Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BOSTON PROPERTIES, INC.
Boston Properties, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is Boston Properties, Inc. The date of the
filing of its original Certificate of Incorporation with the Secretary of State
of the State of Delaware was March 24, 1997 (the "Original Certificate of
Incorporation").
2. This Amended and Restated Certificate of Incorporation (the
"Certificate"), which amends, restates and integrates the provisions of the
Original Certificate of Incorporation filed with the Secretary of State of the
State of Delaware on March 24, 1997, was duly adopted by the Board of Directors
of the Corporation in accordance with the provisions of Sections 141(f), 242 and
245 of the General Corporation Law of the State of Delaware, as amended from
time to time (the "DGCL"), and was duly adopted by the written consent of the
stockholders of the Corporation in accordance with the applicable provisions of
Sections 242 and 245 of the DGCL.
3. The text of the Original Certificate of Incorporation, as amended to
date, is hereby amended and restated in its entirety to provide as herein set
forth in full.
ARTICLE I
NAME
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The name of the corporation is Boston Properties, Inc.
ARTICLE II
REGISTERED OFFICE
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The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
PURPOSES
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The nature of business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act for which corporations may be
organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
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The total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue is 450,000,000 shares, of which
(a) 250,000,000 shares shall be common stock, par value $.01 per share (the
"Common Stock"), (b) 150,000,000 shares shall be excess stock, par value $.01
per share (the "Excess Stock"), and (c) 50,000,000 shares shall be preferred
stock, par value $.01 per share (the "Preferred Stock"). As set forth in this
Article IV, the Board of Directors is authorized from time to time to establish
and designate one or more series of Preferred Stock, to fix and determine the
variations in the relative rights and preferences as between the different
series of Preferred Stock in the manner hereinafter set forth in this Article
IV, and to fix or alter the number of shares comprising any such series and the
designations thereof to the extent permitted by law. The rights, preferences,
voting powers and the qualifications, limitations and restrictions of the
authorized stock shall be as follows:
A. Common Stock. Subject to all of the rights, powers and
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preferences of the Preferred Stock and except as provided by law or in this
Article IV (or in any certificate of designation of any series of Preferred
Stock):
1. The holders of shares of Common Stock shall be entitled to
vote for the election of directors and on all other matters requiring
stockholder action, and each holder of shares of Common Stock shall be entitled
to one vote for each share of Common Stock held by such stockholder.
2. Holders of Common Stock shall be entitled to receive such
dividends and other distributions in cash, stock or property of the Corporation
as may be declared and paid or set apart for payment upon the Common Stock and,
if any Excess Stock is then outstanding, the Excess Stock out of any assets or
funds of the Corporation legally available therefor, but only when and as
declared by the Board of Directors or any authorized committee thereof from time
to time, and shall share ratably with the holders of Excess Stock in any such
dividend or distribution.
3. Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation available for
distribution to the holders of Common Stock, and, if any Excess Stock is then
outstanding, Excess Stock shall be distributed pro rata to such holders in
proportion to the number of shares of Common Stock and Excess Stock held by
each.
B. Preferred Stock.
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1. Subject to any limitations prescribed by law, the Board of
Directors is expressly authorized to provide for the issuance of the shares of
Preferred Stock in one or more series of such stock, and by filing a certificate
pursuant to applicable law of the State of
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Delaware, to establish or change from time to time the number of shares to be
included in each such series, and to fix the designations, powers, preferences
and the relative, participating, optional or other special rights of the shares
of each series and any qualifications, limitations and restrictions thereof.
Any action by the Board of Directors under this Section (B)(1) of Article IV
shall require the affirmative vote of a majority of the directors then in office
(or, if a committee shall be acting on behalf of the Board of Directors, a
majority of the members of such committee then in office, which committee was
established by the affirmative vote of a majority of the directors then in
office). The Board of Directors shall have the right to determine or fix one or
more of the following with respect to each series of Preferred Stock to the
extent permitted by law:
(a) The annual or other periodic dividend rate or amount of dividends
to be paid on the shares of such series, the dividend payment dates, the date
from which dividends on all shares of such series issued shall be cumulative, if
applicable, and the extent of participation and other rights, if any;
(b) Whether the shares of such series shall be redeemable and, if so,
the redemption price or prices, if any, for such series and other terms and
conditions on which such series may be retired and redeemed;
(c) The distinctive serial designation and maximum number of shares of
such series issuable;
(d) The right to vote, if any, with holders of shares of any other
class or series, either generally or as a condition to specified corporate
action;
(e) The amount payable upon shares of such series and the preferences
applicable thereto in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
(f) The rights, if any, of the holders of shares of such series to
convert such shares into other classes of stock of the Corporation or into any
other securities, or to exchange such shares for other securities, and, if so,
the conversion price or prices, or the rate or rates of exchange, and the
adjustments thereof, if any, at which such conversion or exchange may be made
and any other terms and conditions of any such conversion or exchange;
(g) The price or other consideration for which the shares of such
series shall be issued;
(h) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of Preferred Stock (or
series thereof) and whether such shares may be reissued as shares of the same or
any other class or series of stock; and
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(i) Such other powers, preferences, rights, qualifications,
limitations and restrictions thereof as the Board of Directors may deem
advisable and as are not prohibited by law.
All shares of Preferred Stock of any one series shall be identical with
each other in all respects except, if so determined by the Board of Directors,
as to the dates from which dividends thereon shall be cumulative; and all shares
of Preferred Stock shall be of equal rank with each other, regardless of series,
and shall be identical with each other in all respects except as provided herein
or in the resolution or resolutions providing for the issue of a particular
series. In the event that dividends on all shares of Preferred Stock for any
regular dividend period are not paid in full, all such shares shall participate
ratably in any partial payment of dividends for such period in proportion to the
full amounts of dividends for such period to which they are respectively
entitled.
C. Restrictions on Ownership And Transfer of Equity Stock.
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1. Definitions. For purposes of this Article IV, the following terms
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shall have the meanings set forth below:
"Beneficial Ownership," when used with respect to ownership of
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shares of Equity Stock by any Person, shall mean all shares of Equity Stock
which are (i) directly owned by such Person, (ii) indirectly owned by such
Person (if such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code, or (iii) beneficially
owned by such Person pursuant to Rule 13d-3 under the Securities Exchange Act of
1934, as amended, provided that (x) in determining the number of shares
Beneficially Owned by a Person or group, no share shall be counted more than
once although applicable to two or more of clauses (i), (ii) and (iii) of this
definition or (in the case of a group) although Beneficially Owned by more than
one Person in such group, (y) when applying this definition of Beneficial
Ownership to a Related Party, clause (iii) of this definition and clause (b) of
the definition of "Person" shall be disregarded and (z) for purposes of applying
clause (iii) of this definition, the Beneficial Ownership of shares of Common
Stock of the Company owned by a "group" as that term is used for purposes of
Section 13(d)(3) of the Exchange Act shall in no event include any such shares
Beneficially Owned by L-Related Parties or Z-Related Parties who are members of
such "group." (Whenever a Person Beneficially Owns shares of Equity Stock that
are not actually outstanding (e.g., shares issuable upon the exercise of an
option or convertible security) ("Option Shares"), then, whenever this
Certificate requires a determination of the percentage of outstanding shares of
a class of Equity Stock Beneficially Owned by that Person, the Option Shares
Beneficially Owned by that Person shall also be deemed to be outstanding.)
