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Exhibit 3.2
FORM OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
SIMON PROPERTY GROUP, INC.
Simon Property Group, Inc. (the "Corporation"), a corporation
organized under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
1. That the name of the Corporation is Simon Property Group, Inc.
2. The original Certificate of Incorporation of the Corporation was
filed under the name Corporate Property Investors, Inc. with the Secretary of
State of Delaware on March 13, 1998.
3. This Restated Certificate of Incorporation was duly authorized by
the Corporation's Board of Directors and stockholders, and all specifically
affected classes or series of classes of stockholders, in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
4. This Restated Certificate of Incorporation has been duly adopted
in accordance with Sections 242 and 245 of the General Corporation Law of the
State of Delaware.
5. The text of the Restated Certificate of Incorporation reads as
follows:
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RESTATED
CERTIFICATE OF INCORPORATION
OF
SIMON PROPERTY GROUP, INC.
FIRST: The name of the corporation (which is hereinafter called the
"Corporation") is:
Simon Property Group, Inc.
SECOND: The purposes for which and any of which the Corporation is
formed and the business and objects to be carried on and promoted by it are:
(a) To engage in the business of a real estate investment
trust ("REIT") as that phrase is defined in the Internal Revenue Code of 1986,
as amended (the "Code").
(b) To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
THIRD: The address of its registered office in the State of Delaware
is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, County of
New Castle, Delaware. The name of its registered agent at such address is The
Corporation Trust Company.
FOURTH: (a) The total number of shares of stock of all classes
which the Corporation has authority to issue is 750,000,000 shares of capital
stock, of which 400,000 shares are classified as Common Stock, par value $.0001
per share ("Common Stock") 12,000,000 shares are classified as Class B Common
Stock, par value $.0001 per share ("Class B Common Stock"), 4,000 shares are
classified as Class C Common Stock, par value $.0001 per share ("Class C Common
Stock"), 100,000,000 shares are classified as Preferred Stock, par value $.0001
per share, ("Preferred Stock"), and 237,996,000 shares are classified as Excess
Common Stock, par value $.0001 per share ("Excess Common Stock").
(b) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation:
(1) Each share of Common Stock shall have one vote, and, except as
otherwise provided in respect of any series of Preferred Stock and any
series of Preferred Stock
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hereafter created, and except as otherwise provided with respect to
directors elected by the holders of the Class B Common Stock or of the
Class C Common Stock, each voting as a separate class, the exclusive
voting power for all purposes shall be vested in the holders of the Common
Stock, the Class B Common Stock, the Class C Common Stock and the Excess
Common Stock, voting together as a single class. Shares of Common Stock
shall not have cumulative voting rights.
(2) Subject to the provisions of law and any preferences of any
series of Preferred Stock and any series of Preferred Stock hereafter
created, dividends or other distributions, including dividends or other
distributions payable in shares of another class of the Corporation's
stock, may be paid ratably on the Common Stock at such time and in such
amounts as the Board of Directors may deem advisable, but only if at the
same time, dividends are paid on outstanding shares of Class B Common
Stock and Class C Common Stock in accordance with subparagraphs (c)(2) and
(c-1)(2), respectively, of this Article FOURTH.
(3) Subject to the provisions of law and the preferences of any
series of Preferred Stock and any series of Preferred Stock hereafter
created, in the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Common
Stock shall be entitled, together with the holders of Class B Common
Stock, Class C Common Stock, Excess Common Stock and any other series of
Preferred Stock hereafter created not having a preference on distributions
in the liquidation, dissolution or winding up of the Corporation, to share
ratably in the net assets of the Corporation remaining, after payment or
provision for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of any series of Preferred
Stock and any series of Preferred Stock hereafter created having a
preference on distributions in the liquidation, dissolution or winding up
of the Corporation shall be entitled.
(4) Each share of Common Stock is convertible into Excess Common
Stock, as provided in Article NINTH hereof.
(c) The following is a description (which should be read in
conjunction with paragraph (c-1) of this Article FOURTH) of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Class B
Common Stock of the Corporation:
(1) Each share of Class B Common Stock shall have one vote, and,
except as otherwise provided in respect of any
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series of Preferred Stock and any series of Preferred Stock hereafter
created and except as otherwise provided in this paragraph (c) and in
paragraph (c-1), the exclusive voting power for all purposes shall be
vested in the holders of the Class B Common Stock, the Class C Common
Stock and the Common Stock, voting together as a single class. Shares of
Class B Common Stock shall not have cumulative voting rights. The holders
of the shares of Class B Common Stock shall have the right, voting as a
separate class, to elect four directors of the Corporation and shall vote
with the holders of the Class C Common Stock, and the Common Stock (voting
together as a single class) to elect the remaining directors (other than
the director or directors to be elected by the holders of the Class C
Common Stock voting as a separate class); provided that if the Simon
Family Group (as defined in Article NINTH) shall sell or transfer a
portion of their Common Stock, Class B Common Stock and Units (as defined
in Article NINTH) so as to reduce their Aggregate Assumed Equity Interest
in the Corporation (as defined in Article NINTH) to less than 50% of the
Simon Family Group Initial Aggregate Assumed Equity Interest (as defined
in Article NINTH) in the Corporation, from and after the date of such
reduction the holders of the shares of Class B Common Stock shall have the
right, voting as a separate class, to elect two directors of the
Corporation. The right of the holders of Class B Common Stock to elect
directors may be exercised by written consent of such holders. For
purposes of this subparagraph, shares held in a voting trust shall be
deemed owned by the beneficiaries of the voting trust.
(2) Subject to the provisions of law and the preferences of the
Preferred Stock and of any series of Preferred Stock hereafter created,
dividends or other distributions, including dividends or other
distributions payable in shares of another class of the Corporation's
stock, may be paid ratably on the Class B Common Stock at such time and in
such amounts as the Board of Directors may deem advisable; provided that
cash dividends or other distributions shall be paid on each share of Class
B Common Stock at the same time as cash dividends or other distributions
are paid on Common Stock or Class C Common Stock and in an amount equal to
the amount payable on the number of shares of Common Stock into which each
share of Class B Common Stock is then convertible; provided further that
non-cash dividends or other non-cash distributions (including the issuance
of warrants or rights to acquire securities of the Corporation) shall be
distributed on each share of Class B Common Stock at the same time as such
non-cash dividends or other non-cash distributions are distributed on
Common Stock or Class C Common Stock and in an amount equal to the amount
distributable on the number of shares of Common Stock into which each
share of Class B
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Common Stock is then convertible; provided further that any dividends or
other distributions payable otherwise on the Class B Common Stock shall be
paid in shares of Common Stock or securities convertible or exchangeable
into Common Stock (or warrants or rights issued to acquire Common Stock or
securities convertible or exchangeable into Common Stock).
(3) (A) Each share of Class B Common Stock is convertible into
Excess Common Stock, as provided in Article NINTH hereof. Each share of
Class B Common Stock may be converted at the option of the holder thereof
into one share of Common Stock. Immediately and automatically each share
of Class B Common Stock shall be converted into one share of Common Stock
(i) if the Aggregate Assumed Equity Interest in the Corporation of the
Simon Family Group is for any reason reduced to less than 5% of the
Aggregate Assumed Equity Interest in the Corporation or (ii) if such share
of Class B Common Stock is otherwise sold or otherwise transferred to or
is otherwise held by anyone other than a member of the Simon Family Group.
For purposes of this subparagraph, shares held in a voting trust shall be
deemed owned by the beneficiaries of the voting trust.
(B) The Corporation may not subdivide its outstanding shares
of Common Stock, combine its outstanding shares of Common Stock into a
smaller number of shares, or issue by reclassification of its shares of
Common Stock any shares of capital stock of the Corporation without making
the same adjustment to the Class B Common Stock. The Corporation shall not
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other distributions to
the extent permitted by subparagraph (c)(2) of this Article FOURTH) or
rights or warrants to subscribe for or purchase securities issued by the
Corporation or property of the Corporation (excluding those referred to in
subparagraph (c)(2) of this Article FOURTH), without making the same
distribution to all holders of its Class B Common Stock. No adjustment of
the conversion rate shall be made as a result of or in connection with the
issuance of Common Stock of the Corporation pursuant to options or stock
purchase agreements now or hereafter granted or entered into with officers
or employees of the Corporation or its subsidiaries in connection with
their employment, whether entered into at the beginning of the employment
or at any time thereafter. In case of any capital reorganization of the
Corporation, or the consolidation or merger of the Corporation with or
into another corporation, or a statutory share exchange, or the sale,
transfer or other disposition of all or substantially all of the property,
assets or business of the Corporation then, in each such case, each share
of Common Stock and each share of Class B Common Stock shall be treated
the same unless the transaction is approved by the affirmative vote
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of a majority of the holders of Class B Common stock shall be required to
approve such a transaction.
(C) Upon conversion of any shares of Class B Common Stock, no
payment or adjustment shall be made on account of dividends accrued,
whether or not in arrears, on such shares or on account of dividends
declared and payable to holders of Common Stock of record on a date prior
to the date of conversion.
(D) Except with respect to shares of Class B Common Stock
which have been deemed to have been automatically converted into Common
Stock pursuant to subparagraph (c)(3)(A) of this Article FOURTH, in order
to convert shares of Class B Common Stock into Common Stock the holder
thereof shall surrender at the office of the Transfer Agent the
certificate or certificates therefor, duly endorsed to the Corporation or
in blank, and give written notice to the Corporation at said office that
he elects to convert such shares and shall state in writing therein the
name or names (with addresses) in which he wishes the certificate or
certificates for Common Stock to be issued. Shares of Class B Common Stock
shall be deemed to have been converted on the date of the surrender of
such certificate or certificates for shares for conversion as provided
above, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock on such date. As soon as
practicable on or after the date of conversion as aforesaid, the
Corporation will issue and deliver at said office a certificate or
certificates for the number of full shares of Common Stock issuable upon
such conversion, together with cash for any fraction of a share, as
provided in subparagraph (c)(3)(F) of this Article FOURTH, to the person
or persons entitled to receive the same. The Corporation will pay any and
all federal original issue taxes that may be payable in respect of the
issue or delivery of shares of Common Stock on conversion of shares of
Class B Common Stock pursuant hereto. The Corporation shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that in which the shares of Class B Common Stock so converted
were registered, and no issue or delivery shall be made unless and until
the person requesting such issue has paid to the Corporation the amount of
any such tax, or has established to the satisfaction of the Corporation
either that such tax has been paid or that no such tax is payable.
(E) All shares of Class B Common Stock converted into Common
Stock shall be retired and cancelled and shall not be reissued.
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(F) The Corporation shall not issue fractional shares of
Common Stock upon any conversion of shares of Class B Common Stock. As to
any final fraction of a share which the holder of one or more shares of
Class B Common Stock would be entitled to receive upon exercise of such
holder's conversion right the Corporation shall pay a cash adjustment in
an amount equal to the same fraction of the Market Price (as defined in
Article NINTH) for the date of exercise.
(G) The Corporation shall at all times have authorized and
unissued a number of shares of Common Stock sufficient for the conversion
of all shares of Class B Common Stock at the time outstanding. If any
shares of Common Stock require registration with or approval of any
governmental authority under any Federal or State law, before such shares
may be validly issued upon conversion, then the Corporation will in good
faith and as expeditiously as possible endeavor to secure such
registration or approval as the case may be. The Corporation warrants that
all Common Stock issued upon conversion of shares of Class B Common Stock
will upon issue be fully paid and nonassessable by the Corporation and
free from original issue taxes.
(4) Subject to the provisions of law and the preferences of the
Preferred Stock and of any series of Preferred Stock hereafter created, in
the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of Class B
Common Stock shall be entitled, together with the holders of Class C
Common Stock, Common Stock, Excess Common Stock and any other series of
Preferred Stock hereafter created not having a preference on distributions
in the liquidation, dissolution or winding up of the Corporation, to share
ratably in the net assets of the Corporation remaining, after payment or
provision for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of the Preferred Stock and
of any series of Preferred Stock hereafter created having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
(c-1) The following is a description (which should be read in
conjunction with paragraph (c) of this Article FOURTH) of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Class C
Common Stock of the Corporation:
(1) Each share of Class C Common Stock shall have one vote, and,
except as otherwise provided in respect of any series of Preferred Stock
and any series of Preferred Stock hereafter created and except as
otherwise provided in this
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paragraph (c-1) and in paragraph (c), the exclusive voting power for all
purposes shall be vested in the holders of the Class C Common Stock, the
Class B Common Stock and the Common Stock, voting together as a single
class. Shares of Class C Common Stock shall not have cumulative voting
rights. Subject to paragraph (b) of Article FIFTH, the holders of the
shares of Class C Common Stock shall have the right, voting as a separate
class, to elect two directors of the Corporation and shall vote with the
holders of the Class B Common Stock, and the Common Stock (voting together
as a single class) to elect the remaining directors (other than the
directors to be elected by the holders of the Class B Common Stock voting
as a separate class); provided that if the DeBartolo Family Group (as
defined in Article NINTH) shall sell or transfer a portion of their Common
Stock, Class C Common Stock and Units (as defined in Article NINTH) so as
to reduce their Aggregate Assumed Equity Interest in the Corporation (as
defined in Article NINTH) to less than 50% of the DeBartolo Family Group
Initial Aggregate Assumed Equity Interest (as defined in Article NINTH) in
the Corporation, from and after the date of such reduction the holders of
the shares of Class C Common Stock shall have the right, voting as a
separate class, to elect one director of the Corporation. The right of
holders of Class C Common Stock to elect directors may be exercised by
written consent of such holders. For purposes of this subparagraph, shares
held in a voting trust shall be deemed owned by the beneficiaries of the
voting trust.
(2) Subject to the provisions of law and the preferences of the
Preferred Stock and of any series of Preferred Stock hereafter created,
dividends or other distributions, including dividends or other
distributions payable in shares of another class of the Corporation's
stock, may be paid ratably on the Class C Common Stock at such time and in
such amounts as the Board of Directors may deem advisable; provided that
cash dividends or other distributions shall be paid on each share of Class
C Common Stock at the same time as cash dividends or other distributions
are paid on Common Stock or Class B Common Stock and in an amount equal to
the amount payable on the number of shares of Common Stock into which each
share of Class C Common Stock is then convertible; provided further that
non-cash dividends or other non-cash distributions (including the issuance
of warrants or rights to acquire securities of the Corporation) shall be
distributed on each share of Class C Common Stock at the same time as such
non-cash dividends or other non-cash distributions are distributed on
Common Stock or Class B Common Stock and in an amount equal to the amount
distributable on the number of shares of Common Stock into which each
share of Class C Common Stock is then convertible; provided further that
any dividends or other distributions payable otherwise on the
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Class C Common Stock shall be paid in shares of Common Stock or securities
convertible or exchangeable into Common Stock (or warrants or rights
issued to acquire Common Stock or securities convertible or exchangeable
into Common Stock).
(3) (A) Each share of Class C Common Stock is convertible into
Excess Common Stock, as provided in Article NINTH hereof. Each share of
Class C Common Stock may be converted at the option of the holder thereof
into one share of Common Stock. Immediately and automatically each share
of Class C Common Stock shall be converted into one share of Common Stock
(i) if the Aggregate Assumed Equity Interest in the Corporation of the
DeBartolo Family Group is for any reason reduced to less than 5% of the
Aggregate Assumed Equity Interest in the Corporation or (ii) if such share
of Class C Common Stock is otherwise sold or otherwise transferred to or
is otherwise held by anyone other than a member of the DeBartolo Family
Group. For purposes of this subparagraph, shares held in a voting trust
shall be deemed owned by the beneficiaries of the voting trust.
(B) The Corporation may not subdivide its outstanding shares
of Common Stock, combine its outstanding shares of Common Stock into a
smaller number of shares, or issue by reclassification of its shares of
Common Stock any shares of the Corporation without making the same
adjustment to the Class C Common Stock. The Corporation shall not
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other distributions to
the extent permitted by subparagraph (c-1)(2) of this Article FOURTH) or
rights or warrants to subscribe for or purchase securities issued by the
Corporation or property of the Corporation (excluding those referred to
subparagraph (c-1)(2) of this Article FOURTH), without making the same
distribution to all holders of its Class C Common Stock. No adjustment of
the conversion rate shall be made as a result of or in connection with the
issuance of Common Stock of the Corporation pursuant to options or stock
purchase agreements now or hereafter granted or entered into with officers
or employees of the Corporation or its subsidiaries in connection with
their employment, whether entered into at the beginning of the employment
or at any time thereafter. In case of any capital reorganization of the
Corporation, or the consolidation or merger of the Corporation with or
into another corporation, or a statutory share exchange, or the sale,
transfer or other disposition of all or substantially all of the property,
assets or business of the Corporation then, in each such case, each share
of Common Stock and each share of Class C Common Stock shall be treated
the same unless the transaction is approved by the affirmative vote of the
holders of a majority of Class C Common Stock shall be required to approve
such a transaction.
