AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
CENTERPOINT PROPERTIES CORPORATION
ARTICLE I
INCORPORATOR
The undersigned, Bruce P. Golden, whose address is Three First National
Plaza, Suite 3500, Chicago, Illinois 60602, Chicago, Illinois, being at least 18
years of age, does hereby form a corporation under the general laws of the State
of Maryland.
ARTICLE II
NAME
The name of the Corporation is:
CenterPoint Properties Corporation
ARTICLE III
PURPOSE OF CORPORATION
The purpose for which the Corporation is formed and the business or objects
to be carried on and promoted by it, within the State of Maryland or elsewhere,
is to engage in any lawful act or activity for which corporations may be formed
under the Maryland General Corporation Law, as now or hereafter in force, to do
everything necessary, proper, advisable and convenient to accomplish the
purposes herein set forth, and to do all other things incidental thereto or
connected therewith which are not forbidden by the laws of the State of Maryland
as now or hereafter in force or by these Articles of Incorporation.
Without limiting the generality of the foregoing, the Corporation may
engage in business as a real estate investment trust under the Internal Revenue
Code of 1986, as amended, or any successor statute (the "Code"). For purposes of
these Articles of Incorporation, "REIT" shall mean a real estate investment
trust as described in the Code.
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ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The post office address of the principal office of the Corporation in the
State of Maryland is c/o Prentice-Hall, Inc., 11 East Chase St., Baltimore,
Maryland 21201. The name of the resident agent of the Corporation in the State
of Maryland is Prentice-Hall, Inc., 11 East Chase St., Baltimore, Maryland
21202. The resident agent is a corporation in the State of Maryland.
ARTICLE V
CAPITAL STOCK
Section 1. AUTHORIZED SHARES. The total number of shares of
stock which the Corporation has authority to issue is 60,000,000 shares, of
which 47,727,273 are shares of Common Stock, par value $.001 per share
("Common Stock"), 2,272,727 are shares of Class B Common Stock, par value
$.001 per share ("Class B Common Stock") and 10,000,000 are shares of Series
Preferred Stock, par value $.001 per share ("Preferred Stock"). The
aggregate par value of all authorized shares of stock having par value is
$60,000.
Section 2. VOTING RIGHTS. Subject to the provisions of Article VII
regarding Excess Stock (as such term is deemed therein), each share of Common
Stock shall entitle the holder thereof to one vote.
Section 3. ISSUANCE OF PREFERRED STOCK. The Preferred Stock may be
issued, from time to time, in one or more series as authorized by the Board of
Directors. Prior to issuance of shares of each series of Preferred Stock, the
Board of Directors by resolution shall designate that series to distinguish it
from all other series of Preferred Stock and classes of capital stock of the
Corporation, shall specify the number of shares to be included in that series of
Preferred Stock and, subject to the provisions of Article VII regarding Excess
Stock, shall set the terms, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption. Subject to the express
terms of any other series of Preferred Stock outstanding at the time and
notwithstanding any other provision of these Articles of Incorporation, the
Board of Directors may increase or decrease the number of shares of any series
of Preferred Stock by setting or changing, in any one or more respects, from
time to time before issuing the shares, and, subject to the provisions of
Article VII regarding Excess Stock, the terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of the shares
of any series of Preferred Stock.
Section 4. ARTICLES OF INCORPORATION AND BYLAWS. All persons who shall
acquire stock in the Corporation at any time and from time to time shall acquire
the same subject to the provisions of these Articles of Incorporation and the
Bylaws of the Corporation.
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Section 5. CLASS B COMMON STOCK. The Class B Common Stock shall have
the following rights:
(1) Dividend Rights.
(a) The holders of record of outstanding shares of Class B
Common Stock shall be entitled to receive, when and as declared by the
Board of Directors, out of funds legally available therefor, cash dividends
which are payable when, as and if authorized by the Board of Directors,
PARI PASSU with any dividends paid on the Corporation's Common Stock, in an
amount per share equal to the Class B Common Stock Common Dividend Amount,
as in effect from time to time. The initial per share Class B Common Stock
Common Dividend Amount per annum shall be equal to $1.6068. Each calendar
quarter hereafter (or, if the date of original issuance of the Class B
Common Stock (the "Original Issue Date") is not on the first day of a
calendar quarter, the period beginning on the Original Issue Date and
ending on the last day of the calendar quarter of issuance) is referred to
hereinafter as a "Dividend Period." The amount of dividends payable with
respect to each full dividend period for the Class B Common Stock shall be
computed by dividing the Class B Common Stock Common Dividend Amount by
four. The amount of dividends on the Class B Common Stock payable with
respect to the initial Dividend Period, or any other Dividend Period
shorter or longer than a full Dividend Period shall be computed ratably on
the basis of the actual number of days in such Dividend Period. In the
event of any change in the quarterly cash dividend per share applicable to
the Common Stock after the date of these Articles of Amendment, the
quarterly cash dividend per share of the Class B Common Stock shall be
adjusted for the same dividend period by an amount computed by multiplying
the amount of the change in the Common Stock dividend by the Conversion
Ratio (as defined in Section 3.2).
(b) In the event the Corporation shall declare a
distribution payable in (i) securities of other persons, (ii) evidences of
indebtedness issued by the Corporation or other persons, (iii) assets
(excluding cash dividends) or (iv) options or rights to purchase capital
stock or evidences of indebtedness in the Corporation or other persons,
then, in each such case for the purpose of this Section 5(1), the holders
of the Class B Common Stock shall be entitled to a proportionate share of
any such distribution as though they were the holders of the number of
shares of Common Stock of the Corporation into which their shares of Class
B Common Stock are or would be convertible (assuming such shares of Class B
Common Stock were then convertible) as of the record date fixed for
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
(2) Liquidation Rights.
(a) Subject to any prior rights of any other class or
series of stock, the holders of Class B Common Stock shall be entitled to
receive the remaining assets of the Corporation available for distribution
pro rata with the other holders of
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shares of capital stock of the Corporation as though they were the
holders of the number of shares of Common Stock of the Corporation into
which their shares of Class B Common Stock are or would be convertible
(assuming such shares of Class B Common Stock were then convertible) as
of the record date applicable to such distribution.
(b) Neither a consolidation or merger of the Corporation
with or into any other corporation, nor a merger of any other corporation
into the Corporation, nor the purchase or redemption of all or part of the
outstanding shares of any class or classes of stock of the Corporation, nor
a sale or transfer of all or any part of its assets, shall be considered a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 5(2).
(3) Conversation Rights.
3.1 MANDATORY CONVERSION INTO COMMON STOCK.
(a) Beginning on September 30, 1998, and at the end of
each calendar quarter thereafter, such number of shares of Class B
Common Stock will mandatorily convert into such number of shares of
Common Stock as will result in the holders of the Class B Common Stock
owning, in the aggregate, 4.9% of the then outstanding shares of
Common Stock; and if on any such date the total number of outstanding
shares of Class B Common Stock would not, upon conversion, result in
the holders thereof owning, in the aggregate, 4.9% of the then
outstanding shares of Common Stock, then all such outstanding shares
of Class B Common Stock will mandatorily convert into Common Stock.
