Exhibit 4.1
HOST MARRIOTT CORPORATION
ARTICLES SUPPLEMENTARY
HOST MARRIOTT CORPORATION, a Maryland corporation having its principal
Maryland office in Bethesda, Maryland (the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to authority expressly vested in the board of
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directors (the "Board of Directors") of the Corporation by the charter of
the Corporation (the "Charter"), the Board of Directors of the Corporation
at a duly convened meeting held on February 2, 2001 has duly reclassified
5,980,000 shares of preferred stock (par value $0.01 per share) ("Preferred
Stock") of the Corporation into 5,980,000 shares of a series designated as
10% Class C Cumulative Redeemable Preferred Stock (par value $0.01 per
share) of the Corporation ("Class C Preferred Stock").
SECOND: The reclassification increases the number of shares
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classified as Class C Preferred Stock from no shares immediately prior to
the reclassification to 5,980,000 shares immediately after the
reclassification. Their classification decreases the number of shares
classified as Preferred Stock (par value $0.01 per share) from 40,150,000
shares immediately prior to their classification to 34,170,000 shares
immediately after the reclassification.
THIRD: The following is a description of the preferences, conversion
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and other rights, powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the Class C
Preferred Stock of the Corporation:
10% Class C Cumulative Redeemable Preferred Stock.
1. Designation and Amount. A series of Preferred Stock of the
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Corporation, designated as the "10% Class C Cumulative Redeemable Preferred
Stock" (the "Class C Preferred Stock"), par value $0.01 per share, is hereby
established. The number of authorized shares of Class C Preferred Stock is
5,980,000.
2. Ranking. In respect of rights to the payment of dividends and the
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distribution of assets in the event of any liquidation, dissolution or winding
up of the Corporation, the Class C Preferred Stock ranks (i) senior to the
Corporation's common stock, par value $0.01 per share (the "Common Stock"),
senior to the Corporation's Series A Junior Participating Preferred Stock, par
value $0.01 per share (the "Junior Participating Series A Preferred Stock") and
senior to any other class or series of capital stock of the Corporation other
than capital stock referred to in clauses (ii) and (iii) of this sentence, (ii)
on a parity with the Corporation's 10% Class A Cumulative Redeemable Preferred
Stock, the Corporation's 10% Class B Cumulative Redeemable Preferred Stock and
any other class or series of capital stock of the Corporation the terms of which
specifically provide that such class or series of capital stock ranks on a
parity
with the Class C Preferred Stock as to the payment of dividends and the
distribution of assets in the event of any liquidation, dissolution or winding
up of the Corporation, and (iii) junior to any class or series of capital stock
of the Corporation the terms of which specifically provide that such class or
series of capital stock ranks senior to the Class C Preferred Stock as to the
payment of dividends and the distribution of assets in the event of any
liquidation, dissolution or winding up of the Corporation. The term "capital
stock" does not include convertible debt securities.
3. Dividends.
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(a) Subject to the preferential rights of the holders of any class or
series of capital stock of the Corporation ranking senior to the Class C
Preferred Stock as to dividends, the holders of the outstanding shares of Class
C Preferred Stock will be entitled to receive, when, as and if authorized by the
Board of Directors of the Corporation (the "Board of Directors") and declared by
the Corporation, out of funds legally available for the payment of dividends,
cumulative cash dividends at the rate of 10% per annum of the $25.00 per
share liquidation preference of the Class C Preferred Stock (equivalent to an
annual rate of $ $2.50 per share). Such dividends will accrue daily, will accrue
and be cumulative from March 27, 2001 (the "Original Issue Date") and will
be payable quarterly in arrears in cash on January 15, April 15, July 15
and October 15 (each, a "Dividend Payment Date") of each year, commencing April
15, 2001; provided, that if any Dividend Payment Date is not a Business Day (as
hereinafter defined), then the dividend which would otherwise have been payable
on such Dividend Payment Date may be paid on the next succeeding Business Day
with the same force and effect as if paid on such Dividend Payment Date and no
interest or additional dividends or other sum will accrue on the amount so
payable for the period from and after such Dividend Payment Date to such next
succeeding Business Day. The period from and including the Original Issue Date
to but excluding the first Dividend Payment Date, and each subsequent period
from and including a Dividend Payment Date to but excluding the next succeeding
Dividend Payment Date, is hereinafter called a "Dividend Period". Dividends will
be payable to holders of record as they appear in the stock transfer books of
the Corporation at the close of business on the applicable record date (each, a
"Record Date"), which will be the 1st day of the calendar month in which the
applicable Dividend Payment Date falls or such other date designated by the
Board of Directors that is not more than 30 nor less than ten days prior to such
Dividend Payment Date. The amount of any dividend payable for any Dividend
Period, or portion thereof, will be computed on the basis of a 360-day year
consisting of twelve 30-day months (it being understood that the dividend
payable on April 15, 2001 will be for less than a full Dividend Period). The
dividends payable on any Dividend Payment Date or any other date will include
dividends accrued to but excluding such Dividend Payment Date or other date, as
the case may be.
