EXHIBIT 99.1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
AVALON PROPERTIES, INC.
THIS IS TO CERTIFY THAT:
FIRST: Avalon Properties, Inc., a Maryland corporation, with its
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principal office in Baltimore, Maryland, hereby certifies that it desires to
amend and restate its Charter as currently in effect as set forth in these
Articles of Amendment and Restatement.
SECOND: The following provisions are all of the provisions of the
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Charter currently in effect as hereinafter amended:
ARTICLE I
INCORPORATION, AMENDMENT AND RESTATEMENT
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John O. Newell, whose post office address is 53 State Street, Boston,
Massachusetts 02109, being at least eighteen (18) years of age formed the
corporation (the "Corporation") under the General Laws of the State of Maryland.
ARTICLE II
NAME
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The name of the Corporation is:
Avalon Properties, Inc.
ARTICLE III
PURPOSES
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3.1 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 amended from time to
time.
3.2 Without limiting the generality of the foregoing purpose, business
and objects, at such time or times as the Board of Directors of the
Corporation determines that it is in the
interest of the Corporation and its stockholders that the Corporation engage in
the business of, and conduct its business and affairs so as to qualify as, a
real estate investment trust (as that phrase is defined in the Internal Revenue
Code of 1986, as amended (the "Code")), the purpose of the Corporation shall
include engaging in the business of a real estate investment trust ("REIT").
This reference to such purpose shall not make unlawful or unauthorized any
otherwise lawful act or activity that the Corporation may take that is
inconsistent with such purpose.
ARTICLE IV
PRINCIPAL OFFICE ADDRESS
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The post office address of the principal office of the Corporation is c/o
The Corporation Trust, Inc., 32 South Street, Baltimore, Maryland 21202.
ARTICLE V
THE RESIDENT AGENT
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The Resident Agent of the Corporation is The Corporation Trust, Inc.,
whose address is 32 South Street, Baltimore, Maryland 21202. Said Resident Agent
is a Maryland corporation.
ARTICLE VI
BOARD OF DIRECTORS
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6.1 The Corporation shall have a Board of Directors initially
consisting of two (2) Directors, which number may be increased or decreased in
accordance with the Bylaws of the Corporation; provided that so long as there
are fewer than three (3) stockholders, the number of directors may be fewer
than three (3) but not fewer than the number of stockholders. The following
individuals shall act as Directors until the first annual meeting of the
stockholders of the Corporation or until their successors are duly elected to
qualify:
Charles H. Berman
Richard L. Michaux
6.2 The initial term office of the Directors named in Section 6.1
hereof shall expire at the 1994 annual meeting of stockholders. Commencing with
the 1994 annual meeting of stockholders, the Directors elected at each annual
meeting of stockholders shall hold office for
a term of one year. Vacancies occurring by resignation, enlargement of the Board
of Directors or otherwise shall be filled as specified in the Bylaws.
ARTICLE VII
AUTHORIZED CAPITAL STOCK; RIGHTS AND PREFERENCES;
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ISSUANCE OF STOCK
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7.1 Authorized Capital Stock. The total number of shares of stock
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which the Corporation has authority to issue (the "Stock") is one hundred and
fifty million (150,000,000) shares, consisting of (ii) twenty million
(20,000,000) shares of preferred stock, par value $.01 per share ("Preferred
Stock"); (ii) eighty million (80,000,000) shares of common stock, par value $.01
per share ("Common Stock"); and (iii) fifty million (50,000,000) shares of
excess stock, par value $.01 per share ("Excess Stock"). The aggregate par value
of all the shares of all classes of stock is $1,500,000.
7.2 Preferred Stock. The Board of Directors may issue the Preferred
Stock in one or more series consisting of such numbers of shares and having such
preferences, conversion and other rights, voting powers, restrictions and
limitations as to dividends, qualifications and terms and conditions of
redemption of stock as the Board of Directors may from time to time determine
when designating such series.
7.3 Common Stock.
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7.3.1 Dividend Rights. The holders of shares of Common Stock
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shall be entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available therefor.