The Company will notify the Investor in writing at least five (5)
business days prior to the end of each calendar quarter as to the
number of shares of Class B Common Stock subject to mandatory
conversion, which number will be revised, if necessary, as a result of
intervening events, no later than two (2) business days after the end
of the applicable quarter.
(b) On the tenth anniversary of the Original Issue
Date, each remaining share of Class B Common Stock which has not been
converted to Common Stock shall mandatorily convert to that number of
fully paid and nonassessable shares of Common Stock equal to the
Conversion Ratio, as adjusted, regardless of the 4.9% limitation
described in Section 3.1(a) above.
(c) The Corporation shall make such arrangements as it
deems appropriate for the issuance as soon as practicable of
certificates representing shares of Common Stock issued upon the
mandatory conversion of the Class B Common Stock in exchange for and
contingent upon surrender by the holder of the certificate(s)
representing such holder's shares of Class B Common Stock. From and
after the date of mandatory conversion, certificates representing
shares of Class B Common Stock shall be deemed to represent an equal
number of shares of Common Stock.
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3.2 RIGHT TO CONVERT.
Beginning on September 21, 1998, the holders of shares
of Class B Common Stock shall have the right, at their option, to
convert each such share, at any time and from time to time, into one
fully paid and nonassessable share of Common Stock (the "Conversion
Ratio," which is subject to adjustment as provided below); PROVIDED,
HOWEVER, that no holder of Class B Common Stock shall be entitled to
convert shares of such Class B Common Stock into Common Stock pursuant
to the foregoing provision, if, as a result of such conversion, such
person would become the Beneficial Owner of more than 4.9% of the
Corporation's outstanding Common Stock. "Beneficial Owner" shall have
the meaning set forth in Rule 13d-3 under the Securities and Exchange
Act of 1934 (or any successor provision thereto). Notwithstanding the
foregoing, the foregoing conversion right may be exercised at any time
after the date of these Articles of Amendment and irrespective of the
4.9% limitation (and no such limit shall apply) if any of the
following circumstances occurs:
(i) For any two consecutive fiscal quarters, the
aggregate amount outstanding as of the end of the quarter under
(1) all mortgage indebtedness of the Corporation and its
consolidated entities and (2) unsecured indebtedness of the
Corporation and its consolidated entities for money borrowed that
has not been made generally subordinate to the other indebtedness
for borrowed money of the Corporation or any consolidated entity
exceeds fifty-five percent (55%) of the Corporation's total
market capitalization, defined as the market value of all of the
Corporation's outstanding capital stock, assuming the conversion
of all outstanding convertible securities, including the Class B
Common Stock plus the amount of the Company's total non-
convertible indebtedness (all as such items of indebtedness and
capitalization are reported in consolidated financial statements
contained in the Corporation's Form 10-Ks and Form 10-Qs as filed
with the Securities and Exchange Commission); or
(ii) Fewer than three of John S. Gates, Jr., Robert M.
Stovall, Michael M. Mullen and Paul S. Fisher are continuing as
Key Managers of the Company. (For purposes of this subparagraph
(ii), a "Key Manager" shall mean a Person who is (a) employed by
the Company and (b) actively participates as a senior executive
officer in the management of the Company); or
(iii) If (A) the Corporation shall be party to, or
shall have announced or entered into an agreement for, any
transaction (including, without limitation, a merger,
consolidation, statutory share exchange or sale of all or
substantially all of its assets (each of the
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foregoing a "Transaction")), in each case as a result of which
shares of Common Stock shall have been or will be converted
into the right to receive stock, securities or other property
(including cash or any combination thereof) or which has
resulted or will result in the holders of Common Stock
immediately prior to the Transaction owning less than 50% of
the Common Stock after the Transaction, or (b) a "change of
control" as defined in the next sentence occurs with respect
to the Corporation. A change of control shall mean the
acquisition (including by virtue of a merger, share exchange
or other business combination) by one stockholder or a group
of stockholders acting in concert of the power to elect a
majority of the Corporation's board of directors. The
Corporation shall notify the holders of Class B Common Stock
promptly if any of the events listed in this Section 3.2(iii)
shall occur.
3.3 The Corporation shall make such arrangements as it
deems appropriate for the issuance as soon as practicable of
certificates representing shares of Common Stock issued upon the
mandatory conversion of the Class B Common Stock in exchange for and
contingent upon surrender by the holder of the certificate(s)
representing such holder's shares of Class B Common Stock. From and
after the date of mandatory conversion, certificates representing
shares of Class B Common Stock shall be deemed to represent an equal
number of shares of Common Stock.
3.4 PROCEDURE FOR CONVERSION. In order to exercise
its right to convert shares of Class B Common Stock into Common Stock
pursuant to Section 3.2 above, the holder thereof shall surrender the
certificate(s) therefor, duly endorsed if the Corporation shall so
require, or accompanied by appropriate instruments of transfer
satisfactory to the Corporation, at the office of any transfer agent
for the Class B Common Stock, or if there is no such transfer agent,
at the principal offices of the Corporation, or at such other office
as may be designated by the Corporation, together with written notice
that such holder elects to convert such shares. Such notice shall
also state the name(s) and address(es) in which such holder wishes the
certificate(s) for the shares of Common Stock issuable upon conversion
to be issued. As soon as practicable after an optional conversion,
the Corporation shall issue and deliver at said office a certificate
or certificates for the number of whole shares of Common Stock
issuable upon conversion of the shares of Class B Common Stock duly
surrendered for conversion, to the person(s) entitled to receive the
same. Shares of Class B Common Stock shall be deemed to have been
converted immediately prior to the close of business on the date on
which the certificates therefor and notice of election to convert the
same are duly received by the Corporation in accordance with the
foregoing provisions, and the person(s) entitled to receive the Common
Stock issuable upon such conversion shall be deemed for all purposes
as record holder(s) of such Common Stock as of the close of business
on such date.
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3.5 NO FRACTIONAL SHARES. No fractional shares shall
be issued upon conversion of the Class B Common Stock into Common
Stock, and the number of shares of Common Stock to be issued shall be
rounded to the nearest whole share. Whether or not fractional shares
would be issuable upon such conversion shall be determined on the
basis of the total number of shares of Class B Common Stock the holder
is at the time converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate conversion. As to any
final fraction of a share which the holder of one or more shares of
Class B Common Stock would be entitled to receive upon exercise of his
conversion right, the Corporation shall pay a cash adjustment in an
amount equal to the same fraction of the last sale price (or bid price
if there were no sales) per share of Common Stock on the American
Stock Exchange on the business day which next precedes the conversion
date or, if such Common Stock is not then listed or admitted to
trading on such Exchange, on any national securities exchange, of the
market price per share (as determined in a manner prescribed by the
Board of Directors of the Corporation) at the close of business on the
business day which next precedes the conversion date.
