EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VENCOR, INC.
Vencor, Inc., a Delaware corporation (the "Corporation"), hereby certifies
as follows:
FIRST: The Board of Directors of the Corporation duly adopted a resolution
setting forth and declaring advisable the amendment and restatement of Article I
of the certificate of incorporation of said corporation as follows:
"ARTICLE I
NAME
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The name of the Corporation is Ventas, Inc."
SECOND: The Board of Directors of the Corporation duly adopted a resolution
setting forth and declaring advisable the amendment and restatement of the first
paragraph of Article IV of the certificate of incorporation of said corporation
as follows:
"ARTICLE IV
CAPITAL STOCK
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The total number of shares of stock that the Corporation shall have
authority to issue is 190,000,000 shares, of which 180,000,000 shall be shares
of common stock, having a par value of twenty-five cents per share (the "Common
Shares"), and 10,000,000 shares of preferred stock, having a par value of one
dollar per share (the "Preferred Shares"). The designations, voting powers and
relative rights and preferences of the two classes of shares of stock shall be
as set forth below."
THIRD: The Board of Directors of the Corporation duly adopted a resolution
setting forth and declaring advisable the amendment of the certificate of
incorporation of said corporation to add an Article XII as follows:
"ARTICLE XII
RESTRICTIONS ON OWNERSHIP AND TRANSFER;
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DESIGNATION OF EXCESS SHARES
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A. (1) Definitions. For the purposes of this Article XII, the following
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terms shall have the following meanings:
"Adoption Date" shall mean the date upon which the Corporation files the
Certificate of Amendment to the Certificate of Incorporation of the Corporation
adding this Article XII with the Secretary of State of the State of Delaware.
"Beneficial Ownership" shall mean ownership of Shares by a Person who (i)
would be treated as an owner of such Shares either directly or constructively
through the application of Section 544 of the Code, as modified by Section
856(h) of the Code or (ii) would be treated as an owner of such Shares either
directly or constructively through the application of Section 318(a) of the
Code, as modified by Section 856(d)(5) of the Code. The terms "Beneficial
Owner," "Beneficially Own," "Beneficially Owns" and "Beneficially Owned" shall
have the correlative meanings.
"Beneficiary" shall mean an organization or organizations described in
Sections 170(b)(1)(A) and 170(c) of the Code and identified by the Board of
Directors as the beneficiary or beneficiaries of the Trust.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Common Shares" shall mean outstanding Common Shares of the Corporation as
may be authorized and issued from time to time pursuant to Article IV.
"Excess Shares" shall mean Shares resulting from an event described in
Section 3 of this Article XII.
"Excess Common Shares" shall mean Common Shares that are designated as
Excess Shares.
"Excess Preferred Shares" shall mean Preferred Shares that are designated
as Excess Shares.
"Existing Holder" shall mean any Person who is the Beneficial Owner of
Common Shares in excess of the Ownership Limit on the Adoption Date, so long as,
but only so long as, such Person Beneficially Owns shares of Common Shares in
excess of the Ownership Limit.
1. "Existing Holder Limit" for any Existing Holder shall mean, initially,
the percentage of the outstanding Common Shares Beneficially Owned by such
Existing Holder on the Adoption Date, and after any adjustment pursuant to
Section A.(9) of this Article XII shall mean the percentage of the
outstanding Common Shares as so adjusted; provided, however, that the
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Existing Holder Limit shall be 9.9% in number of shares or value of the
outstanding Common Shares of the Corporation unless, from the Adoption Date
until the Ownership Limitation Termination Date, each Existing Holder does
not Beneficially Own more than 9.9%, in number of shares or value, of the
outstanding shares of any class or series of capital stock of one or more
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Tenants (other than Vencor, Inc., a Delaware corporation formerly known as
Vencor Healthcare, Inc.) if the failure of rents received or accrued,
directly or indirectly, by the Corporation from such Tenant(s) to qualify
as "rents from real property" for purposes of Section 856(d) of the Code,
would in the judgment of the Board of Directors, cause the Corporation to
fail to qualify as a REIT for Federal income tax purposes.
