EXHIBIT 3.1.3
LIBERTY PROPERTY TRUST
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
A SERIES OF
JUNIOR PARTICIPATING PREFERRED SHARES OF BENEFICIAL INTEREST
of
LIBERTY PROPERTY TRUST
Liberty Property Trust, a Maryland real estate investment trust (the
"Trust") certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Pursuant to the authority vested in the Board of Trustees of the
Trust (the "Board of Trustees") by Sections 3.2(e), 6.1 and 6.3 of the
Amended and Restated Declaration of Trust of the Trust (the "Declaration
of Trust") and by Section 8-203 of the Corporations and Associations
Article of the Annotated Code of Maryland, the Board of Trustees by duly
adopted resolution on December 17, 1997, has duly classified and
designated 200,000 shares of the 200,000,000 authorized shares of
beneficial interest in the Trust designated as "Series A Junior
Participating Preferred Shares of Beneficial Interest," which possess
the preferences conversion or other rights, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption as
set forth in these Articles Supplementary:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Shares," par
value $0.0001 per share, and the number of shares constituting such
series shall be 200,000.
Section 2. Dividends and Distributions.
(A) The holders of Series A Junior Participating Preferred
Shares shall be entitled to receive, when, as and if declared by the
Board of Trustees out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a Series A Junior Participating Preferred Share, in an
amount per share (rounded to the nearest cent) equal to the greater of
(a) $0.01 or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable
in Common Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares, par value
$0.001 per share, of the Trust (the "Common Shares") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a Series A Junior Participating Preferred
Share. In the event the Trust shall at any time after December 17, 1997
(the "Rights Declaration Date") (i) declare any dividend on Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount to which holders of
Series A Junior Participating Preferred Shares were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) The Trust shall declare a dividend or distribution on
the outstanding Series A Junior Participating Preferred Shares as
provided in Paragraph (A) above immediately after it declares a dividend
or distribution on the Common Shares (other than a dividend payable in
Common Shares); provided that, in the event no dividend or distribution
shall have been declared on the Common Shares during the period between
any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $0.01 per share on the outstanding
Series A Junior Participating Preferred Shares shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from the
Quarterly Dividend Payment Date next preceding the date of issue of such
Series A Junior Participating Preferred Shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of Series A Junior
Participating Preferred Shares entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the Series A Junior Participating
Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Trustees may fix a record date for
the determination of holders of Series A Junior Participating Preferred
Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than thirty (30)
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Series A Junior Participating
Preferred Shares shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Junior Participating Preferred Shares
shall entitle the holder thereof to 1,000 votes on all matters submitted
to a vote of the shareholders of the Trust. In the event the Trust
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the
number of votes per share to which holders of Series A Junior
Participating Preferred Shares were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number
of Common Shares that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of Series A Junior Participating Preferred Shares and the
holders of Common Shares shall vote together as one class on all matters
submitted to a vote of shareholders of the Trust.
(C)(i) If at any time dividends on any Series A Junior
Participating Preferred Shares shall be in arrears in an amount equal to
six (6) quarterly dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all Series A Junior Participating
Preferred Shares then outstanding shall have been declared and paid or
set apart for payment. During each default period, all holders of
Preferred Shares (including holders of the Series A Junior Participating
Preferred Shares) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Trustees.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Shares may be
exercised initially at a special meeting called pursuant to subparagraph
(iii) of this Section 3(C) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders, provided that such voting
right shall not be exercised unless the holders of ten percent (10%) in
number of Preferred Shares outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common Shares shall
not affect the exercise by the holders of Preferred Shares of such
voting right. At any meeting at which the holders of Preferred Shares
shall exercise such voting right initially during an existing default
period, they shall have the right, voting as a class, to elect Trustees
to fill such vacancies, if any, in the Board of Trustees as may then
exist up to two (2) Trustees or, if such right is exercised at an annual
meeting, to elect two (2) Trustees. If the number which may be so
elected at any special meeting does not amount to the required number,
the holders of the Preferred Shares shall have the right to make such
increase in the number of Trustees as shall be necessary to permit the
election by them of the required number. After the holders of the
Preferred Shares shall have exercised their right to elect Trustees in
any default period and during the continuance of such period, the number
of Trustees shall not be increased or decreased except by vote of the
holders of Preferred Shares as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu with the Series
A Junior Participating Preferred Shares.