3.6 ADJUSTMENTS.
(i) The Conversion Ratio shall be subject to
adjustment as follows:
(A) In the event the Corporation shall at
any time (i) pay a dividend or make a distribution to
holders of Common Stock in shares of capital stock, (ii)
subdivide its outstanding shares of Common Stock into a
larger number of shares, (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 Conversion Ratio in
effect immediately prior thereto shall be adjusted as
provided below so that the holder of any share of Class B
Common Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of the Corporation
which such holder would have owned or have been entitled to
receive after the happening of any of the events described
above, had such share of Class B Common Stock been converted
immediately prior to the happening of such event. Any
adjustment made pursuant to this subparagraph (a) shall
become effective retroactively immediately after the record
date in the case of a dividend and shall become effective
immediately after the effective date in the case of a
subdivision, combination or reclassification.
(B) In case the Corporation shall issue
rights or warrants to all holders of its Common Stock
entitling
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them to subscribe for or purchase shares of Common
Stock at a price per share less than the current market
price (as hereinafter defined) per share of Common Stock at
the record date mentioned below, the number of shares of
Common Stock into which each share of Class B Common Stock
shall thereafter be convertible shall be determined by
multiplying the number of shares of Common Stock into which
such share of Class B Common Stock was therefore convertible
by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance
of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase,
and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so
offered would purchase at such current market price. Such
adjustment shall be made whenever such rights or warrants
are issued, and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants.
(C) In case the Corporation shall distribute
to all holders of its Common Stock evidences of its
indebtedness or assets or rights or warrants to subscribe
for or purchase securities issued by the Corporation or
property of the Corporation (excluding those referred to in
subparagraph (b) above), then in each such case the number
of shares of Common Stock into which each share of Class B
Common Stock shall thereafter be convertible shall be
determined by multiplying the number of shares of Common
Stock into which such share of Class B Common Stock was
theretofore convertible by a fraction, of which the
numerator shall be the current market price per share of the
Common Stock, and of which the denominator shall be such
current market price per share of Common Stock, less the
then fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be
conclusive) of the portion of the assets or evidence of
indebtedness so distributed or of such rights or warrants
applicable to one share of the Common Stock. Such
adjustment shall be made whenever any such distribution is
made, and shall become effective retroactively immediately
after the record date for the determination of stockholders
entitled to receive such distribution.
(D) If any such rights or warrants referred
to above shall expire without having been exercised, the
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Conversion Ratio as theretofore adjusted because of the
issue of such rights or warrants shall forthwith be
readjusted to the Conversion Ratio which would have been in
effect had an adjustment been made on the basis that only
the rights or warrants so issued or sold were those rights
or warrants actually exercised and that with respect to any
such rights or warrants to subscribe for or purchase
securities issued by the Corporation, other than Common
Stock or property of the Corporation, the fair market value
thereof shall be the fair market value of the rights or
warrants actually exercised. If any such rights or warrants
shall expire without having been exercised, the Conversion
Ratio as theretofore adjusted because of the issue of such
rights or warrants shall forthwith be readjusted to the
Conversion Ratio which would have been in effect had an
adjustment been made on the basis that the only rights or
warrants, so issued or sold, were those rights or warrants
actually exercised and that with respect to any such rights
or warrants to subscribe for or purchase securities issued
by the Corporation, other than Common Stock, or property of
the Corporation the fair market value thereof shall be the
fair market value of the rights or warrants actually
exercised.
For the purpose of any computation under this
paragraph (i) the current market price per share of Common
Stock at any date shall be deemed to be the average of the
daily closing prices for the fifteen (15) consecutive
business days commencing thirty (30) business days before
the day in question. The closing price for each day shall
be the last reported sale price regular way or, in the case
no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in
either case on the American Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on such
Exchange, on any national securities exchange, designated by
the Board of Directors, on which the Common Stock is listed
or admitted to trading, or if not listed or admitted to
trading on any national securities exchange, the average of
the closing bid and asked prices as furnished by any
American Stock Exchange or New York Stock Exchange firm
selected from time to time by the Corporation for the
purpose.
All calculations under this paragraph (i)
shall be made to the nearest cent or to the nearest 1/100th
of a share as the case may be.
(ii) No adjustment of the Conversion Ratio shall
be made as a result of or in connection with the issuance of
Common
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Stock of the Corporation pursuant to options or stock purchase
agreements now or hereafter granted or entered into with
directors, officers or employees of the Corporation or its
subsidiaries in connection with their employment, whether entered
into at the beginning of the employment or at any time
thereafter.
(iii) In case of:
(A) any capital reorganization of the
Corporation, or
(B) the consolidation or merger of the
Corporation with or into another corporation, or
(C) a statutory share exchange whereby the
Corporation's Common Stock is converted into property
other than cash, or
(D) the sale, transfer or other disposition
of all or substantially all of the property, assets or
business of the Corporation as a result of which sale,
transfer or other disposition property other than cash
shall be payable or distributable to the holders of the
Common Stock, then, in each such case, each share of
Class B Common Stock shall thereafter be convertible
into the number and class of shares or other securities
or property of the Corporation, or of the corporation
resulting from such consolidation or merger or with or
to which such statutory share exchange, sale, transfer
or other disposition shall have been made, to which the
Common Stock otherwise issuable upon conversion of such
share of Class B Common Stock would have been entitled
upon such reorganization, consolidation, merger,
statutory share exchange, or sale, transfer or other
disposition if outstanding at the time thereof; and in
any such case appropriate adjustment, as determined by
the Board of Directors, shall be made in the
application of the provisions set forth in this Section
3.6 with respect to the conversion rights thereafter of
the holders of the Class B Common Stock, to the end
that such provisions shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares
or securities or other property thereafter issuable or
deliverable upon the conversion of Class B Common
Stock. Proper provision shall be made as a part of the
terms of any such reorganization, consolidation,
merger, statutory share exchange or sale,
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transfer or other disposition whereby the conversion
rights of the holders of Class B Common Stock shall
be protected and preserved in accordance with the
provisions of this paragraph (iii). The provisions
of this paragraph (iii) shall similarly apply to
successive capital reorganizations, consolidations,
merger, statutory share exchanges, sales, transfers
or other dispositions of property as aforesaid.
(iv) Upon conversion of any shares of Class B
Common Stock, no payment or adjustment shall be made on account
of dividends accrued, whether or not in arrears, on such shares
or on account of dividends declared and payable to holders of
Common Stock of record on a date prior to the date of conversion.
(v) Whenever the Conversion Ratio shall be
adjusted as herein provided, the Corporation shall cause to be
mailed by first class mail, postage prepaid, as soon as
practicable to each holder of record of shares of Class B Common
Stock a notice stating that the Conversion Ratio has been
adjusted and setting forth the adjusted Conversion Ratio,
together with an explanation of the calculation of the same.