7.3.2 Rights Upon Liquidation. In the event of any voluntary or
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involuntary liquidation, dissolution or winding up of, or any distribution
of the assets of, the Corporation, each holder of shares of Common Stock
shall be entitled to receive, ratably with each other holder of shares of
Common Stock or Excess Stock resulting from the exchange of Common Stock
("Excess Common Stock"), that portion of the assets of the Corporation
available for distribution to the holders of its Common Stock and Excess
Common Stock as the number of shares of Common Stock held by such holder
bears to the total number of shares of Common Stock and Excess Common
Stock then outstanding.
7.3.3 Voting Rights. The holders of shares of Common Stock
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shall be entitled to vote on all matters submitted to the holders of
Common Stock for a vote, at all meetings of the stockholders, and each
holder of shares of Common Stock shall be entitled to one vote for each
share of Common Stock held by such stockholder.
7.3.4 Exchange. Shares of Common Stock shall automatically and
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without further action be exchanged for shares of Excess Stock, and shares
of Excess Stock shall be exchanged for shares of Common Stock, at the
times and in the manner provided in Section 9.5 hereof. Such exchanges
shall not require the tender, cancellation or issuance of any certificate
representing such shares of Excess Stock or Common Stock.
7.4 Excess Stock. The voting, distribution, redemption and certain
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other rights, qualifications and limitations of shares of Excess Stock are set
forth in Section 9.5 hereof.
7.5 Classification of Stock. The Board of Directors may classify or
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reclassify any unissued shares of Stock from time to time by setting or changing
the preferences, conversion and other rights, voting powers, restrictions and
limitations as to dividends, qualifications, and terms and conditions of
redemption of those shares of Stock, including, but not limited to, the
reclassification of unissued shares of Common Stock to shares of Preferred Stock
or unissued shares of Preferred Stock to shares of Common Stock or the issuance
of any rights plan or similar plan.
7.6 Issuance of Stock. The Board of Directors may authorize the
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issuance from time to time of shares of Stock of any class, whether now or
hereafter authorized, or securities or rights convertible into shares of Stock,
for such consideration as the Board of Directors may deem advisable (or without
consideration in the case of a share split or dividend), subject to such
restrictions or limitations, if any, as may be set forth in the Bylaws of the
Corporation.
ARTICLE VIII
LIMITATION ON PREEMPTIVE RIGHTS
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No stockholder shall have any preferential or preemptive right to acquire
additional shares of Stock.
ARTICLE IX
LIMITATIONS ON TRANSFER AND OWNERSHIP
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9.1 Limitations on Transfer. The shares of Stock (other than Excess
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Stock) shall be freely transferable by the record owner thereof, subject to the
provisions of Section 9.2 and provided that any purported acquisition or
transfer of Stock that would result in the disqualification of the Corporation
as a REIT shall be void ab initio, except to the extent necessary to give effect
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to Section 9.10 hereof. Any purported transfer of Stock that, if effective,
would result in a violation of Section 9.2 (unless excepted from the application
of
Section 9.2 pursuant to Section 9.6) shall be void ab initio as to the
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transfer of that number of shares of Stock that would otherwise be beneficially
owned by a stockholder in violation of Section 9.2, the intended transferee of
such shares shall acquire no rights therein and the transfer of such shares will
not be reflected on the Corporation's stock record books. For purposes of this
Article Ninth, a "transfer" of shares of Stock shall mean any sale, transfer,
gift, hypothecation, pledge, assignment, or other disposition, whether voluntary
or involuntary, by operation of law or otherwise.
9.2 Limitations on Ownership. Commencing on the date of the sale of
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shares of Common Stock pursuant to the Corporation's first effective
registration statement for the Common Stock filed with the Securities and
Exchange Commission under the Securities Act of 1933 (the "Initial Public
Offering Date"), or such earlier time as the Board of Directors may determine,
except as provided by Section 9.6, no person shall at any time directly or
indirectly acquire or hold beneficial ownership of shares of any class or series
of Stock with an aggregate value in excess of 9.8% of the aggregate value of all
outstanding Stock of the Corporation (the "Ownership Limit").
For purposes of this Article Ninth, (a) the value of any share of Stock
shall be determined in the manner established by the Board of Directors, and (b)
a person (which includes natural persons, corporations, trusts, partnerships,
and other entities) shall be deemed to be the beneficial owner of the Stock that
such person (i) actually owns, (ii) constructively owns after applying the rules
of Section 544 of the Code as modified in the case of a REIT by Section 856(h)
of the Code, and (iii) has the right to acquire upon exercise of outstanding
rights, options and warrants, and upon conversion of any securities convertible
into Stock, if any.