"Beneficiary" shall mean, with respect to any Trust, one or more
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organizations described in each of Section 170(b)(1)(A) (other than clauses
(vii) and (viii) thereof) and Section 170(c)(2) of the Code that are named by
the Corporation as the beneficiary or
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beneficiaries of such Trust, in accordance with the provisions of Section (D)(4)
of this Article IV.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Constructive Ownership" shall mean ownership of shares of Equity
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Stock by a Person who is or would be treated as a direct or indirect owner of
such shares of Equity Stock through the application of Section 318 of the Code,
as modified by Section 856(d)(5) of the Code. The terms "Constructive Owner,"
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"Constructively Owns" and "Constructively Owned" shall have correlative
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meanings.
"Equity Stock" shall mean a particular class (other than Excess Stock)
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or series of capital stock of the Corporation. The use of the term "Equity
Stock" or any term defined by reference to the term "Equity Stock" shall refer
to the particular class or series of capital stock which is appropriate under
the context.
"Initial Public Offering" shall mean the closing of the initial sale
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of shares of Common Stock to the public pursuant to the Corporation's first
effective registration statement for such Common Stock filed under the
Securities Act of 1933, as amended.
"L-Related Party" shall mean each of Edward H. Linde, his heirs,
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legatees and devisees, and any other Person who Beneficially Owns shares of
Equity Stock which shares are also deemed to be Beneficially Owned by Edward H.
Linde or his heirs, legatees or devisees.
"Look-Through Entity" shall mean a Person that is either (i) a trust
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described in Section 401(a) of the Code and exempt from tax under Section 501(a)
of the Code as modified by Section 856(h)(3) of the Code or (ii) registered
under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, with respect to a class or
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series of Equity Stock, 15% of the number of outstanding shares of such Equity
Stock.
"Market Price" of Equity Stock on any date shall mean the average of
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the Closing Price for shares of such Equity Stock for the five consecutive
Trading Days ending on such date. The "Closing Price" on any date shall mean
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the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Equity Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Equity Stock are listed or
admitted to trading or, if the shares of Equity Stock are not listed or admitted
to trading on any national securities exchange, the last quoted price, or if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the Nasdaq Stock Market, Inc. or, if such system
is no longer in use, the principal
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other automated quotation system that may then be in use or, if the shares of
Equity Stock are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker selected by the
Board of Directors making a market in the shares of Equity Stock.
"Non-Transfer Event" shall mean an event other than a purported
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Transfer that would cause (a) any Person (other than a Related Party or a Look-
Through Entity) to Beneficially Own shares of Equity Stock in excess of the
Ownership Limit, (b) any L-Related Party or Z-Related Party to Beneficially Own
shares of Equity Stock which, when aggregated with all shares of Equity Stock
Beneficially Owned by all other L-Related Parties or Z-Related Parties,
respectively, are in excess of the Related Party Limit, or (c) any Look-Through
Entity to Beneficially Own shares of Equity Stock in excess of the Look-Through
Ownership Limit. Non-Transfer Events include but are not limited to (i) the
granting of any option or entering into any agreement for the sale, transfer or
other disposition of shares (or of Beneficial Ownership of shares) of Equity
Stock or (ii) the sale, transfer, assignment or other disposition of interests
in any Person or of any securities or rights convertible into or exchangeable
for shares of Equity Stock or for interests in any Person that results in
changes in Beneficial Ownership of shares of Equity Stock.
"Operating Partnership" shall mean Boston Properties Limited
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Partnership, a Delaware limited partnership.
"Ownership Limit" shall mean, with respect to a class or series of
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Equity Stock, 6.6% of the number of outstanding shares of such Equity Stock.
"Permitted Transferee" shall mean any Person designated as a Permitted
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Transferee in accordance with the provisions of Section (D)(8) of this Article
IV.
"Person" shall mean (a) an individual or any corporation, partnership,
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estate, trust, association, private foundation, joint stock company or any other
entity and (b) a "group" as that term is used for purposes of Section 13(d)(3)
of the Exchange Act; but shall not include an underwriter that participates in a
public offering of Equity Stock for a period of 90 days following purchase by
such underwriter of such Equity Stock.
"Prohibited Owner" shall mean, with respect to any purported Transfer
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or Non-Transfer Event, any Person who is prevented from becoming or remaining
the owner of record title to shares of Equity Stock by the provisions of Section
(D)(1) of this Article IV.
"Related Party" shall mean any L-Related Party or any Z-Related Party.
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"Related Party Limit" shall mean, with respect to a class or series of
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Equity Stock, 15% of the number of outstanding shares of such Equity Stock
applied (i) in the aggregate, to all Persons who are Z-Related Parties and (ii)
in the aggregate, to all Persons who are L-Related Parties.
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"Restriction Termination Date" shall mean the first day on which the
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Board of Directors, in accordance with Article VI hereof, determines that it is
no longer in the best interests of the Corporation to attempt to, or continue
to, qualify under the Code as a real estate investment trust (a "REIT").
"Trading Day" shall mean a day on which the principal national
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securities exchange on which any of the shares of Equity Stock are listed or
admitted to trading is open for the transaction of business or, if none of the
shares of Equity Stock are listed or admitted to trading on any national
securities exchange, any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
"Transfer" (as a noun) shall mean any sale, transfer, gift,
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assignment, devise or other disposition of shares (or of Beneficial Ownership of
shares) of Equity Stock, whether voluntary or involuntary, whether of record,
constructively or beneficially and whether by operation of law or otherwise.
"Transfer" (as a verb) shall have the correlative meaning.
"Trust" shall mean any separate trust created and administered in
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accordance with the terms of Section (D) of this Article IV, for the exclusive
benefit of any Beneficiary.
"Trustee" shall mean any Person or entity, unaffiliated with both the
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Corporation and any Prohibited Owner (and, if different than the Prohibited
Owner, the Person who would have had Beneficial Ownership of the Shares that
would have been owned of record by the Prohibited Owner), designated by the
Corporation to act as trustee of any Trust, or any successor trustee thereof.
"Z-Related Party" shall mean each of Mortimer B. Zuckerman, his heirs,
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legatees and devisees, and any other Person who Beneficially Owns shares of
Equity Stock which shares are also deemed to be Beneficially Owned by Mortimer
B. Zuckerman or his heirs, legatees or devisees.
2. Restriction on Ownership and Transfer.
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(a) (I) Except as provided in Section (C)(4) of this Article IV,
from and after the date of the Initial Public Offering and until the Restriction
Termination Date, (i) no Person (other than a Related Party or a Look-Through
Entity) shall Beneficially Own shares of Equity Stock in excess of the Ownership
Limit, the L-Related Parties in the aggregate and the Z-Related Parties in the
aggregate shall not Beneficially Own shares of Equity Stock in excess of the
Related Party Limit, and no Look-Through Entity shall Beneficially Own shares of
Equity Stock in excess of the Look-Through Ownership Limit.