(vi) If the Corporation shall be party to any
Transaction in each case as a result of which shares of Common
Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination
thereof), the holder of each share of Class B Common Stock shall
have the right after such Transaction to convert such share,
pursuant to the optional conversion provisions hereof, into the
number and kind of shares of stock or other securities and the
amount and kind of property receivable upon such Transaction by a
holder of the number of shares of Common Stock issuable upon
conversion of such share of Class B Common Stock immediately
prior to such Transaction. The Corporation shall not be party to
any Transaction unless the terms of such Transaction are
consistent with the provisions of this Section 3.6(vi), and it
shall not consent to or agree to the occurrence of any
Transaction until the Corporation has entered into an agreement
with the successor or purchasing entity, as the case may be, for
the benefit of the holders of the Class B Common Stock, thereby
enabling the holders of the Class B Common Stock to receive the
benefits of this Section 3.6(vi) and the other provisions of
these Articles of Amendment. Without limiting the generality of
the foregoing, provision shall be made for adjustments in the
Conversion Ratio which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 3.6(i).
The provisions of this Section 3.6(vi) shall similarly apply to
successive Transactions.
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(vii) In the event that the Corporation shall
propose to effect any Transaction which would result in an
adjustment under Section 3.6(vi), the Corporation shall cause to
be mailed to the holders of record of Class B Common Stock at
least twenty (20) days prior to the applicable date hereinafter
specified a notice stating the date on which such Transaction is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such Transaction. Failure to give such
notice, or any defect therein, shall not affect the legality or
validity of such Transaction.
3.7 OTHER.
(i) The Corporation shall at all times reserve
and keep available out of its authorized but unissued Common
Stock the maximum number of shares of Common Stock issuable
upon the conversion of all shares of Class B Common Stock
then outstanding, and if at any time the number of
authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding
shares of the Class B Common Stock, in addition to such
other remedies as shall be available to the holder of such
Class B Common Stock, the Corporation shall take such
corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient
for such purposes.
(ii) The Corporation shall pay any taxes that may
be payable in respect of the issuance of shares of Common
Stock upon conversion of shares of Class B Common Stock, but
the Corporation shall not be required to pay any taxes which
may be payable in respect of any transfer of shares of Class
B Common Stock or any transfer involved in the issuance of
shares of Common Stock in a name other than that in which
the shares of Class B Common Stock so converted are
registered, and the Corporation shall not be required to
transfer any such shares of Class B Common Stock or to issue
or deliver any such shares of Common Stock unless and until
the person(s) requesting such transfer or issuance shall
have paid to the Corporation the amount of any such taxes,
or shall have established to the satisfaction of the
Corporation that such taxes have been paid.
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(iii) The Corporation will not, by amendment
of the Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to
be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in carrying out of
all the provisions of these Articles of Amendment and in the
taking of all such action as may be necessary or appropriate
to protect the conversion rights of the holders of the Class
B Common Stock against impairment.
(iv) Holders of Class B Common Stock shall be
entitled to receive copies of all communications by the
Corporation to its holders of Common Stock, concurrently
with the distribution to such shareholders.
(v) The Corporation warrants that all Common
Stock issued upon conversion of shares of Class B Common
Stock will upon issue be fully paid and nonassessable by the
Corporation and free from original issue taxes.
(4) Voting Rights. The holders of record of Class B Common
Stock shall not be entitled to vote on any matter on which the holders
of record of Common Stock are entitled to vote, except that the
holders of a majority of the Class B Common Stock, voting as a
separate class, shall be required to vote on and approve: (a) any
material adverse change in the rights, preferences or privileges of
the Class B Common Stock, and (b) any creation of a new class of stock
having rights, preferences or privileges senior to or in parity with
the rights, preferences or privileges of the Class B Common Stock.
(5) Reacquired Shares. Shares of Class B Common Stock
converted, redeemed or otherwise purchased or acquired by the
Corporation shall be restored to the status of authorized but unissued
shares of preferred stock without designation as to series.
ARTICLE VI
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 1. NUMBER AND CERTIFICATION. The number of directors of the
Corporation initially shall be three, which number may be increased or decreased
pursuant to the Bylaws of the Corporation; provided, however, that (a) if there
is stock outstanding and so long as there are
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three or more stockholders, the number of directors shall never be less than
three and (b) if there is stock outstanding and so long as there are less
than three stockholders, the number of directors may be less than three but
not less than the number of stockholders. The names of the directors who
shall serve effective immediately and until the first annual meeting of
stockholders and until their successors are duly elected and shall qualify
are:
Martin Barber
John S. Gates, Jr.
Robert L. Stovall
At the first annual meeting of stockholders, and at each annual meeting
thereafter, the stockholders shall elect the directors who shall serve until
their successors are duly elected and shall qualify.
Section 2. REMOVAL. A director may be removed, with or without cause,
by the stockholders upon the affirmative vote of a majority of all of the votes
entitled to be cast for the election of directors. A director may be removed,
with or without cause, by the Board of Directors upon the affirmative vote of a
majority of the then acting directors. A special meeting of the stockholders or
the Board of Directors may be called, in accordance with the Bylaws of the
Corporation, for the purpose of removing a director.
Section 3. AUTHORIZATION BY BOARD OF CAPITAL STOCK ISSUANCE. The Board
of Directors of the Corporation may authorize the issuance from time to time of
shares of its stock of any class, whether now or hereafter authorized, or
securities convertible into shares of its stock of any class, whether now or
hereafter authorized, for such consideration as the Board of Directors in its
sole discretion may deem advisable, subject to such restrictions or limitations,
if any, as may be set forth in these Articles of Incorporation or the Bylaws of
the Corporation or in the general laws of the State of Maryland.
Section 4. PREEMPTIVE RIGHTS. Except as may be provided by the Board
of Directors in authorizing the issuance of shares of Preferred Stock pursuant
to Article V, Section 3, no holder of shares of stock of the Corporation shall,
as such holder, have any preemptive right to purchase or subscribe for any
additional shares of the stock of the Corporation or any other security of the
Corporation which it may issue or sell.
Section 5. INDEMNIFICATION. The Corporation shall have the power, to
the maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse expenses under the
procedure provided by such Maryland law in advance of final disposition of a
proceeding to, (i) any individual who is a present or former director or officer
of the Corporation or (ii) any individual who, while a director of the
Corporation and at the request of the Corporation, serves or has served another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise as a director, officer, partner or trustee of such corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
The Corporation shall have the power, with the approval of its Board of
Directors, to provide such indemnification and advancement of expenses to a
person who served a predecessor
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of the Corporation in any of the capacities described in (i) or (ii) above
and to any employee or agent of the Corporation or a predecessor of the
Corporation.
Section 6. ADVISOR AGREEMENTS. Subject to such approval of
stockholders and other conditions, if any, as may be required by any applicable
statute, rule or regulation, the Board of Directors may authorize the execution
and performance by the Corporation of one or more agreements with any person,
corporation, association, company, trust, partnership (limited or general) or
other organization whereby, subject to the supervision and control of the Board
of Directors, any such other person, corporation, association, company, trust,
partnership (limited or general) or other organization (the "Advisor") shall
render or make available to the Corporation managerial, investment, advisory
and/or related services, office space and other services and facilities
(including, if deemed advisable by the Board of Directors, the management or
supervision of the investments of the Corporation) upon such terms and
conditions as may be provided in such agreement or agreements (including, if
deemed fair and equitable by the Board of Directors, the compensation payable
thereunder by the Corporation).