9.3 Stockholder Information. Each stockholder shall, upon demand of
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the Corporation, disclose to the Corporation in writing such information with
respect to his or its direct and indirect beneficial ownership of the Stock as
the Board of Directors in its discretion deems necessary or appropriate in order
that the Corporation may fully comply with all provisions of the Code relating
to REITs and all regulations, rulings and cases promulgated or decided
thereunder (the "REIT Provisions") and to comply with the requirements of any
taxing authority or governmental agency.
9.4 Transferee Information. Whenever the Board of Directors deems it
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reasonably necessary to protect the tax status of the Corporation as a REIT
under the REIT Provisions, the Board of Directors may require a statement or
affidavit from each stockholder or proposed transferee of Stock setting forth
the number of shares of Stock already beneficially owned by such proposed
transferee and any related person specified by the Board of Directors. If, in
the opinion of the Board of Directors, any proposed transfer may jeopardize the
qualification of the Corporation as a REIT, the Board of Directors shall have
the right, but not the duty, to refuse to permit the transfer of such Stock to
the proposed transferee. All contracts for the sale or other transfer of Stock
shall be subject to this Section 9.4.
9.5 Excess Stock.
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9.5.1 Exchange for Excess Stock. If, notwithstanding the other
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provisions contained in this Article Ninth, at any time after the Initial Public
Offering Date there is a purported transfer of Stock or a change in the capital
structure of the Corporation (including any redemption of Excess Stock pursuant
to Subsection 9.5.7) as a result of which any person would beneficially own
Stock in excess of the Ownership Limit, then, except as otherwise provided in
Section 9.6, such shares of Stock in excess of the Ownership Limit (rounded up
to the nearest whole share) shall automatically and without further action be
exchanged for an equal number of shares of Excess Stock. Such exchange shall be
effective as of the close of business on the business day prior to the date of
the purported transfer of Stock or the change in capital structure. The shares
of Common Stock which were exchanged for shares of Excess Stock shall revert to
the Corporation, subject to the provisions of Subsection 9.5.2.
9.5.2 Ownership in Trust. Upon any purported transfer of Stock that
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results in an exchange for Excess Stock pursuant to Subsection 9.5.1, such
shares of Excess Stock shall be deemed to have been transferred to the
Corporation, as trustee of a separate trust for the exclusive benefit of the
person or persons to whom such Excess Stock can ultimately be transferred
without violating the Ownership Limit. Shares of Excess Stock so held in trust
shall be issued and outstanding Stock of the Corporation under the Maryland
General Corporation Law. The purported transferee of Excess Stock shall have no
rights in such Excess Stock, except the right to designate a transferee of its
interest in the trust created under this Subsection 9.5.2 upon the terms
specified in Subsection 9.5.6. If any of the restrictions on transfer set forth
in this Article Ninth are determined to be void, invalid or unenforceable by
virtue of any legal decision, statute, rule or regulation, then the intended
transferee of any Excess Stock may be deemed, at the option of the Corporation,
to have acted as an agent on behalf of the Corporation in acquiring the Excess
Stock and to hold the Excess Stock on behalf of the Corporation.
9.5.3 Dividend Rights. Excess Stock shall not be entitled to any
dividends. Any dividend or distribution paid prior to the discovery by the
Corporation that shares of Stock have been exchanged for Excess Stock shall be
repaid to the Corporation upon demand, and any dividend or distribution declared
but unpaid shall be rescinded as void ab initio with respect to such shares of
Excess Stock.