"Market Price" shall mean the last reported sales price reported on the New
York Stock Exchange of Shares of the relevant class on the trading day
immediately preceding the relevant date, or if the Shares of the relevant class
are not then traded on the New York Stock Exchange, the last reported sales
price of Shares of the relevant class on the trading day immediately preceding
the relevant date as reported on any exchange or quotation system over which the
Shares of the relevant class may be traded, or if the Shares of the relevant
class are not then traded over any exchange or quotation system, then the market
price of the Shares of the relevant class on the relevant date as determined in
good faith by the Board of Directors of the Corporation.
"Ownership Limit" shall mean, with respect to the Common Shares for any
Person other than an Existing Holder, the Beneficial Ownership of nine percent
(9.0%), in number of shares or value, of the outstanding Common Shares of the
Corporation, and, with respect to the Preferred Shares for any Person, the
Beneficial Ownership of nine and nine-tenths percent (9.9%), in number of shares
or value, of the outstanding shares of any class or series of Preferred Shares
of the Corporation. The value of any outstanding Common Shares or shares of any
class or series of Preferred Shares of the Corporation shall be determined by
the Board of Directors of the Corporation in good faith which determination
shall be conclusive for all purposes hereof.
"Ownership Limitation Termination Date" shall mean the first day after the
date on which the Board of Directors determines that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT.
"Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust (including a trust qualified under Section
401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside
for or to be used exclusively for the purposes described in Section 642(c) of
the Code, association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity or any government or agency or
political subdivision thereof and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Person" does not include an underwriter which participates in a public offering
of Shares for a period of 25 days following the purchase by such underwriter of
those Shares.
"Preferred Shares" shall mean outstanding preferred shares of the
Corporation as may be authorized and issued from time to time pursuant to
Article IV.
"Purported Beneficial Transferee" shall mean, with respect to any purported
Transfer which results in Excess Shares, the purported beneficial transferee for
whom the Purported Record Transferee would have acquired Shares, if such
Transfer had been valid under Section A.(2) of this Article XII.
"Purported Record Transferee" shall mean, with respect to any purported
Transfer which results in Excess Shares, the record holder of the Shares if such
Transfer had been valid under Section A.(2) of this Article XII.
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"REIT" shall mean a real estate investment trust under Section 856 of the
Code.
"REIT Election Date" shall mean January 1, 1999 or such other date on which
the Corporation elects to be taxed as a REIT under the Code.
"Shares" shall mean the shares of the Corporation as may be authorized and
issued from time to time pursuant to Article IV.
"Tenant" shall mean any Person that leases (or subleases) real property
from the Corporation.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or other
disposition of Shares (including (a) the granting of any option or entering into
any agreement for the sale, transfer or other disposition of Shares or (b) the
sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Shares), whether voluntary or involuntary,
whether of record or beneficially and whether by operation of law or otherwise.
"Trust" shall mean the trust created pursuant to Section C.(1) of this
Article XII.
"Trustee" shall mean a Person, who shall be unaffiliated with the
Corporation, any Purported Beneficial Transferee and any Purported Record
Transferee, identified by the Board of Directors as the trustee of the Trust.
(2) Restrictions on Ownership and Transfer.
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(a) Except as provided in Section A.(12) of this Article XII, from the
Adoption Date and prior to the Ownership Limitation Termination Date, no Person
(other than, in the case of Common Shares, an Existing Holder) shall
Beneficially Own Shares of any class in excess of the Ownership Limit for such
class of Shares and no Existing Holder shall Beneficially Own Common Shares in
excess of the Existing Holder Limit for such Existing Holder.
(b) Except as provided in Section A.(12) of this Article XII, from the
Adoption Date and prior to the Ownership Limitation Termination Date, any
Transfer that, if effective, would result in any Person (other than, in the case
of a Transfer of Common Shares, an Existing Holder) Beneficially Owning Shares
of any class in excess of the Ownership Limit with respect to Shares of such
class shall be void ab initio as to the Transfer of such Shares which would be
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otherwise Beneficially Owned by such Person in excess of such Ownership Limit;
and the intended transferee shall acquire no rights to such Shares.
(c) Except as provided in Section A.(12) of this Article XII, from the
Adoption Date and prior to the Ownership Limitation Termination Date, any
Transfer that, if effective, would result in any Existing Holder Beneficially
Owning Common Shares in excess of the applicable Existing Holder Limit shall be
void ab initio as to the Transfer of such Common Shares which would be otherwise
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Beneficially Owned by such Existing Holder in excess of the applicable Existing
Holder Limit; and such Existing Holder shall acquire no rights to such Common
Shares.