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(C) Upon conversion of any shares of Class C Common Stock, no
payment or adjustment shall be made on account of dividends accrued,
whether or not in arrears, on such shares or on account of dividends
declared and payable to holders of Common Stock of record on a date prior
to the date of conversion.
(D) Except with respect to shares of Class C Common Stock
which have been deemed to have been automatically converted into Common
Stock pursuant to subparagraph (c-1)(3)(A) of this Article FOURTH, in
order to convert shares of Class C Common Stock into Common Stock the
holder thereof shall surrender at the office of the Transfer Agent the
certificate or certificates therefor, duly endorsed to the Corporation or
in blank, and give written notice to the Corporation at said office that
he elects to convert such shares and shall state in writing therein the
name or names (with addresses) in which he wishes the certificate or
certificates for Common Stock to be issued. Shares of Class C Common Stock
shall be deemed to have been converted on the date of the surrender of
such certificate or certificates for shares for conversion as provided
above, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock on such date. As soon as
practicable on or after the date of conversion as aforesaid, the
Corporation will issue and deliver at said office a certificate or
certificates for the number of full shares of Common Stock issuable upon
such conversion, together with cash for any fraction of a share, as
provided in subparagraph (c-l)(3)(F) of this Article FOURTH, to the person
or persons entitled to receive the same. The Corporation will pay any and
all federal original issue taxes that may be payable in respect of the
issue or delivery of shares of Common Stock on conversion of shares of
Class C Common Stock pursuant hereto. The Corporation shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that in which the shares of Class C Common Stock so converted
were registered, and no issue or delivery shall be made unless and until
the person requesting such issue has paid to the Corporation the amount of
any such tax, or has established to the satisfaction of the Corporation
either that such tax has been paid or that no such tax is payable.
(E) All shares of Class C Common Stock converted into Common
Stock shall be retired and cancelled and shall not be reissued.
(F) The Corporation shall not issue fractional shares of
Common Stock upon any conversion of shares of Class C Common Stock. As to
any final fraction of a share which the holder of one or more shares of
Class C Common
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Stock would be entitled to receive upon exercise of such holder's
conversion right the Corporation shall pay a cash adjustment in an amount
equal to the same fraction of the Market Price (as defined in Article
NINTH) for the date of exercise.
(G) The Corporation shall at all times have authorized and
unissued a number of shares of Common Stock sufficient for the conversion
of all shares of Class C Common Stock at the time outstanding. If any
shares of Common Stock require registration with or approval of any
governmental authority under any Federal or State law, before such shares
may be validly issued upon conversion, then the Corporation will in good
faith and as expeditiously as possible endeavor to secure such
registration or approval as the case may be. The Corporation warrants that
all Common Stock issued upon conversion of shares of Class C Common Stock
will upon issue be fully paid and nonassessable by the Corporation and
free from original issue taxes.
(4) Subject to the provisions of law and the preferences of the
Preferred Stock and of any series of Preferred Stock hereafter created, in
the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of Class C
Common Stock shall be entitled, together with the holders of Class B
Common Stock, Common Stock, Excess Common Stock and any other series of
Preferred Stock hereafter created not having a preference on distributions
in the liquidation, dissolution or winding up of the Corporation, to share
ratably in the net assets of the Corporation remaining, after payment or
provision for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of the Preferred Stock and
any series of Preferred Stock hereafter created having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
(c-2) Subject in all cases to the provisions of Article NINTH with
respect to Excess Stock (as defined in this paragraph), the Preferred Stock may
be issued from time to time in one or more series, each of which series shall
have such distinctive designation or title as shall be fixed by the Board of
Directors prior to the issuance of any shares thereof. Each such series of
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution providing for the issue of such series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of
Delaware;
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provided, however, no shares of any series of Preferred Stock may be authorized
or issued unless (i) the certificates of designations relating to such series
contains restrictions on ownership and transfer and conversion provisions
applicable to such series comparable to those set forth in this Article NINTH,
and (ii) a corresponding series of Preferred Stock ("Excess Preferred Stock" and
together with Excess Common Stock, unless the context otherwise requires,
"Excess Stock"), to be issued in accordance with any such conversion provisions
upon a violation of such restrictions on ownership and transfer, is
simultaneously authorized by filing of a certificate of designations. The Board
of Directors is further authorized to increase or decrease (but not below the
number of such shares of series then outstanding) the shares of any series
subsequent to the issuance of shares of that series.
FIFTH: (a) The powers and duties conferred and imposed upon the
board of directors by the General Corporation Law of the State of Delaware shall
be exercised and performed, in accordance with Section 141 thereof governing the
action of directors, by a board (the "Board of Directors"); provided, however
that pursuant to Section 141(a) of the General Corporation Law of the State of
Delaware: (i) certain of such powers and duties of the Board of Directors set
forth herein shall be exercised and performed only by the Independent Directors
(as defined in Article NINTH hereof), (ii) certain of the directors shall serve
until the annual meeting of the stockholders next to his or her name in Article
FIFTH(e) and (iii) certain of such powers and duties of the Board of Directors
as described herein may be exercised and performed by one or more committees
consisting of one or more members of the Board of Directors and one or more
other persons to the extent such powers and duties are delegated thereto by the
Board of Directors. The number of directors of the Corporation shall never be
less than the minimum number permitted by the General Corporation Law of the
State of Delaware now or hereafter in force and:
(1) so long as any shares of both Class B Common Stock and Class C
Common Stock are outstanding, the number of directors of the Corporation
shall be thirteen;
(2) so long as any shares of Class B Common Stock (but no Class C
Common Stock) are outstanding, the number of directors of the Corporation
shall be nine;
(3) so long as any shares of Class C Common Stock (but no Class B
Common Stock) are outstanding, the number of directors of the Corporation
shall be nine; and
(4) so long as no shares of Class B Common Stock or Class C Common
Stock are outstanding, the number of directors of the Corporation shall be
fixed by the Board of Directors from time to time.
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At least a majority of the directors shall be Independent Directors (as defined
in Article NINTH).
(b) Subject to the rights of the holders of any class of
Preferred Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors shall be filled by a vote of the
stockholders or a majority of the entire Board of Directors, and any vacancies
on the Board of Directors resulting from death, disability ("disability," which
for purposes of this paragraph (b) shall mean illness, physical or mental
disability or other incapacity), resignation, retirement, disqualification,
removal from office, or other cause shall be filled by a vote of the
stockholders or a majority of the directors then in office; provided that
(1) any vacancies on the Board of Directors resulting from death,
disability, resignation, retirement, disqualification, removal from
office, or other cause of a director elected by the holders of Class B
Common Stock shall be filled by a vote of the holders of Class B Common
Stock; and
(2) any vacancies on the Board of Directors with respect to a
director elected by the holders of Class C Common Stock shall be filled as
follows:
(A) any vacancy resulting from the death, disability,
resignation, retirement, disqualification, removal from office or other
cause of Mr. Frederick W. Petri (and any person duly nominated and elected
to serve as his replacement) shall be filled by the holders of Class C
Common Stock, voting as a separate class, to elect as a replacement
director a candidate who is an Independent Director, who has similar
experience and standing in the business community to the Independent
Directors and who has been approved by a majority of the Independent
Directors elected by the holders of Common Stock and other capital stock
entitled to vote with the Common Stock as a single class. If such
Independent Directors do not approve such candidate, the holders of Class
C Common Stock may propose another candidate for approval by a majority of
such Independent Directors. The right of holders of Class C Common Stock
to propose candidates to the Independent Directors shall continue until
one such candidate is approved by a majority of such Independent
Directors;
(B) at any time prior to December 31, 2003, any vacancy in the
seat on the Board of Directors occupied by Ms. Marie Denise DeBartolo York
on [the date of the CPI Merger] other than one resulting from her death or
disability shall reduce by such vacancy an equivalent number of the
directors that holders of Class C Common Stock may,
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voting as a separate class, elect, and such vacancy shall be filled by a
majority of the entire Board of Directors; and
(C) any vacancy in the seat on the Board of Directors occupied
by Ms. Marie Denise DeBartolo York on [the date of the CPI Merger]
resulting from the death or disability of Ms. Marie Denise DeBartolo York,
or (ii) at any time on or subsequent to December 31, 2003, shall be filled
by holders of Class C Common Stock, voting as a separate class, to elect
as a replacement director a candidate who is either (i) the Chief
Executive Officer of the Edward J. DeBartolo Corporation (or any successor
to such corporation), (ii) the Chief Financial Officer of the Edward J.
DeBartolo Corporation (or any successor to such corporation) provided that
such person was the Chief Financial Officer of the Edward J. DeBartolo
Corporation on the [date of the CPI Merger] or (iii) an Independent
Director, who has similar experience and standing in the business
community to the Independent Directors and who has been approved by a
majority of the Independent Directors elected by the holders of Common
Stock and other capital stock entitled to vote with the Common Stock as a
single class. If such Independent Directors do not approve such candidate,
the holders of Class C Common Stock may propose another candidate for
approval by a majority of such Independent Directors. The right of holders
of Class C Common Stock to propose candidates to the Independent Directors
shall continue until one such candidate is approved by a majority of such
Independent Directors.
(3) A special meeting of holders of the Class B Common Stock or
Class C Common Stock shall be called by the President in the event a
vacancy occurs on the Board of Directors from any cause among the
directors entitled to be elected by the holders of the Class B Common
Stock or Class C Common Stock, as the case may be, and a special meeting
of holders of the Common Stock, the Class C Common Stock and the Class B
Common Stock shall be called by the President in the event a vacancy
occurs on the Board of Directors from any cause among the directors
elected by the holders of the Common Stock, the Class C Common Stock and
the Class B Common Stock (voting together as a single class) and is not
filled by the directors within 30 days after the vacancy occurs. The
holders of Class B Common Stock and Class C Common Stock may exercise
their rights to elect directors by written consent without a meeting.
No decrease in the number of directors constituting the Board of Directors shall
affect the tenure of office of any director.
(c) Whenever the holders of any one or more series of
Preferred Stock of the Corporation shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the Board of Directors
shall
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consist of said directors so elected in addition to the number of directors
fixed as provided in paragraph (a) of this Article FIFTH or in the By-Laws;
provided that if any shares of Class B Common Stock or Class C Common Stock are
outstanding, the election of one or more directors by such holders of Preferred
Stock will eliminate the corresponding number of directors to be elected by the
combined holders of the Common Stock, the Class B Common Stock, and the Class C
Common Stock, voting together as a single class, and will neither increase the
size of the Board of Directors nor eliminate the seat or seats of directors
elected by the holders of the Class B Common Stock or of the Class C Common
Stock, each voting as a separate class. Notwithstanding the foregoing, and
except as otherwise may be required by law, whenever the holders of any one or
more series of Preferred Stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
terms of the director or directors elected by such holders shall expire at the
next succeeding annual meeting of stockholders.
(d) Subject to Section 141(k) of the General Corporation Law
of the State of Delaware, directors may be removed from office at any time, with
or without cause, by the affirmative vote of the holders of at least a majority
of the combined voting power of all classes of shares of capital stock entitled
to vote in the election for directors voting together as a single class.
(e) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the following are the names of the current directors
of the Corporation, each of whom shall serve until the annual meeting of
stockholders indicated next to his or her name, and who thereafter will serve
(or whose replacement will serve) until the next following annual meeting of
stockholders.
Name of Stock Classes Director
Current Director Entitled to Elect Class
---------------- ----------------- -----
Robert E. Angelica Equity Stock
Birch Bayh Equity Stock
Hans C. Mautner Equity Stock
G. William Miller Equity Stock
Terry S. Prindiville Equity Stock
J. Albert Smith, Jr. Equity Stock
Pieter S. van den Berg Equity Stock
David Simon Class B Common Stock
Herbert Simon Class B Common Stock
Richard S. Solokov Class B Common Stock
Frederick W. Petri Class C Common Stock
M. Denise DeBartolo York Class C Common Stock
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(f) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, any action by the Corporation relating to (1)
transactions between the Corporation and M.S. Management Associates, Inc., Simon
MOA Management Company, Inc., DeBartolo Properties Management, Inc. and/or M.S.
Management Associates (Indiana), Inc. or (2) transactions involving the
Corporation, individually or in its capacity as general partner (whether
directly or indirectly through another entity) of Simon Property Group, L.P., in
which the Simon Family Group or the DeBartolo Family Group or any member or
affiliate of any member of the Simon Family Group or DeBartolo Family Group has
an interest (other than through ownership interests in the Corporation or Simon
Property Group, L.P.), shall, in addition to such other vote that may be
required, require the prior approval of a majority of the Independent Directors.
(g) Elections of directors need not be by written ballot.
(h) Pursuant to Section 141(a) of the Delaware General
Corporation Law, the Board of Directors may appoint an Executive Committee, an
Audit Committee, a Nominating Committee and other committees composed of one or
more directors or one or more other persons delegated such powers and duties by
the Board of Directors. Each committee except the Executive Committee, the Audit
Committee and the Nominating Committee shall have as a member at least one
director elected by the Class B Common Stock and at least one director elected
by the Class C Common Stock. The entire Audit Committee and a majority of the
Compensation Committee shall be Independent Directors. The Nominating Committee
shall have five members, with two being independent Directors, two elected by
the Class B Common Stock, and one elected by the Class C Common Stock, and,
except as otherwise provided in paragraph (b) of Article FIFTH of the Charter,
only those members of the Nominating Committee elected by the Class B Common
Stock or the Class C Common Stock shall nominate the persons to be elected to
serve as directors by the holders of Class B Common Stock or Class C Common
Stock, respectively.
SIXTH: (a) The following provisions are hereby adopted for the
purpose of defining, limiting, and regulating the powers of the Corporation and
of the directors and the stockholders:
(1) The Board of Directors is hereby empowered to authorize the
issuance from time to time of shares of its stock of any class, whether
now or hereafter authorized, or securities convertible into shares of its
stock of any class or classes, whether now or hereafter authorized, for
such consideration as may be deemed advisable by the Board of Directors
and without any action by the stockholders.
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(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation and at such price or prices and upon such
other terms as the Board of Directors, in its sole discretion, may fix;
and any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of Directors in its
sole discretion shall determine, be offered to the holders of any class,
series or type of stock or other securities at the time outstanding to the
exclusion of the holders of any or all other classes, series or types of
stock or other securities at the time outstanding.
(3) The Board of Directors of the Corporation shall, consistent with
applicable law, have power in its sole discretion to determine from time
to time in accordance with sound accounting practice or other reasonable
valuation methods what constitutes annual or other net profits, earnings,
surplus, or net assets in excess of capital; to fix and vary from time to
time the amount to be reserved as working capital, or determine that
retained earnings or surplus shall remain in the hands of the Corporation;
to set apart out of any funds of the Corporation such reserve or reserves
in such amount or amounts and for such proper purpose or purposes as it
shall determine and to abolish any such reserve or any part thereof; to
redeem or purchase its stock or to distribute and pay distributions or
dividends in stock, cash or other securities or property, out of surplus
or any other funds or amounts legally available therefor, at such times
and to the stockholders of record on such dates as it may, from time to
time, determine; to determine the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or
charges and the propriety thereof (whether or not any obligation or
liability for which such reserves or charges shall have been created shall
have been paid or discharged); to determine the fair value and any matters
relating to the acquisition, holding and disposition of any assets by the
Corporation; and to determine whether and to what extent and at what times
and places and under what conditions and regulations the books, accounts
and documents of the Corporation, or any of them, shall be open to the
inspection of stockholders, except as otherwise provided by statute or by
the By-Laws, and, except as so provided, no stockholder shall have any
right to inspect any book, account or document of the Corporation unless
authorized so to do by resolution of the Board of Directors.
(4) (a) The Corporation shall indemnify to the fullest extent
permitted under and in accordance with the laws of the State of Delaware
any person who was or is a party or is threatened to be made a party to
any threatened,
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pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer or trustee of or in any
other capacity with another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
(b) Expenses incurred in defending a civil or criminal action,
suit or proceeding shall (in the case of any action, suit or proceeding
against a director of the Corporation) or may (in the case of any action,
suit or proceeding against an officer, trustee, employee or agent) be paid
by the Corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors upon receipt of
an undertaking by or on behalf of the indemnified person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article SIXTH
paragraph (a)(4).
(c) The indemnification and other rights set forth in this
paragraph (a)(4) shall not be exclusive of any provisions with respect
thereto in the By-Laws or any other contract or agreement between the
Corporation and any officer, director, employee or agent of the
Corporation.
(d) Neither the amendment nor repeal of this paragraph (a)(4),
subparagraph (a), (b) or (c), nor the adoption of any provision of this
Restated Certificate of Incorporation inconsistent with paragraph (a)(4),
subparagraph (a), (b) or (c), shall eliminate or reduce the effect of this
paragraph (a)(4), subparagraphs (a), (b) and (c), in respect of any matter
occurring before such amendment, repeal or adoption of an inconsistent
provision or in respect of any cause of action, suit or claim relating to
any such matter which would have given rise to a right of indemnification
or right to receive expenses pursuant to this paragraph (a)(5),
subparagraph (a), (b) or (c), if such provision had not been so amended or
repealed or if a provision inconsistent therewith had not been so adopted.