(II) Except as provided in Section (C)(4) of this Article IV, from
and after the date of the Initial Public Offering and until the Restriction
Termination Date, any purported Transfer (whether or not the result of a
transaction entered into through the facilities
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of the New York Stock Exchange or any other national securities exchange or the
Nasdaq Stock Market, Inc. or any other automated quotation system) that, if
effective, would result in any Person (other than a Related Party or Look-
Through Entity) Beneficially Owning shares of Equity Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of that number of
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shares of Equity 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 Equity Stock.
(III) Except as provided in Section (C)(4) of this Article IV, from
and after the date of the Initial Public Offering and until the Restriction
Termination Date, any purported Transfer (whether or not the result of a
transaction entered into through the facilities of the New York Stock Exchange
or any other national securities exchange or the Nasdaq Stock Market, Inc. or
any other automated quotation system) that, if effective, would result in any
Look-Through Entity Beneficially Owning shares of Equity Stock in excess of the
Look-Through Ownership Limit shall be void ab initio as to the Transfer of that
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number of shares of Equity Stock which would be otherwise Beneficially Owned by
such Look-Through Ownership Entity in excess of the Look-Through Ownership
Limit, and the intended transferee Look-Through Entity shall acquire no rights
in such shares of Equity Stock.
(IV) Except as provided in Section (C)(4) of this Article IV, from and
after the date of the Initial Public Offering and until the Restriction
Termination Date, any purported Transfer (whether or not the result of a
transaction entered into through the facilities of the New York Stock Exchange
or any other national securities exchange or the Nasdaq Stock Market, Inc. or
any other automated quotation system) that, if effective, would result in any L-
Related Party or Z-Related Party Beneficially Owning shares of Equity Stock
which, when aggregated with all shares of Equity Stock Beneficially Owned by all
other L-Related Parties or Z-Related Parties, respectively, would cause the L-
Related Parties or the Z-Related Parties, respectively, to exceed the Related
Party Limit shall be void ab initio as to the Transfer of that number of shares
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of Equity Stock which would be otherwise Beneficially Owned by such L-Related
Party or Z-Related Party in violation of the Related Party Limit, and the
intended transferee Related Party shall acquire no rights in such shares of
Equity Stock.
(b) From and after the date of the Initial Public Offering and until
the Restriction Termination Date, any purported Transfer (whether or not the
result of a transaction entered into through the facilities of the New York
Stock Exchange or any other national securities exchange or the Nasdaq Stock
Market, Inc. or any other automated quotation system) of shares of Equity Stock
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
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Transfer of that number of shares of Equity Stock that would cause the
Corporation to be "closely held" within the meaning of Section 856(h) of the
Code, and the intended transferee shall acquire no rights in such shares of
Equity Stock.
(c) From and after the date of the Initial Public Offering and until
the Restriction Termination Date, any purported Transfer (whether or not the
result of a
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transaction entered into through the facilities of the New York Stock Exchange
or any other national securities exchange or the Nasdaq Stock Market, Inc. or
any other automated quotation system) of shares of Equity Stock that, if
effective, would cause the Corporation to Constructively Own 10% or more of the
ownership interests in a tenant of the real property of the Corporation or any
direct or indirect subsidiary (whether a corporation, partnership, limited
liability company or other entity) of the Corporation (a "Subsidiary"), within
the meaning of Section 856(d)(2)(B) of the Code, shall be void ab initio as to
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the Transfer of that number of shares of Equity Stock that would cause the
Corporation to Constructively Own 10% or more of the ownership interests in a
tenant of the real property of the Corporation or a Subsidiary within the
meaning of Section 856(d)(2)(B) of the Code, and the intended transferee shall
acquire no rights in such shares of Equity Stock.
(d) From and after the date of the Initial Public Offering and until
the Restriction Termination Date, any purported Transfer (whether or not the
result of a transaction entered into through the facilities of the New York
Stock Exchange or any other national securities exchange or the Nasdaq Stock
Market, Inc. or any other automated quotation system) that, if effective, would
result in shares of Equity Stock being beneficially owned by fewer than 100
persons within the meaning of Section 856(a)(5) of the Code shall be void ab
--
initio and the intended transferee shall acquire no rights in such shares of
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Equity Stock.
3. Owners Required to Provide Information. Until the Restriction
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Termination Date:
(a) Every Beneficial Owner of more than 5%, or such lower percentages
as are then required pursuant to regulations under the Code, of the outstanding
shares of any class or series of Equity Stock of the Corporation as of any
dividend record date on the Company's Equity Stock shall, within 30 days after
January 1 of each year, provide to the Corporation a written statement or
affidavit stating the name and address of such Beneficial Owner, the number of
shares of Equity Stock Beneficially Owned by such Beneficial Owner as of each
such dividend record date, 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 request in order to determine the effect, if
any, of such Beneficial Ownership on the Corporation's status as a REIT and to
ensure compliance with the Ownership Limit.
(b) Each Person who is a Beneficial Owner of shares of Equity Stock
and each Person (including the stockholder of record) who is holding shares of
Equity Stock for a Beneficial Owner shall provide to the Corporation a written
statement or affidavit stating such information as the Corporation may request
in order to determine the Corporation's status as a REIT and to ensure
compliance with the Ownership Limit.
4. Exception. The Board of Directors, upon receipt of a ruling from
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the Internal Revenue Service or an opinion of counsel or other evidence or
undertakings acceptable to it, may, in its sole discretion, waive the
application of the Ownership Limit, the Look-Through Ownership Limit or the
Related Party Limit to a Person subject, as the case may be,
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to any such limit, provided that (A) the Board of Directors obtains such
representations and undertakings from such Person as are reasonably necessary to
ascertain that such Person's Beneficial Ownership or Constructive Ownership of
shares of Equity Stock will now and in the future (i) not result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, (ii) not cause the Corporation to Constructively Own 10% or more of the
ownership interests of a tenant of the Corporation or a Subsidiary within the
meaning of Section 856(d)(2)(B) of the Code and to violate the 95% gross income
test of Section 856(c)(2) of the Code, and (iii) not result in the shares of
Equity Stock of the Corporation being beneficially owned by fewer than 100
persons within the meaning of Section 856(a)(5) of the Code and (B) such Person
agrees in writing that any violation or attempted violation of (x) such other
limitation as the Board of Directors may establish at the time of such waiver
with respect to such Person or (y) such other restrictions and conditions as the
Board of Directors may in its sole discretion impose at the time of such waiver
with respect to such Person, will result, as of the time of such violation even
if discovered after such violation, in the conversion of such shares in excess
of the original limit applicable to such Person into shares of Excess Stock
pursuant to Section (D)(1) of this Article IV.