Section 7. RELATED PARTY TRANSACTIONS. Without limiting any other
procedures available by law or otherwise to the Corporation, the Board of
Directors may authorize any agreement of the character described in Section 6 of
this Article VI or other transaction with any person, corporation, association,
company, trust, partnership (limited or general) or other organization, although
one or more of the directors or officers of the Corporation may be a party to
any such agreement or an officer, director, stockholder or member of such other
party, and no such agreement or transaction shall be invalidated or rendered
void or voidable solely by reason of the existence of any such relationship if
the existence is disclosed or known to the Board of Directors, and the contract
or transaction is approved by the affirmative vote of a majority of the
disinterested directors, even if they constitute less than a quorum of the
Board. Any director of the Corporation who is also a director, officer,
stockholder or member of such other entity may be counted in determining the
existence of a quorum at any meeting of the Board of Directors considering such
matter.
Section 8. DETERMINATION BY BOARD. The determination as to any of the
following matters, made in good faith by or pursuant to the direction of the
Board of Directors consistent with these Articles of Incorporation and in the
absence of actual receipt of an improper benefit in money, property or services
or active and deliberate dishonesty established by a court, shall be final and
conclusive and shall be binding upon the Corporation and every holder of shares
of its stock: the amount of the net income of the Corporation for any period and
the amount of assets at any time legally available for the payment of dividends,
redemption of its stock or the payment of other distributions on its stock; the
amount of paid-in surplus, net assets, other surplus, annual or other net
profit, net assets in excess of capital, undivided profits or excess of profits
over losses on sales of assets; the amount, purpose, time of creation, increase
or decrease, alteration or cancellation of any reserves or charges and the
propriety thereof (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged);
the fair value, or any sale, bid or asked price to be applied in determining the
fair value, of any asset owned or held by the Corporation, and any matters
relating to the acquisition, holding and disposition of any assets by the
Corporation.
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Section 9. RESERVED POWERS OF BOARD. The enumeration and definition of
particular powers of the Board of Directors included in this Article VI shall in
no way be limited or restricted by reference to or inference from the terms of
any other clause of this or any other provision of these Articles of
Incorporation, or construed or deemed by inference or otherwise in any manner to
exclude or limit the powers conferred upon the Board of Directors under the
general laws of the State of Maryland as now or hereafter in force.
ARTICLE VII
RESTRICTION ON TRANSFER
ACQUISITION AND REDEMPTION OF SHARES
Section 1. DEFINITIONS. For the purpose of this Article VII, the
following terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Beneficial Ownership" shall mean ownership of Equity Stock (as
hereinafter defined) by a Person (as hereinafter defined) who would be treated
as an owner of such Equity Stock under Section 542(a)(2) of the Code either
directly or constructively through the application of Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code but without regard to Section
856(h)(3) of the Code. The terms "Beneficial Owner, "Beneficially Owns,"
"Beneficially Own" and "Beneficially Owned" shall have the correlative meanings.
"Beneficiary" shall mean the beneficiary of the Trust (as hereinafter
defined) as determined pursuant to Section 19 of this Article VII.
"Debt" shall mean indebtedness of (i) the Corporation or (ii) any
subsidiary thereof.
"Equity Stock" shall mean capital stock that is either Common Stock or
Preferred Stock.
"Existing Holder" shall mean Capital and Regional Properties plc, a
United Kingdom corporation.
"Existing Holder Limit" shall initially mean 18.0%, in number of
shares or value, of the outstanding Equity Stock of the corporation, and after
any adjustment as set forth in Section 10 of this Article VII, shall mean such
greater percentage of the outstanding Equity Stock as so adjusted. The number
and value of shares of the outstanding Equity Stock of the Corporation shall be
determined by the Board of Directors in good faith, which determination shall be
conclusive for all purposes hereof.
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"Initial Public Offering Date" shall mean the date of the first sale
of shares of Common Stock pursuant to the Corporation's first effective
registration statement for such shares of Common Stock filed pursuant to the
Act.
"Market Price" shall mean the last reported sales price of Common
Stock or Preferred Stock, as the case may be, reported on any nationally
registered securities exchange on the trading day immediately preceding the
relevant date, or if not then traded on any such exchange, the last reported
sales price of the Common Stock or Preferred Stock, as the case may be, on the
trading day immediately preceding the relevant date as reported on any exchange
or quotation system over which the Common Stock or Preferred Stock, as the case
may be, may be traded, or if not then traded over any exchange or quotation
system, then the market price of the Common Stock or Preferred Stock, as the
case may be, on the relevant date as determined in good faith by the Board of
Directors of the Corporation.
"Ownership Limit" shall initially mean 9.8%, in number of shares or
value, of the outstanding Equity Stock of the corporation, and after any
adjustment as set forth in Section 10 of this Article VII, shall mean such
greater percentage of the outstanding Equity Stock as so adjusted. The number
and value of shares of the outstanding Equity Stock of the Corporation shall be
determined by the Board of Directors in good faith, which determination shall be
conclusive for all purposes hereof.
"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 or any successor
statute, joint stock company or other entity; but does not include an
underwriter which participated in the initial public offering of the Common
Stock on the Initial Public Offering Date and/or in any subsequent public
offering registered under the Act of any capital stock of the Corporation for a
period of 30 days following the purchase by such underwriter of the Common Stock
and/or capital stock.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock (as defined in Section 3 of
this Article VII), the purported beneficial transferee for whom the Purported
Record Transferee (as hereinafter defined) would have acquired shares of Equity
Stock, if such transfer had been valid under Section 2 of this Article VII.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record Holder of the
Equity Stock if such transfer had been valid under Section 2 of this Article
VII.
"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 as a
REIT.
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"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of Equity Stock (including (i) the granting of any option or
entering into any agreement for the sale, transfer or other disposition of
Equity Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Equity Stock, but
excluding the exchange of Debt for Equity Stock), whether by operation of law or
otherwise. The terms "Transfers" and "Transferred" shall have the correlative
meanings.
"Trust" shall mean the trust created pursuant to Section 15 of this
Article VII.
"Trustee" shall mean the Corporation as trustee for the Trust, and any
successor trustee appointed by the Corporation.
Section 2. OWNERSHIP LIMITATION. (i) Except as provided in Section 12
of this Article VII, from the Initial Public Offering Date until the
Restriction Termination Date, no Person (other than an Existing Holder) shall
Beneficially Own shares of Common Stock and/or Preferred Stock in excess of the
Ownership Limit and no Existing Holder shall Beneficially Own shares of Common
Stock and/or Preferred Stock in excess of the Existing Holder Limit for such
Existing Holder.
(ii) Subject to Section 21, notwithstanding any other provisions
of this Article VII and except as provided in Sections 9 and 12 of this Article
VII, from the Initial Public Offering Date until the Restriction Termination
Date, any Transfer that, if effective, would result in any Person (other than an
Existing Holder) Beneficially Owning Common Stock and/or Preferred Stock in
excess of the Ownership Limit shall be void AB INITIO as to the Transfer of such
shares of Common Stock and/or Preferred Stock which would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit; and the
intended transferee shall acquire no rights in such shares of Common Stock
and/or Preferred Stock.