"Business Day" means any day, other than a Saturday or Sunday, that is not
a day on which banking institutions in The City of New York are authorized or
required by law, regulation or executive order to be closed. All references
herein to "accrued and unpaid" dividends on the Class C Preferred Stock (and all
references of like import) include, unless otherwise expressly stated or the
context otherwise requires, accumulated dividends, if any, on the Class C
Preferred Stock; and all references herein to "accrued and unpaid" dividends on
any other class or series of capital stock of the Corporation include, if (and
only if) such class or
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series of capital stock provides for cumulative dividends and unless otherwise
expressly stated or the context otherwise requires, accumulated dividends, if
any, thereon.
(b) If any shares of Class C Preferred Stock are outstanding, no full
dividends will be authorized or declared or paid or set apart for payment on any
capital stock of the Corporation of any other class or series ranking, as to
dividends, on a parity with or junior to the Class C Preferred Stock for any
period unless full cumulative dividends have been or contemporaneously are
authorized, declared and paid or authorized, declared and a sum sufficient for
the payment thereof set apart for such payment on the Class C Preferred Stock
for all past Dividend Periods (including, without limitation, any Dividend
Period that terminates on any date upon which dividends on such other class or
series of capital stock of the Corporation are authorized or declared or paid or
set apart for payment, as the case may be). When such cumulative dividends are
not paid in full (or a sum sufficient for such full payment is not set apart
therefor) upon the Class C Preferred Stock and the shares of any other class or
series of capital stock of the Corporation ranking on a parity as to dividends
with the Class C Preferred Stock, all dividends authorized and declared upon the
Class C Preferred Stock and any other class or series of capital stock of the
Corporation ranking on a parity as to dividends with the Class C Preferred Stock
will be authorized and declared pro rata so that the amount of dividends
authorized and declared per share of Class C Preferred Stock and such other
class or series of capital stock of the Corporation will in all cases bear to
each other the same ratio that accrued and unpaid dividends per share on the
shares of Class C Preferred Stock and such other class or series of capital
stock of the Corporation bear to each other.
Except as provided in the immediately preceding paragraph, unless full
cumulative dividends on the Class C Preferred Stock have been or
contemporaneously are authorized, declared and paid or authorized, declared and
a sum sufficient for the payment thereof set apart for such payment on the Class
C Preferred Stock for all past Dividend Periods (including, without limitation,
any Dividend Period that terminates on a date that also is a Subject Date (as
defined below)), no dividends (other than in shares of Common Stock or shares of
any other class or series of capital stock of the Corporation ranking junior to
the Class C Preferred Stock as to dividends and as to the distribution of assets
upon liquidation, dissolution and winding up of the Corporation) will be
authorized or declared or paid or set apart for payment nor will any other
distribution be authorized or declared or made upon the Common Stock of the
Corporation or any other class or series of capital stock of the Corporation
ranking junior to or on a parity with the Class C Preferred Stock as to
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up of the Corporation, and no shares of Common Stock of the Corporation
or shares of any other class or series of capital stock of the Corporation
ranking junior to or on a parity with the Class C Preferred Stock as to
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up of the Corporation will be redeemed, purchased or otherwise acquired
for any consideration (or any monies paid to or made available for a sinking
fund for the redemption of any such shares of junior or parity stock) by the
Corporation (except by conversion into or exchange for shares of any other class
or series of capital stock of the Corporation ranking junior to the Class C
Preferred Stock as to dividends and as to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation and except for the
redemption, purchase or acquisition by the Corporation of capital stock of the
Corporation of any class or series pursuant to Article VIII (or any similar
provisions) of the Charter allowing the Corporation to redeem or repurchase
shares of its capital stock to preserve
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its status as a real estate investment trust (a "REIT") for federal income tax
purposes or the status of Host Marriott, L.P., a Delaware limited partnership
(the "Operating Partnership", which term includes any successor thereto), as a
partnership for federal income tax purposes). As used in this paragraph, the
term "Subject Date" means (A) any date on which any dividends are authorized,
declared or paid or set apart for payment or other distribution authorized,
declared or made upon the Common Stock or any other class or series of the
Corporation's capital stock ranking junior to or on a parity with the Class C
Preferred Stock as to dividends or as to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, and (B) any date on
which any shares of Common Stock or any other class or series of the
Corporation's capital stock ranking junior to or on a parity with the Class C
Preferred Stock as to dividends or as to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation are redeemed,
purchased or otherwise acquired for any consideration or any money paid to or
made available for a sinking fund for the redemption of any such shares of
junior or parity stock by the Corporation.