9.5.4 Rights Upon Liquidation. In the event of any voluntary or
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involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, the trustee holding any shares of Excess Stock
resulting from the exchange of Common Stock ("Excess Common Stock") shall be
entitled to receive, ratably with each other holder of shares of Common Stock or
Excess Common Stock, that portion of the assets of the Corporation available for
distribution to the holders of
Common Stock and Excess Common Stock as the number of shares of Excess Common
Stock held by such holder bears to the total number of shares of Common Stock
and Excess Common Stock then outstanding. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, the trustee holding any shares of Excess Stock
resulting from the exchange of Preferred Stock ("Excess Preferred Stock") shall
be entitled to receive the pro rata share of the assets of the Corporation
available for distribution to the holders of Preferred Stock of the series from
which such Excess Stock was exchanged which such holder of Excess Preferred
Stock would be entitled to receive if such shares of Excess Preferred Stock were
shares of Preferred Stock of the series from which such Excess Preferred Stock
was exchanged. The Corporation, as the holder of all Excess Stock in one or more
trusts, or, if the Corporation shall have been dissolved, any trustee appointed
by the Corporation prior to its dissolution, shall distribute to each transferee
of an interest in such a trust pursuant to Subsection 9.5.6 hereof, when
determined, any assets received in any liquidation, dissolution or winding up
of, or any distribution of the assets of, the Corporation in respect of the
Excess Stock held in such trust and represented by the trust interest
transferred to such transferee.
9.5.5 Voting Rights. No stockholder may vote any shares of Excess Stock.
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The shares of Excess Stock will not be considered to be issued or outstanding
for purposes of any stockholder vote or for purposes of determining a quorum for
such a vote.
9.5.6 Restrictions on Transfer. Excess Stock shall not be transferable.
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The purported transferee of any shares of Stock that are exchanged for Excess
Stock pursuant to Section 9.5.1 may freely designate a transferee of the
interest in the trust that represents such shares of Excess Stock, if (a) the
shares of Excess Stock held in the trust and represented by the trust interest
to be transferred would not be Excess Stock in the hands of the transferee of
the trust interest and (b) the transferor of the trust interest does not receive
a price for the trust interest in excess of (i) the price such transferor paid
for the Stock in the purported transfer of Stock that resulted in the Excess
Stock represented by the trust interest, or (ii) if such transferor did not give
value for such Stock (e.g., the shares were received through a gift, devise or
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other transaction), a price equal to the aggregate Market Price (as defined
in Subsection 9.5.7) for all shares of the Stock that were exchanged for Excess
Stock on the date of the purported transfer that resulted in the Excess Stock.
No interest in a trust may be transferred unless the transferor of such interest
has given advance notice to the Corporation of the intended transferee and the
Corporation has agreed in writing to waive its redemption rights under
Subsection 9.5.7. Upon the transfer of an interest in a trust in compliance with
this Subsection 9.5.6, the corresponding shares of Excess Stock that are
represented by the transferred interest in the trust shall be automatically
exchanged for an equal number of shares of Stock of the same class and series
from which they were originally exchanged and such shares of Stock shall be
transferred of
record to the transferee of the interest in the trust. Upon any exchange of
Excess Stock for Stock of another class, the interest in the trust representing
such Excess Stock shall automatically terminate.
9.5.7 Corporation's Redemption Right. All shares of Excess
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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 (a) the price
per share of Stock in the transaction that created such Excess Stock (or,
in the case of devise or gift, the Market Price per share of such Stock at
the time of such devise or gift) or (b) the Market Price per share of
Stock of the class of Stock from which such Excess Stock was converted on
the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer at any time until
the date ninety (90) days after the date on which the purported owner or
transferee gives written notice to the Corporation of any event (including
without limitation redemptions or repurchases of Stock by the Corporation)
or any purported transfer that results in the exchange of Stock for Excess
Stock and the nature and amount of all ownership interests, direct or
indirect, of record or beneficial, of such purported owner or transferee.
For purposes of this Article Ninth, "Market Price" means for any share of
Stock, the average daily per share closing sales price of a share of such
Stock if shares of such Stock are listed on a national securities exchange
or quoted on the National Association of Securities Dealers Automated
Quotation National Market System (the "NASDAQ NMS"), and if such shares
are not so listed or quoted, the Market Price shall be the mean between
the average per share closing bid prices and the average per share closing
asked prices, in each case during the 30-day period ending on the business
day prior to the redemption date, or if there have been no sales on a
national securities exchange or on the NASDAQ NMS and no published bid and
asked quotations with respect to shares of such Stock during such 30-day
period, the Market Price shall be the price determined by the Board of
Directors in good faith. Unless the Board of Directors determines that it
is in the interest of Corporation to make earlier payment of all of the
amount determined as the redemption payment for Stock redeemed in
accordance with this Subsection 9.5.7, the redemption payment shall be
paid to the transferee of the trust interest representing the redeemed
Excess Stock only upon the liquidation of the Corporation and shall not
exceed an amount equal to the lesser of the price determined pursuant to
the first sentence of this Subsection 9.5.7 or the product of (x) the
number of Excess Shares redeemed, multiplied by (y) the sum of the per
share distributions designated as liquidating distributions and return of
capital distributions declared subsequent to the redemption date with
respect to unredeemed shares of Stock of the class from which the redeemed
Excess Stock was converted. No interest shall accrue on any redemption
payment with respect to the period subsequent to the redemption date to
the date of the redemption payment.