(d) From the Adoption Date and prior to the Ownership Limitation
Termination Date, any Transfer that, if effective, would result in Shares being
Beneficially Owned by less than 100 Persons (determined without referring to any
rules of attribution) shall be void ab initio as to the Transfer of such
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Shares which would be otherwise Beneficially Owned by the transferee; and the
intended transferee shall acquire no rights in such Shares.
(e) From the Adoption Date and prior to the Ownership Limitation
Termination Date, any Transfer that, if effective, would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code shall be void ab initio as to the Transfer of the Shares which would cause
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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.
(3) Designation of Excess Shares.
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(a) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a purported Transfer such that any Person (other
than, in the case of Common Shares, an Existing Holder) would Beneficially Own
Shares of any class in excess of the applicable Ownership Limit with respect to
such class, then, except as otherwise provided in Section A.(12) of this Article
XII, such number of Shares in excess of such Ownership Limit (rounded up to the
nearest whole Share) shall be automatically designated as Excess Shares. Such
designation shall be effective as of the close of business on the business day
prior to the date of the purported Transfer.
(b) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a purported Transfer such that an Existing Holder
would Beneficially Own Common Shares in excess of the applicable Existing Holder
Limit, then, except as otherwise provided in Section A.(12) of this Article XII,
such number of Common Shares in excess of such Existing Holder Limit (rounded up
to the nearest whole Share) shall be automatically designated as Excess Shares.
Such designation shall be effective as of the close of business on the business
day prior to the date of the purported Transfer.
(c) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a purported Transfer which, if effective, would cause
the Corporation to become "closely held" within the meaning of Section 856(h) of
the Code, then the Shares being Transferred which would cause the Corporation to
be "closely held" within the meaning of Section 856(h) of the Code (rounded up
to the nearest whole Share) shall be automatically designated as Excess Shares.
Such designation shall be effective as of the close of business on the business
day prior to the date of the purported Transfer.
(d) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, any Person other than, with respect to Common Shares, an
Existing Holder (the "Purchaser") purchases or otherwise acquires an interest in
a Person which Beneficially Owns Shares (the "Purchase") and, as a result, the
Purchaser would Beneficially Own Shares of any class in excess of the applicable
Ownership Limit with respect to such class, then, except as provided in Section
A.(12) of this Article XII, such number of Shares in excess of such Ownership
Limit (rounded up to the nearest whole Share) shall be automatically designated
as Excess Shares. Such designation shall be effective as of the close of
business on the business day prior to the date of the Purchase. In determining
which Shares are designated as Excess Shares, Shares of the relevant class
Beneficially Owned by the Purchaser prior to the Purchase shall be
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treated as designated as Excess Shares before any Shares Beneficially Owned by
the Person an interest in which is being so purchased or acquired are so
treated.
(e) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, an Existing Holder purchases or otherwise acquires an interest
in a Person which Beneficially Owns Shares (the "Purchase") and, as a result,
such Existing Holder would Beneficially Own Common Shares in excess of the
applicable Existing Holder Limit, then, except as provided in Section A.(12) of
this Article XII, such number of Common Shares in excess of such Existing Holder
Limit (rounded up to the nearest whole Share) shall be automatically designated
as Excess Shares. Such designation shall be effective as of the close of
business on the business day prior to the date of the Purchase. In determining
which Common Shares are exchanged, Common Shares Beneficially Owned by the
purchasing Existing Holder prior to the Purchase shall be treated as designated
as Excess Shares before any Common Shares Beneficially Owned by the Person an
interest in which is being so purchased or acquired are so treated.
(f) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a redemption, repurchase, restructuring or similar
transaction with respect to a Person that Beneficially Owns Shares (the
"Entity") and, as a result, a Person (other than, in the case of Common Shares,
an Existing Holder) holding an interest in the Entity would Beneficially Own
Shares in excess of the applicable Ownership Limit with respect to such class,
then except as provided in Section A.(12) of this Article XII, such number of
Shares in excess of such Ownership Limit (rounded up to the nearest whole Share)
shall be automatically designated as Excess Shares. Such designation shall be
effective as of the close of business on the business day prior to the date of
the redemption, repurchase, restructuring or similar transaction. In determining
which Shares are designated as Excess Shares, Shares of the relevant class
Beneficially Owned by the Entity shall be treated as designated as Excess Shares
before any Shares Beneficially Owned by the Person holding an interest in the
Entity (independently of such Person's interest in the Entity) are so treated.