5. New York Stock Exchange Transactions. Notwithstanding any
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provision contained herein to the contrary, nothing in this Certificate shall
preclude the settlement of any transaction entered into through the facilities
of the New York Stock Exchange or any other national securities exchange or the
Nasdaq Stock Market, Inc. or any other automated quotation system. In no event
shall the existence or application of the preceding sentence have the effect of
deterring or preventing the conversion of Equity Stock into Excess Stock as
contemplated herein.
D. Excess Stock.
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1. Conversion into Excess Stock.
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(a) If, notwithstanding the other provisions contained in this
Article IV, from and after the date of the Initial Public Offering and prior to
the Restriction Termination Date, there is a purported Transfer or Non-Transfer
Event such that any Person (other than a Related Party or Look-Through Entity)
would Beneficially Own shares of Equity Stock in excess of the Ownership Limit,
or such that any Person that is an L-Related Party would Beneficially Own shares
of Equity Stock which when aggregated together with all shares of Equity Stock
Beneficially Owned by all other L-Related Parties would cause the L-Related
Parties to exceed the Related Party Limit, or such that any Person that is a Z-
Related Party would Beneficially Own shares of Equity Stock which when
aggregated together with all shares of Equity Stock Beneficially Owned by all
other Z-Related Parties would cause the Z-Related Parties to exceed the Related
Party Limit, or such that any Person that is a Look-Through Entity would
Beneficially Own shares of Equity Stock in excess of the Look-Through Limit,
then, (i) except as otherwise provided in Section (C)(4) of this Article IV, the
purported transferee shall be deemed to be a Prohibited Owner and shall acquire
no right or interest (or, in the case of a Non-Transfer Event, the Person
holding record title to the shares of Equity
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Stock Beneficially Owned by such Beneficial Owner shall cease to own any right
or interest) in such number of shares of Equity Stock which would cause such
Beneficial Owner (alone or together with other Related Parties, if applicable)
to Beneficially Own shares of Equity Stock in excess of the Ownership Limit, the
Related Party Limit, or the Look-Through Limit, as the case may be, (ii) such
number of shares of Equity Stock in excess of the Ownership Limit, the Related
Party Limit or the Look-Through Limit, as the case may be, (rounded up to the
nearest whole share) shall be automatically converted into an equal number of
shares of Excess Stock and transferred to a Trust in accordance with Section
(D)(4) of this Article IV and (iii) the Prohibited Owner shall submit the
certificates representing such number of shares of Equity Stock to the
Corporation, accompanied by all requisite and duly executed assignments of
transfer thereof, for registration in the name of the Trustee of the Trust.
Such conversion into Excess Stock and transfer to a Trust shall be effective as
of the close of trading on the Trading Day prior to the date of the purported
Transfer or Non-Transfer Event, as the case may be, even though the certificates
representing the shares of Equity Stock so converted may be submitted to the
Corporation at a later date.
(b) If, notwithstanding the other provisions contained in this Article
IV, from and after the date of the Initial Public Offering and prior to the
Restriction Termination Date there is a purported Transfer or Non-Transfer Event
that, if effective, would (i) result in the Corporation being "closely held"
within the meaning of Section 856(h) of the Code, (ii) cause the Corporation to
Constructively Own 10% or more of the ownership interest in a tenant of the
Corporation's or a Subsidiary's real property within the meaning of Section
856(d)(2)(B) of the Code or (iii) result in the shares of Equity Stock being
beneficially owned by fewer than 100 persons within the meaning of Section
856(a)(5) of the Code, then (x) the purported transferee shall be deemed to be a
Prohibited Owner and shall acquire no right or interest (or, in the case of a
Non-Transfer Event, the Person holding record title of the shares of Equity
Stock with respect to which such Non-Transfer Event occurred shall cease to own
any right or interest) in such number of shares of Equity Stock, the ownership
of which by such purported transferee or record holder would (A) result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, (B) cause the Corporation to Constructively Own 10% or more of the
ownership interests in a tenant of the Corporation's or a Subsidiary's real
property within the meaning of Section 856(d)(2)(B) of the Code or (c) result in
the shares of Equity Stock being beneficially owned by fewer than 100 persons
within the meaning of Section 856(a)(5) of the Code, (y) such number of shares
of Equity Stock (rounded up to the nearest whole share) shall be automatically
converted into an equal number of shares of Excess Stock and transferred to a
Trust in accordance with Section (D)(4) of this Article IV and (z) the
Prohibited Owner shall submit such number of shares of Equity Stock to the
Corporation, accompanied by all requisite and duly executed assignments of
transfer thereof, for registration in the name of the Trustee of the Trust.
Such conversion into Excess Stock and transfer to a Trust shall be effective as
of the close of trading on the Trading Day prior to the date of the purported
Transfer or Non-Transfer Event, as the case may be, even though the certificates
representing the shares of Equity Stock so converted may be submitted to the
Corporation at a later date.
11
(c) Upon the occurrence of such a conversion of shares of Equity
Stock into an equal number of shares of Excess Stock, such shares of Equity
Stock shall be automatically retired and canceled, without any action required
by the Board of Directors of the Corporation, and shall thereupon be restored to
the status of authorized but unissued shares of the particular class or series
of Equity Stock from which such Excess Stock was converted and may be reissued
by the Corporation as that particular class or series of Equity Stock.
2. Remedies for Breach. If the Corporation, or its designees, shall
-------------------
at any time determine in good faith that a Transfer has taken place in violation
of Section (C)(2) of this Article IV or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership or Constructive Ownership of any
shares of Equity Stock in violation of Section (C)(2) of this Article IV, the
Corporation shall take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer or acquisition, including, but not limited
to, refusing to give effect to such Transfer on the stock transfer books of the
Corporation or instituting proceedings to enjoin such Transfer or acquisition,
but the failure to take any such action shall not affect the automatic
conversion of shares of Equity Stock into Excess Stock and their transfer to a
Trust in accordance with Section (D)(1).
3. Notice of Restricted Transfer. Any Person who acquires or
-----------------------------
attempts to acquire shares of Equity Stock in violation of Section (C)(2) of
this Article IV, or any Person who owns shares of Equity Stock that were
converted into shares of Excess Stock and transferred to a Trust pursuant to
Sections (D)(1) and (D)(4) of this Article IV, shall immediately give written
notice to the Corporation of such event and shall provide to the Corporation
such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or Non-Transfer Event, as the case may be, on
the Corporation's status as a REIT.
4. Ownership in Trust. Upon any purported Transfer or Non-Transfer
------------------
Event that results in Excess Stock pursuant to Section (D)(1) of this Article
IV, (i) the Corporation shall create, or cause to be created, a Trust, and shall
designate a Trustee and name a Beneficiary thereof and (ii) such Excess Stock
shall be automatically transferred to such Trust to be held for the exclusive
benefit of the Beneficiary. Any conversion of shares of Equity Stock into
shares of Excess Stock and transfer to a Trust shall be effective as of the
close of trading on the Trading Day prior to the date of the purported Transfer
or Non-Transfer Event that results in the conversion. Shares of Excess Stock so
held in trust shall remain issued and outstanding shares of stock of the
Corporation.