(c) No dividends on the Class C Preferred Stock will be authorized or
declared or paid or set apart for payment at such time as any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment will be restricted or prohibited by applicable law.
Anything in these Articles Supplementary to the contrary notwithstanding
(including, without limitation, the provisions set forth in the immediately
preceding paragraph), dividends on the Class C Preferred Stock will accrue and
be cumulative from the Original Issue Date whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized or declared.
(d) No interest, or sum of money in lieu of interest, will be payable in
respect of any dividend payment or payments on the Class C Preferred Stock which
may be in arrears, and holders of the Class C Preferred Stock will not be
entitled to any dividends, whether payable in cash, securities or other
property, in excess of the full cumulative dividends described herein.
(e) Any dividend payment made on the Class C Preferred Stock will first be
credited against the earliest accrued but unpaid dividend due with respect to
the Class C Preferred Stock.
(f) If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Internal Revenue Code
of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount") of
the dividends (within the meaning of the Code) paid or made available for the
year to holders of all classes and series of the Corporation's capital stock
(the "Total Dividends"), then the portion of the Capital Gains Amount that is
allocable to the holders of the Class C Preferred Stock will be an amount equal
to (A) the total Capital Gains Amount multiplied by (B) a fraction (1) the
numerator of which is equal to the total dividends (within the meaning of the
Code) paid or made available to the holders of the Class C Preferred Stock for
that year and (2) the denominator of which is the Total Dividends for that year.
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4. Liquidation Preference.
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(a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, then, before any distribution or payment is made to the
holders of any Common Stock of the Corporation or shares of any other class or
series of capital stock of the Corporation ranking junior to the Class C
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up of the Corporation, but subject to the preferential rights of the
holders of shares of any class or series of capital stock of the Corporation
ranking senior to the Class C Preferred Stock as to such distribution of assets
upon such liquidation, dissolution or winding up, the holders of the shares of
Class C Preferred Stock then outstanding will be entitled to receive and to be
paid out of the assets of the Corporation legally available for distribution to
its shareholders liquidating distributions in the amount of $25.00 per share,
plus an amount equal to all accrued and unpaid dividends thereon to the date of
payment.
(b) After payment to the holders of the Class C Preferred Stock of the full
amount of the liquidating distributions (including accrued and unpaid dividends)
to which they are entitled, the holders of Class C Preferred Stock, as such,
will have no right or claim to any of the remaining assets of the Corporation.
(c) If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation legally available
for distribution to its shareholders are insufficient to pay the full amount of
liquidating distributions on all outstanding shares of Class C Preferred Stock
and the full amount of the liquidating distributions payable on all outstanding
shares of any other classes or series of capital stock of the Corporation
ranking on a parity with the Class C Preferred Stock as to the distribution of
assets upon liquidation, dissolution or winding up of the Corporation, then the
holders of the Class C Preferred Stock and all other such classes or series of
capital stock will share ratably in any such distribution of assets in
proportion to the full liquidating distributions (including, if applicable,
accrued and unpaid dividends) to which they would otherwise respectively be
entitled.
(d) If liquidating distributions are made in full to all holders of Class C
Preferred Stock and any other classes or series of capital stock of the
Corporation ranking on a parity with the Class C Preferred Stock as to the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation, then, the remaining assets of the Corporation will be distributed
among the holders of any other classes or series of capital stock of the
Corporation ranking junior to the Class C Preferred Stock as to the distribution
of assets upon liquidation, dissolution or winding up, according to their
respective rights and preferences.