(iii) Subject to Section 21, notwithstanding any other provisions
of this Article VII and except as provided in Sections 9 and 12 of this Article
VII, from the Initial Public Offering Date until the Restriction Termination
Date, any Transfer that, if effective, would result in any Existing Holder
Beneficially Owning Common Stock and/or Preferred Stock in excess of the
Existing Holder Limit shall be void AB INITIO as to the Transfer of such shares
of Common Stock and/or Preferred Stock which would be otherwise Beneficially
Owned by such Existing Holder in excess of the Existing Holder Limit; and such
Existing Holder shall acquire no rights in such shares of Common Stock and/or
Preferred Stock.
(iv) Subject to Section 21, notwithstanding any other provisions
of this Article VII and except as provided in Section 12 of this Article VII,
from the Initial Public Offering Date until the Restriction Termination Date,
any Transfer that, if effective, would result in the Common Stock and/or
Preferred Stock being Beneficially Owned by less than 100 Persons (determined
without reference to any rules of attribution) shall be void AB INITIO as to the
Transfer of such shares of Common Stock and/or Preferred Stock which would be
otherwise Beneficially Owned by the transferee; and the intended transferee
shall acquire no rights in such shares of Common Stock and/or Preferred Stock.
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(v) From the Initial Public Offering Date until the Restriction
Termination Date, any Transfer 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 Transfer of the shares of Common Stock
and/or Preferred Stock which would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code or any successor statute; and
the intended transferee shall acquire no rights in such shares of Common Stock
and/or Preferred Stock.
Section 3. EXCESS STOCK. (i) If, notwithstanding the other provisions
contained in this Article VII, at any time from the Initial Public Offering Date
until the Restriction Termination Date, there is a purported Transfer or other
change in the capital structure of the Corporation such that any Person would
Beneficially Own Common Stock and/or Preferred Stock in excess of the Ownership
Limit or that the Existing Holder would Beneficially Own Common Stock and/or
Preferred Stock in excess of the Existing Holder Limit, then, except as
otherwise provided in Sections 9 and 12, such shares of Common Stock and/or
Preferred Stock in excess of such Ownership Limit or Existing Holder Limit
(rounded up to the nearest whole share) shall constitute "Excess Stock" and be
treated as provided in this 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 purported Transfer or change in capital structure.
(ii) If, notwithstanding the other provisions contained in this
Article VII, at any time from the Initial Public Offering Date until the
Restriction Termination Date, there is a purported Transfer or other change in
the capital structure of the Corporation (except for a change resulting from the
exchange of Debt for Equity Stock) which, if effective, would cause the
corporation to become "closely held" within the meaning of Section 856(h) of the
Code or any successor statute, then the shares of Common Stock and/or Preferred
Stock being Transferred which would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code or any successor statute
(rounded up to the nearest whole share) shall constitute Excess Stock and be
treated as provided in this 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 purported Transfer or change in capital structure.
(iii) The Ownership Limit shall not apply to the acquisition of
shares of Common Stock or Preferred Stock by an underwriter on the Initial
Public Offering Date or in a public offering of such shares or in any
transaction involving the issuance of shares of capital stock by the Corporation
in which the Board of Directors determines that the underwriter or another
person initially acquiring such shares will timely distribute such shares to
others such that the following such distribution none of such shares will be
Excess Stock.
Section 4. PREVENTION OF TRANSFER. If the Board of Directors or its
designee shall at any time determine in good faith that a Transfer has taken
place in violation of Section 2 of this Article VII or that a Person intends to
acquire or has attempted to acquire Beneficial Ownership of any shares of stock
of the Corporation in violation of Section 2 of this Article VII, the Board of
Directors or its designee shall take such action as it deems advisable to refuse
to give effect to
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or to prevent such Transfer, including, but not limited to, refusing to give
effect to such Transfer on the books of the Corporation, directing the
Corporation's transfer agent and/or registrar to refuse to give effect to
such Transfer on the books of the Corporation or instituting proceedings to
enjoin such Transfer; provided, however, that any Transfers or attempted
Transfers in violation of subparagraphs Section 2(ii), (iii) and (iv) of this
Article VII shall automatically result in the designation and treatment
described in Section 3 irrespective of any action (or non-action) by the
Board of Directors or its designee.
Section 5. NOTICE TO CORPORATION. Any Person who acquires or attempts
to acquire shares in violation of Section 2 of this Article VII, or any Person
who is a transferee such that Excess Stock results under Section 3 of this
Article VII, shall immediately give written notice or, in the event of a
proposed or attempted Transfer, give at least 15 days prior 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 attempted Transfer on the Corporation's status as a
REIT.
Section 6. INFORMATION FOR CORPORATION. From the Initial Public
Offering Date until the Restriction Termination Date:
(i) every Beneficial Owner of more than 5.0% (or such other
percentage, between 1/2 of 1% and 5%, as provided in the regulations of the
Internal Revenue Service promulgated under the Code) of the number or value of
outstanding shares of Equity Stock of the Corporation shall, within 30 days
after January 1 of each year, give written notice to the Corporation stating the
name and address of such Beneficial Owner, the number of shares Beneficially
Owned, and a description of how such shares are held. Each such Beneficial
Owner shall provide to the Corporation such additional information as the
Corporation may reasonably request in order to determine the effect, if any, of
such Beneficial Ownership on the Corporation's status as a REIT.
(ii) each Person who is a Beneficial Owner of Common Stock and/or
Preferred Stock and each Person (including the stockholder of record) who is
holding Common Stock and/or Preferred Stock for a Beneficial Owner shall provide
to the Corporation such information as the Corporation may reasonably request in
order to determine the Corporation's status as a REIT, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.
Section 7. OTHER ACTION BY BOARD. Subject to Section 21,
notwithstanding any other provisions of this Article VII, nothing contained in
this Article VII shall limit the authority of the Board of Directors 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.
Section 8. AMBIGUITIES. In the case of an ambiguity in the application
of any of the provisions of this Article VII, including any definition contained
in Section 1, the Board of
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Directors shall have the power to determine the application of the provisions
of this Article VII with respect to any situation based on the facts known to
it.
Section 9. MODIFICATION OF EXISTING HOLDER LIMITS. Subject to the
limitations provided in Section 11 of this Article VII, an Existing Holder may
elect to participate in a dividend reinvestment plan approved by the Board of
Directors of the Corporation which results in Beneficial Ownership of Common
Stock and/or Preferred Stock by such participating Existing Holder. Any such
participation shall increase the Existing Holder Limit for the affected Existing
Holder to the maximum extent possible under Section 11 to permit Beneficial
Ownership of the shares of Common Stock and/or Preferred Stock acquired as a
result of such participation.
Section 10. INCREASE IN OWNERSHIP LIMIT. Subject to the limitations
provided in Section 11 of this Article VII, the Board of Directors may from time
to time increase the Ownership Limit.