9.6 Exceptions to Certain Ownership and Transfer Limitations. The
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Ownership Limit set forth in Section 9.2 shall not apply to the following shares
of Stock and such shares
shall not be deemed to be Excess Stock at the times and subject to the terms and
conditions set forth in this Section 9.6:
9.6.1 Subject to the provisions of Section 9.7, shares of Stock
which the Board of Directors in its sole discretion may exempt from the
Ownership Limit while owned by a person who has provided the Corporation
with evidence and assurances acceptable to the Board of Directors that the
qualification of the Corporation as a REIT would not be jeopardized
thereby.
9.6.2 Subject to the provisions of Section 9.7, shares of Stock
acquired and held by an underwriter in a public offering of Stock, or in
any transaction involving the issuance of Stock by the Corporation in
which the Board of Directors determines that the underwriter or other
person or party initially acquiring such Stock will make a timely
distribution of such Stock to or among other holders such that, following
such distribution, the Corporation will continue to be in compliance with
the REIT Provisions.
9.6.3 Shares of Stock acquired pursuant to an all cash tender
offer made for all outstanding shares of Stock of the Corporation in
conformity with applicable federal and state securities laws where not
less than two-thirds of the outstanding Stock (not including Stock or
securities convertible into Stock held by the tender offeror and/or any
"affiliates" or "associates" thereof within the meaning of the Securities
Exchange Act of 1934) are duly tendered and accepted pursuant to the cash
tender offer and where the tender offeror commits in such tender offer, if
the tender offer is so accepted by the holders of such two-thirds of the
outstanding Stock, as promptly as practicable thereafter to give any
holders who did not accept such tender offer a reasonable opportunity to
put their Stock to the tender offeror at a price not less than the price
per share paid for Stock tendered pursuant to the tender offer.
9.7 Authority to Revoke Exceptions to Limitations. The Board of
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Directors, in its sole discretion, may at any time revoke any exception pursuant
to Subsections 9.6.1 or 9.6.2 in the case of any stockholder, and upon such
revocation, the provisions of Sections 9.2 and 9.5 shall immediately become
applicable to such stockholder and all Stock of which such stockholder may be
the beneficial owner. A decision to exempt or refuse to exempt from the
Ownership Limit the ownership of certain designated shares of Stock, or to
revoke an exemption previously granted, shall be made by the Board of Directors
in its sole discretion, based on any reason whatsoever, including, but not
limited to, the preservation of the Corporation's qualification as a REIT.
9.8 Severability. If any provision of this Article Ninth or any
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application of any such provision is determined to be invalid by any federal or
state court having jurisdiction, the validity of the remaining provisions of
this Article Ninth 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. To the extent this Article Ninth may be
inconsistent with any other provision of these Articles of Incorporation, this
Article Ninth shall be controlling.
9.9 Authority of the Board of Directors. Subject to Section 9.10
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hereof, nothing else contained in this Article Ninth or in any other provision
of these Articles of Incorporation shall limit the authority of the Board of
Directors to take such action as it deems necessary or advisable to protect the
Corporation and the interests of the stockholders by preservation of the
Corporation's qualification as a REIT under the REIT Provisions. In applying the
provisions of this Article Ninth, the Board of Directors may take into account
the lack of certainty in the REIT Provisions relating to the ownership of stock
that may prevent a corporation from qualifying as a REIT and may make
interpretations concerning the Ownership Limit, Excess Stock, beneficial
ownership and related matters on as conservative basis as the Board of Directors
deems advisable to minimize or eliminate uncertainty as to the Corporation's
continued qualification as a REIT. Notwithstanding any other provision of these
Articles of Incorporation, if the Board of Directors determines that it is no
longer in the best interests of the Corporation and the stockholders to continue
to have the Corporation qualify as a REIT, the Board of Directors may revoke or
otherwise terminate the Corporation's REIT election pursuant to Section 856(g)
of the Code.