(e) No director shall be personally liable to the Corporation
or any stockholder for monetary damages for breach of fiduciary duty as a
director, except for liability
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(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law;
(iii) under Section 174 of the General Corporation Law of the
State of Delaware; or
(iv) for any transaction from which the director derived an
improper personal benefit.
If the General Corporation Law of the State of Delaware is amended
after the date hereof 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 General Corporation Law of the State of Delaware,
as so amended. All references in this paragraph (e) shall also be deemed
to refer to the Independent Directors and members of committees of the
Board of Directors.
(5) For any stockholder proposal to be presented in connection with
an annual meeting of stockholders of the Corporation, including any
proposal relating to the nomination of a director to be elected to the
Board of Directors of the Corporation, the stockholders must have given
timely written notice thereof in writing to the Secretary of the
Corporation in the manner and containing the information required by the
By-Laws. Stockholder proposals to be presented in connection with a
special meeting of stockholders will be presented by the Corporation only
to the extent required by the General Corporation Law of the State of
Delaware.
(b) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Charter, including any
amendments changing the terms or contract rights, as expressly set forth in the
Charter, of any of its outstanding stock by reclassification or otherwise, by a
majority of the directors (including a majority of the Independent Directors, a
majority of the directors elected by the holders of the Class B Common Stock and
one director elected by the holders of the Class C Common Stock, if such Class B
Common Stock and Class C Common Stock have at that time elected directors)
adopting a resolution setting forth the proposed change, declaring its
advisability, and either calling a special meeting of the stockholders certified
to vote on the proposed change, or directing the proposed change to be
considered at the next annual stockholders meeting; provided
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however, that any amendment to, repeal of or adoption of any provision
inconsistent with subparagraphs (a)(4)(e) or (a)(5) or this paragraph (b) of
Article SIXTH will be effective only if it is adopted upon the affirmative vote
of not less than 80% of the aggregate votes entitled to be cast thereon
(considered for this purpose as a single class) and any amendment to, repeal of,
or adoption of any provision inconsistent with paragraphs (c) or (c-1) of
Article FOURTH or Article FIFTH will be effective only if it is adopted upon
both (1) the affirmative vote of not less than 80% of the aggregate votes
entitled to be cast thereon (considered for this purpose as a single class) and
(2) the affirmative vote of not less than a majority of the aggregate votes
entitled to be cast by the holders of the Class B Common Stock (in the case of
paragraph (c) of Article FOURTH or Article FIFTH) or by the holders of the Class
C Common Stock (in the case of paragraph (c-1) of Article FOURTH or Article
FIFTH).
(c) In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-Laws of the Corporation.
(d) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the affirmative vote of least six of the Independent
Directors is necessary to cause any partnership in which the Corporation acts,
directly or indirectly, as a general partner to sell any property owned by such
partnership in accordance with the terms of the partnership agreement of such
partnership.
(e) The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the Charter of the Corporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit any powers
conferred upon the Board of Directors under the General Corporation Law of the
State of Delaware now or hereafter in force.
SEVENTH: In the case of shares of Common Stock, Class B Common
Stock, Class C Common Stock, Preferred Stock and Excess Stock, the holders of
which are entitled to beneficial interests in shares of stock of SPG Realty
Consultants, Inc., a Delaware corporation ("SRC"), held in the trusts created
under (i) Trust Agreements dated as of October 30, 1979 anf as of August 26,
1994, among stockholders of the Corporation (as successor to Corporate Property
Investors, a Massachusetts voluntary association), SRC (as successor to
Corporate Realty Consultants, Inc., a Delaware corporation) and the Trustee
thereunder, or (ii) any similar trust, such shares of the Corporation and such
beneficial interests in shares of SRC will not be separately transferable. By
acceptance of such shares of Common Stock, Class B Common Stock, Class C Common
Stock, Preferred Stock and
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Excess Stock, the holder thereof agrees to thereafter be subject to, bound by
and entitled to the benefits of all the terms and provisions of the applicable
Trust Agreement or any similar trust. Each certificate evidencing any such
shares of the Corporation will be endorsed with a legend stating that the holder
of the shares represented thereby also holds a beneficial interest in shares of
stock of SRC held in said trust under said Trust Agreement. Any purported
transfer in violation of this paragraph shall be null and void.
EIGHTH: Except as otherwise set forth in this Charter, any action
required or permitted to be taken by stockholders of the Company must be taken
at a duly called annual or special meeting of such stockholders of the Company
and may not be effected by any consent in writing by such stockholders.
NINTH: (a) (1) The following terms shall have the following meaning:
"Aggregate Assumed Equity Interest in the Corporation" shall mean
the aggregate equity interest in the Corporation represented by the Common
Stock, the Class B Common Stock, the Class C Common Stock and the Units on
the assumption that all shares of Class B Common Stock and Class C Common
Stock and all such Units are exchanged for Common Stock.
"Beneficial Ownership" shall mean ownership of Capital Stock by a
Person who would be treated as an owner of such shares of Capital Stock
either directly or indirectly through the application of Section 544 of
the Code, as modified by Section 856(h)(1)(B) of the Code, and any
comparable successor provisions thereto. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have correlative
meanings.
"Beneficiary" shall mean any Qualified Charitable Organization
which, from time to time, is designated by the Corporation to be a
beneficiary of the Trust.
"Board of Directors" shall mean the Board of Directors of the
Corporation as defined in Article FIFTH.
"By-Laws" shall mean the By-Laws of the Corporation.
"Capital Stock" shall mean stock that is Common Stock, Class B
Common Stock, Class C Common Stock, Excess Stock or Preferred Stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Constructive Ownership" shall mean ownership of Capital Stock by a
Person who would be treated as an owner
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of such shares of Capital Stock either directly or indirectly through the
application of Section 318 of the Code, and any comparable successor
provisions thereto, as modified by Section 856(d)(5) of the Code. The
terms "Constructive Owner," "Constructively Owns" and "Constructively
Owned" shall have correlative meanings.
"DeBartolo Family Group" shall mean the Estate of Edward J.
DeBartolo, Sr., Edward J. DeBartolo, Jr. and Marie Denise DeBartolo York,
other members of the immediate family of any of the foregoing, any other
lineal descendants of any of the foregoing, any estates of any of the
foregoing, any trusts established for the benefit of any of the foregoing,
and any other entity controlled by any of the foregoing.
"DeBartolo Family Group Initial Aggregate Assumed Equity Interest in
the Corporation" shall mean the portion of the Aggregate Assumed Equity
Interest in the Corporation owned by the DeBartolo Family Group
immediately following the closing of the DeBartolo Merger.
"DeBartolo Merger" shall mean the merger, pursuant to the Agreement
and Plan of Merger dated March 26, 1996, among Simon DeBartolo Group,
Inc., Day Acquisition Corp., an Ohio corporation and a wholly owned
subsidiary of Simon DeBartolo Group, Inc. ("Sub"), and DeBartolo Realty
Corporation, an Ohio corporation ("DeBartolo"), pursuant to which merger
Sub was merged with and into DeBartolo.
"Exchange Rights" shall mean any rights granted to limited partners
of Simon Property Group, L.P., a Delaware limited partnership (including
pursuant to an Exchange Rights Agreement) to exchange (subject to the
Ownership Limit) limited partnership interests in such Partnership for
shares of Capital Stock or cash at the option of the Corporation.
"Independent Director" shall mean a director of the Corporation who
is neither an employee of the Corporation nor a member (or an affiliate of
a member) of the Simon Family Group or the DeBartolo Family Group.
"Market Price" of any class of Capital Stock on any date shall mean
the average Closing Price (as defined below) of such security for the
twenty consecutive Trading Days (as defined below) ending on the Trading
Day immediately preceding the day in question; the "Closing Price" shall
mean the last sale price for a such security as shown on the New York
Stock Exchange Composite Transactions Tape, or if no such sale has taken
place on such day, then the average of the closing bid and ask prices for
such security on the New York Stock Exchange, or if such security is not
listed or admitted to trading on the New York Stock Exchange, then
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on the principal national securities exchange on which such security is
listed or admitted to trading, or, if such security is not listed or
admitted to trading on any national securities exchange, then on the
Nasdaq National Market, or, if such security is not quoted on the Nasdaq
National Market, then the average of the closing bid and ask prices as
furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors of the Corporation for such purposes; and
"Trading Day" shall mean a day on which the New York Stock Exchange or, if
such security is not listed or admitted to trading thereon, the principal
national securities exchange on which the Common Stock is listed or
admitted to trading is open for the transaction of business or, if the
Common Stock is not so listed or admitted, then any day that is not a
Saturday, Sunday or other day on which depositary institutions in the City
of New York are authorized or obligated by law to close.
"Option" shall mean any options, rights, warrants or convertible or
exchangeable securities containing the right to subscribe for, purchase or
receive upon exchange or conversion shares of Capital Stock.
"Ownership Limit" shall mean (x) in the case of any member of the
Simon Family Group, 18.0%, and (y) in the case of any other Person, 8.0%,
in each case, of any class of Capital Stock, or any combination thereof,
determined by (i) number of shares outstanding, (ii) voting power or (iii)
value (as determined by the Board of Directors), whichever produces the
smallest holding of Capital Stock under the three methods, computed with
regard to all outstanding shares of Capital Stock and, to the extent
provided by the Code, all shares of Capital Stock issuable under
outstanding Options and Exchange Rights that have not been exercised.
"Person" shall mean an individual, corporation, partnership, 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 and also includes a group as
the term is used for purposes of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended.
"Purported Beneficial Holder" shall mean, with respect to any event
(other than a purported Transfer) which results in Excess Stock, the
Person for whom the Purported Record Holder held shares that were,
pursuant to subparagraph
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(a)(3) of this article NINTH, automatically converted into Excess Stock
upon the occurrence of such event.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired
shares of Common Stock or Preferred Stock if such Transfer had been valid
under subparagraph (a)(2) of this Article NINTH.
"Purported Record Holder" shall mean, with respect to any event
(other than a purported Transfer) which results in Excess Stock, the
record holder of the shares that were, pursuant to subparagraph (a)(3) of
this Article NINTH, automatically converted into Excess Stock upon the
occurrence of such event.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record holder of the
Common Stock or the Preferred Stock if such Transfer had been valid under
subparagraph (a)(2) of this Article NINTH.
"Qualified Charitable Organization" shall mean (i) any entity which
would be exempt from federal income under Section 501(c)(3) of the Code
and to which contributions are deductible under Section 170 of the Code or
(ii) any federal, state or local government entity.
"REIT" shall mean a real estate investment trust under Section 856
of the Code.
"Restriction Termination Date" shall mean the first day after the
effective date of the DeBartolo Merger on which the Corporation's status
as a REIT shall have been terminated by the Board of Directors and the
stockholders of the Corporation.
"Simon Family Group" shall mean Melvin Simon, Herbert Simon and
David Simon, other members of the immediate family of any of the
foregoing, any other lineal descendants of any of the foregoing, any
estates of any of the foregoing, any trust established for the benefit of
any of the foregoing, and any other entity controlled by any of the
foregoing.
"Simon Family Group Initial Aggregate Assumed Equity Interest in the
Corporation" shall mean the portion of the Aggregate Assumed Equity
Interest in the Corporation owned by the Simon Family Group immediately
following the closing of the DeBartolo Merger.
"Trading Day" shall mean, with respect to any class of Capital
Stock, a day on which the principal national securities exchange on which
such class of Capital Stock is
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listed or admitted to trading is open for the transaction of business or,
if such class of Capital Stock is not listed or admitted to trading on any
national securities exchange, shall mean 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" shall mean any sale, transfer, gift, hypothecation,
pledge, assignment, devise or other disposition of Capital Stock
(including (i) the granting of any option (including an option to acquire
an Option or any series of such options) or entering into any agreement
for the sale, transfer or other disposition of Capital Stock or (ii) the
sale, transfer, assignment or other disposition of any securities or
rights convertible into or exchangeable for Capital Stock), whether
voluntary or involuntary, whether of record, constructively or
beneficially and whether by operation of law or otherwise.
"Trust" shall mean the trust created pursuant to subparagraph (b)(1)
of this Article NINTH.
"Trustee" shall mean any trustee for the Trust (or any successor
trustee) appointed from time to time by the Corporation; provided,
however, during any period in which Excess Stock is issued and outstanding
the Corporation shall undertake to appoint trustees of the Trust which
trustees are unaffiliated with the Corporation.
"Undesignated Excess Stock" shall have the meaning set forth in
subparagraph (b)(3) of this Article NINTH.
"Units" shall mean units representing limited partnership interests
in Simon Property Group, L.P.
(2) (A) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, no Person shall Beneficially Own or
Constructively Own shares of the outstanding Capital Stock in excess of
the Ownership Limit.
(B) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in any Person Beneficially Owning or Constructively Owning Capital
Stock in excess of the Ownership Limit shall be void ab initio as to the
Transfer of that number of shares of Capital Stock which would be
otherwise Beneficially or Constructively Owned by such Person in excess of
the Ownership Limit; and the intended transferee shall acquire no rights
in such
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shares of Common Stock or Preferred Stock in excess of the Ownership
Limit.
(C) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in the Capital Stock being Beneficially Owned by fewer than 100
Persons (determined without reference to any rules of attribution) shall
be void ab initio; and the intended transferee shall acquire no rights in
such shares of Common Stock or Preferred Stock.
(D) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, any Transfer of shares or other event or
transaction involving Capital 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 Transfer of that number of
shares or other event or transaction of Capital Stock which 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 Common Stock or Preferred Stock in excess of the Ownership
Limit.
(3) (A) If, notwithstanding the other provisions contained in this
Article NINTH, at any time after the effective date of the DeBartolo
Merger and prior to the Restriction Termination Date, there is a purported
Transfer or other event such that any Person would Beneficially Own or
Constructively Own Capital Stock in excess of the Ownership Limit, then,
except as otherwise provided in subparagraph (a)(9), each such share of
Common Stock or Preferred Stock which, when taken together with all other
Capital Stock, would be in excess of the Ownership Limit (rounded up to
the nearest whole share), shall automatically be converted into one share
of Excess Stock, as further described in subparagraph (a)(3)(C) below and
such shares of Excess Stock shall be automatically transferred to the
Trustee as trustee for the Trust. The Corporation shall issue fractional
shares of Excess Stock if required by such conversion ratio. Such
conversion shall be effective as of the close of business on the business
day prior to the date of the Transfer or other event.
(B) If, notwithstanding the other provisions contained in this
Article NINTH, at any time after the effective date of the DeBartolo
Merger and prior to the Restriction Termination Date, there is a purported
Transfer or other event which, if effective, would cause the Corporation
to become "closely held" within the meaning of
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Section 856(h) of the Code, then each share of Common Stock or Preferred
Stock being Transferred or which are otherwise affected by such event and
which, in either case, would cause, when taken together with all other
Capital Stock, the Corporation to be "closely held" within the meaning of
Section 856(h) of the Code (rounded up to the nearest whole share) shall
automatically be converted into one share of Excess Stock, as further
described in subparagraph (a)(3)(C) of this Article NINTH, and such shares
of Excess Stock shall be automatically transferred to Trustee as trustee
for the Trust. The Corporation shall issue fractional shares of Excess
Stock if required by such conversion ratio. Such conversion shall be
effective as of the close of business on the business day prior to the
date of the Transfer or other event.
(C) Upon conversion of Common Stock or Preferred Stock into
Excess Stock pursuant to this subparagraph (a)(3) of this Article NINTH,
Common Stock shall be converted into Excess Common Stock and Preferred
Stock shall be converted into Excess Preferred Stock.
(4) If the Board of Directors or its designees shall at any time
determine in good faith that a Transfer or other event has taken place in
violation of subparagraph (a)(2) of this Article NINTH or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership or
Constructive Ownership of any shares of Capital Stock in violation of
subparagraph (a)(2) of this Article NINTH, the Board of Directors or its
designees may take such action as it or they deem advisable to refuse to
give effect to or to prevent such Transfer or other event, including, but
not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation or instituting proceedings to enjoin such
Transfer or other event or transaction; provided, however, that any
Transfers or attempted Transfers (or, in the case of events other than a
Transfer, Beneficial ownership or Constructive Ownership) in violation of
subparagraphs (a)(2)(A), (B), (C) and (D) of this Article NINTH shall be
void ab initio and any Transfers or attempted Transfers (or, in the case
of events other than a Transfer, Beneficial Ownership or Constructive
ownership) in violation of subparagraphs (a)(2)(A), (B), and (D) shall
automatically result in the conversion described in subparagraph (a)(3),
irrespective of any action (or non-action) by the Board of Directors or
its designees.