(e) For purposes of this Section 4, neither the consolidation or merger of
the Corporation with or into any other corporation, trust or other entity, nor
the sale, lease or conveyance of all or substantially all of the property or
business of the Corporation, will be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
5. Redemption.
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(a) The Class C Preferred Stock is not redeemable prior to March 27, 2006,
except that the Corporation will be entitled, pursuant to the provisions of
Article VIII (or any similar
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provision) of the Charter, to redeem, purchase or acquire shares of Class C
Preferred Stock in order to preserve the status of the Corporation as a REIT for
federal income tax purposes or the status of the Operating Partnership as a
partnership for federal income tax purposes. Any date fixed for the redemption
of shares of Class C Preferred Stock is hereinafter called a "Redemption Date".
(b) On and after March 27, 2006, the Corporation may, at its option, upon
not less than 30 nor more than 60 days' prior written notice to the holders of
record of the Class C Preferred Stock to be redeemed, redeem the Class C
Preferred Stock, in whole or from time to time in part, for a cash redemption
price equal to $25.00 per share together with (except as provided in Section
6(f) below) all accrued and unpaid dividends to the date fixed for redemption
(the "Optional Redemption Price").
(c) In the event of any redemption of Class C Preferred Stock pursuant to
Article VIII (or any similar provision) of the Charter in order to preserve the
status of the Corporation as a REIT for federal income tax purposes or the
status of the Operating Partnership as a partnership for federal income tax
purposes, such redemption shall be made on the terms and subject to the
conditions set forth in Article VIII of the Charter and in accordance with the
further terms and conditions set forth in this Section 5(c) and Section 6 of
these Articles Supplementary. If the Corporation calls for redemption any shares
of Class C Preferred Stock pursuant to and in accordance with such provisions of
Article VIII of the Charter and this Section 5(c), then, anything in the Charter
to the contrary notwithstanding, the redemption price for such shares will be an
amount in cash equal to $25.00 per share together with (except as provided in
Section 6(f) below) all accrued and unpaid dividends to the date fixed for
redemption (the "Charter Redemption Price"). Anything in these Articles
Supplementary to the contrary notwithstanding, the provisions of this Section
5(c) shall apply only to the redemption of Class C Preferred Stock pursuant to
Article VIII (or any similar provisions) of the Charter and not to any other
purchase or acquisition of shares of Class C Preferred Stock pursuant to Article
VIII (or any similar provisions) of the Charter.
(d) Any redemption of shares of Class C Preferred Stock, whether pursuant
to paragraph (b) or (c) of this Section 5, will be made in accordance with the
applicable provisions set forth in Section 6 below.
6. Procedures for Redemption; Limitations on Redemption.
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(a) If fewer than all of the outstanding shares of Class C Preferred Stock
are to be redeemed at the option of the Corporation pursuant to Section 5(b)
above, the number of shares to be redeemed will be determined by the Corporation
and the shares to be so redeemed will be selected by the Corporation pro rata
from the holders of record of such shares in proportion to the number of such
shares held by such holders (as nearly as may be practicable without creating
fractional shares) or by lot or by any other equitable manner determined by the
Corporation that will not result in the transfer of any shares of Class C
Preferred Stock to a trust for the benefit of a charitable beneficiary pursuant
to Article VIII (or any similar provision) of the Charter.