9.10 New York Stock Exchange. Nothing in these Articles of
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Incorporation shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange.
ARTICLE X
RIGHTS AND POWERS OF CORPORATION,
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BOARD OF DIRECTORS AND OFFICERS
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In carrying on its business, or for the purpose of attaining or furthering
any of its objects, the Corporation shall have all of the rights, powers and
privileges granted to corporations by the laws of the State of Maryland, as well
as the power to do any and all acts and things that a natural person or
partnership could do as now or hereafter authorized by law, either alone or in
partnership or conjunction with others. In furtherance and not in limitation of
the powers conferred by statute, the powers of the Corporation and of the
Directors and stockholders shall include the following:
10.1 Any Director or officer individually, or any firm of which any
Director or officer may be a member, or any corporation or association of which
any Director or officer may be a director or officer or in which any Director or
officer may be interested as the holder of any amount of its capital stock or
otherwise, may be a party to, or may be pecuniarily or otherwise interested in,
any contract or transaction of the Corporation, and, in the absence of fraud, no
contract or other transaction shall be thereby affected or invalidated;
provided,
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however, that (a) such fact shall have been disclosed or shall have been known
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to the Board of Directors or the committee thereof that approved such contract
or transaction and such contract or transaction shall have been approved or
satisfied by the affirmative vote of a majority of the disinterested Directors,
or (b) such fact shall have been disclosed or shall have been known to the
stockholders entitled to vote, and such contract or transaction shall have been
approved or ratified by a majority of the votes cast by the stockholders
entitled to vote, other than the votes of shares owned of record or beneficially
by the interested Director or corporation, firm or other entity, or (c) the
contract or transaction is fair and reasonable to the Corporation. Any Director
of the Corporation who is also a director or officer of or interested in such
other corporation or association, or who, or the firm of which he is a member,
is so interested, may be counted in determining the existence of a quorum at any
meeting of the Board of Directors of the Corporation which shall authorize any
such contract or transaction, with like force and effect as if he were not such
director or officer of such other corporation or association or were not so
interested or were not a member of a firm so interested.
10.2 The Corporation reserves the right, from time to time, to make any
amendment of its Articles of Incorporation, now or hereafter authorized by law,
including any amendment which alters the contract rights, as expressly set forth
in its Articles of Incorporation, of any outstanding Stock.
10.3 Except as otherwise provided in the Articles of Incorporation or
the Bylaws of the Corporation, as amended from time to time, the business of
the Corporation shall be managed by its Board of Directors. The Board of
Directors shall have and may exercise all the rights, powers and privileges of
the Corporation except only for those that are by law, these Articles of
Incorporation or the Bylaws of the Corporation, conferred upon or reserved to
the stockholders. Additionally, the Board of Directors is hereby specifically
authorized and empowered from time to time in its discretion:
10.3.1 To borrow and raise money, without limit and upon any
terms, for any corporate purposes; and, subject to applicable law, to
authorize the creation, issuance, assumption, or guaranty of bonds,
debentures, notes, or other evidences of indebtedness for money so
borrowed, to include therein such provisions as to redeemability,
convertibility, or otherwise, as the Board of Directors, in its sole
discretion, determines, and to secure the payment of principal, interest,
or sinking fund in respect thereof by mortgage upon, or the pledge of, or
the conveyance or assignment in trust of, all or any part of the
properties, assets, and goodwill of the Corporation then owned or
thereafter acquired.
10.3.2 To make, alter, amend, change, add to or repeal the Bylaws
of the Corporation in accordance with the terms of the Bylaws adopted by
the Board of Directors pursuant to Section 2-109 of the Maryland General
Corporation Law; and
10.3.3 To the extent permitted by law, to declare and pay
dividends or other distributions to the stockholders from time to time out
of the earnings, earned surplus, paid-in
surplus or capital of the Corporation, notwithstanding that such declaration may
result in the reduction of the capital of the Corporation. In connection with
any dividends or other distributions upon the Stock, the Corporation need not
reserve any amount from such dividend or other distributions to satisfy any
preferential rights of any stockholder.