(5) Any Person who acquires or attempts to acquire shares of Capital
Stock in violation of subparagraph (a)(2) of this Article NINTH, or any
Person who is a transferee such that Excess Stock results under
subparagraph (a)(3) of this Article NINTH, shall immediately give written
notice to the Corporation of such event and shall provide to the
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Corporation such other information as the Corporation may request in order
to determine the effect, if any, of such Transfer or attempted Transfer or
other event on the Corporation's status as a REIT.
(6) From the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date:
(A) Every Beneficial Owner or Constructive Owner of more than
5%, or such lower percentages as required pursuant to regulations under
the Code, of the outstanding Capital Stock of the Corporation shall,
before January 30 of each year, give written notice to the Corporation
stating the name and address of such Beneficial Owner or Constructive
Owner, the general ownership structure of such Beneficial Owner or
Constructive Owner, the number of shares of each class of Capital Stock
Beneficially Owned or Constructively Owned, and a description of how such
shares are held.
(B) Each Person who is a Beneficial Owner or Constructive
Owner of Capital Stock and each Person (including the stockholder of
record) who is holding Capital Stock for a Beneficial Owner or
Constructive Owner shall provide on demand to the Corporation such
information as the Corporation may request from time to time in order to
determine the Corporation's status as a REIT and to ensure compliance with
the Ownership Limit.
(7) Subject to subparagraph (a)(12) of this Article NINTH, nothing
contained in this Article NINTH 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 as REIT and to ensure compliance
with the Ownership Limit.
(8) In the case of an ambiguity in the application of any of the
provisions of subparagraph (a) of this Article NINTH, including any
definition contained in subparagraph (a)(1), the Board of Directors shall
have the power to determine the application of the provisions of this
subparagraph (a) with respect to any situation based on the facts known to
it.
(9) The Board of Directors upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel in each case to the
effect that the restrictions contained in subparagraphs (a)(2)(A), (B),
(C) and (D) of this Article NINTH will not be violated, may exempt a
Person from the Ownership Limit:
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(A) (i) if such Person is not an individual for purposes of
Section 542(a)(2) of the Code, or (ii) if such Person is an underwriter
which participates in a public offering of Common Stock or Preferred Stock
for a period of 90 days following the purchase by such underwriter of the
Common Stock or Preferred Stock, or (iii) in such other circumstances
which the Board of Directors determines are appropriately excepted from
the Ownership Limit, and
(B) the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain
that no individual's Beneficial Ownership and Constructive Ownership of
Capital Stock will violate the Ownership Limit and agrees that any
violation or attempted violation will result in such Common Stock or
Preferred Stock being converted into shares of Excess Stock in accordance
with subparagraph (a)(3) of this Article NINTH.
(10) From the effective date of the DeBartolo Merger and until the
Restriction Termination Date, each certificate for the respective class of
Capital Stock shall bear the following legend:
The securities represented by this certificate are subject to
restrictions on transfer for the purpose of the Corporation's
maintenance of its status as a real estate investment trust
under the Internal Revenue Code of 1986, as amended from time
to time (the "Code"). Transfers in contravention of such
restrictions shall be void ab initio. Except as otherwise
determined by the Board of Directors of the Corporation, no
Person may (1) Beneficially Own or Constructively Own shares
of Capital Stock in excess of 8.0% (other than members of the
Simon Family Group, whose relevant percentage is 18.0%) of the
value of any class of outstanding Capital Stock of the
Corporation, or any combination thereof, determined as
provided in the Corporation's Charter, as the same may be
amended from time to time (the "Charter"), and computed with
regard to all outstanding shares of Capital Stock and, to the
extent provided by the Code, all shares of Capital Stock
issuable under existing Options and Exchange Rights that have
not been exercised; or (2) Beneficially Own Capital Stock
which would result in the Corporation being "closely held"
under Section 856(h) of the Code. Unless so excepted, any
acquisition of
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Capital Stock and continued holding of ownership constitutes a
continuous representation of compliance with the above
limitations, and any Person who attempts to Beneficially Own
or Constructively Own shares of Capital Stock in excess of the
above limitations has an affirmative obligation to notify the
Corporation immediately upon such attempt. If the restrictions
on transfer are violated, the transfer will be void ab initio
and the shares of Capital Stock represented hereby will be
automatically converted into shares of Excess Stock and will
be transferred to the Trustee to be held in trust for the
benefit of one or more Qualified Charitable Organizations,
whereupon such Person shall forfeit all rights and interests
in such Excess Stock. In addition, certain Beneficial Owners
or Constructive Owners must give written notice as to certain
information on demand and on an annual basis. All capitalized
terms in this legend have the meanings defined in the Charter.
The Corporation will mail without charge to any requesting
stockholder a copy of the Charter, including the express terms
of each class and series of the authorized capital stock of
the Corporation, within five days after receipt of a written
request therefor.
(11) if any provision of this Article NINTH or any 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.
(12) Nothing in this Article NINTH shall preclude the settlement of
any transaction entered into through the facilities of the New York Stock
Exchange.
(A)(1) Upon any purported Transfer or other event that results in
Excess Stock pursuant to subparagraph (a)(3) of this Article NINTH, such
Excess Stock shall be deemed to have been transferred to the Trustee as
trustee of the Trust for the exclusive benefit of one or more Qualifying
Charitable Organizations as are designated from time to time by the Board
of Directors with respect to such Excess Stock. Shares of Excess Stock
held in trust shall be issued and outstanding stock of the Corporation.
The Purported Record Transferee or Purported Record Holder and the
Purported Beneficial Transferee or Purported Beneficial Holder shall
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have no rights in such Excess Stock, except such rights to certain
proceeds upon Transfer of shares of Excess Stock or upon any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution
of the assets of, the Corporation as are expressly set forth herein.
(2) Excess Common Stock shall be entitled to dividends in an amount
equal to any dividends which are declared and paid with respect to shares
of Common Stock from which such shares of Excess Common Stock were
converted. Excess Preferred Stock shall be entitled to dividends in an
amount equal to any dividends which are declared and paid with respect to
shares of Preferred Stock from which such shares of Excess Preferred Stock
were converted. Any dividend or distribution paid prior to discovery by
the Corporation that shares of Common Stock or Preferred Stock have been
converted into Excess Common Stock or Excess Preferred Stock, as the case
may be, shall be repaid to the Corporation upon demand for delivery to the
Trustee. The recipient of such dividend shall be personally liable to the
Trust for such dividend. Any dividend or distribution declared but unpaid
shall be rescinded as void ab initio with respect to such shares of Common
Stock or Preferred Stock and shall automatically be deemed to have been
declared and paid with respect to the shares of Excess Common Stock or
Excess Preferred Stock, as the case may be, into which such shares of
Common Stock or Preferred Stock shall have been converted.
(3) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of, or any distribution of the assets of, the
Corporation, (i) subject to the preferential rights of the Preferred
Stock, if any, as may be determined by the Board of Directors and the
preferential rights of the Excess Preferred Stock, if any, each holder of
shares of Excess Common Stock shall be entitled to receive, ratably with
each other holder of Common Stock and Excess Common Stock that portion of
the assets of the Corporation available for distribution to the holders of
Common Stock or Excess Common Stock as the number of shares of the Excess
Common Stock held by such holder bears to the total number of shares of
Common Stock and the number of shares of Excess Common Stock then
outstanding and (ii) each holder of shares of Excess Preferred Stock shall
be entitled to receive that portion of the assets of the Corporation which
a holder of the shares of Preferred Stock that were converted into such
shares of Excess Preferred Stock would have been entitled to receive had
such shares of Preferred Stock remained outstanding. Notwithstanding the
foregoing, distributions shall not be made to holders of Excess Stock
except in accordance with the following sentence. The Corporation shall
distribute to the Trustee, as holder of the Excess Stock in trust, on
behalf of the
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Beneficiaries any such assets received in respect of the Excess Stock in
any liquidation, dissolution or winding up of, or any distribution of the
assets of the Corporation. Following any such distribution, the Trustee
shall distribute such proceeds between the Purported Record Transferee or
Purported Record Holder, as appropriate, and the Qualified Charitable
organizations which are Beneficiaries in accordance with procedure for
distribution of proceeds upon Transfer of Excess Stock set forth in
subparagraph (b)(5) of this Article NINTH; provided, however, that with
respect to any Excess Stock as to which no Beneficiary shall have been
determined within 10 days following the date upon which the Corporation is
prepared to distribute assets ("Undesignated Excess Stock"), any assets
that would have been distributed on account of such Undesignated Excess
Stock had a Beneficiary been determined shall be distributed to the
holders of Common Stock and the Beneficiaries of the Trust designated with
respect to shares of Excess Common Stock, or to the holders of Preferred
Stock and the Beneficiaries of the Trust designated with respect to shares
of Excess Preferred Stock as determined in the sole discretion of the
Board of Directors.
(4) Excess Common Stock shall be entitled to such voting rights as
are ascribed to shares of Common Stock from which such shares of Excess
Common Stock were converted. Excess Preferred Stock shall be entitled to
such voting rights as are ascribed to shares of Preferred Stock from which
such shares of Excess Preferred Stock were converted. Any voting rights
exercised prior to discovery by the Corporation that shares of Common
Stock or Preferred Stock have been converted into Excess Common Stock or
Excess Preferred Stock, as the case may be, shall be rescinded and recast
as determined by the Trustee.
(5) (A) Following the expiration of the ninety day period referred
to in subparagraph (b)(6) of this Article NINTH, Excess Stock shall be
transferable by the Trustee to any Person whose Beneficial Ownership or
Constructive Ownership of shares of Capital Stock outstanding, after
giving effect to such Transfer, would not result in the shares of Excess
Stock proposed to be transferred constituting Excess Stock in the hands of
the proposed transferee. A Purported Record Transferee or, in the case of
Excess Stock resulting from any event other than a purported Transfer, the
Purported Record Holder shall have no rights whatsoever in such Excess
Stock, except that such Purported Record Transferee or, in the case of
Excess Stock resulting from any event other than a purported Transfer, the
Purported Record Holder, upon completion of such Transfer, shall be
entitled to receive the lesser of a price per share for such Excess Stock
not in excess (based on the information provided to the Corporation in the
notice given
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pursuant to this subparagraph (b)(5)(A)) of (x) the price per share such
Purported Beneficial Transferee paid for the Common Stock or Preferred
Stock in the purported Transfer that resulted in the Excess Stock, or (y)
if the Purported Beneficial Transferee did not give value for such shares
of Excess Stock (through a gift, devise or other transaction), a price per
share of Excess Stock equal to the Market Price of the Common Stock or
Preferred Stock on the date of the purported Transfer that resulted in the
Excess Stock. Upon such transfer of any interest in Excess Stock held by
the Trust, the corresponding shares of Excess Stock in the Trust shall be
automatically converted into such number of shares of Common Stock or
Preferred Stock (of the same class as the shares that were converted into
such Excess Stock) as is equal to the number of shares of Excess Stock,
and such shares of Common Stock or Preferred Stock (of the same class as
the shares that were converted into such Excess Stock) as is equal to the
number of shares of Excess Stock, and such shares of Common Stock or
Preferred Stock shall be transferred of record to the proposed transferee
of the Excess Stock. If, notwithstanding the provisions of this Article
NINTH, under any circumstances, a Purported Transferee receives an amount
for shares of Excess Stock that exceeds the amount provided by the formula
set forth above, the Purported Transferee must pay the excess to the
Trust. Prior to any transfer resulting in Common Stock or Preferred Stock
being converted into Excess Stock, the Purported Record Transferee and
Purported Beneficial Transferee, jointly, or Purported Record Holder and
Purported Beneficial Holder, jointly, must give written notice to the
Corporation of the date and sale price of the purported Transfer that
resulted in Excess Stock or the Market Price on the date of the other
event that resulted in Excess Stock. Prior to a Transfer by the Trustee of
any shares of Excess Stock, the intended transferee must give advance
notice to the Corporation of the information (after giving effect to the
intended Transfer) required under subparagraph (a)(6), and the Corporation
must have waived in writing its purchase rights, if any, under
subparagraph (b)(6) of this Article NINTH. The Board of Directors may
waive the notice requirements of this subparagraph in such circumstances
as it deems appropriate.
(B) Notwithstanding the foregoing, if the provisions of
paragraph (b)(5) of this Article NINTH are determined to be void or
invalid by virtue of any legal decision, statue, rule or regulation, then
the Purported Beneficial Transferee or Purported Beneficial Holder of any
shares of Excess Stock may be deemed, at the option of the Corporation, to
have acted as an agent on behalf of the Trust, in acquiring or holding
such shares of Excess Stock and to hold such shares of Excess Stock in
trust on behalf of the Trust.
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(6) Shares of Excess Stock shall be deemed to have been offered for
sale by the Trust to the Corporation, or its designee, at a price per
share of Excess Stock equal to the lesser of:
(A) (i) in the case of Excess Stock resulting from a purported
Transfer, (x) the price per share of the Common Stock or Preferred Stock
in the transaction that created such Excess Stock (or, in the case of
devise or gift, the Market Price of the Common Stock or Preferred Stock at
the time of such devise or gift), or (y) in the absence of a notice from
the Purported Record Transferee or Purported Record Holder and Purported
Beneficial Transferee to the Corporation within ten days after request
therefor, such price as may be determined by the Board of Directors in its
sole discretion, which price per share of Excess Stock shall be equal to
the lowest Market Price of Common Stock or Preferred Stock (whichever
resulted in Excess Stock) at any time prior to the date the Corporation,
or its designee, accepts such offer; or
(ii) in the case of Excess Stock resulting from an event other than
a Purported Transfer, (x) the Market Price of the Common Stock or
Preferred Stock on the date of such event, or (y) in the absence of a
notice from the Purported Record Holder and Purported Beneficial Holder to
the Corporation within ten days after request therefor, such price as may
be determined, by the Board of Directors in its sole discretion, which
price shall be the lowest Market Price for shares of Common Stock or
Preferred Stock (whichever resulted in Excess Stock) at any time from the
date of the event resulting in Excess Stock and prior to the date the
Corporation, or its designee, accepts such offer, and
(B) the Market Price of the Common Stock or Preferred Stock 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
ninety days after the later of (i) the date of the Transfer which resulted
in such shares of Excess Stock and (ii) the date the Board of Directors
determines in good faith that a Transfer or other event resulting in
shares of Excess Stock has occurred, if the Corporation does not receive a
notice of such Transfer or other event pursuant to subparagraph (a)(5) of
this Article NINTH.
TENTH: Whenever the Corporation shall have the obligation to
purchase Units and shall have the right to choose to satisfy such obligation by
purchasing such Units either with cash or with Common Stock, the determination
whether to utilize cash or Common Stock to effect such purchase shall be made by
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majority vote of the Independent Directors, pursuant to Section 141(a) of the
General Corporation Law of the State of Delaware.
ELEVENTH: In the event any term, provision, sentence or paragraph of
the Charter of the Corporation is declared by a court of competent jurisdiction
to be invalid or unenforceable, such term, provision, sentence or paragraph
shall be deemed severed from the remainder of the Charter, and the balance of
the Charter shall remain in effect and be enforced to the fullest extent
permitted by law and shall be construed to preserve the intent and purposes of
the Charter. Any such invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such term, provision, sentence or
paragraph of the Charter in any other jurisdiction.
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IN WITNESS WHEREOF, I have made and signed this Certificate this __ day of
______ __, 1998 and affirm the statements contained herein as true under
penalties of perjury.
_______________________________
Name:
Title:
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Exhibit A
to Restated Certificate of
Incorporation of Simon
Property Group, Inc.
SIMON PROPERTY GROUP, INC.
Form of 6.50% Series A Convertible Preferred Stock
The authorized number of shares of the series of preferred
stock created by this Exhibit and the voting powers, preferences and relative,
participating optional or other special rights and qualifications, and the
limitations or restrictions thereof, of such series shall be as set forth in
this Exhibit herein. For purposes of this Exhibit:
"Corporation" shall mean Simon Property Group, Inc., a
Delaware corporation, and, with reference to periods prior to the reorganization
of the Corporation as a Delaware corporation; the Trust (as defined below);
"Trust" shall mean Corporate Property Investors, a
Massachusetts business trust and the predecessor to the Corporation; and
"Convertible Preference Shares" shall mean the preference
shares of beneficial interest in the Trust which have been converted into shares
of Series A Convertible Preferred Stock (as defined below).
SECTION 1. Designation and Number. The designation of the
series of Preferred Stock of the Corporation created by this Exhibit shall be
"6.50% Series A Convertible Preferred Stock" (the "Series A Convertible
Preferred Stock"). The authorized number of shares of Series A Convertible
Preferred Stock shall be 209,249, with par value $.0001 per share.