Section 11. LIMITATIONS ON CHANGES IN OWNERSHIP LIMIT. (i) Neither the
Ownership Limit nor the Existing Holder Limit may be increased (nor may any
additional Existing Holder Limit be created) if, after giving effect to such
increase (or creation), five Beneficial Owners of Equity Stock (including all of
the then Existing Holders) could Beneficially Own, in the aggregate, more than
50% in number or value of the outstanding shares of Equity Stock.
(ii) Prior to the modification of the Ownership Limit or Existing
Holder Limit pursuant to Sections 9 or 10 of this Article VII, the Board of
Directors of the Corporation shall require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary to advisable in order to
ensure the Corporation's status as a REIT will not be affected.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
Section 12. EXEMPTIONS BY BOARD. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of counsel or other
evidence satisfactory to the Board of Directors and upon at least 15 days
written notice from a Transferee prior to a proposed Transfer which, if
consummated, would result in the intended Transferee owning shares in excess of
Ownership Limit or Existing Holder Limit, as the case may be, and upon such
other conditions as the Board of Directors may direct, may exempt a Person from
the Ownership Limit or the Existing Holder Limit, as the case may be.
Section 13. LEGEND. Each certificate for shares of Common Stock and for
shares of Preferred Stock shall bear substantially the following legend:
The securities represented by this certificate are subject
to restrictions on transfer for the purpose of the
Corporation's maintenance of its status as a real estate
investment trust under the Internal Revenue Code of 1986, as
amended. Except as otherwise
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provided pursuant to the Articles of Incorporation of the Corporation,
no Person may Beneficially Own shares of Common Stock and/or Preferred
Stock in excess of 9.8% (or such greater percentage as may be
determined by the Board of Directors of the Corporation) of the
number or value of the outstanding Equity Stock of the Corporation
(unless such Person is an Existing Holder). Any Person who attempts
or proposes to Beneficially Own shares of Common Stock and/or
Preferred Stock in excess of the above limitations must notify the
Corporation in writing at least 15 days prior to such proposed or
attempted Transfer. All capitalized terms in this legend have the
meanings defined in the Articles of Incorporation of the
Corporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder who so
requests. If the restrictions on transfer are violated, the
securities represented hereby will be designated and treated as
shares of Excess Stock which will be held in trust by the
Corporation.
Section 14. SEVERABILITY. If any provision of this Article VII or any
application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity and
enforceability of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary to
comply with the determination of such court.
Section 15. TRUST FOR EXCESS STOCK. Upon any purported Transfer that
results in Excess Stock pursuant to Section 3 of this Article VII, such Excess
Stock shall be deemed to have been transferred to the Corporation, as Trustee of
a Trust for the benefit of such Beneficiary or Beneficiaries to whom an interest
in such Excess Stock may later be transferred pursuant to Section 18 of this
Article VII. Shares of Excess Stock so held in trust shall be issued and
outstanding stock of the Corporation. The Purported Record Transferee shall
have no rights in such Excess Stock except the right to designate a transferee
of such Excess Stock upon the terms specified in Section 18 of this Article VII.
The Purported Beneficial Transferee shall have no rights in such Excess Stock
except as provided in Section 18 of this Article VII.
Section 16. NO DIVIDENDS OR DISTRIBUTIONS FOR EXCESS STOCK. Excess
Stock shall not be entitled to any distributions or dividends. Any dividend or
distribution paid prior to the discovery by the Corporation that the shares of
Common Stock and/or Preferred Stock have been Transferred so as to be deemed
Excess Stock shall be repaid to the Corporation upon demand.
Section 17. LIQUIDATION DISTRIBUTIONS FOR EXCESS STOCK. Subject to the
preferential rights of the Preferred Stock, if any, as may be determined by the
Board of Directors of the Corporation, in the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any other distribution
of all or substantially all of the assets of, the Corporation, each holder of
shares of Excess Stock shall be entitled to receive, in the case of Excess Stock
constituting Preferred Stock, ratably with each other holder of Preferred Stock
and Excess Stock
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constituting Preferred Stock and, in the case of Excess Stock constituting
Common Stock, ratably with each other holder of Common Stock and Excess Stock
constituting Common Stock, that portion of the assets of the Corporation
available for distribution to its stockholders as the number of shares of the
Excess Stock held by such holder bears to the total number of shares of (i)
Preferred Stock and Excess Stock then outstanding in the case of Excess Stock
constituting Preferred Stock and (ii) Common Stock and Excess Stock then
outstanding in the case of Excess Stock constituting Common Stock. The
Corporation, as holder of the Excess Stock in trust, or if the Corporation
shall have been dissolved, any trustee appointed by the Corporation prior to
its dissolution, shall distribute ratably to the Beneficiaries of the Trust,
when determined, any such assets received in respect of the Excess Stock in
any liquidation, dissolution or winding up of, or any distribution of the
assets of the Corporation.
Section 18. VOTING RIGHTS FOR EXCESS STOCK. The holders of shares of
Excess Stock shall not be entitled to vote on any matter.
Section 19. NON-TRANSFERABILITY OF EXCESS STOCK. Excess Stock shall not
be transferable. The Purported Record Transferee may freely designate a
Beneficiary of an interest in the Trust (representing the number of shares of
Excess Stock held by the Trust attributable to a purported Transfer that
resulted in the Excess Stock), if (i) the shares of Excess Stock held in the
Trust would not be Excess Stock in the hands of such Beneficiary and (ii) the
Purported Beneficial Transferee does not receive a price for designating such
Beneficiary that reflects a price per share for such Excess Stock that exceeds
(x) the price per share such Purported Beneficial Transferee paid for the Common
Stock and/or Preferred Stock, as the case may be, in the purported Transfer that
resulted in the Excess Stock, or (y) if the Purported Beneficial Transferee did
not give value for such Excess Stock (through a gift, devise or other
transaction), a price per share equal to the Market Price for the shares of the
Excess Stock on the date of the purported Transfer that resulted in the Excess
Stock. Upon such transfer of an interest in the Trust, the corresponding shares
of Excess Stock in the Trust shall be automatically exchanged for an equal
number of shares of Common Stock and/or Preferred Stock, as applicable, and such
shares of Common Stock and/or Preferred Stock, as applicable, shall be
transferred of record to the transferee of the interest in the Trust if such
shares of Common Stock and/or Preferred Stock, as applicable, would not be
Excess Stock in the hands of such transferee. Prior to any transfer of any
interest in the Trust, the Purported Record Transferee must give advance notice
to the Corporation of the intended transfer and the Corporation must have waived
in writing its purchase rights under Section 20 of this Article VII.
Notwithstanding the foregoing, if a Purported Beneficial Transferee
receives a price for designating a Beneficiary of an interest in the Trust that
exceeds the amounts allowable under this Section 19 of this Article VII, such
Purported Beneficial Transferee shall pay, or cause such Beneficiary to pay such
excess to the Corporation.
If any of the foregoing restrictions on transfer of Excess Stock are
determined to be void, invalid or unenforceable by any court of competent
jurisdiction, then the Purported Record Transferee may be deemed, at the option
of the Company, to have acted as an agent of
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the Company in acquiring such Excess Stock and to hold such Excess Stock on
behalf of the Company.