(b) Notice of redemption will be given by publication in The Wall Street
Journal or, if such newspaper is not then being published, another newspaper of
general circulation in The
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City of New York, such publication to be made at least once a week for two
successive weeks commencing not less than 30 nor more than 60 days prior to the
Redemption Date, except that no such notice need be published in the case of a
redemption pursuant to Section 5(c) of these Articles Supplementary. Notice of
any redemption (whether pursuant to Section 5(b) or 5(c) of these Articles
Supplementary, as the case may be) will also be mailed by or on behalf of the
Corporation, first class postage prepaid, not less than 30 nor more than 60 days
prior to the applicable Redemption Date, addressed to each holder of record of
shares of Class C Preferred Stock to be redeemed at the address set forth in the
share transfer records of the Corporation; provided, that if the Corporation
reasonably concludes, based upon the advice of independent tax counsel
experienced in such matters, that any redemption made pursuant to Section 5(c)
must be made on a date (the "Early Redemption Date") which is earlier than 30
days after the date of such mailing in order to preserve the status of the
Corporation as a REIT for federal income tax purposes or the status of the
Operating Partnership as a partnership for federal income tax purposes or to
comply with federal tax laws relating to the Corporation's qualification as a
REIT, then the Corporation may give such shorter notice as is necessary to
effect such redemption on the Early Redemption Date. Any notice which has been
mailed in the manner provided for in the preceding sentence will be conclusively
presumed to have been duly given on the date mailed whether or not the
applicable holder receives such notice. In addition to any information required
by law or by the applicable rules of any exchange upon which Class C Preferred
Stock may be listed or admitted to trading, such notice will state: (1) the
Redemption Date; (2) the Optional Redemption Price or the Charter Redemption
Price, as the case may be (the "Redemption Price"); (3) the number of shares of
Class C Preferred Stock to be redeemed and whether such shares are being
redeemed at the option of the Corporation pursuant to Section 5(b) or in order
to preserve the Corporation's status as a real estate investment trust for
federal income tax purposes pursuant to Section 5(c); (4) the place or places
(which will include a place in the Borough of Manhattan, The City of New York)
where certificates for such shares are to be surrendered for payment of the
Redemption Price; and (5) that dividends on the shares of Class C Preferred
Stock to be redeemed will cease to accrue on such Redemption Date. If fewer than
all of the outstanding shares of Class C Preferred Stock are to be redeemed, the
notice mailed to each holder of shares to be redeemed will also specify the
number of shares of Class C Preferred Stock to be redeemed from such holder. No
failure to mail or defect in such mailed notice or in the mailing thereof will
affect the validity of the proceedings for the redemption of any shares of Class
C Preferred Stock except as to the holder to whom notice was defective or not
given.
(c) If notice has been published (with respect to a redemption pursuant to
Section 5(b) only) and mailed in accordance with Section 6(b) above and all
funds necessary for such redemption have been irrevocably set aside by the
Corporation on or before the Redemption Date specified in such notice, separate
and apart from its other funds, in trust for the benefit of the holders of the
Class C Preferred Stock so called for redemption, so as to be, and to continue
to be, available therefor, then, from and after the Redemption Date, dividends
on the shares of Class C Preferred Stock so called for redemption will cease to
accrue, such shares will no longer be deemed to be outstanding, and all rights
of the holders thereof as holders of such shares (except the right to receive
the Redemption Price together with, if applicable, accrued and unpaid dividends
thereon to the Redemption Date) will terminate. In the event any Redemption Date
is not a Business Day, then payment of the Redemption Price may be made on the
next succeeding Business Day with the same force and effect as if made on such
Redemption Date and no
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interest, additional dividends or other sum will accrue on the amount payable
for the period from and after such Redemption Date to such next succeeding
Business Day.
(d) Upon surrender, in accordance with such notice, of the certificates for
any shares of Class C Preferred Stock to be so redeemed (properly endorsed or
assigned for transfer, if the Corporation so requires and the redemption notice
so states), such shares of Class C Preferred Stock will be redeemed by the
Corporation at the Redemption Price. In case fewer than all the shares of Class
C Preferred Stock evidenced by any such certificate are redeemed, a new
certificate or certificates will be issued evidencing the unredeemed shares of
Class C Preferred Stock without cost to the holder thereof.
(e) Any deposit of monies with a bank or trust company for the purpose of
redeeming Class C Preferred Stock will be irrevocable and such monies will be
held in trust for the benefit of the holders of Class C Preferred Stock entitled
thereto, except that (1) the Corporation will be entitled to receive from such
bank or trust company the interest or other earnings, if any, earned on the
monies so deposited in trust; and (2) any balance of the monies so deposited by
the Corporation and unclaimed by the holders of the Class C Preferred Stock
entitled thereto at the expiration of two years from the applicable Redemption
Date will be repaid, together with any interest or other earnings earned
thereon, to the Corporation and, after any such repayment, the holders of the
shares entitled to the funds so repaid to the Corporation will look only to the
Corporation for payment without interest or other earnings thereon.
(f) Anything in these Articles Supplementary to the contrary
notwithstanding, the holders of record of shares of Class C Preferred Stock at
the close of business on a Record Date will be entitled to receive the dividend
payable with respect to such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares after such Record Date and on or
prior to such Dividend Payment Date or the Corporation's default in the payment
of the dividend due on such Dividend Payment Date, in which case the amount
payable upon redemption of such shares of Class C Preferred Stock will not
include the dividend payable on such Dividend Payment Date and the full amount
of the dividend payable on such Dividend Payment Date will instead be paid on
such Dividend Payment Date to the holders of record at the close of business on
such Record Date as aforesaid. Except as provided in this Section 6(f) and
except to the extent that accrued and unpaid dividends are payable as part of
the Redemption Price pursuant to Section 5, the Corporation will make no payment
or allowance for unpaid dividends, regardless of whether or not in arrears, on
shares of Class C Preferred Stock called for redemption.