5. Dividend Rights. Each share of Excess Stock shall be entitled to
---------------
the same dividends and distributions (as to both timing and amount) as may be
declared by the Board of Directors with respect to shares of Common Stock. The
Trustee, as record holder of the shares of Excess Stock, shall be entitled to
receive all dividends and distributions and shall hold all such dividends or
distributions in trust for the benefit of the Beneficiary. The Prohibited Owner
with respect to such shares of Excess Stock shall repay to the Trust the amount
of any dividends or distributions received by it (i) that are attributable to
any shares of
12
Equity Stock that have been converted into shares of Excess Stock and (ii) the
record date of which was on or after the date that such shares were converted
into shares of Excess Stock. The Corporation shall take all measures that it
determines reasonably necessary to recover the amount of any such dividend or
distribution paid to a Prohibited Owner, including, if necessary, withholding
any portion of future dividends or distributions payable on shares of Equity
Stock Beneficially Owned by the Person who, but for the provisions of this
Article IV, would Constructively Own or Beneficially Own the shares of Equity
Stock that were converted into shares of Excess Stock; and, as soon as
reasonably practicable following the Corporation's receipt or withholding
thereof, shall pay over to the Trust for the benefit of the Beneficiary the
dividends so received or withheld, as the case may be.
6. Rights upon Liquidation. In the event of any voluntary or
-----------------------
involuntary liquidation of, or winding up of, or any distribution of the assets
of, the Corporation, each holder of shares of Excess Stock shall be entitled to
receive, ratably with each other holder of shares of Common Stock and Excess
Stock, that portion of the assets of the Corporation that is available for
distribution to the holders of Common Stock and Excess Stock. The Trust shall
distribute to the Prohibited Owner the amounts received upon such liquidation,
dissolution, or winding up, or distribution; provided, however, that the
-------- -------
Prohibited Owner shall not be entitled to receive amounts in excess of, in the
case of a purported Transfer in which the Prohibited Owner gave value for shares
of Equity Stock and which Transfer resulted in the conversion of the shares into
shares of Excess Stock, the product of (x) the price per share, if any, such
Prohibited Owner paid for the shares of Equity Stock and (y) the number of
shares of Equity Stock which were so converted into Excess Stock, and, in the
case of a Non-Transfer Event or purported Transfer in which the Prohibited Owner
did not give value for such shares (e.g., if the shares were received through a
gift or devise) and which Non-Transfer Event or purported Transfer, as the case
may be, resulted in the conversion of the shares into shares of Excess Stock,
the product of (x) the price per share equal to the Market Price on the date of
such Non-Transfer Event or purported Transfer and (y) the number of shares of
Equity Stock which were so converted into Excess Stock. Any remaining amount in
such Trust shall be distributed to the Beneficiary.
7. Voting Rights. Each share of Excess Stock shall entitle the
-------------
holder to no voting rights other than those voting rights which accompany a
class of capital stock under Delaware law. The Trustee, as record holder of the
Excess Stock, shall be entitled to vote all shares of Excess Stock. Any vote by
a Prohibited Owner as a purported holder of shares of Equity Stock prior to the
discovery by the Corporation that such shares of Equity Stock have been
converted into shares of Excess Stock shall, subject to applicable law, be
rescinded and shall be void ab initio with respect to such shares of Excess
-- ------
Stock.
8. Designation of Permitted Transferee.
-----------------------------------
(a) As soon as practicable after the Trustee acquires Excess
Stock, but in an orderly fashion so as not to materially adversely affect the
trading price of Common Stock, the Trustee shall designate one or more Persons
as Permitted Transferees and sell to
13
such Permitted Transferees any shares of Excess Stock held by the Trustee;
provided, however, that (i) any Permitted Transferee so designated purchases for
- - -------- -------
valuable consideration (whether in a public or private sale) the shares of
Excess Stock and (ii) any Permitted Transferee so designated may acquire such
shares of Excess Stock without violating any of the restrictions set forth in
Section (C)(2) of this Article IV and without such acquisition resulting in the
conversion of the shares of Equity Stock so acquired into shares of Excess Stock
and the transfer of such shares to a Trust pursuant to Sections (D)(1) and
(D)(4) of this Article IV. The Trustee shall have the exclusive and absolute
right to designate Permitted Transferees of any and all shares of Excess Stock.
Prior to any transfer by the Trustee of shares of Excess Stock to a Permitted
Transferee, the Trustee shall give not less than five Trading Days prior written
notice to the Corporation of such intended transfer and the Corporation must
have waived in writing its purchase rights under Section (D)(10) of this Article
IV.
(b) Upon the designation by the Trustee of a Permitted Transferee
in accordance with the provisions of this Section (D)(8), the Trustee shall
cause to be transferred to the Permitted Transferee shares of Excess Stock
acquired by the Trustee pursuant to Section (D)(4) of this Article IV. Upon such
transfer of shares of Excess Stock to the Permitted Transferee, such shares of
Excess Stock shall be automatically converted into an equal number of shares of
Equity Stock of the same class and series from which such Excess Stock was
converted. Upon the occurrence of such a conversion of shares of Excess Stock
into an equal number of shares of Equity Stock, such shares of Excess Stock
shall be automatically retired and canceled, without any action required by the
Board of Directors of the Corporation, and shall thereupon be restored to the
status of authorized but unissued shares of Excess Stock and may be reissued by
the Corporation as Excess Stock. The Trustee shall (i) cause to be recorded on
the stock transfer books of the Corporation that the Permitted Transferee is the
holder of record of such number of shares of Equity Stock, and (ii) distribute
to the Beneficiary any and all amounts held with respect to such shares of
Excess Stock after making payment to the Prohibited Owner pursuant to Section
(D)(9) of this Article IV.
(c) If the Transfer of shares of Excess Stock to a purported
Permitted Transferee would or does violate any of the transfer restrictions set
forth in Section (C)(2) of this Article IV, such Transfer shall be void ab
--
initio as to that number of shares of Excess Stock that cause the violation of
- - ------
any such restriction when such shares are converted into shares of Equity Stock
(as described in clause (b) above) and the purported Permitted Transferee shall
be deemed to be a Prohibited Owner and shall acquire no rights in such shares of
Excess Stock or Equity Stock. Such shares of Equity Stock shall be automatically
re-converted into Excess Stock and transferred to the Trust from which they were
originally Transferred. Such conversion and transfer to the Trust shall be
effective as of the close of trading on the Trading Day prior to the date of the
Transfer to the purported Permitted Transferee and the provisions of this
Article IV shall apply to such shares, including, without limitation, the
provisions of Sections (D)(8) through (D)(10) with respect to any future
Transfer of such shares by the Trust.