SECTION 2. Dividends. (a) The holders of shares of Series A
Convertible Preferred Stock, in preference to the holders of Common Stock, par
value $.0001 per share, of the Corporation (the "Common Stock"), any other
series of Preferred Stock ranking junior to the Series A Convertible Preferred
Stock either as to dividends or upon liquidation, dissolution or winding-up
("Junior Preferred Stock") or any other class or series of stock of the
Corporation ranking junior to the Series A Convertible Preferred Stock either as
to dividends or upon liquidation, dissolution or winding-up ("Other Junior
Stock"), shall be entitled to receive, when, as and if declared by the Board of
Directors, in their sole discretion, out of assets of
38
the Corporation legally available for payment of dividends, an annual cash
dividend of the Per Share Dividend Amount (as defined below), payable in equal
semiannual installments on March 31 and September 30, commencing on March 31,
1998 (each such date, a "Semiannual Payment Date"); provided that if any
Semiannual Payment Date is not a business day (as defined in Section 4(b)), then
such semiannual installment shall be payable on the next business day. The "Per
Share Dividend Amount" shall be equal to the product of (x) the Liquidation
Preference (as defined below) and (y) the Basic Rate (as defined below) and (z)
the sum of 1.00 and a fraction, the numerator of which shall be the Basic Rate
and the denominator of which shall be 8.00. The "Basic Rate" shall be .065.
Dividends shall be payable to holders of record as they appear on the stock
register of the Corporation (or, with respect to the first dividend payable
hereon, if applicable, the Trust) on such record dates, not more than 30
calendar days nor less than five calendar days preceding the payment dates
thereof, as shall be fixed by the Board of Directors. A dividend shall not be
payable, but shall accumulate (even if undeclared), to the extent that it would
exceed the Corporation's cash flow from operations, as determined in good faith
by the Board of Directors, for the six-month period ending immediately before
the Semiannual Payment Date.
(b) Dividends on shares of Series A Convertible Preferred
Stock shall be cumulative (even if undeclared). Such dividends on shares of
Series A Convertible Preferred Stock shall accumulate from the first date of
issuance of any such shares. Dividends on shares of Series A Convertible
Preferred Stock shall cease to accumulate on such shares on the date of their
earlier conversion or redemption.
(c) When holders of shares of Series A Convertible Preferred
Stock are entitled to receive dividends pursuant to the first sentence of this
Section and such dividends and dividends on any other series of Preferred Stock
ranking on a parity both as to dividends and upon liquidation, dissolution or
winding-up with the Series A Convertible Preferred Stock (the Series A
Convertible Preferred Stock and such other Preferred Stock being called "Parity
Preferred Stock") are not paid in full, all dividends declared on Parity
Preferred Stock shall be declared pro rata so that the amount of dividends
declared per share on shares of Series A Convertible Preferred Stock and on
such other Parity Preferred Stock bear to each other the same ratio that unpaid
dividends per share on shares of Series A Convertible Preferred Stock and such
other Parity Preferred Stock bear to each other. Except as set forth in the
preceding sentence with respect to Parity Preferred Stock, unless the full
amount of cumulative dividends on shares of Series A Convertible Preferred
Stock have been paid, no dividends may be paid or declared and set aside for
payment or other distribution ordered or made on
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the Common Stock or on any other series of Preferred Stock or other class or
series of stock of the Corporation ranking junior to or on a parity with the
Series A Convertible Preferred Stock either as to dividends or upon liquidation,
dissolution or winding-up, nor may any Common Stock or any other series of
Preferred Stock or other class or series of stock of the Corporation ranking
junior to or on a parity with the Series A Convertible Preferred Stock either as
to dividends or upon liquidation, dissolution or winding-up be redeemed,
repurchased or otherwise acquired for any consideration (or any payment made to
or available for a sinking fund or defeasance Corporation for any such
redemption, repurchase or acquisition) by the Corporation or any subsidiary
thereof.
(d) The Corporation shall not repurchase any shares of Series
A Convertible Preferred Stock from any holder thereof prior to the initial
Permissible Conversion Date (as defined below) unless the holders of more than
50% of the outstanding shares of Series A Convertible Preferred Stock shall
have given their written consent thereto.
SECTION 3. Liquidation. The Series A Convertible Preferred
Stock shall rank prior to the Common Stock, Junior Preferred Stock and any Other
Junior Stock, so that in the event of any liquidation, dissolution or winding-up
of the Corporation (a "Liquidation Transaction"), whether voluntary or
involuntary, the holders of shares of Series A Convertible Preferred Stock shall
be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of Common Stock, Junior Preferred
Stock or Other Junior Stock, an amount equal to $1,000.00 per share (the
"Liquidation Preference" of a share of Series A Convertible Preferred Stock)
plus an amount equal to the full amount of accumulated and unpaid dividends
thereon on the date of final distribution, prorating the dividend accumulated
during the period commencing on the Semiannual Payment Date immediately
preceding the date of final distribution and ending on such final distribution
date (calculated on the basis of a 360-day year of twelve 30-day months). If,
upon any Liquidation Transaction, the assets of the Corporation, or proceeds
thereof, distributable among the holders of Parity Preferred Stock shall be
insufficient to permit the payment in full to such holders of the amounts
payable to such holders upon a Liquidation Transaction pursuant to the
provisions of the Restated Certificate of Incorporation of the Corporation, then
such assets or proceeds shall be distributed among such holders ratably in
proportion to the amounts that would be payable on such shares if all amounts
payable thereon were paid in full. After payment in full of the Liquidation
Preference and accumulated and unpaid dividends to which they are entitled, the
holders of shares of Series A Convertible Preferred Stock shall not be entitled
to any further participation in any distribution of the assets of the
Corporation. For purposes hereof, neither
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the voluntary sale, conveyance, exchange or transfer (for cash, shares,
securities or other consideration) of all or substantially all the property or
assets of the Corporation nor a consolidation or merger of the Corporation with
one or more other persons shall be deemed to be a Liquidation Transaction,
voluntary or involuntary.
The holder of any share of Series A Convertible Preferred
Stock shall not be entitled to receive any payment owed for such shares of
Series A Convertible Preferred Stock under this Section 3 until such holder
shall (a) cause to be delivered to the Corporation the certificate(s)
representing such shares of Series A Convertible Preferred Stock and (b)
transfer instrument(s) satisfactory to the Corporation and sufficient to
transfer such shares of Series A Convertible Preferred Stock to the Corporation
free of any adverse interest. As in the case of the Redemption Price referred to
in Section 6, no interest shall accrue on any payment upon liquidation after the
date thereof.
SECTION 4. Conversion. (a) General. On the terms and subject
to the conditions of this Section 4, at any time after the earlier of (i) the
later of (A) the last day of the first calendar year in which the aggregate
dividends and distributions that would have been payable to the holder of a
single share of Series A Convertible Preferred Stock or Convertible Preference
Share that had converted such share pursuant to this Section 4 (or the
comparable provision for the Convertible Preference Shares) on the last day of
the preceding calendar year and thereafter held the Conversion Stock (as defined
below) received in the conversion of such single share of Series A Convertible
Preferred Stock or Convertible Preference Share exceeds $65 and (B) August 31,
2000, and (ii) the first date as of which written conversion notices pursuant to
Section 4(b) shall have been delivered with respect to more than 50% of the
outstanding shares of Series A Convertible Preferred Stock (any conversion date
occurring after such earlier date is hereinafter called a "Permissible
Conversion Date"), the holder of a share of Series A Convertible Preferred Stock
shall have the right, at such holder's option, to convert such shares of Series
A Convertible Preferred Stock, unless previously redeemed, into that number of
voting shares of Common Stock (calculated as to each conversion to the nearest
1/1000th of a share) obtained by dividing $1,000.00 by the lesser of the
Conversion Price (as defined in Section 4(d)) and the Alternative Conversion
Price (as defined below) (shares of the Common Stock issuable upon the aforesaid
conversion, together with shares of any Common Stock issuable pursuant to clause
(iii) of the third sentence of Section 4(b), being called "Conversion Stock").
The right of conversion of shares of Series A Convertible Preferred Stock called
for redemption by the Corporation shall terminate immediately prior to the close
of business on the Redemption Date (as defined in Section 6) with respect to
such shares of Series A Convertible Preferred Stock. The "Alternative Conversion
Price"
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shall be the amount that would be the Conversion Price if the Conversion
Price had been determined without giving effect to any adjustment pursuant to
paragraphs (iii) or (iv) of Section 4(d).
(b) Conversion Procedures. In order to exercise the conversion
privilege, the holder of any share of Series A Convertible Preferred Stock to be
converted (i) at least fifteen business days prior to any Permissible Conversion
Date (or five business days, if another holder of shares of Series A Convertible
Preferred Stock shall have delivered a conversion notice with respect to such
Permissible Conversion Date), shall deliver to the principal office of the
Corporation a written notice (a) stating that such holder elects to convert all
or a specified whole number of such shares pursuant to this Section 4 and (b)
specifying the name or names in which such holder wishes the certificate or
certificates for Conversion Stock to be issued, (ii) on or prior to the
applicable Permissible Conversion Date, shall surrender the certificate
representing the shares of Series A Convertible Preferred Stock to be converted
at the principal office of the Corporation and (iii) on or prior to the
applicable Permissible Conversion Date, execute and deliver to the Corporation
at the principal office of the Corporation a dividend proration agreement in the
form of Exhibit A attached hereto. Unless the shares of Conversion Stock are to
be issued in the same name as the name in which such shares of Series A
Convertible Preferred Stock are registered, the certificate representing the
shares surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or its duly authorized attorney. As promptly as practicable after such surrender
of a certificate for shares of Series A Convertible Preferred Stock, but in no
event before the applicable Permissible Conversion Date or after the fifth
business day following such Permissible Conversion Date, the Corporation shall
issue and deliver at such office to such holder, or on such holder's written
order, (i) a certificate or certificates for the applicable number of full
shares of Common Stock determined to be issuable pursuant to Section 4(a), (ii)
if less than the full number of shares of Series A Convertible Preferred Stock
evidenced by the surrendered certificate is being converted, a new certificate,
of like tenor, for the number of shares of Series A Convertible Preferred Stock
evidenced by such surrendered certificate less the number of shares being
converted and (iii) to the extent that the Board of Directors determine in good
faith that the amount in the numerator of the fraction referred to below does
not exceed the Corporation's cash flow from operations from the last Semiannual
Payment Date with respect to the Convertible Preference Shares or Series A
Convertible Preferred Stock, a certificate or certificates for a number of
shares of Common Stock equal to a fraction, the numerator of which shall be an
amount equal to a pro rata portion
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of the semiannual dividend next payable on shares of Series A Convertible
Preferred Stock being converted by such holder, such proration to be made from
the date of the last Semiannual Payment Date with respect to the Convertible
Preference Shares or Series A Convertible Preferred Stock to the date of
conversion of such shares of Series A Convertible Preferred Stock and computed
on the basis of a 360-day year of twelve 30-day months, and the denominator of
which shall be the current market price of a share of Common Stock (as defined
in Section 4(h)). Except as provided in clause (iii) above and the dividend
proration agreement referred to above, no payment or adjustment shall be made on
conversion for accumulated and unpaid dividends on shares of Series A
Convertible Preferred Stock surrendered for conversion or for dividends on
Conversion Stock. A "business day" is a day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized to be closed.
Each conversion shall be deemed to have been effected as of
the close of business on the applicable Permissible Conversion Date, and the
person or persons in whose name or names any certificate or certificates for
Conversion Stock are issuable shall be deemed to have become the holder or
holders of record of such Conversion Stock at such time on such Permissible
Conversion Date and such conversion shall be at the Conversion Price (or current
market price, as applicable) in effect at such time on such Permissible
Conversion Date, unless the share transfer books of the Corporation are closed
on such Permissible Conversion Date, in which event such person or persons shall
be deemed to have become such holder or holders of record at the close of
business on the next day on which such share transfer books are open, but such
conversion shall be at the Conversion Price in effect on the applicable
Permissible Conversion Date. Upon delivery, all Conversion Stock shall be duly
authorized, validly issued, fully paid, nonassessable, free of all liens and
charges and not subject to any preemptive or subscription rights.
(c) Warrants issued for Fractional Conversion Stock. No
fractional Conversion Stock or scrip representing fractions of Conversion Stock
shall be issued upon conversion of shares of Series A Convertible Preferred
Stock. If a fractional share of Conversion Stock is otherwise deliverable to a
converting holder upon a conversion of shares of Series A Convertible Preferred
Stock being converted by such holder, the Corporation shall in lieu thereof
issue to the person entitled thereto a warrant in certified form which shall
entitle the holder to receive a full share of Common Stock upon the surrender
of warrants aggregating a full share of Common Stock. Any such warrant shall
become void if not exchanged for certificates representing full shares of
Common Stock before the first anniversary of the conversion of the shares of
Series A Preferred Stock giving rise to the issuance of such warrant. No
warrant issued in lieu of a fractional share of Conversion Stock shall entitle
the holder thereof to exercise voting rights with respect thereto, receive
dividends thereon of to participate in any assets os the Corporation in the
event of liquidation.
(d) Conversion Price. "Conversion Price" shall mean $26.319,
as adjusted pursuant to this Section 4(d). The Conversion Price (and the kind
and amount of consideration receivable by holders of shares of Series A
Convertible Preferred Stock upon conversion) shall be adjusted from time to
time as follows:
(i) If the Corporation (A) pays a dividend or makes a
distribution to all or substantially all holders of Common Stock on
the Common Stock in shares of Common Stock or (B) subdivides, combines
or reclassifies its outstanding shares of Common Stock into a greater
or smaller number of shares, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the holder
of any shares of Series A Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock that it would have owned or been entitled to
receive immediately following such action had such stock been
converted immediately prior to such action or the record date
therefor, whichever is earlier. Such adjustment shall become effective
immediately after the record date, in the case of a dividend or
distribution, or immediately after the effective date, in the case of
a subdivision, combination or reclassification.
(ii) In case the Corporation shall issue rights or warrants to
all or substantially all holders of Common
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Stock entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible into shares of Common Stock) at
a price per share of Common Stock (or having a conversion price per
share of Common Stock) less than the current market price (as defined
in Section 4(h)) of a share of Common Stock on the record date
mentioned below, the Conversion Price in effect immediately prior
thereto shall be adjusted so that it shall equal the price determined
by multiplying the Conversion Price in effect immediately prior thereto
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or
warrants (immediately prior to such issuance) plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so offered (or the aggregate conversion price
of the convertible securities so offered) would purchase at such
current market price per share of Common Stock and the denominator of
which shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants (immediately prior to such
issuance) plus the total number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever any rights or warrants are issued and shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or
warrants; provided, however, that in the event that all shares of the
Common Stock offered for subscription or purchase are not delivered (or
securities convertible into shares of Common Stock are not delivered)
upon the exercise of such rights or warrants, upon the expiration of
such rights or warrants the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the numerator and
the denominator of the foregoing fraction and the resulting adjustments
made upon the issuance of such rights or warrants been made based upon
the number of shares of Common Stock (or securities convertible into
shares of Common Stock) actually delivered upon the exercise of such
rights or warrants rather than upon the number of shares of Common
Stock offered for subscription or purchase. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such current market price, and in
determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received by
the Corporation for such rights or warrants, the value of such
consideration, if other than cash, to be determined in good faith by
the Board of Directors (whose determination shall be described in a
Board of Directors' resolution filed with the Transfer Agent).
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(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of shares of Common Stock, evidences of
indebtedness or other assets (including, without limitation, securities
and cash distributions paid on shares of Common Stock to the extent
exceeding Cash Flow (as defined below) in the period with respect to
which such dividend or distribution is payable, but excluding cash
dividends or distributions to the extent not exceeding Cash Flow in the
period with respect to which such dividends or distributions are
payable and dividends or distributions referred to in paragraph (i) of
this Section 4(d)) or rights or warrants (excluding those referred to
in paragraph (ii) of this Section 4(d)), in each such case the
Conversion Price in effect thereafter shall be determined by
multiplying the Conversion Price in effect immediately prior thereto by
a fraction, of which the numerator shall be the difference between (I)
the total number of shares of Common Stock outstanding multiplied by
the current market price per share of Common Stock on the record date
mentioned below and (II) the aggregate fair market value determined by
the Board of Directors, whose determination shall be described in a
Board of Directors' resolution filed with the Transfer Agent) of such
evidences of indebtedness or other assets so distributed or of such
rights or warrants, and the denominator shall be the total number of
shares of Common Stock outstanding multiplied by such current market
price per share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately
after the record date for the determination of stockholders entitled to
receive such distribution. "Cash Flow" shall mean cash flow from
operations after payment of dividends on all shares of stock of the
Corporation other than shares of Common Stock, as determined in good
faith by the Board of Directors, whose determination shall be described
in a Board of Directors' resolution filed with the Transfer Agent.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute cash from Cash Flow to all holders of shares of its shares
of Common Stock but, after giving effect to the distribution, shall
retain a portion of such Cash Flow in the Corporation undistributed,
the Conversion Price in effect thereafter shall be determined by
multiplying the Conversion Price in effect immediately prior thereto by
a fraction, of which the numerator shall be the total number of shares
of Common Stock outstanding multiplied by the current market price per
share of Common Stock on the record date mentioned below, plus the
portion of such Cash Flow retained in the Corporation and the
denominator of which shall be the total number of shares of Common
Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made whenever any such
distribution and retention occurs and
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shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.