(g) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a redemption, repurchase, restructuring or similar
transaction with respect to a Person that Beneficially Owns shares of Common
Shares (the "Entity") and, as a result, an Existing Holder would Beneficially
Own Common Shares in excess of the applicable Existing Holder Limit, then,
except as provided in Section A.(12) of this Article XII, such number of Common
Shares in excess of such Existing Holder Limit (rounded up to the nearest whole
Share) shall be automatically designated as Excess Shares. Such designation
shall be effective as of the close of business on the business day prior to the
date of the transfer. In determining which Common Shares are designated as
Excess Shares, Common Shares Beneficially Owned by the Entity shall be treated
as so designated before any Common Shares Beneficially Owned by the Existing
Holder (independently of such Existing Holder's interest in the Entity) are so
treated.
(h) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, an event, other than an event described in Sections A.(3)(a)
through (g) of this Article XII, occurs which would, if effective, results in
any Person (other than, in the case of Common Shares, an Existing Holder)
Beneficially Owning Shares in excess of the applicable Ownership Limit, then,
except as provided in Section A.(12) of this Article XII, the smallest number of
Shares Beneficially Owned by such Person which, if designated as
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Excess Shares, would result in such Person's Beneficial Ownership of Shares not
being in excess of such Ownership Limit, shall be automatically designated as
Excess Shares. Such designation shall be effective as of the close of business
on the business day prior to the date of the relevant event.
(i) If, notwithstanding the other provisions contained in this Article
XII, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, an event, other than an event described in Section A.(3)(a)
through (g) of this Article XII, occurs which would, if effective, result in any
Existing Holder Beneficially Owning Common Shares in excess of the applicable
Existing Holder Limit, then, except as provided in Section A.(12) of this
Article XII, the smallest number of Common Shares Beneficially Owned by such
Existing Holder which, if designated as Excess Shares, would result in such
Existing Holder's Beneficial Ownership of Common Shares not being in excess of
such Existing Holder Limit, shall be automatically designated as Excess Shares.
Such designation shall be effective as of the close of business on the business
day prior to the date of the relevant event.
(j) In addition, if a Person (the "nonreporting Person") does not provide
all of the information required by Section A.(6) of this Article XII and, as a
result, the Corporation, but for the provisions of this paragraph, would not
qualify as a REIT, then, as of the day prior to the date on which such aggregate
ownership would have caused the Corporation to fail to qualify as a REIT, Shares
Beneficially Owned by such Person shall be automatically designated as Excess
Shares to the extent necessary to prevent the Corporation from failing to
qualify as a REIT.
(4) Remedies For Breach. If the Board of Directors or its designees shall
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at any time determine in good faith that a Transfer has taken place in violation
of Section A.(2) of this Article XII or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership of any Shares in violation of Section
A.(2) of this Article XII, the Board of Directors shall take such action as it
deems advisable to refuse to give effect or to prevent such Transfer (or any
Transfer related to such intent), including, but not limited to, refusing to
give effect to such Transfer on the books of the Corporation or instituting
proceedings to enjoin such Transfer; provided, however, that any Transfers or
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attempted Transfers in violation of Sections A.(2)(a) through (c) of this
Article XII or Section A.(2)(e) of this Article XII shall automatically result
in the designation of Excess Shares described in Section A.(3) of this Article
XII, irrespective of any action (or non-action) by the Board of Directors.
(5) Notice of Ownership or Attempted Ownership in Violation of Section
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A.(2). Any Person who acquires or attempts to acquire Beneficial Ownership of
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Shares in violation of Section A.(2) 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 acquisition or attempted acquisition on the Corporation's status
(or, if prior to the REIT Election Date, expected status) as a REIT.
(6) Owners Required to Provide Information.
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From the Adoption Date and prior to the Ownership Limitation Termination
Date:
(a) every Beneficial Owner of more than 5.0% (or such other lower
percentages as required pursuant to regulations under the Code) of the
outstanding number or value of any class or series of Shares shall, within 30
days after January 1 of each year, give written notice to the Corporation
stating the name and address of such Beneficial Owner, the number of Shares
Beneficially Owned, and a
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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 (or, if prior to the REIT Election Date, expected
status) as a REIT.