Section 20. CALL BY CORPORATION ON 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 in
the transaction that created such Excess Stock, (or, in the case of a devise or
gift, the Market Price at the time of such devise or gift) and (ii) the Market
Price of the Common Stock or Preferred Stock to which such Excess Stock relates
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 ninety
days after the later of (i) the date of the Transfer which resulted in such
Excess Stock and (ii) the date the Board of Directors determines in good faith
that a Transfer resulting in Excess Stock has occurred, if the Corporation does
not receive a notice of such Transfer pursuant to Section 5 of this Article VII
but in no event later than a permitted Transfer pursuant to and in compliance
with the terms of Section 19 of this Article VII.
Section 21. SETTLEMENTS ON THE NYSE. Nothing in Article VII shall
preclude the settlement of any transaction entered through the facilities of the
New York Stock Exchange or any other national securities exchange or automated
inter-dealer system. The immediately foregoing sentence shall not limit the
authority of the Board of Directors to take any and all actions it deems
necessary or advisable to protect the Corporation and the interests of the
stockholders in preserving the Corporation's status as a REIT, so long as such
actions do not prohibit settlement of any transactions entered into through the
facilities of the New York Stock Exchange or any other national securities or
automated inter-dealer quotation system.
Section 22. INVALIDITY. If any provision of this Article VII or any
application of such provision is determined to be invalid by any federal or
state court having jurisdiction over the issue, the validity of the remaining
provisions shall not be affected except only to the extent necessary to comply
with the determination of such court.
Section 23. EFFECTIVENESS OF ARTICLE VII. Notwithstanding anything to
the contrary provided for in these Articles of Incorporation, the provisions of
this ARTICLE VII shall not be effective until the Initial Public Offering Date.
ARTICLE VIII
AMENDMENTS
The Corporation reserves the right from time to time to make any
amendment to these Articles of Incorporation, now or hereafter authorized by
law, including any amendment altering the terms or contract rights, as
expressly set forth in these Articles of Incorporation, of any shares of
outstanding stock. Any amendment to these Articles of Incorporation shall be
valid only if such amendment shall have been approved by the affirmative vote
of two-thirds of all the votes entitled to be case on the matter except to
the extent Maryland law requires a higher vote. All rights and powers
conferred by these Articles of Incorporation on stockholders, directors and
officers are granted subject to this reservation.
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ARTICLE IX
LIMITATION OF LIABILITY
To the maximum extent that Maryland law in effect from time to time permits
limitation of the liability of directors and officers, no director or officer of
the Corporation shall be liable to the Corporation or its stockholders for money
damages. Neither the amendment nor repeal of this Article IX, nor the adoption
or amendment of any other provision of these Articles of Incorporation or Bylaws
of the Corporation inconsistent with this Article IX, shall apply to or affect
in any respect the applicability of the preceding sentence with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption.
ARTICLE X
NOMINATION AND BUSINESS PROCEDURES
Section 1. GENERAL. At a meeting of the stockholders, no business shall
be conducted which has not been properly brought before the meeting as set forth
in this ARTICLE X. To be property brought before a meeting, business must be
brought before the meeting by or at the direction of the Board of Directors or
brought before the meeting by a stockholder. For business to be properly
brought before a meeting by a stockholder, the Secretary of the Corporation must
have received written notice not less than sixty (60) days nor more than ninety
(90) days prior to the date fixed by the Board of Directors for such meeting;
provided, however, that in the event that less than seventy (70) days' notice or
prior public disclosure is given or made to stockholders of the date of such
meeting, notice by a stockholder to be timely made must be received no later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the meeting was mailed or the public disclosure was
made.
Section 2. BOARD OF DIRECTOR NOMINATIONS. In the case of stockholder
nominations for election to the Board of Directors, the notice set forth in
Section 1 of this ARTICLE X shall set forth (i) the name, age, business address
and, if known, residence address of each nominee proposed in such notice, (ii)
the principal occupations or employment of each such nominee for the past five
(5) years, (iii), the number of shares of the Corporation which are beneficially
owned by each such nominee, (iv) other directorships held by each such nominee,
(v) the names of business entities of which each such nominee owns a ten percent
(10%) or more beneficial interest, and (vi) all other information with respect
to the nominees required by the Federal proxy rules in effect at the time the
notice is submitted. In addition, such notice shall be accompanied by a
statement, over the signature of each proposed nominee, that he consents to
being a nominee, if elected he intends to serve as a director, and confirming
the information with respect to him set forth in the notice.
Section 3. STOCKHOLDER PROPOSALS. In the case of stockholder proposals or
business other than the election of directors, the notice set forth in Section 1
of this ARTICLE X shall set forth (i) a brief description of the proposal or
business to be brought before the meeting, (ii) the name,
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age, business and residence address of the stockholder submitting the
proposal or business, (iii) the principal occupation or employment of that
stockholder, (iv) the number of shares of the Corporation which are
beneficially owned by that stockholder, and (v) any material interest of that
stockholder in the proposal or business to be brought before the meeting.
Section 4. DETERMINATIONS BY CHAIRMAN. The Chairman of any meeting in
respect of which a stockholder nomination or proposal has been submitted, may,
if the facts as determined by the Chairman in his sole discretion warrant,
determine and declare to the meeting that the stockholder nomination or proposal
was not made in accordance with the procedures set forth in this ARTICLE X, in
which event the defective nomination or proposal shall not be considered at such
meeting and shall be disregarded and no votes cast either for or against such
nomination or proposal shall be counted or, in the event votes have previously
been cast for or against such nomination or proposal, the duly appointed
inspectors for such meeting shall disregard any such votes.
Section 5. EXCLUSIVITY. Notwithstanding anything in these Articles of
Incorporation or the By-Laws of this Corporation to the contrary, no
elections, proposals or other business shall be conducted at any meeting of
the stockholders except in accordance with the procedures set forth in this
ARTICLE X.
ARTICLE XI
QUORUM
At an annual meeting of the stockholders called for the sole purpose of
electing directors and ratifying the selection of the Corporation's independent
public accountants, the holders of one-third of the outstanding shares of the
Corporation entitled to vote, present in person or represented by proxy, shall
constitute a quorum at such annual meeting of stockholders; provided, if less
than one-third of the outstanding shares entitled to vote are represented at
said meeting, a majority of the shares so represented may adjourn the meeting at
any time without further notice. At any other annual meeting or any special
meeting of stockholders, the holders of a majority of the outstanding shares of
the Corporation entitled to vote, present in person or represented by proxy,
shall constitute a quorum at such meeting of stockholders; provided, if less
than a majority of the outstanding shares entitled to vote are represented at
said meeting, a majority of the shares so represented may adjourn the meeting at
any time without further notice. If a quorum is present at any meeting of the
stockholders, the affirmative vote of the majority of the shares entitled to
vote represented at the meeting and entitled to vote on the matter shall be the
act of the stockholders. At any adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at the
original meeting. Withdrawal of stockholders from any meeting shall not cause
failure of a duly constituted quorum at that meeting.
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