(v) (A) If the Corporation effects any consolidation or merger
to which the Corporation is a party (other than a merger or
consolidation in which the Corporation is the surviving person),
any sale or conveyance to another person of all or substantially all
the assets of the Corporation or any statutory exchange of securities
with another person (including any exchange effected in connection with
a merger of a third person into the Corporation), then in any such
event the holder of each share of Series A Convertible Preferred Stock
then outstanding shall have the right thereafter to convert such share
into the kind and amount of consideration receivable pursuant to such
transaction by a holder of the number of shares of Common Stock into
which such shares of Series A Convertible Preferred Stock might have
been converted immediately prior to such transaction, assuming such
holder of shares of Common Stock failed to exercise its rights of
election, if any, as to the kind or amount of consideration receivable
upon such transaction (provided that if the kind or amount of
consideration receivable pursuant to such transaction is not the same
for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then,
for purposes of this paragraph (v)(A) the kind and amount of
consideration receivable pursuant to such transaction for each
non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares).
Thereafter, the holders of shares of Series A Convertible Preferred
Stock shall be entitled to appropriate adjustments with respect to
their conversion rights to the end that the provisions set forth in
this Section 4 shall correspondingly be made applicable, as nearly as
may reasonably be, to any consideration thereafter deliverable on
conversion of shares of Series A Convertible Preferred Stock.
(B) As evidence of the kind and amount of consideration
receivable pursuant to such consolidation, merger, statutory exchange,
sale or conveyance, or as to the appropriate adjustments of the
Conversion Price applicable with respect thereto, the Transfer Agent
shall be furnished with and may accept the certificates or opinion of
an independent public accountant of the type referred to in paragraph
(vii) of this Section 4(d) with respect thereto; and, in the absence of
bad faith on the part of the Transfer Agent, the Transfer Agent may
conclusively rely thereon and shall not be responsible or accountable
to any holder of shares of Series A Convertible Preferred Stock for any
provision in conformity therewith or approved by such independent
public accountant. The foregoing provisions of
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this paragraph (v) shall similarly apply to successive consolidations,
mergers, statutory exchanges, sales or conveyances.
(vi) No adjustment in the Conversion Price shall be required
to be made unless it would require an increase or decrease of at
least .25% in the Conversion Price, but any adjustments not made
because of this paragraph (vi) shall be carried forward and taken into
account in any subsequent adjustment otherwise required. All
calculations under this Section 4(d) shall be made to the nearest
1/10th of a cent or to the nearest 1/1000th of a share, as the case may
be. All adjustments with respect to a transaction or event shall apply
to subsequent such transactions and events. Anything in this Section
4(d) to the contrary notwithstanding, the Board of Directors shall be
entitled to make such an irrevocable reduction in the Conversion Price,
in addition to the adjustments required by this Section 4(d), as in
their discretion they shall determine to be advisable in order to avoid
or diminish any income deemed to be received for Federal income tax
purposes by any holder of shares of Common Stock or shares of Series A
Convertible Preferred Stock resulting from any event or occurrence
giving rise to an adjustment pursuant to this Section 4(d) or from any
similar event or occurrence, and evidence of the Board of Directors'
determination of such adjustment shall be described in a Board of
Directors' resolution filed with the Transfer Agent.
(vii) Whenever the Conversion Price is adjusted pursuant to
this Section 4(d), (A) the Corporation shall promptly file with the
Transfer Agent a certificate of a firm of nationally recognized
independent public accountants setting forth the Conversion Price (and
any change in the kind or amount of consideration to be received by
holders of shares of Series A Convertible Preferred Stock upon
conversion) after such adjustment and setting forth a brief statement
of the facts requiring such adjustment and the manner of computing the
same and (B) a notice stating that the Conversion Price has been
adjusted, stating the effective date of such adjustment and enclosing
such certificate shall forthwith be mailed by the Corporation to the
holders of shares of Series A Convertible Preferred Stock at their
addresses as shown on the share register books of the Corporation.
(viii) If as a result of any adjustment pursuant to this
Section 4(d), the holder of any shares of Series A Convertible
Preferred Stock surrendered for conversion becomes entitled to receive
any consideration other than shares of Common Stock, (A) the Conversion
Price with respect to such other consideration shall be subject to
adjustment from time to time in a manner and on terms as
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nearly equivalent as practicable to the provisions with respect to
shares of Common Stock contained in this Section 4(d) and (B) in the
case such consideration shall consist of shares of Common Stock and
some other kind of consideration or of two or more kinds of
consideration, the Board of Directors shall determine in good faith the
fair allocation of the adjusted Conversion Price between or among such
types of consideration, and evidence of such determination shall be
described in a Board of Directors' resolution filed with the Transfer
Agent.
(e) The Corporation shall at all times reserve and keep
available, free from preemptive and subscription rights, out of its authorized
but unissued shares of Common Stock, for the purpose of effecting conversions
of shares of Series A Convertible Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding shares of
Series A Convertible Preferred Stock not theretofore converted. For this
purpose, the number of shares of Common Stock deliverable upon the conversion
of all outstanding shares of Series A Convertible Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were held
by a single holder. The Corporation will not effect any transaction which would
give rise to an adjustment in the Conversion Price unless immediately following
such transaction the Corporation shall have available, free from preemptive and
subscription rights, out of its authorized but unissued shares of Common Stock,
the full number of shares of Common Stock deliverable upon the conversion of
all outstanding shares of Series A Convertible Preferred Stock not theretofore
converted.
(f) The Corporation shall pay all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
securities on conversion of the shares of Series A Convertible Preferred Stock;
provided, however, that (i) the Corporation shall not be required to pay any tax
to the extent payable in respect of any transfer involved in the issue or
delivery of securities in a name other than that of the holder of shares of the
Series A Convertible Preferred Stock to be converted and (ii) no such issue or
delivery shall be made unless and until such holder has paid to the Corporation
the amount of any tax described in clause (i) payable in respect of the shares
of stock of such holder or has established, to the satisfaction of the
Corporation, that such tax has been paid or provided for.
(g) By acceptance of any shares of Series A Convertible
Preferred Stock, the holder thereof agrees that upon conversion of any shares
of Series A Convertible Preferred Stock, any shares of Common Stock, par value
$0.0001 per share ("SPG Shares"), of SPG Realty Consultants, Inc., a Delaware
corporation ("SPG"), which relate to such shares of Series A Convertible
Preferred Stock and which are held in the SPG Trust II (as defined below) shall
be transferred to the SPG Trust (as defined
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below), and shall thereafter be subject to, bound by and entitled to the
benefits of all the terms and provisions of the SPG Trust Agreement (as defined
below within the definition of the "SPG Trust"), all as provided in the
agreement establishing the SPG Trust II. The "SPG Trust II" means that certain
Trust created by that certain Trust Agreement among the holders of the shares of
Series A Convertible Preferred Stock, SPG (as successor to Corporate Realty
Consultants, Inc. ("CRC")) and the Trustee of such Trust, under which the
holders of the shares of Series A Convertible Preferred Stock have beneficial
interests in the SPG Shares deposited in such Trust. The "SPG Trust" means that
certain Trust created by that certain Trust Agreement (the "SPG Trust
Agreement") dated as of October 30, 1979, among certain shareholders of the
Corporation at that date, SPG (as successor to CRC) and the Trustee of such
Trust, under which substantially all the holders of shares of Common Stock have
beneficial interests in the SPG Shares deposited in such Trust.
(h) The "currentmarket price" per share of share of Common
Stock on any day shall be the average of the closing per share sales prices of
the Common Stock during the last twenty trading days as reported on the
Composite Tape of the New York Stock Exchange, Inc. (the "NYSE") or, if shares
of Common Stock are not then listed on the NYSE, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934, as
amended, on which shares of Common Stock are then listed or, if shares of
Common Stock are not then listed on any such stock exchange, the average of the
average closing bid and ask quotations with respect to a share of Common Stock
during the last twenty trading days on the NASDAQ Stock Market or any successor
system then in use or, if no such quotations are then available, the average of
the bid and asked prices with respect to a share of Common Stock for such
trading days, as furnished by a member of the NYSE regularly making a market in
the Common Stock selected by the Board of Directors of the Corporation, or, if
no such member firm is then making a market in the Common Stock, the fair
market value on such date of a share of Common Stock as determined in good
faith by a majority of the members of the Board of Directors of the Corporation
after consultation with an independent financial advisor of recognized national
standing.
SECTION 5. Status of Converted or Redeemed Series A
Convertible Preferred Stock. Upon any conversion or any redemption, repurchase
or other acquisition by the Corporation of shares of Series A Convertible
Preferred Stock, the shares of Series A Convertible Preferred Stock so
converted, redeemed, repurchased or acquired shall be retired and canceled.
SECTION 6. Redemption at the Option of the Corporation. (a)
The Board of Directors shall have the power to restrict transfers of shares of
Series A Convertible Preferred Stock and/or to call for redemption a sufficient
number of shares of Series A Convertible Preferred Stock, selected in a manner
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deemed appropriate in the opinion of the Board of Directors, to maintain or
bring the direct or indirect ownership of the capital stock of the Corporation
into conformity with the requirements of Section 856(a)(6) of the Internal
Revenue Code of 1986, as amended, at the greater of (i) a price (the "Redemption
Price") equal to the Liquidation Preference of the redeemed shares of Series A
Convertible Preferred Stock, plus an amount equal to the full amount of
accumulated and unpaid dividends thereon at the Redemption Date (as hereinafter
defined), prorating the dividend accumulated during the period commencing on the
Semiannual Payment Date immediately preceding the date of the payment of the
Redemption Price and ending on such payment date (calculated on the basis of a
360-day year of twelve 30-day months) and (ii) the current market price of the
Common Stock into which shares of such redeemed Series A Convertible Preferred
Stock could have been converted if a right to convert existed at such time. In
making such selection, the Board of Directors shall take due regard of all
feasible selection methods and shall only select shares of Series A Convertible
Preferred Stock if, in their considered, good faith judgment, such selection
shall be an equitable way of maintaining or bringing ownership of the capital
stock of the Corporation into conformity with Section 856(a)(6) of the Internal
Revenue Code of 1986, as amended, given the burdens on the holders of the shares
of redeemed Series A Convertible Preferred Stock of the various selection
methods and the consequences (including withholding tax and other tax
consequences) to the Corporation and its remaining shareholders associated with
such methods, such judgment to be made without reference to the liquidation
preference, conversion rights or dividend rate of the shares of Series A
Convertible Preferred Stock unless such preference, conversion rights or rate
shall be directly relevant to the conformity of the ownership of the capital
stock of the Corporation with said Section 856(a)(6).
(b) The Corporation shall give the holders of shares of
Series A Convertible Preferred Stock prior written notice of a redemption
pursuant to this Section 6 (a "Redemption") not more than 60 nor less than 30
calendar days prior to the date fixed for redemption (the "Redemption Date") at
the address of such holders on the books of the Corporation (provided that
failure to give such notice or any defect therein shall not affect the validity
of the proceeding for a Redemption except as to the holder to whom the
Corporation has failed to give such notice or whose notice was defective), and
shall set apart the funds necessary to pay the aggregate Redemption Price on
all shares of Series A Convertible Preferred Stock then called for redemption.
Provided that such funds have been so set apart, from and after the close of
business on the Redemption Date the shares of Series A Convertible Preferred
Stock shall no longer be deemed outstanding and all rights with respect to such
shares shall forthwith cease and terminate, except the right of the holders
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thereof to receive the Redemption Price (without interest) upon surrender of the
certificates evidencing their shares of Series A Convertible Preferred Stock. In
case fewer than all of the shares of Series A Convertible Preferred Stock
represented by any such surrendered certificate are called for redemption, a new
certificate shall be issued at the expense of the Corporation representing the
unredeemed shares.
SECTION 7. Voting. (a) In addition to any rights provided by
law, each holder of shares of Series A Convertible Preferred Stock shall be
entitled to such number of votes per share held as shall equal the number
(rounded to the nearest whole vote) obtained by dividing $1,000.00 by the lesser
of (x) the Conversion Price and (y) the Alternative Conversion Price. Except as
provided in paragraph (b) below, the holders of shares of Series A Convertible
Preferred Stock shall be entitled to vote on all matters as to which holders of
shares of Common Stock shall be entitled to vote, in the same manner and with
the same effect as such holders of shares of Common Stock, voting together with
the holders of shares of Common Stock as one class.
(b) The Corporation shall not, without the affirmative
consent or approval of the holders of at least two-thirds of the shares of
Series A Convertible Preferred Stock then outstanding, voting separately as a
class, given by written consent in lieu of a meeting or by vote at a meeting
called for such purpose for which notice shall have been given to the holders
of shares of Series A Convertible Preferred Stock, (i) authorize any class of
stock ranking prior to the Series A Convertible Preferred Stock with respect to
the payment of dividends or distribution of assets upon dissolution,
liquidation or winding-up; (ii) amend, alter or repeal any of the provisions of
the Restated Certificate of Incorporation of the Corporation so as to affect
adversely the powers, preferences or rights of the holders of shares of Series
A Convertible Preferred Stock then outstanding or reduce the minimum time
required for any notice to which only the holders of shares of Series A
Convertible Preferred Stock then outstanding may be entitled (an amendment of
the Restated Certificate of Incorporation of the Corporation to authorize or
create, or to increase the authorized amount of, any shares of any class
ranking junior or on a parity with shares of Series A Convertible Preferred
Stock shall be deemed not to affect adversely the powers, preferences or rights
of the holders of shares of Series A Convertible Preferred Stock); (iii)
authorize or create, or increase the authorized amount of, any shares, or any
security convertible into stock, of any class ranking prior to the Series A
Convertible Preferred Stock with respect to the payment of dividends or
distribution of assets upon dissolution, liquidation or winding-up; (iv) merge
or consolidate with or into any other person, unless each holder of shares of
Series A Convertible Preferred Stock immediately preceding such merger or
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consolidation shall receive or continue to hold in the resulting person the
same number of shares, with substantially the same rights and preferences, as
correspond to shares of Series A Convertible Preferred Stock so held; (v)
increase the number of authorized shares of Series A Convertible Preferred Stock
above 209,249; (vi) amend, alter or modify any of the provisions of this
Exhibit; or (vii) otherwise alter or change the powers, preferences, or rights,
or qualifications, limitations or restrictions of the shares of Series A
Convertible Preferred Stock so as to affect them adversely.
SECTION 8. Notice of Certain Events. (a) In case at any time
the Corporation shall propose
(i) to pay any dividend payable in shares of Common Stock
upon its shares of Common Stock, or to make any distribution (other
than a dividend or distribution of cash from Cash Flow) to the holders
of shares of Common Stock;
(ii) to make any dividend or distribution of cash to the
holders of shares of Common Stock from Cash Flow but to retain a
portion of such Cash Flow in the Corporation;
(iii) to offer for subscription pro rata to the holders of
shares of Common Stock any additional shares of beneficial interest of
any class or any other rights or warrants;
(iv) to consolidate or merge with or into another person; or
(v) to effect any reorganization, reclassification,
liquidation, dissolution or winding-up of the Corporation;
and the effect of such proposed action would be to cause there to be made an
adjustment in the Conversion Price pursuant to Section 4(d), then, and in any
one or more of such cases, the Corporation shall cause at least ten calendar
days' notice thereof to be filed with the Transfer Agent and to be given to each
holder of shares of Series A Convertible Preferred Stock as of the date on which
(x) the books of the Corporation shall close, or a record be taken, for such
dividend or distribution on shares of Common Stock, dividend or distribution or
offering of rights or warrants or (y) such consolidation, merger,
reorganization, reclassification, liquidation, dissolution or winding-up shall
be effective, as the case may be.
(b) In case the Board of Directors shall approve the sale or
other transfer of all or substantially all the interest of the Corporation or
any affiliate of the Corporation in any of the Specified Assets (as defined
below) to any person that is not an affiliate of the Corporation, then the
Corporation shall cause notice of such approval to be filed with the Transfer
Agent and given to each holder of shares of Series A Convertible Preferred
Stock as of the date of the giving of such approval within five business days
of the date of the giving of such approval. The term "Specified Assets" shall
mean the properties commonly known as Roosevelt Field Shopping Center (Nassau
County, New York), Lenox Square Mall (Atlanta, Georgia), Town Center at Boca
Raton (Palm Beach County, Florida), Georgia), Brea Mall (Brea, California) and
Rockaway Townsquare Mall (Rockaway, New Jersey).
(c) If the Corporation shall receive written conversion
notices pursuant to Section 4(b) with respect to more than two percent of the
outstanding shares of Series A
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Convertible Preferred Stock, then the Corporation shall cause notice of its
receipt of such notices to be filed with the Transfer Agent and given to each
holder of shares of Series A Convertible Preferred Stock within five business
days of the date of the Corporation's receipt of such notices.