(b) each Person who is a Beneficial Owner of Shares and each Person
(including the shareholder of record) who is holding Shares for a Beneficial
Owner shall provide to the Corporation such information as the Corporation may
request, in good faith, in order to determine the Corporation's status (or, if
prior to the REIT Election Date, expected status) as a REIT or to comply with
regulations promulgated under the REIT provisions of the Code.
(7) Remedies Not Limited. Except as provided in Section E. of this
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Article XII, nothing contained in this Article XII shall limit the authority of
the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its stockholders by
preservation of the Corporation's status (or, if prior to the REIT Election
Date, expected status) as a REIT.
(8) Ambiguity. In the case of an ambiguity in the application of any of
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the provisions of this Article XII, including any definition contained in
Section A.(1) of this Article XII and any ambiguity with respect to which Shares
are to be designated as Excess Shares in a given situation, the Board of
Directors shall have the power to determine the application of the provisions of
this Article XII with respect to any situation based on the facts known to it.
(9) Modification of Existing Holder Limit. The Existing Holder Limit for
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any Existing Holder will be reduced after any transfer permitted in this Section
A or any other event that reduces the percentage of the outstanding Common
Shares Beneficially Owned by any Existing Holder of this Article XII by such
Existing Holder to a Person other than an Existing Holder by the amount of
Shares Transferred; but in no event shall such Existing Holder Limit be reduced
to less than the Ownership Limit for Common Shares.
(10) Modifications of Ownership Limit. Subject to the limitations
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provided in Section A.(11) of this Article XII, the Board of Directors may from
time to time increase or decrease the Ownership Limit with respect to a class of
Shares.
(11) Limitations on Modifications.
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(a) Neither the Ownership Limit with respect to a class of Shares nor any
Existing Holder Limit may be increased (nor may any additional Existing Holder
Limit be created) if, after giving effect to such increase (or creation), five
Beneficial Owners of Shares (including all of the then-existing Existing
Holders) could Beneficially Own, in the aggregate, more that 49.9% of the
outstanding Shares of the class of Shares to which such Ownership Limit or
Existing Holder Limit relates.
(b) Prior to the modification of any Existing Holder Limit or Ownership
Limit pursuant to Section A.(9) or Section A.(10) of this Article XII, the Board
of Directors may require such opinions of counsel, affidavits, undertakings or
agreements as it may deem necessary or advisable in order to determine or ensure
the Corporation's status (or, if prior to the REIT Election Date, expected
status) as a REIT.
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(c) The Ownership Limit with respect to a class of Shares may not be
increased to a percentage which is greater than 9.9%.
(12) Exceptions. The Board of Directors, with a ruling from the Internal
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Revenue Service or an opinion of counsel that such exemption will not cause the
Corporation to fail to qualify as a REIT or such other evidence or documents as
the Board of Directors deems appropriate, may exempt a Person from the Ownership
Limit with respect to a class of Shares or an Existing Holder Limit, as the case
may be, if the Board of Directors obtains such representations and undertakings
from such Persons as the Board of Directors determines are reasonably necessary,
and such Person agrees that any violation or attempted violation of such
representations or undertakings will result in, to the extent necessary, the
designation of Shares held by such Person as Excess Shares in accordance with
Section A.(3) of this Article XII.
B. Legend. (1) Each certificate for Common Shares shall bear the
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following legend:
"The Common Shares represented by this certificate are subject to
restrictions on ownership and transfer for the purpose of the
Corporation's maintenance of its status (or, if prior to the REIT
Election Date, expected status) as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"). No
Person may Beneficially Own Common Shares in excess of 9.0% (or such
greater percentage as may be determined by the Board of Directors) of
the outstanding Common Shares of the Corporation (unless such Person
is an Existing Holder). Any Person who attempts to Beneficially Own
Common Shares in excess of the above limitation must immediately
notify the Corporation. All capitalized terms used in this Legend have
the meanings set forth in the Certificate of Incorporation of the
Corporation, as amended, a copy of which, including the restrictions
on ownership and transfer, will be sent without charge to each
stockholder who so requests. If the restrictions on ownership and
transfer are violated, the Common Shares represented hereby will be
automatically designated as Excess Shares which will be held in trust
by the Trustee for the benefit of the Beneficiary."
Instead of the foregoing legend, the certificate may state that the
Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge.