(iii) Unless the holders of Preferred Shares shall,
during an existing default period, have previously exercised their right
to elect Trustees, the Board of Trustees may order, or any shareholder
or shareholders owning in the aggregate not less than ten percent (10%)
of the total number of Preferred Shares outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Shares, which meeting shall thereupon be called by the
President, a Vice-President or the Secretary of the Trust. Notice of
such meeting and of any annual meeting at which holders of Preferred
Shares are entitled to vote pursuant to this Paragraph (C)(iii) shall be
given to each holder of record of Preferred Shares by mailing a copy of
such notice to such holder at such holder's last address as the same
appears on the books of the Trust. Such meeting shall be called for a
time not earlier than twenty (20) days and not later than sixty (60)
days after such order or request, or in default of the calling of such
meeting within sixty (60) days after such order or request, such meeting
may be called on similar notice by any shareholder or shareholders
owning in the aggregate not less than ten percent (10%) of the total
number of Preferred Shares outstanding. Notwithstanding the provisions
of this Paragraph (C)(iii), no such special meeting shall be called
during the period within sixty (60) days immediately preceding the date
fixed for the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common
Shares, and other classes of shares of the Trust if applicable, shall
continue to be entitled to elect the whole number of Trustees until the
holders of Preferred Shares shall have exercised their right to elect
two (2) Trustees voting as a class, after the exercise of which right
(x) the Trustees so elected by the holders of Preferred Shares shall
continue in office until their successors shall have been elected by
such holders or until the expiration of the default period, and (y) any
vacancy in the Board of Trustees may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Trustees theretofore elected by the holders of the class of
stock which elected the Trustee whose office shall have become vacant.
References in this Paragraph (C) to Trustees elected by the holders of a
particular class of stock shall include Trustees elected by such
Trustees to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Shares as a class to
elect Trustees shall cease, (y) the term of any Trustees elected by the
holders of Preferred Shares as a class shall terminate, and (z) the
number of Trustees shall be such number as may be provided for in the
Declaration of Trust or By-laws of the Trust irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter in
any manner provided by law or in the Declaration of Trust or By-laws of
the Trust). Any vacancies in the Board of Trustees effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Trustees.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred
Shares as provided in Section 2 hereof are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on Series A Junior Participating Preferred Shares outstanding
shall have been paid in full, the Trust shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Shares;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Shares, except dividends paid
ratably on the Series A Junior Participating Preferred Shares and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Shares, provided that the Trust
may at any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Trust ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Junior Participating Preferred Shares; or
(iv) purchase or otherwise acquire for consideration
any Series A Junior Participating Preferred Shares, or any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Trustees) to
all holders of such shares upon such terms as the Board of Trustees,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Trust shall not permit any subsidiary of the Trust
to purchase or otherwise acquire for consideration any shares of the
Trust unless the Trust could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. Reacquired Shares. Any Series A Junior Participating
Preferred Shares purchased or otherwise acquired by the Trust in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued Preferred Shares and may be reissued as
part of a new series of Preferred Shares to be created by resolution or
resolutions of the Board of Trustees, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Trust, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Shares unless, prior thereto, the holders of
Series A Junior Participating Preferred Shares shall have received an
amount equal to $100,000 per share of Series A Junior Participating
Preferred Shares, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such
payment (the "Series A Liquidation Preference"). Following the payment
of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of Series A Junior
Participating Preferred Shares unless, prior thereto, the holders of
Common Shares shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Shares)
(such number in clause (ii), the "Adjustment Number"). Following the
payment of the full amount of the Series A Liquidation Preference and
the Common Adjustment in respect of all outstanding Series A Junior
Participating Preferred Shares and Common Shares, respectively, holders
of Series A Junior Participating Preferred Shares and holders of Common
Shares shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Shares and Common Shares, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
Preferred Shares, if any, which rank on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Shares, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Shares.
(C) In the event the Trust shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares,
or (iii) combine the outstanding Common Shares into a smaller number of
shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Trust shall enter
into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
Series A Junior Participating Preferred Shares shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
Common Share is changed or exchanged. In the event the Trust shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of Series
A Junior Participating Preferred Shares shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately
prior to such event.
Section 8. No Redemption. The Series A Junior Participating Preferred
Shares shall not be redeemable.
Section 9. Amendment. The Declaration of Trust of the Trust shall not
be further amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Junior
Participating Preferred Shares so as to affect them adversely without
the affirmative vote of the holders of a majority or more of the
outstanding Series A Junior Participating Preferred Shares, voting
separately as a class.
Section 10. Fractional Shares. Series A Junior Participating Preferred
Shares may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior
Participating Preferred Shares.
SECOND: The Series A Junior Participating Preferred Shares have been
classified and designated by the Board of Trustees under 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: These Articles Supplementary shall be effective at the time the
State Department of Assessments and Taxation accepts these Articles
Supplementary for record.
FIFTH: The undersigned Chairman of the Board of Trustees and Chief
Executive Officer of the Trust acknowledges these Articles Supplementary
to be the act of the Trust and, as to all matters of fact required to be
verified under oath, the undersigned Chairman of the Board of Trustees
and Chief Executive Officer of the Trust 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
penalties for perjury.
IN WITNESS WHEREOF, the Trust has caused these Articles Supplementary to
be executed under seal in its name and in its behalf by the Chairman of
the Board of Trustees and Chief Executive Officer and attested to by its
Secretary on this 23rd day of December, 1997.
LIBERTY PROPERTY TRUST
By: /s/ Willard G. Rouse IIII (SEAL)
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Willard G. Rouse III, Chairman of the Board of
Trustees and Chief Executive Officer
Attest:
/s/ James J. Bowes (SEAL)
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James J. Bowes, Secretary