(g) Unless full cumulative dividends on all outstanding shares of Class C
Preferred Stock have been or contemporaneously are authorized, declared and paid
or authorized, declared and a sum sufficient for the payment thereof set apart
for payment for all past Dividend Periods (including, without limitation, any
Dividend Period that terminates on the date of any redemption of shares of Class
C Preferred Stock referred to below or on the date of any direct or indirect
purchase or other acquisition of shares of Class C Preferred Stock referred to
below, as the case may be), (i) no shares of Class C Preferred Stock will be
redeemed unless all outstanding shares of Class C Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing will not prevent
the redemption, repurchase or acquisition of shares of Class C Preferred Stock
pursuant to Article VIII (or any similar provision) of the Charter in order to
preserve the status of
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the Corporation as a REIT for federal income tax purposes or the status of the
Operating Partnership as a partnership for federal income tax purposes or
pursuant to a purchase or exchange offer made on the same terms to the holders
of all outstanding shares of Class C Preferred Stock, and (ii) the Corporation
will not purchase or otherwise acquire, directly or indirectly, any shares of
Class C Preferred Stock (except by conversion into or exchange for capital stock
of the Corporation ranking junior to the Class C Preferred Stock as to the
payment of dividends and as to the distribution of assets upon liquidation,
dissolution and winding up of the Corporation); provided, however, that the
foregoing will not prevent the redemption, purchase or acquisition of shares of
Class C Preferred Stock pursuant to Article VIII (or any similar provision) of
the Charter in order to preserve the status of the Corporation as a REIT for
federal income tax purposes or the status of the Operating Partnership as a
partnership for federal income tax purposes or pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
Class C Preferred Stock.
7. Voting Rights. Except as required by law and as set forth below in
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this Section 7, the holders of the Class C Preferred Stock do not have any
voting rights.
(a) Whenever dividends on any shares of Class C Preferred Stock are in
arrears for six or more Dividend Periods, whether or not such Dividend
Periods are consecutive, the number of directors then constituting the
Board of Directors of the Corporation will be automatically increased by
two (if not already increased by two by reason of the election of directors
by the holders of any other class or series of capital stock of the
Corporation upon which like voting rights have been conferred and are
exercisable and with which the Class C Preferred Stock is entitled to vote
as a class with respect to the election of such two directors) and the
holders of shares of Class C Preferred Stock (voting together as a single
class with all other classes or series of capital stock of the Corporation
upon which like voting rights have been conferred and are exercisable and
which are entitled to vote as a class with the Class C Preferred Stock in
the election of such two directors) will be entitled to vote for the
election of a total of two additional directors of the Corporation at a
special meeting called by an officer of the Corporation at the request of
the holders of record of at least 10% of the outstanding shares of Class C
Preferred Stock or by the holders of any other class or series of capital
stock of the Corporation upon which like voting rights have been conferred
and are exercisable and which is entitled to vote as a class with the Class
C Preferred Stock in the election of such two additional directors (unless
such request is received less than 90 days before the date fixed for the
next annual or special meeting of shareholders of the Corporation, in which
case the vote for such two directors will be held at the earlier of the
next such annual or special meeting of shareholders), and at each
subsequent annual meeting of shareholders, until all dividends accumulated
on the Class C Preferred Stock for all past Dividend Periods and the then
current Dividend Period have been fully paid or authorized and declared and
a sum sufficient for the payment thereof set aside for payment in full,
whereupon the right of the holders of Class C Preferred Stock to elect such
two directors will cease and (unless there are one or more other classes or
series of capital stock of the Corporation upon which like voting rights
have been conferred and are exercisable) the term of office of such two
directors previously so elected will immediately and automatically
terminate, such directors will no longer be qualified to serve and the
authorized number of directors of the Corporation will thereupon return to
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the number of authorized directors otherwise in effect, but subject always
to the same provisions for the reinstatement and divestment of the right to
elect such two additional directors in the case of any such future dividend
arrearage.