(d) The failure to give or receive the notice required by this
Section 8 or any defect therein shall not affect the legality or validity of any
such dividend, distribution, issuance of any right or warrant or other action.
SECTION 9. Designation of Capital Gain Dividends. So long as
10,000 or more shares of Series A Convertible Preferred Stock are held of record
by one or more of (i) Stichting Pensioenfonds voor de Gezondheid Geestelijke en
Maatschappelijke belangen ("PGGM"), (ii) any affiliate of PGGM that identifies
itself to the Transfer Agent and the Corporation as such an affiliate and (iii)
any other foreign individual or entity with a record address outside the United
States of America: the Corporation shall not designate any dividends paid on
shares of the Series A Convertible Preferred Stock (or dividends deemed paid
pursuant to Section 305 of the Code) as capital gain dividends for U.S. tax
purposes, and all distributions on the Common Stock of the Corporation in excess
of the Corporation's real estate investment trust taxable income (excluding net
capital gains) for any taxable year shall be designated as capital gains
dividends to the extent of the Corporation's recognized capital gains for such
taxable year.
SECTION 10. Return of Money Deposited for Converted Shares of
Series A Convertible Preferred Stock. Notwithstanding anything elsewhere
contained herein, any funds which at any time shall have been deposited by the
Corporation or on its behalf with the Transfer Agent or any other depositary for
the purpose of any payment with respect to any shares of Series A Convertible
Preferred Stock which shall have been converted into shares of Common Stock
pursuant to the provisions of Section 4 shall forthwith upon such conversion be
repaid to the Corporation by the Transfer Agent or such other depositary.
SECTION 11. Definitions and Construction. As used in this
resolution: (a) "herein", "hereof", "hereunder" and other like words mean or
refer to this resolution in its entirety; (b) "outstanding", when used with
reference to shares of stock, means issued shares of stock, excluding shares of
stock held by the Corporation or a subsidiary thereof; (c) "person" means any
corporation, partnership, trust, organization, association or other entity or
individual; (d) "affiliate" of any person means any other person controlling,
controlled by or under common control with such person; (e) "capital stock of
the Corporation" shall mean shares of the capital stock of the Corporation as
described in Article FOURTH of the Restated Certificate of Incorporation of the
Corporation; (f) "Common Stock" shall mean
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the stock described as Common Stock in Article FOURTH of the Restated
Certificate of Incorporation of the Corporation; (g) "Preferred Stock" shall
mean the stock described as Preferred Stock in Article FOURTH of the Restated
Certificate of Incorporation of the Corporation; (h) "Transfer Agent" shall
First Chicago Trust Company of New York or such other successor transfer
agent(s) appointed by the Board of Directors in accordance with Section 6.02 of
the Restated By-Laws of the Corporation; (i) headings are for convenience of
reference only and shall not define, limit or affect any of the provisions
hereof; and (j) references to Sections are to Sections of this Exhibit, unless
otherwise expressly provided.
In addition, whenever reference is made herein to cash flow
from operations of the Corporation, as determined in good faith by the Board of
Directors, such determination shall be made on a basis substantially consistent
with that employed by the Corporation in computing Funds From Operations as
reported in the Corporation's filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and the
Securities and Exchange Act of 1934, as amended.
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Exhibit A to
Form of 6.50% Series A Convertible
Preferred Stock of
Simon Property Group, Inc.
DIVIDEND PRORATION AGREEMENT
Date: __________________
Simon Property Group, Inc.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
Dear Sirs:
The undersigned is a holder of shares of 6.50% Series A Convertible
Preferred Stock ("Preferred Stock") of Simon Property Group, Inc., a Delaware
corporation (the "Corporation"). On the date hereof, the undersigned has
presented _____________ (number) shares of Preferred Stock for conversion
pursuant to their terms (the "Conversion"). This letter agreement is being given
in satisfaction of a condition to the Conversion.
The undersigned hereby agrees with the Corporation that concurrently
with the first payment of a regular cash dividend (i.e., a dividend that would
not give rise to an adjustment of the "Conversion Price" pursuant to Section
4(d)(iv) of Exhibit A to the Corporation's Restated Certificate of Incorporation
with respect to the shares of Preferred Stock) on shares of the Corporation's
Common Stock with respect to which the record date (the "Next Record Date")
occurs after the date of the Conversion, the undersigned shall pay to the
Corporation an amount equal to the product of (x) the number of such shares of
Common Stock issued in the Conversion (adjusted for any dividend or distribution
on the shares of Common Stock in shares of Common Stock or the subdivision,
combination or reclassification of outstanding shares of Common Stock into a
greater or smaller number of Preferred Stock occurring after the date of the
Conversion in order to give appropriate effect thereto), (y) the per share
amount of such cash dividend and (z) a fraction, the numerator of which shall be
the number of days elapsed (computed on the basis of a 360-day year of twelve
30-day months) from the record date (the "Last Record Date") for the payment of
the last regular dividend on shares of the Corporation's Common Stock occurring
on or before the date of the Conversion and the denominator of which shall be
the number of days elapsed (computed as aforesaid) from the Last Record Date to
the Next Record Date.
The undersigned further grants to the Corporation the right to set off
against any unpaid amount due to the Corporation under this letter agreement any
debt or other obligation of the
55
Corporation owing to the undersigned, including, without limitation, any
dividend or other distribution payable to the undersigned by reason of its
ownership of shares of the Corporation's Common Stock.
If the undersigned wishes to transfer legal, beneficial or record
ownership of any shares of the Corporation's Common Stock (or any interest
therein) issuable in the Conversion before all the undersigned's foregoing
obligations are fully performed, it shall obtain, for the Corporation's benefit,
an instrument of assumption by the transferee in which the transferee assumes
all the undersigned's obligations under this letter agreement, which instrument
shall contain a provision with respect to subsequent transfers with the same
effect as this paragraph.
This letter agreement shall be construed in accordance with, and
governed by, the laws of the State of New York, without regard to conflicts of
laws principles.
Very truly yours,
--------------------------------------------
(Name of Converting Holder of Preferred Stock)
By:
----------------------------------------
Name:
Title:
AGREED:
SIMON PROPERTY GROUP, INC.
By:
---------------------------------
Name:
Title:
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Exhibit B to the Simon Property Group, Inc.
Restated Certificate of Incorporation
FORM OF
SIMON PROPERTY GROUP, INC.
SERIES B CONVERTIBLE PREFERRED STOCK
The authorized number of shares of the series of Preferred Stock created
herein and the voting powers, preferences and relative, participating optional
or other special rights and qualifications, and the limitations or restrictions
thereof, of such series shall be as set forth herein.
For purposes of this exhibit, capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Simon Property
Group, Inc. Restated Certificate of Incorporation (the "Charter").
Subject in all cases to the provisions of Article NINTH of the Charter
of the Corporation with respect to Excess Stock, the following is a description
of the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Series B Convertible Preferred Stock (the "Series B Preferred
Stock") of the Corporation:
(1) Designation and Amount. The designation of the series of Preferred
Stock of the Corporation created herein shall be "Series B Convertible Preferred
Stock." The authorized number of shares of Series B Preferred Stock shall be
5,000,000, with par value $0.0001 per share.
All shares of Series B Preferred Stock redeemed, purchased, exchanged,
unissued or otherwise acquired by the Corporation shall be retired and canceled
and, upon the taking of any action required by applicable law, shall be restored
to the status of authorized but unissued shares of capital stock and may
thereafter be issued, but not as Series B Preferred Stock.
(2) Ranking. The Series B Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up, dissolution, and
redemption rights, rank (A) junior to any other class or series of preferred
stock hereafter duly established by the Board of Directors of the Corporation,
the terms of which shall specifically provide that such series shall rank prior
to the Series B Preferred Stock as to the payment of dividends, distribution of
assets upon liquidation and redemption rights
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(the "Senior Preferred Stock"), (B) pari passu with the Series A Convertible
Preferred Stock of the Corporation, par value $0.0001 per share, and any other
class or series of Preferred Stock hereafter duly established by the Board of
Directors of the Corporation, the terms of which shall specifically provide that
such class or series shall rank pari passu with the Series B Preferred Stock as
to the payment of dividends, distribution of assets upon liquidation and
redemption rights (the "Parity Preferred Stock") and (C) prior to any other
class or series of preferred stock or other class or series of capital stock of
or other equity interests in the Corporation, including, without limitation, all
classes of the common stock of the Corporation, whether now or hereafter
created. All of such classes or series of capital stock and other equity
interests of the Corporation, including, without limitation, the Common Stock,
the Class B Common Stock and the Class C Common Stock are collectively referred
to herein as the "Junior Stock".
(3) Dividends. (A) Subject to the rights of series of Preferred Stock
which may from time to time come into existence, holders of the then outstanding
Series B Preferred Stock shall be entitled to receive, when and as declared by
the Board of Directors, out of funds legally available for the payment of
dividends, cumulative preferential cash dividends at the rate of $6.50 per annum
per share. Such dividends shall accrue and be cumulative from the date of
original issue and shall be payable in equal amounts quarterly in arrears on the
last day of March, June, September and December or, if not a business day, the
next succeeding business day (each, a "Distribution Payment Date"). The first
dividend, which will be paid on September 30, 1998, will be for less than a full
quarter. Such first dividend and any dividend distribution payable on Series B
Preferred Stock for any partial distribution period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Distributions will
be payable to holders of record as they appear in the share records of the
Corporation at the close of business on the applicable record date, which shall
be on the first day of the calendar month in which the applicable Distribution
Payment Date falls on or on such other date designated by the Board of Directors
of the Corporation for the payment of distributions that is not more than 30 nor
less than 10 days prior to such Distribution Payment Date (each, a "Distribution
Record Date").
(B) Dividends on Series B Preferred Stock will accrue and be cumulative
whether or not the Corporation has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not such
distributions are earned, declared or authorized. No interest, or sum of money
in lieu of interest, shall be payable in respect of any distribution payment or
payments on Series B Preferred Stock which may be in arrears. Dividends paid on
the Series B Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a
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per share basis among all such shares at the time outstanding.
(C) If, for any taxable year, the Corporation elects to designate as
capital gain distributions (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended, or any successor revenue code or section (the "Code"))
any portion (the "Capital Gains Amount") of the total distributions (as
determined for federal income tax purposes) paid or made available for the year
to holders of all classes of capital stock (the "Total Distributions"), then the
portion of the Capital Gains Amount that shall be allocable to holders of Series
B Preferred Stock shall be in the same percentage that the total distributions
paid or made available to the holders of Series B Preferred Stock for the year
bears to the Total Distributions.
(D) If any shares of Series B Preferred Stock are outstanding, then,
except as provided in the following sentence, no distributions shall be declared
or paid or set apart for payment on any shares of any other series of Preferred
Stock of the Corporation ranking, as to distributions, on a parity with or
junior to Series B Preferred Stock for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payments on
shares of Series B Preferred Stock for all past distribution periods and the
then current distribution period. When distributions are not paid in full (or a
sum sufficient for such full payment is not set apart) upon the shares of Series
B Preferred Stock and the shares of any other series of Preferred Stock ranking
on parity as to distributions with shares of Series B Preferred Stock, all
distributions declared upon shares of Series B Preferred Stock and any other
series of Preferred Stock ranking on a parity as to distributions with Series B
Preferred Stock shall be declared pro rata so that the amount of distributions
declared per share on Series B Preferred Stock and such other series of
Preferred Stock shall in all cases bear to each other the same ratio that
accrued distributions per share on Series B Preferred Stock and such other
series of Preferred Stock bear to each other.
(E) Except as provided in subparagraph (3)(D) herein, unless full
cumulative distributions on shares of Series B Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past distribution periods and the
then current distribution period, no distributions (other than in shares of
Common Stock or other Junior Stock) shall be declared or paid aside for payment
or other distribution shall be declared or made upon the shares of Common Stock
or any other capital stock of the Corporation ranking junior to or on a parity
with Series B Preferred Stock as to distributions or upon liquidation, nor shall
any shares of Common Stock or any other capital stock of the Corporation ranking
junior to or on a parity with Series B Preferred Stock as to distributions or
upon liquidation be
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redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any such
capital stock) by the Corporation (except by conversion into or exchange for
Junior Stock).
(F) Any distribution payment made on shares of Series B Preferred Stock
shall first be credited against the earliest accrued but unpaid distribution due
with respect to shares of Series B Preferred Stock which remain payable.
(G) No distributions on the Series B Preferred Stock shall be authorized
by the Board of Directors of the Corporation or be paid or set apart for payment
by the Corporation at such time as the terms and provisions of any agreement of
the Corporation, including any agreement relating to its indebtedness, prohibits
such authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder if such authorization or payment shall be
restricted or prohibited by law.
(H) Except as provided in this paragraph (3) and in paragraph (5), the
Series B Preferred Stock shall not be entitled to participate in the earnings or
assets of the Corporation.
(4) Conversion. (A) General. On the terms and subject to the conditions
of this paragraph (4), the holder of a share of Series B Preferred Stock shall
have the right, at any time at such holder's option, to convert such shares of
Series B Preferred Stock, unless previously redeemed, into that number of shares
of Common Stock (calculated as to each conversion to the nearest 1/1000th of a
share) obtained by dividing $100.00 by the Conversion Price (as defined in
subparagraph (4)(D)) (shares of the Common Stock issuable upon the aforesaid
conversion being called "Conversion Stock"). (Any such conversion date is
hereinafter called a "Permissible Conversion Date"). The right of conversion of
shares of Series B Preferred Stock called for redemption by the Corporation
shall terminate immediately prior to the close of business on the redemption
date with respect to such shares of Series B Preferred Stock.
(B) Conversion Procedures. In order to exercise the conversion
privilege, the holder of any share of Series B Preferred Stock to be converted
(i) at least fifteen business days prior to any Permissible Conversion Date (or
five business days, if another holder of shares of Series B Preferred Stock
shall have delivered a conversion notice with respect to such Permissible
Conversion Date), shall deliver to the principal office of the Corporation a
written notice (a) stating that such holder elects to convert all or a specified
whole number of such shares pursuant to this paragraph (4) and (b) specifying
the name or names in which such holder wishes the certificate or certificates
for Conversion Stock to be issued and (ii) on or
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prior to the applicable Permissible Conversion Date, shall surrender the
certificate representing the shares of Series B Preferred Stock to be converted
at the principal office of the Corporation. Unless the shares of Conversion
Stock are to be issued in the same name as the name in which such shares of
Series B Preferred Stock are registered, the certificate representing the shares
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or its duly
authorized attorney. As promptly as practicable after such surrender of a
certificate for shares of Series B Preferred Stock, but in no event before the
applicable Permissible Conversion Date or after the fifth business day following
such Permissible Conversion Date, the Corporation shall issue and deliver at
such office to such holder, or on such holder's written order, (i) a certificate
or certificates for the applicable number of full shares of Common Stock
determined to be issuable pursuant to subparagraph (4)(A) and (ii) if less than
the full number of shares of Series B Preferred Stock evidenced by the
surrendered certificate is being converted, a new certificate, of like tenor,
for the number of shares of Series B Preferred Stock evidenced by such
surrendered certificate less the number of shares being converted. No payment or
adjustment shall be made on conversion for accumulated and unpaid dividends on
shares of Series B Preferred Stock surrendered for conversion or for dividends
on Conversion Stock. A "business day" is a day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized to be closed.
Each conversion shall be deemed to have been effected as of the close
of business on the applicable Permissible Conversion Date, and the person or
persons in whose name or names any certificate or certificates for Conversion
Stock are issuable shall be deemed to have become the holder or holders of
record of such Conversion Stock at such time on such Permissible Conversion Date
and such conversion shall be at the Conversion Price (or current market price,
as applicable) in effect at such time on such Permissible Conversion Date,
unless the share transfer books of the Corporation are closed on such
Permissible Conversion Date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next day on which such share transfer books are open, but such conversion
shall be at the Conversion Price in effect on the applicable Permissible
Conversion Date. Upon delivery, all Conversion Stock shall be duly authorized,
validly issued, fully paid, nonassessable, free of all liens and charges and not
subject to any preemptive or subscription rights.
In lieu of delivering physical certificates representing the securities
issued upon conversion, providing the Corporation's Transfer Agent is
participating on the Depositary Trust Company ("DTC") Fast Automated Securities
Transfer program, upon the request of the holder of Series B Preferred Stock and
its
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compliance with the provisions contained in this paragraph, so long as the
certificates therefor do not bear a legend and such holders of Series B
Preferred Stock thereof is not obligated to return such certificate for a
placement of a legend thereon, the Corporation shall use its reasonable best
efforts to cause its Transfer Agent to electronically transmit the Common Stock
issuable upon conversion to the holder of Series B Preferred Stock by crediting
the account of the broker of such holder of Series B Preferred Stock with DTC
through its Deposit Withdrawal Agent Commission System.