(2) Each certificate for Preferred Shares shall bear the following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on ownership and transfer for the purpose of the
Corporation's maintenance of its status (or, if prior to the REIT
Election Date, expected status) as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"). No
Person may Beneficially Own Preferred Shares of any class in excess of
9.9% of the outstanding Preferred Shares of such class. Any Person who
attempts to Beneficially Own Shares in excess of the above limitations
must immediately notify the Corporation. All capitalized terms used in
this legend have the meanings set forth in the Certificate of
Incorporation of the Corporation, a copy of which, including the
restrictions on ownership and transfer, will be sent without charge to
each stockholder who so requests. If the restrictions on ownership and
transfer are violated, the Preferred Shares represented hereby will be
automatically designated as Excess Shares which will be held in trust
by the Trustee for the benefit of the Beneficiary."
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Instead of the foregoing legend, the certificate may state that the
Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge.
C. Excess Shares.
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(1) Ownership in Trust. Upon any purported Transfer or other event that
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results in the designation of Shares as Excess Shares pursuant to Section A.(3)
of this Article XII, such Excess Shares shall be deemed to have been transferred
to the Trustee, as trustee of the Trust for the exclusive benefit of the
Beneficiary. The Trust shall name a Beneficiary if one does not already exist,
within five days of the discovery of any designation of any Excess Shares;
provided, however, that the failure to so name a Beneficiary shall not affect
the designation of Shares as Excess Shares or the transfer thereof to the
Trustee. Excess Shares so held in trust shall be issued and outstanding stock of
the Corporation. The Purported Record Transferee shall have no rights in such
Excess Shares except as provided in Section C.(5) of this Article XII.
(2) Dividend Rights. Any dividends (whether taxable as a dividend,
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return of capital or otherwise) on Excess Shares shall be paid to the Trust for
the benefit of the Beneficiary. Upon liquidation, dissolution or winding up, the
Purported Record Transferee shall receive, for each Excess Share, the lesser of
(a) the amount per share of any distribution made upon liquidation, dissolution
or winding up or (b) the price paid by the Purported Record Transferee for the
Excess Shares, or if the Purported Record Transferee did not give value for the
Excess Shares, the Market Price of the Excess Shares on the day of the event
causing the Excess Shares to be in held in trust. Any such dividend paid or
distribution paid to the Purported Record Transferee in excess of the amount
provided in the preceding sentence prior to the discovery by the Trust that the
Shares with respect to which the dividend or distribution was made had been
designated as Excess Shares shall be repaid, upon demand, to the Trust for the
benefit of the Beneficiary.
(3) Rights Upon Liquidation. In the event of any voluntary or involuntary
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liquidation, dissolution or winding up of, or any distribution of the assets of,
the Corporation, (a) subject to the preferential rights of the Preferred Shares,
if any, as may be determined by the Board of Directors of the Corporation and
the preferential rights of the Excess Preferred Shares, if any, each holder of
Excess Common Shares shall be entitled to receive, ratably with each other
holder of Common Shares and Excess Common Shares, that portion of the assets of
the Corporation available for distribution to the holders of Common Shares or
Excess Common Shares which bears the same relation to the total amount of such
assets of the Corporation as the number of Excess Common Shares held by such
holder bears to the total number of Common Shares and Excess Common Shares then
outstanding, and (b) each holder of Excess Preferred Shares shall be entitled to
receive that portion of the assets of the Corporation which a holder of the
Preferred Shares that was exchanged for such Excess Preferred Shares would have
been entitled to receive had such Preferred Shares remained outstanding. The
Corporation, as holder of the Excess Shares in trust shall distribute ratably to
the Beneficiaries of the Trust, when determined, any such assets received in
respect of the Excess Shares in any liquidation, dissolution or winding up of,
or any distribution of the assets of the Corporation.
(4) Voting Rights. The Trustee shall be entitled to vote the Excess
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Shares on behalf of the Beneficiary on any matter. Subject to Delaware law, any
vote cast by a Purported Record Transferee with respect to the Excess Shares
prior to the discovery by the Corporation that the Excess Shares were held
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in trust will be rescinded ab initio; provided, however, that if the Corporation
-- ------ -------- -------
has already taken irreversible action with respect to a merger, reorganization,
sale of all or substantially all of the assets, dissolution of the Corporation
or other action by the Corporation, then the vote cast by the Purported Record
Transferee shall not be rescinded. The owner of the Excess Shares will be deemed
to have given an irrevocable proxy to the Trustee to vote the Excess Shares for
the benefit of the Beneficiary.