In the case of any such request for a special meeting (unless such
request is received less than 90 days before the date fixed for the next
annual or special meeting of shareholders), such meeting will be held on
the earliest practicable date at the place designated by the holders of
capital stock requesting such meeting or, if none, at a place designated by
the Corporate Secretary of the Corporation, upon notice similar to that
required for an annual meeting of shareholders. If such special meeting is
not called by an officer of the Corporation within 30 days after such
request, then the holders of record of at least 10% of the outstanding
shares of Class C Preferred Stock may designate in writing a holder of
Class C Preferred Stock to call such meeting at the expense of the
Corporation, and such meeting may be called by the holder so designated
upon notice similar to that required for an annual meetings of shareholders
and will be held at the place designated by the holder calling such
meeting. At all times that the voting rights conferred by this Section 7(a)
are exercisable, the holders of Class C Preferred Stock will have access to
the stock transfer records of the Corporation. The Corporation will pay all
costs and expenses of calling and holding any meeting and of electing
directors pursuant to this Section 7(a), including, without limitation, the
cost of preparing, reproducing and mailing the notice of such meeting, the
cost of renting a room for such meeting to be held, and the cost of
collecting and tabulating votes.
The procedures in this Section 7(a) for the calling of meetings and
the election of directors will, to the extent permitted by law, supersede
anything inconsistent contained in the Charter or Bylaws of the Corporation
and, without limitation to the foregoing, the provisions of Sections
13(a)(2) and 13(b) of Article II of the Bylaws of the Corporation will not
be applicable to the election of directors by holders of Class C Preferred
Stock pursuant to this Section 7. Notwithstanding the provisions of Section
2 of Article III of the Bylaws of the Corporation, subject to the
limitations on the number of directors set forth in Article VII of the
Charter, the number of directors constituting the entire Board of Directors
of the Corporation will be automatically increased to include the directors
to be elected pursuant to this Section 7(a).
So long as any shares of Class C Preferred Stock are outstanding, the
number of directors constituting the entire Board of Directors of the
Corporation will at all times be such so that the exercise, by the holders
of the Class C Preferred Stock and the holders of any other classes or
series of capital stock of the Corporation upon which like voting rights
have been conferred, of the right to elect directors under the
circumstances provided above will not contravene any provision of the
Corporation's Charter or Bylaws restricting the number of directors which
may constitute the entire Board of Directors of the Corporation.
If at any time when the voting rights conferred upon the Class C
Preferred Stock pursuant to this Section 7(a) are exercisable any vacancy
in the office of a director elected pursuant to this Section 7(a) occurs,
then such vacancy may be filled only by the remaining such director or by
vote of the holders of record of the outstanding Class C
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Preferred Stock and any other classes or series of capital stock of the
Corporation upon which like voting rights have been conferred and are
exercisable and which are entitled to vote as a class with the Class C
Preferred Stock in the election of directors pursuant to this Section 7(a).
Any director elected or appointed pursuant to this Section 7(a) may be
removed only by the holders of the outstanding Class C Preferred Stock and
any other classes or series of capital stock of the Corporation upon which
like voting rights have been conferred and are exercisable and which are
entitled to vote as a class with the Class C Preferred Stock in the
election of directors pursuant to this Section 7(a), and may not be removed
by the holders of the Common Stock.