ARTICLE XI
INDEMNIFICATION
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The Corporation shall have the power to indemnify, by express provision in
its Bylaws, by agreement, or by majority vote of either its stockholders or
disinterested Directors, any one or more of the following classes of
individuals: (1) present or former Directors of the Corporation, (2) present or
former officers of the Corporation, (3) present or former agents and/or
employees of the Corporation, (4) present or former administrators, trustees or
other fiduciaries under any pension, profit sharing, deferred compensation, or
other employee benefit plan maintained by the Corporation, and (5) persons
serving or who have served at the request of the Corporation in any of these
capacities for any other corporation, partnership, joint venture, trust or other
enterprise; provided, however, that the Corporation shall not be obligated to
indemnify or advance expenses to a member of the foregoing classes of
individuals ( an "Indemnitee") with respect to proceedings or claims initiated
or brought voluntarily by an Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under these Articles of Incorporation or any other statute or
law or otherwise as provided by Maryland General Corporation Law Section 2-418,
but such indemnification or advancement of expenses may be provided by the
Corporation in specific cases if the Board of Directors has approved the
initiation or bringing of such suit. However, the Corporation shall not have the
power to indemnify any person to the extent such indemnification would be
contrary to Section 2-418 of the Maryland General Corporation Law or any
successor provision of Maryland law or any other applicable statute, rule or
regulation. The Company hereby agrees to indemnify Indemnitee's spouse (whether
by statute or at common law and without regard to the location of the governing
jurisdiction) to the same extent and subject to the same limitations applicable
to Indemnitee hereunder for claims arising solely out of the status of such
person as a spouse of Indemnitee, including claims seeking damages from marital
property (including community property) or property held by the Indemnitee and
such spouse or transferred to such spouse, but such indemnity shall not
otherwise extend to protect the spouse against liabilities caused by the
spouse's own acts.
ARTICLE XII
LIMITATION OF LIABILITY
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To the full extent permitted under the Maryland General Corporation Law as
in effect on the date of filing these Articles of Incorporation or as the
Maryland General Corporation
Law is thereafter amended from time to time, no Director or officer shall be
liable to the Corporation for money damages for any breach of any duty owed by
such Director or officer to the Corporation. Neither the amendment or the repeal
of this Article, nor the adoption of any other provision in the Corporation's
Articles of Incorporation inconsistent with this Article, shall eliminate or
reduce the protection afforded by this Article to a Director or officer of the
Corporation with respect to any matter which occurred, or any cause of action,
suit or claim which but for this Article would have accrued or arisen, prior to
such amendment, repeal or adoption.
ARTICLE XIII
SPECIAL VOTING REQUIREMENTS
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Pursuant to Section 3-603(e)(1)(iii) of the Maryland General Corporation
Law, the Corporation expressly elects not to be governed by the provisions of
Section 3-602 of the Maryland General Corporation Law with respect to any
business combination (as defined in Section 3-601 of the Maryland General
Corporation Law) involving Richard L. Michaux or Charles H. Berman or any
present or future affiliates associated or other person acting in concert or as
a group with either or both of them or any present or future affiliates or
associates (as such terms are defined in Section 3-601 of the Maryland General
Corporation Law) of the either Richard L. Michaux or Charles H. Berman, or any
other person acting in concert or as a group with either or both of them.
THIRD: The amendment to and restatement of the Charter of the Corporation
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as hereinabove set forth has been duly advised by the Board of Directors and has
been unanimously approved by the Board of Directors and the stockholders of the
Corporation.
FOURTH: The number of Directors of the Corporation and the names of those
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currently in office are as set forth in Article VI of the foregoing amendment
and restatement of the Charter of the Corporation.
FIFTH: The capital stock of the Corporation is not altered hereby.
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IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
and Restatement to be signed in its name and on its behalf by its President and
attested to by its Secretary on this 2nd day of November, 1993 and its said
President acknowledges under the penalties of perjury that these Articles of
Amendment and Restatement are the corporate act of said Corporation and that, to
the best of his knowledge, information and belief, the matters and facts set
forth herein are true in all material respects.
Avalon Properties, Inc.
By:_______________________________________
Charles H. Berman
President
Attest:
___________________________________
Patrick B. Patterson
Secretary