (1), the Board of Trustees shall have
the power to determine the application of this section with respect to
any situation based on the facts known to it (subject, however, to the
provisions of Section 7.2(a)).
(4) EXCLUSION OF OTHER RIGHTS.
The Series M-5 Preferred Shares shall not have any voting
powers, preferences and relative, participating, optional or other
special rights, other than those specifically set forth in these terms
of the Series M-5 Preferred Shares (as such terms may be amended from
time to time) and in the Declaration of Trust. The Series M-5 Preferred
Shares shall have no preemptive or subscription rights.
(5) HEADINGS OF SUBDIVISIONS.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation
of any of the provisions hereof.
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(6) SEVERABILITY OF PROVISIONS.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series M-5 Preferred Shares
and qualifications, limitations and restrictions thereof set forth in
these terms of the Series M-5 Preferred Shares (as such terms may be
amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other
voting powers, preferences and relative, participating, optional and
other special rights of Series M-5 Preferred Shares and qualifications,
limitations and restrictions thereof set forth in these terms of the
Series M-5 Preferred Shares (as so amended), which can be given effect
without the invalid, unlawful or unenforceable voting powers,
preferences, and relative, participating, optional or other special
rights of Series M-5 Preferred Shares and qualifications, limitations
and restrictions thereof herein set forth, shall nevertheless, remain
in full force and effect and no preferences or other rights, voting
powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of
the Series M-5 Preferred Shares herein set forth shall be deemed
dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series M-5 Preferred
Shares and qualifications, limitations and restrictions thereof unless
so expressed herein.
SECOND: The Series M-5 Preferred Shares have been classified and
designated by the Board of Trustees under the authority contained in the
Declaration of Trust.
THIRD: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
FOURTH: The undersigned Executive Vice President of the Trust
acknowledges these Articles Supplementary to be the act of the Trust and, as to
all matters or facts required to be verified under oath, the undersigned
Executive Vice President acknowledges that, to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties of perjury.
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IN WITNESS WHEREOF, the Trust has caused these Articles Supplementary
to be signed in its name and on its behalf by its Executive Vice President and
attested to by the Assistant Secretary this 23rd day of March, 2001.
ATTEST: EQUITY RESIDENTIAL PROPERTIES TRUST
/s/ Bradley A. Van Auken /s/ Michael J. McHugh
- ------------------------ --------------------------------------------
Bradley A. Van Auken, Michael J. McHugh, Executive Vice President,
Assistant Secretary Chief Accounting Officer and Treasurer
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