(b) So long as any shares of Class C Preferred Stock remain
outstanding, the Corporation will not, without the affirmative vote or
consent of the holders of at least two-thirds of the shares of Class C
Preferred Stock outstanding at the time, given in person or by proxy either
in writing or at a meeting (with the Class C Preferred Stock voting
separately as a class), (A) authorize, create or issue, or increase the
authorized or issued amount of, any class or series of capital stock of the
Corporation ranking senior to the Class C Preferred Stock as to the payment
of dividends or the distribution of assets upon liquidation, dissolution or
winding up of the Corporation or reclassify any authorized capital stock of
the Corporation into such shares, or create, authorize or issue any
obligation or security convertible into, exchangeable or exercisable for,
or evidencing the right to purchase, any such shares, or (B) amend, alter
or repeal any provisions of the Charter (including, without limitation, any
provision of these Articles Supplementary), whether by the merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of the Class C
Preferred Stock or the holders thereof; provided, however, with respect to
the occurrence of any Event, so long as each share of Class C Preferred
Stock then outstanding remains outstanding or is converted into like
securities of the surviving or resulting entity, in each case with the
preferences, rights, privileges, voting powers and other terms thereof
materially unchanged, taking into account that upon the occurrence of an
Event the Corporation may not be the surviving entity and the surviving
entity may be a non-corporate entity, such as a limited liability company,
limited partnership or business trust, in which case the Class C Preferred
Stock would be converted into an equity interest, other than capital stock,
having preferences, rights, privileges, voting powers and other terms which
are materially unchanged from those of the Class C Preferred Stock, the
occurrence of such Event will not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers of the Class C
Preferred Stock or the holders thereof; and provided, further, that (i) any
increase in the amount of authorized Preferred Stock or Common Stock, (ii)
any increase in the amount of authorized shares of Class C Preferred Stock,
or (iii) the creation, issuance or increase in the amount of authorized
shares of any other class or series of capital stock of the Corporation, in
each case ranking on a parity with or junior to the Class C Preferred Stock
as to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, will not be
deemed to materially and adversely affect such rights, preferences,
privileges or voting powers. For purposes of this paragraph, the filing in
accordance with applicable law of articles supplementary or any similar
document setting forth or changing the designations, preferences,
conversion or other rights, voting
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powers, restrictions, limitation as to dividends, qualifications or other
terms of any class or series of capital stock of the Corporation will be
deemed an amendment to the Charter.
(c) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required is effected, all outstanding shares of Class C Preferred Stock
have been redeemed or called for redemption and sufficient funds have been
deposited in trust in accordance with the terms of Section 6 hereof to
effect such redemption.
(d) On any matter submitted to a vote of the holders of Class C
Preferred Stock or on which the Class C Preferred Stock otherwise is
entitled to vote (as expressly provided in the Charter, including these
Articles Supplementary, or as may be required by law), including any action
by written consent, each share of Class C Preferred Stock is entitled to
one vote, except that when shares of any other class or series of Preferred
Stock of the Corporation have the right to vote with the Class C Preferred
Stock as a single class on any matter, the Class C Preferred Stock and the
shares of each such other class or series will have one vote for each
$25.00 of liquidation preference (excluding accrued dividends). The
provisions of this paragraph will supersede any inconsistent provisions of
the Bylaws of the Corporation.
8. Conversion. The Class C Preferred Stock is not convertible into or
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exchangeable for any other property or securities of the Corporation.
9. Office or Agency in New York City. The Corporation will at all times
---------------------------------
maintain an office or agency in the Borough of Manhattan, The City of New York,
where shares of Class C Preferred Stock may be surrendered for payment
(including upon redemption), registration of transfer or exchange.
10. No Preemptive Rights. The Class C Preferred Stock has no preemptive
--------------------
rights.
11. Status of Redeemed and Reacquired Class C Preferred Stock. In the
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event any shares of Class C Preferred Stock are redeemed pursuant to Section 5
hereof or otherwise reacquired by the Corporation, the shares so redeemed or
reacquired will become authorized but unissued shares of Class C Preferred
Stock, available for future issuance and reclassification by the Corporation.
12. Severability. If any preference, right, voting power, restriction,
------------
limitation as to dividends, qualification, term or condition of redemption or
other term of the Class C Preferred Stock is invalid, unlawful or incapable of
being enforced by reason of any rule of law or public policy, then, to the
extent permitted by law, all other preferences, rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms or conditions
of redemption and other terms of the Class C Preferred Stock which can be given
effect without the invalid, unlawful or unenforceable preference, right, voting
power, restriction, limitation as to dividends, qualification, term or
condition of redemption or other term of the Class C Preferred Stock will
remain in full force and effect and will not be deemed dependent upon any other
such preference, right, voting power, restriction, limitation as to dividends,
qualification, term or condition of redemption or other term of the Class C
Preferred Stock unless so expressed herein.
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FOURTH: These Articles Supplementary have been approved by the Board
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of Directors in the manner and by the vote required by the law.
FIFTH: The undersigned Senior Vice President of the Corporation
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acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under
oath, the undersigned Senior Vice President acknowledges that to the best
of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the
penalties for perjury.
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IN WITNESS WHEREOF, HOST MARRIOTT CORPORATION has caused these presents to
be signed in its name and on its behalf by its Executive Vice President, and
witnessed by its Assistant Secretary on, March , 2001.
Witness: HOST MARRIOTT CORPORATION
By: By:
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Name: David E. Reichmann Name: W. Edward Walter
Title: Assistant Secretary Title: Executive Vice President
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