Notwithstanding the provisions of this Article XII, until the Corporation
has received notification that Excess Shares have been transferred into a Trust,
the Corporation shall be entitled to rely on its share transfer and other
stockholder records for purposes of preparing lists of stockholders entitled to
vote at meetings, determining the validity and authority of proxies and
otherwise conducting votes of stockholders.
(5) Restrictions on Transfer. Excess Shares shall be transferable only
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as provided in this Section C.(5) of Article XII. At the direction of the Board
of Directors, the Trustee shall transfer the Shares held in the Trust to a
Person or Persons whose ownership of such Shares will not violate the Ownership
Limit. If such a transfer is made to such a Person or Persons, the interest of
the Beneficiary shall terminate and proceeds of the sale shall be payable to the
Purported Record Transferee and to the Beneficiary. The Purported Record
Transferee shall receive the lesser of (a) the price paid by the Purported
Record Transferee for the Shares or, if the Purported Record Transferee did not
give value for the Shares, the Market Price of the Shares on the day of the
event causing the Shares to be held in trust, or (b) the price received by the
Trust from the sale or other disposition of the Shares. Any proceeds in excess
of the amount payable to the Purported Record Transferee will be paid to the
Beneficiary. The Trustee shall be under no obligation to obtain the highest
possible price for the Excess Shares. Prior to any transfer of any Excess Shares
by the Trustee, the Corporation must have waived in writing its purchase rights
under Section C.(6) of this Article XII. It is expressly understood that the
Purported Record Transferee may enforce the provisions of this Section against
the Beneficiary.
If any of the foregoing restrictions on transfer of Excess Shares is
determined to be void, invalid or unenforceable by any court of competent
jurisdiction, then the Purported Record Transferee may be deemed, at the option
of the Corporation, to have acted as an agent of the Corporation in acquiring
such Excess Shares in trust and to hold such Excess Shares on behalf of the
Corporation.
(6) Purchase Right in Excess Shares. Excess Shares shall be deemed to
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have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
created such Excess Shares (or, in the case of a devise, gift or other
transaction in which no value was given for such Excess Shares, the Market Price
at the time of such devise, gift or other transaction) and (ii) the Market Price
on the date the Corporation, or its designee accepts such offer (the "Redemption
Price"). The Trust shall have the right to accept such offer for a period of
ninety days after the later of (i) the date of the purported Transfer or other
event which resulted in the designation of the Shares as Excess Shares and (ii)
the date the Board of Directors determines in good faith that a purported
Transfer or other event resulting in the designation of Excess Shares has
occurred, if the Corporation does not receive a notice of any such Transfer
pursuant to Section A.(5) of this Article XII. Unless the Board of Directors
determines that it is in the interests of the Corporation to make earlier
payments of all of the amounts determined as the Redemption Price per Share in
accordance with the preceding sentence, the Redemption Price may be payable at
the option of the Board of Directors at any time up to but not later than five
years after the date the Corporation accepts the offer to purchase the
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Excess Shares. In no event shall the Corporation have an obligation to pay
interest to the Purported Record Transferee.
D. Severability. If any provision of this Article XII or any
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application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
E. New York Stock Exchange Transactions. Nothing in this Article XII
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shall preclude the settlement of any transaction entered into through the
facilities of the New York Stock Exchange. The fact that the settlement of any
transaction occurs or takes place shall not negate the effect of any other
provision of this Article XII and any transferee in such a transaction shall be
subject to all of the provisions and limitations set forth in this Article XII.
F. Amendment of Article XII. This Article XII may not be amended,
------------------------
modified or repealed except by the affirmative vote of not less than two-thirds
(2/3) of the votes entitled to be cast by the holders of all Shares of the
Corporation entitled to vote generally in the election of Directors voting
together as one class."
FOURTH: The foregoing amendment has been duly adopted by the favorable vote
of the holders of a majority of the outstanding stock of the Corporation
entitled to vote thereon in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Vencor, Inc. has caused this certificate to be signed
by Joseph L. Landenwich, its Secretary, on the 30th day of April, 1998.
VENCOR, INC.
By:
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Joseph L. Landenwich
Secretary
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