14
9. Compensation to Record Holder of Shares of Equity Stock That Are
----------------------------------------------------------------
Converted into Shares of Excess Stock. Any Prohibited Owner shall be entitled
- - -------------------------------------
(following acquisition of the shares of Excess Stock and subsequent designation
of and sale of Excess Stock to a Permitted Transferee in accordance with Section
(D)(8) of this Article IV or following the acceptance of the offer to purchase
such shares in accordance with Section (D)(10) of this Article IV) to receive
from the Trustee following the sale or other disposition of such shares of
Excess Stock the lesser of (i) (a) in the case of a purported Transfer in which
the Prohibited Owner gave value for shares of Equity Stock and which Transfer
resulted in the conversion of such shares into shares of Excess Stock, the
product of (x) the price per share, if any, such Prohibited Owner paid for the
shares of Equity Stock and (y) the number of shares of Equity Stock which were
so converted into Excess Stock and (b) in the case of a Non-Transfer Event or
purported Transfer in which the Prohibited Owner did not give value for such
shares (e.g., if the shares were received through a gift or devise) and which
Non-Transfer Event or purported Transfer, as the case may be, resulted in the
conversion of such shares into shares of Excess Stock, the product of (x) the
price per share equal to the Market Price on the date of such Non-Transfer Event
or purported Transfer and (y) the number of shares of Equity Stock which were so
converted into Excess Stock or (ii) the proceeds received by the Trustee from
the sale or other disposition of such shares of Excess Stock in accordance with
Section (D)(8) or Section (D)(10) of this Article IV. Any amounts received by
the Trustee in respect of such shares of Excess Stock and in excess of such
amounts to be paid to the Prohibited Owner pursuant to this Section (D)(9) shall
be distributed to the Beneficiary in accordance with the provisions of Section
(D)(8) of this Article IV. Each Beneficiary and Prohibited Owner shall waive
any and all claims that it may have against the Trustee and the Trust arising
out of the disposition of shares of Excess Stock, except for claims arising out
of the gross negligence or willful misconduct of, or any failure to make
payments in accordance with this Section (D) of this Article IV by such Trustee.
10. Purchase Right in Excess Stock. Shares of Excess Stock shall be
------------------------------
deemed to have been offered for sale to the Corporation or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that created such shares of Excess Stock (or, in the case of a Non-
Transfer Event or Transfer in which the Prohibited Owner did not give value for
the shares (e.g., if the shares were received through a gift or devise), the
Market Price on the date of such Non-Transfer Event or Transfer in which the
Prohibited Owner did not give value for the shares) or (ii) the Market Price on
the date the Corporation, or its designee, accepts such offer. The Corporation
shall have the right to accept such offer for a period of 90 days following the
later of (a) the date of the Non-Transfer Event or purported Transfer which
results in such shares of Excess Stock or (b) the date the Board of Directors
first determined that a Transfer or Non-Transfer Event resulting in shares of
Excess Stock has occurred, if the Corporation does not receive a notice of such
Transfer or Non-Transfer Event pursuant to Section (D)(3) of this Article IV.
E. Preemptive Rights. No holder of shares of any class or series of
-----------------
capital stock shall as such holder have any preemptive or preferential right to
purchase or subscribe to (i)
15
any shares of any class or series of capital stock of the Corporation, whether
now or hereafter authorized, (ii) any warrants, rights or options to purchase
any such capital stock or (iii) any obligations convertible into any such
capital stock or into warrants, rights or options to purchase any such capital
stock.
F. Remedies Not Limited. Except as set forth in Section (C)(5) of
--------------------
this Article IV, nothing contained in this Article IV shall limit the authority
of the Corporation to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its stockholders by preservation
of the Corporation's status as a REIT and to ensure compliance with the
Ownership Limit, the Look-Through Ownership Limit and the Related Party Limit.
G. Ambiguity. In the case of an ambiguity in the application of any
---------
of the provisions of this Article IV, including any definition contained in
Section (C)(1) of this Article IV, the Board of Directors shall have the power
to determine the application of the provisions of this Article IV with respect
to any situation based on the facts known to it.
H. Legend. Each certificate for shares of Equity Stock shall bear the
------
following legend:
"The shares of Boston Properties, Inc. (the "Corporation") represented
by this certificate are subject to restrictions set forth in the
Corporation's Certificate of Incorporation which prohibit in general
(a) any Person (other than a Related Party or a Look-Through Entity)
from Beneficially Owning shares of Equity Stock in excess of the
Ownership Limit, (b) any L-Related Party from Beneficially Owning
shares of Equity Stock which, when aggregated with the shares of
Equity Stock Beneficially Owned by all other L-Related Parties, are in
excess of the Related Party Limit, (c) any Z-Related Party from
Beneficially Owning shares of Equity Stock which, when aggregated with
the shares of Equity Stock Beneficially Owned by all other Z-Related
Parties, are in excess of the Related Party Limit, (d) any Look-
Through Entity from Beneficially Owning shares of Equity Stock in
excess of the Look-Through Ownership Limit and (e) any Person from
acquiring or maintaining any ownership interest in the stock of the
Corporation that is inconsistent with (i) the requirements of the Code
pertaining to real estate investment trusts or (ii) the Certificate of
Incorporation of the Corporation, and the holder of this certificate
by his acceptance hereof consents to be bound by such restrictions.
Capitalized terms used in this paragraph and not defined herein are
defined in the Corporation's Certificate of Incorporation.
16
The Corporation will furnish without charge, to each stockholder who
so requests, a copy of the relevant provisions of the Certificate of
Incorporation and By-laws of the Corporation, a copy of the provisions
setting forth the designations, preferences, privileges and rights of
each class of stock or series thereof that the Corporation is
authorized to issue and the qualifications, limitations and
restrictions of such preferences and/or rights. Any such request may
be addressed to the Secretary of the Corporation or to the transfer
agent named on the face hereof."
I. Severability. Each provision of this Article IV shall be severable
------------
and an adverse determination as to any such provision shall in no way affect the
validity of any other provision.
ARTICLE V
STOCKHOLDER ACTION
------------------
Any action required or permitted to be taken by stockholders of the
Corporation at any annual or special meeting of stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders and
may not be taken or effected by a written consent of stockholders in lieu
thereof.
ARTICLE VI
DIRECTORS
---------
A. General Powers; Action by Committee. (a) The property, affairs and
-----------------------------------
business of the Corporation shall be managed by or under the direction of the
Board of Directors and, except as otherwise expressly provided by law, the By-
laws or this Certificate, all of the powers of the Corporation shall be vested
in such Board. Any action which the Board of Directors is empowered to take may
be taken on behalf of the Board of Directors by a duly authorized committee
thereof except (i) to the extent limited by Delaware law, this Certificate or
the By-laws and (ii) for any action which requires the affirmative vote or
approval of a majority or a supermajority of the Directors then in office
(unless, in such case, this Certificate or the By-laws specifically provides
that a duly authorized Committee can take such action on behalf of the Board of
Directors). A majority of the Board of Directors shall constitute a quorum and,
except as provided in paragraph (b) of this Section (A), the affirmative vote of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
(b) Notwithstanding the foregoing or any other provision of this
Certificate of Incorporation, the affirmative vote of more than 75% of the
directors then in office (the "Required Directors") shall be required to approve
the actions set forth in clauses (i) through
17
(viii) below and any such action shall not be effective unless approved by the
vote of the Required Directors:
(i) a Change of Control (as hereinafter defined) of the Corporation
or the Operating Partnership;
(ii) any amendment to the limited partnership agreement of the
Operating Partnership;
(iii) any waiver or modification of the Ownership Limit, the Related
Party Limit or the Look-Through Ownership Limit;
(iv) any merger, consolidation or sale of all or substantially all
of the assets of the Corporation or the Operating Partnership;
(v) the issuance of any Equity Securities of the Corporation or any
securities convertible into or exchangeable or exercisable for any Equity
Securities of the Corporation, provided that the affirmative vote of the
-------- ----
Required Directors shall not be required with respect to the issuance of
Equity Securities (a) pursuant to any stock incentive plan or employee
bonus or compensation arrangement, (b) in a bona fide underwritten public
offering managed by one or more nationally recognized investment banking
firms, (c) in exchange for Units presented to the Operating Partnership for
redemption pursuant to the Operating Partnership Agreement or (d) to a
Look-Through Entity that would not violate the Look-Through Ownership Limit
following such issuance;
(vi) for the Corporation to take title to assets (other than
temporarily in connection with an acquisition prior to contributing such
assets to the Operating Partnership), or to conduct business other than
through the Operating Partnership, or for the Corporation or the Operating
Partnership to engage in any business other than the ownership,
construction, development, management and operation of commercial real
estate properties;
(vii) for the Corporation or the Operating Partnership to make a
general assignment for the benefit of creditors or to institute any
proceedings in bankruptcy or for the liquidation, dissolution,
reorganization or winding up of the Corporation or the Operating
Partnership or to consent to the taking of any such action against the
Corporation or the Operating Partnership;
(viii) to terminate the Corporation's status as a real estate
investment trust for federal income tax purposes; and
(ix) to recommend to the stockholders that this Certificate or a
provision of this Certificate be amended or repealed.
18
(c) Except as defined below, capitalized terms in this Section (A) have
the meanings specified in Section (C)(1) of Article IV. For purposes of this
Section (A):
(i) "Change of Control" of (A) the Corporation shall mean any
-----------------
transaction or series of related transactions (whether by purchase of
existing shares of Common Stock or Units, merger, consolidation or
otherwise, but not including the issuance of newly issued shares of Common
Stock by the Corporation or of Units by the Operating Partnership following
a capital contribution by the Corporation in response to such issuance by
the Corporation), to which the Corporation is a party or the Corporation's
consent or approval is required, the result of which is that either (1) any
Person or Group other than the Related Parties becomes the Beneficial
Owner, directly or indirectly, of 25% or more of the total voting power in
the aggregate of all classes of capital stock of the Corporation then
outstanding normally entitled to vote in the election of directors of the
Corporation (or any surviving entity) (including in such calculation the
shares of capital stock such Person or Group would receive if any Units
owned by such Person or Group were presented for redemption and acquired by
the Corporation for shares of capital stock) or (2) the Beneficial Owners
of the capital stock of the Corporation normally entitled to vote in the
election of directors immediately prior to the transaction or series of
related transactions beneficially own less than 75% of the total voting
power in the aggregate of all classes of capital stock of the Corporation
then outstanding normally entitled to vote in the election of directors of
the Corporation (or any surviving entity) immediately after such
transaction or transactions (including in such calculation the shares of
capital stock such Beneficial Owners would receive if any Units owned by
such Beneficial Owners were presented for redemption and acquired by the
Corporation for shares of capital stock); or (B) the Operating Partnership
shall mean (i) any sale, transfer or other conveyance (whether by merger or
consolidation of the Corporation or otherwise) by the Corporation of the
general partnership interest in the Operating Partnership, or (ii) any
transaction or series of related transactions (whether by purchase of
existing Units, issuance of Units (other than as a result of a capital
contribution by the Corporation following an issuance of shares of Equity
Stock), merger consolidation or otherwise), to which the Operating
Partnership is a party or the consent or approval of the Corporation is
required, the result of which is that either (1) any Person or Group other
than the Related Parties becomes the Beneficial Owner, directly or
indirectly, of Units which represent 25% or more of the total percentage of
limited partnership interests therein or (2) the Beneficial Owners of
limited partnership interests therein immediately prior to the transaction
beneficially own less than 75% of the total percentage of limited
partnership interests therein then outstanding immediately after such
transaction or series of related transactions.
(ii) "Person" shall have the same meaning as such term has for
------
purposes of Sections 13(d) and 14(d) of the Exchange Act.
19
(iii) "Group" shall have the same meaning as such term has for
-----
purposes of Sections 13(d) and 14(d) of the Exchange Act.
(iv) "Beneficial Owner" shall have the same meaning as such term has
----------------
for purposes of Rule 13d-3 promulgated under the Exchange Act, except that
a Person shall be deemed to have beneficial ownership of all shares that a
Person has the right to acquire, whether or not such right is immediately
exercisable. "Beneficially Owns" and "Beneficially Owned" shall have the
----------------- ------------------
correlative meanings.
(v) "Units" shall mean the units into which partnership interests in
-----
the Operating Partnership are divided, and as the same may be adjusted, as
provided in the limited partnership agreement of the Operating Partnership
(the "Operating Partnership Agreement").
C. Election of Directors. Election of directors need not be by written
---------------------
ballot unless the By-laws of the Corporation shall so provide.
D. Number and Terms of Directors. The Corporation shall have a Board of
-----------------------------
Directors initially consisting of five (5) directors. Thereafter, the number of
directors shall be fixed by resolution duly adopted from time to time by the
Board of Directors; provided, however, that in no event shall the number of
-------- -------
directors exceed eleven (11) or be less than the minimum number required by the
DGCL. A director need not be a stockholder of the Corporation.
The directors shall be classified, with respect to the term for which they
severally hold office, into three classes, as nearly equal in number as
possible. The initial Class I Directors of the Corporation shall be Mortimer B.
Zuckerman; the initial Class II Directors of the Corporation shall be Alan J.
Patricof and Martin Turchin; and the initial Class III Directors of the
Corporation shall be Edward H. Linde and Ivan G. Seidenberg. The initial Class
I Directors shall serve for a term expiring at the annual meeting of
stockholders to be held in 1998; the initial Class II Directors shall serve for
a term expiring at the annual meeting of stockholders to be held in 1999; and
the initial Class III Directors shall serve for a term expiring at the annual
meeting of stockholders to be held in 2000. At each annual meeting of
stockholders, the successor or successors of the class of directors whose term
expires at that meeting shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at such meeting and entitled to
vote on the election of directors, and shall hold office for a term expiring at
the annual meeting of stockholders held in the third year following the year of
their election. The directors elected to each class shall hold office until
their successors are duly elected and qualified or until their earlier
resignation or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate, the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a series or together
with holders of other such series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies
20
and other features of such directorships shall be governed by the terms of this
Certificate and any certificates of designation applicable thereto, and such
directors so elected shall not be divided into classes pursuant to this Section
(C).
During any period when the holders of any series of Preferred Stock have
the right to elect additional directors as provided for or fixed pursuant to the
provisions of Article IV of this Certificate, then upon commencement and for the
duration of the period during which such right continues: (a) the then
otherwise total authorized number of directors of the Corporation shall
automatically be increased by such specified number of directors, and the
holders of such Preferred Stock shall be entitled to elect the additional
directors so provided for or fixed pursuant to said provisions and (b) each such
additional director shall serve until such director's successor shall have been
duly elected and qualified, or until such director's right to hold such office
terminates pursuant to said provisions, whichever occurs earlier, subject to
such director's earlier death, disqualification, resignation or removal. Except
as otherwise provided by the Board in the resolution or resolutions establishing
such series, whenever the holders of any series of Preferred Stock having such
right to elect additional directors are divested of such right pursuant to the
provisions of such stock, the terms of office of all such additional directors
elected by the holders of such stock, or elected to fill any vacancies resulting
from the death, resignation, disqualification or removal of such additional
directors, shall forthwith terminate and the total authorized number of
directors of the Corporation shall be reduced accordingly.
E. Removal of Directors. Subject to the rights, if any, of the holders
--------------------
of any series of Preferred Stock to elect directors and to remove any director
whom such holders have the right to elect, any director (including persons
elected by directors to fill vacancies in the Board of Directors) may be removed
from office (a) only with cause and (b) only by the affirmative vote of the
holders of at least 75% of the shares then entitled to vote at a meeting of the
stockholders called for that purpose. At least 30 days prior to any meeting of
stockholders at which it is proposed that any director be removed from office,
written notice of such proposed removal shall be sent to the director whose
removal will be considered at the meeting. For purposes of this Certificate,
"cause," with respect to the removal of any director, shall mean only (i)
conviction of a felony, (ii) declaration of unsound mind by order of a court,
(iii) gross dereliction of duty, (iv) commission of any act involving moral
turpitude or (v) commission of an act that constitutes intentional misconduct or
a knowing violation of law if such action in either event results both in an
improper substantial personal benefit to such director and a material injury to
the Corporation.
F. Vacancies. Subject to the rights, if any, of the holders of any
---------
series of Preferred Stock to elect directors and to fill vacancies in the Board
of Directors relating thereto, any and all vacancies in the Board of Directors,
however occurring, including, without limitation, by reason of an increase in
size of the Board of Directors, or the death, resignation, disqualification or
removal of a director, shall be filled solely by the affirmative vote of a
majority of the remaining directors then in office, even if less than a quorum
of the Board of Directors. Any director appointed in accordance with the
preceding sentence shall hold office
21
for the remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been duly elected and qualified or until such director's
earlier resignation or removal. Subject to the rights, if any, of the holders
of any series of Preferred Stock, when the number of directors is increased or
decreased, the Board of Directors shall determine the class or classes to which
the increased or decreased number of directors shall be apportioned; provided,
--------
however, that no decrease in the number of directors shall shorten the term of
- - -------
any incumbent director. In the event of a vacancy in the Board of Directors,
the remaining directors, except as otherwise provided by law, may exercise the
powers of the full Board of Directors until such vacancy is filled.
ARTICLE VII
LIMITATION OF LIABILITY
-----------------------
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the DGCL or (d) for any transaction
from which the director derived an improper personal benefit. If the DGCL is
amended after the effective date of this Certificate to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so amended.
Any repeal or modification of this Article VII by either (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person who has served as a director prior to, or is then
serving as a director at the time of, such repeal or modification.
ARTICLE VIII
MAINTENANCE OF REIT STATUS
--------------------------
For so long as the Board of Directors deems the maintenance of REIT status
to be in the best interests of the Corporation, the Corporation shall seek to
satisfy the requirements for qualification as a REIT under the Code, including,
but not limited to, the ownership of its outstanding stock, the nature of its
assets, the sources of its income, and the amount and timing of its
distributions to its stockholders.
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ARTICLE IX
AMENDMENT OF BYLAWS
-------------------
A. Amendment by Directors. Except as otherwise provided bylaw, the
----------------------
By-laws of the Corporation may be amended or repealed by the Board of Directors
by the affirmative vote of a majority of the directors then in office.
B. Amendment by Stockholders. The By-laws of the Corporation may be
-------------------------
amended or repealed at any annual meeting of stockholders, or at any special
meeting of stockholders called for such purpose, by the affirmative vote of at
least 75% of the outstanding shares of capital stock of the Corporation entitled
to vote on such amendment or repeal, voting together as a single class;
provided, however, that if the Board of Directors recommends that stockholders
- - -------- -------
approve such amendment or repeal at such meeting of stockholders, such amendment
or repeal shall only require the affirmative vote of the majority of the shares
present in person or represented by proxy at such meeting and entitled to vote
on such amendment or repeal, voting together as a single class.
ARTICLE X
AMENDMENT OF CERTIFICATE OF INCORPORATION
-----------------------------------------
The Corporation reserves the right to amend or repeal this Certificate
in the manner now or hereafter prescribed by statute and this Certificate, and
all rights conferred upon stockholders herein are granted subject to this
reservation.
No amendment or repeal of this Certificate shall be made unless the
same is first approved by the Board of Directors pursuant to a resolution
adopted by the Board of Directors in accordance with Section 242 of the DGCL,
and, except as otherwise provided by law, thereafter approved by the
stockholders. Whenever any vote of the holders of voting stock is required to
amend or repeal any provision of this Certificate, then in addition to any other
vote of the holders of voting stock that is required by this Certificate or by-
law, the affirmative vote of a majority of the outstanding shares of capital
stock of the Corporation entitled to vote on such amendment or repeal, voting
together as a single class, and the affirmative vote of a majority of the
outstanding shares of each class entitled to vote thereon as a class, shall be
required to amend or repeal any provision of this Certificate; provided,
--------
however, that in each case two-thirds rather than a majority shall be needed if
- - -------
such amendment or repeal relates to a repeal or modification of the Ownership
Limit, the Related Party Limit or the Look-Through Ownership Limit; and
provided, further, that the affirmative vote of not less than 75% of the
- - -------- -------
outstanding shares entitled to vote on such amendment or repeal, voting together
as a single class, and the affirmative vote of not less than 75% of the
outstanding shares of each class entitled to vote thereon as a class, shall be
required to amend or repeal any of the provisions of Article V, Article VI,
Article VII, Article IX or Article X of this Certificate.
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I, William J. Wedge, Senior Vice President and Secretary of the
Corporation, do make this certificate, hereby declaring and certifying that this
is my act and deed on behalf of the Corporation this 12th day of June, 1997.
BOSTON PROPERTIES, INC.
By:
-----------------------------------
William J. Wedge
Senior Vice President and Secretary
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