(C) Rounding of Fractional Conversion Stock. No fractional Conversion
Stock or scrip representing fractions of Conversion Stock shall be issued upon
conversion of shares of Series B Preferred Stock. If a fractional Conversion
Share is otherwise deliverable to a converting holder upon a conversion of
shares of Series B Preferred Stock (based upon the total number of shares of
Series B Preferred Stock being converted by such holder), the Corporation shall
in lieu thereof pay to the person entitled thereto an amount in cash equal to
the current value of such fraction, calculated to the nearest 1/1000th of a
share, to be computed based on the current market price of a share of Common
Stock on the date of conversion.
(D) Conversion Price. "Conversion Price", shall mean $38.669, as
adjusted pursuant to this subparagraph (4)(D). The Conversion Price (and the
kind and amount of consideration receivable by holders of shares of Series B
Preferred Stock upon conversion) shall be adjusted from time to time as follows:
(i) If the Corporation (A) pays a dividend or makes a
distribution to all holders of Common Stock on the Common
Stock in shares of Common Stock or (B) subdivides, combines or
reclassifies its outstanding shares of Common Stock into a
greater or smaller number of shares, the Conversion Price in
effect immediately prior to such action shall be adjusted so
that the holder of any shares of Series B Preferred Stock
thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock that it would
have owned or been entitled to receive immediately following
such action had such stock been converted immediately prior to
such action or the record date therefor, whichever is earlier.
Such adjustment shall become effective immediately after the
record date, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a
subdivision, combination or reclassification.
(ii) In case the Corporation shall issue rights or warrants to
all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at
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a price per share of Common Stock (or having a conversion
price per share of Common Stock) less than the current market
price (as defined in subparagraph (4)(H)) of a share of Common
Stock on the record date mentioned below, the Conversion Price
in effect immediately prior thereto shall be adjusted so that
it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior thereto by a
fraction, of which the numerator shall be the number of shares
of Common Stock outstanding on the date of issuance of such
rights or warrants (immediately prior to such issuance) plus
the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock
so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at such
current market price per share of Common Stock and the
denominator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or
warrants (immediately prior to, such issuance) plus the total
number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall
be made successively whenever any rights or warrants are
issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive
such rights or warrants; provided, however, that in the event
that all shares of the Common Stock offered for subscription
or purchase are not delivered (or securities convertible into
shares of Common Stock are not delivered) upon the exercise of
such rights or warrants, upon the expiration of such rights or
warrants the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the
numerator and the denominator of the foregoing fraction and
the resulting adjustments made upon the issuance of such
rights or warrants been made based upon the number of shares
of Common Stock (or securities convertible into shares of
Common Stock) actually delivered upon the exercise of such
rights or warrants rather than upon the number of shares of
Common Stock offered for subscription or purchase. In
determining whether any rights or warrants entitle the holders
to subscribe for or purchase shares of Common Stock at less
than such current market price, and in determining the
aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the
Corporation for such rights or warrants, the value of such
consideration, if other than cash, to be determined in good
faith by the Board of Directors (whose determination shall be
described in a Board of Directors' resolution filed
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with the Transfer Agent).
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of shares of Common Stock, evidences
of indebtedness or other assets (excluding cash dividends or
distributions paid in cash and dividends or distributions
referred to in subparagraph (i) of this subparagraph 4(D)) or
rights or warrants (excluding those referred to in
subparagraph (ii) of this subparagraph 4(D)), in each such
case the Conversion Price in effect thereafter shall be
determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, of which the
numerator shall be the difference between (I) the total number
of shares of Common Stock outstanding multiplied by the
current market price per share of Common Share on the record
date mentioned below and (II) the aggregate fair market value
determined by the Board of Directors (whose determination
shall be described in a Board of Directors' resolution filed
with the Transfer Agent) of such evidences of indebtedness or
other assets so distributed or of such rights or warrants, and
the denominator shall be the total number of shares of Common
Stock outstanding multiplied by such current market price per
share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(iv)(a) If the Corporation effects any consolidation or merger
to which the Corporation is a party (other than a merger in
which the Corporation is the surviving person and which does
not result in any change in the Common Stock), any sale or
conveyance to another person of all or substantially all the
assets of the Corporation or any statutory exchange of
securities with another person, then in any such event the
holder of each share of Series B Preferred Stock thereafter
outstanding shall have the right to convert such share into
the kind and amount of consideration receivable pursuant to
such transaction by a holder of the number of shares of Common
Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such transaction,
assuming such holder of shares of Common Stock failed to
exercise its rights of election, if any, as to the kind or
amount of consideration receivable upon such transaction
(provided that if the kind or amount of consideration
receivable pursuant to such transaction is not the same for
each share of Common Stock in respect of which such rights of
election shall not have been exercised
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("nonelecting share"), then, for purposes of this subparagraph
(iv)(a) the kind and amount of consideration receivable
pursuant to such transaction for each non-electing share shall
be deemed to be the kind and amount so receivable per share by
a plurality of the non-electing shares). Thereafter, the
holders of shares of Series B Preferred Stock shall be
entitled to appropriate adjustments with respect to their
conversion rights such that the provisions set forth in this
paragraph 4 shall correspondingly be made applicable, as
nearly as may reasonably be, to any consideration thereafter
deliverable on conversion of shares of Series B Preferred
Stock.
(b) As evidence of the kind and amount of
consideration receivable pursuant to such consolidation,
merger, statutory exchange, sale or conveyance, or as to the
appropriate adjustments of the Conversion Price applicable
with respect thereto, the Transfer Agent shall be furnished
with and may accept the certificates or opinion of an
independent public accountant of the type referred to in
subparagraph (vi) of this subparagraph 4(D) with respect
thereto; and, in the absence of bad faith on the part of the
Transfer Agent, the Transfer Agent may conclusively rely
thereon and shall not be responsible or accountable to any
holder of shares of Series B Preferred Stock for any provision
in conformity therewith or approved by such independent public
accountant. The foregoing provisions of this subparagraph (iv)
shall similarly apply to successive consolidations, mergers,
statutory exchanges, sales or conveyances.
(v) No adjustment in the Conversion Price shall be required to
be made unless it would require an increase or decrease of at
least .25% in the Conversion Price, but any adjustments not
made because of this subparagraph (v) shall be carried forward
and taken into account in any subsequent adjustment otherwise
required. All calculations under this subparagraph 4(D) shall
be made to the nearest 1/10th of a cent or to the nearest
1/1000th of a share, as the case may be. All adjustments with
respect to a transaction or event shall apply to subsequent
such transactions and events. Anything in this subparagraph
4(D) to the contrary notwithstanding, the Board of Directors
shall be entitled to make such an irrevocable reduction in the
Conversion Price, in addition to the adjustments required by
this subparagraph 4(D), as in their discretion they shall
determine to be advisable in order to avoid or diminish any
income deemed to be received for Federal income tax purposes
by any holder of shares of Common Stock or shares of Series B
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Preferred Stock resulting from any event or occurrence giving
rise to an adjustment pursuant to this subparagraph 4(D) or
from any similar event or occurrence, and evidence of the
Board of Directors' determination of such adjustment shall be
described in a Board of Directors' resolution filed with the
Transfer Agent.
(vi) Whenever the Conversion Price is adjusted pursuant to
this subparagraph 4(D), (a) the Corporation shall promptly
file with the Transfer Agent a certificate of a firm of
nationally recognized independent public accountants setting
forth the Conversion Price (and any change in the kind or
amount of consideration to be received by holders of shares of
Series B Preferred Stock upon conversion) after such
adjustment and setting forth a brief statement of the facts
requiring such adjustment and the manner of computing the same
and (b) a notice stating that the Conversion Price has been
adjusted, stating the effective date of such adjustment and
enclosing such certificate shall forthwith be mailed by the
Corporation to the holders of shares of Series B Preferred
Stock at their addresses as shown on the share register books
of the Corporation.
(vii) If as a result of any adjustment pursuant to this
subparagraph 4(D), the holder of any shares of Series B
Preferred Stock surrendered for conversion becomes entitled to
receive any consideration other than shares of Common Stock,
(a) the Conversion Price with respect to such other
consideration shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to shares of Common Stock
contained in this subparagraph (4)(D) and (b) in the case such
consideration shall consist of shares of Common Stock and some
other kind of consideration or of two or more kinds of
consideration, the Board of Directors shall determine in good
faith the fair allocation of the adjusted Conversion Price
between or among such types of consideration, and evidence of
such determination shall be described in a Board of Directors,
resolution filed with the Transfer Agent.
(E) The Corporation shall at all times reserve and keep available, free
from preemptive and subscription rights, out of its authorized but unissued
shares of Common Stock, for the purpose of effecting conversions of shares of
Series B Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Series B Preferred Stock not
theretofore converted. For this purpose, the number of shares of Common Stock
deliverable upon the conversion of all
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outstanding shares of Series B Preferred Stock shall be computed as if at the
time of computation all such outstanding shares were held by a single holder.
The Corporation will not effect any transaction which would give rise to an
adjustment in the Conversion Price unless immediately following such transaction
the Corporation shall have available, free from preemptive and subscription
rights, out of its authorized but unissued shares of Common Stock, the full
number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Series B Preferred Stock not theretofore converted.
(F) The Corporation shall pay all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of securities on
conversion of the shares of Series B Preferred Stock; provided, however, that
(i) the Corporation shall not be required to pay any tax to the extent payable
in respect of any transfer involved in the issue or delivery of securities in a
name other than that of the holder of shares of the Series B Preferred Stock to
be converted and (ii) no such issue or delivery shall be made unless and until
such holder has paid to the Corporation the amount of any tax described in
clause (i) payable in respect of the shares of stock of such holder or has
established, to the satisfaction of the Corporation, that such tax has been paid
or provided for.
(G) By acceptance of any shares of Series B Preferred Stock, the holder
thereof agrees that upon conversion of any shares of Series B Preferred Stock,
the holder will have a beneficial interest in shares of Common Stock, par value
$.0001 per share ("SRC Shares"), of SPG Realty Consultants, Inc., a Delaware
corporation ("SRC"), which relate to such Conversion Stock and which are held in
the SRC Trust (as defined below), and that the holder of Series B Preferred
Stock shall thereafter be subject to, bound by and entitled to the benefits of
all the terms and provisions of the SRC Trust Agreement (as defined below within
the definition of the "SRC Trust"). The "SRC Trust" means that certain trust
created by that certain Trust Agreement (the "SRC Trust Agreement"), dated as of
October 30, 1979, among certain stockholders of the Corporation at that date,
SRC (as successor to Corporate Realty Consultants, Inc., a Delaware corporation)
and the Trustee of such trust, under which all the holders of shares of Common
Stock have beneficial interests in the SRC Shares deposited in such trust.
(H) The "current market price" of a security on any date shall mean the
average Closing Price (as defined below) of such security for the twenty
consecutive Trading Days (as defined below) ending on the Trading Day
immediately preceding the day in question; the "Closing Price" shall mean the
last sale price for a such security as shown on the New York Stock Exchange
Composite Transactions Tape, or if no such sale has taken place on such day,
then the average of the closing bid and ask prices for such security on the New
York Stock Exchange, or if such security is not listed or admitted to trading on
the New York Stock Exchange, then on the principal national securities exchange
on which such security is listed or admitted to trading, or, if such security is
not listed or admitted to trading on any national securities exchange, then on
the Nasdaq National Market, or, if such security is
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not listed or admitted to trading on the New York Stock Exchange, then on the
principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on any national securities exchange, then on the Nasdaq National Market, or, if
such security is not quoted on the Nasdaq National Market, then the average of
the closing bid and ask prices as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors of the
Corporation for such purposes; and "Trading Day" shall mean a day on which the
New York Stock Exchange or, if such security is not listed or admitted to
trading thereon, the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of business
or, if the Common Stock is not so listed or admitted, then any day that is not a
Saturday, Sunday or other day on which depositary institutions in the City of
New York are authorized or obligated by law to close.
(5) Liquidation, Dissolution or Winding Up. (A) Subject to the rights
of series of Preferred Stock which may from time to time come into existence,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any Junior Stock, the holders of shares of Series B
Preferred Stock shall be entitled to receive out of assets of the Corporation
legally available for distribution to stockholders, liquidation distributions in
the amount of the liquidation preference of $100.00 per share in cash or
property having a fair market value as determined by the Board of Directors
valued at $100.00 per share, plus an amount equal to all distributions accrued
and unpaid at the date of such liquidation, dissolution or winding up. After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of shares of Series B Preferred Stock will have no right
or claim to any of the remaining assets of the Corporation. In the event that,
upon any such voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the available assets of the Corporation are
insufficient to pay the amount of the liquidation distributions on all
outstanding shares of Series B Preferred Stock and the corresponding amounts
payable on all shares of Parity Preferred Stock, then the holders of shares of
Series B Preferred Stock and Parity Preferred Stock shall share ratably in any
such distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled.
(B) A consolidation or merger of the Corporation with or into any other
entity or entities, or a sale, lease, transfer, conveyance or disposition of all
or substantially all of the assets of the Corporation or a statutory share
exchange in which stockholders of the Corporation may participate, shall not be
deemed to be a liquidation, dissolution or winding up of the
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affairs of the Corporation within the meaning of this paragraph (5).
(6) Redemption. (A) Shares of Series B Preferred Stock are not
redeemable prior to [the fifth anniversary of the Closing Date]. On and after
[the fifth anniversary of the Closing Date], the Corporation at its option upon
not less than 30 nor more than 60 days' written notice, may redeem outstanding
shares of Series B Preferred Stock, in whole or in part, at any time or from
time to time, for cash at the following redemption prices (expressed as a
percentage of liquidation value) after [the anniversary of the Closing Date] in
the following years:
Year Percentage
---- ----------
2003 105
2004 104
2005 103
2006 102
2007 101
2008 and thereafter 100
plus an amount equal to all distributions accrued and unpaid thereon to the date
fixed for redemption, without interest to the extent the Corporation will have
funds legally available therefor. The redemption price of shares of Series B
Preferred Stock (other than the portion hereof consisting of accrued and unpaid
distributions) is payable solely out of proceeds from the sale of other capital
stock of the Corporation, which may include Common Stock, Preferred Stock,
depository shares, interests, participations or other ownership interests in the
Corporation however designated, and any rights (other than debt securities
converted into or exchangeable for capital stock), warrants or options to
purchase any thereof, and not from any other source. Holders of shares of Series
B Preferred Stock to be redeemed shall surrender such shares of Series B
Preferred Stock at the place designated in such notice and shall be entitled to
the redemption price and any accrued and unpaid distributions payable upon such
redemption following such surrender. If fewer than all of the outstanding shares
of Series B Preferred Stock are to be redeemed, the number of shares to be
redeemed will be determined by the Corporation and such shares may be redeemed
pro rata from the holder of record of such shares in proportion to the number of
such shares held by such holders (with adjustments to avoid redemption of
fractional shares or by lot in a manner determined by the Corporation).
(B) Unless cumulative distributions on all shares of Series B Preferred
Stock and Parity Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof for payment for
all past distribution periods and the current distribution period, no shares of
Series B Preferred Stock or Parity Stock shall be redeemed unless all
outstanding shares of Series B Preferred Stock and Parity Preferred Stock are
simultaneously redeemed; the
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foregoing shall not prevent the purchase or acquisition of shares of Series B
Preferred Stock or Parity Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of Series B Preferred Stock
or Parity Preferred Stock, as the case may be. Furthermore, unless full
cumulative distributions on all outstanding shares of Series B Preferred Stock
and Parity Preferred Stock have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for payment
for all past distribution periods and the then current distribution period, the
Corporation shall not purchase or otherwise acquire directly or indirectly any
shares of Series B Preferred Stock or Parity Preferred Stock (except by
conversion into or exchange for shares of capital stock of the Corporation
ranking junior to Series B Preferred Stock and Parity Preferred Stock as to
distributions and upon liquidation).
(C) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be mailed, postage prepaid,
at least 30 days but not more than 90 days before the redemption date, to each
holder of record of shares of Series B Preferred Stock at the address shown on
the share transfer books of the Corporation. Each notice shall state: (i) the
redemption date; (ii) the number of shares of Series B Preferred Stock to be
redeemed; (iii) the redemption price per share; (iv) the place or places where
certificates for shares of Series B Preferred Stock are to be surrendered for
payment of the redemption price; and (v) that distributions on shares of Series
B Preferred Stock will cease to accrue on such redemption date. No failure to
give such notice or any defect thereto or in the mailing thereof shall affect
the validity of the proceeding for the redemption of any Series B Preferred
Stock except as to the holder to whom notice was defective or not given. If
fewer than all shares of Series B Preferred Stock are to be redeemed, the notice
mailed to each such holder thereof shall also specify the number of shares of
Series B Preferred Stock to be redeemed from each such holder. If notice of
redemption of any shares of Series B Preferred Stock has been given and if the
funds necessary for such redemption have been set aside by the Corporation in
trust for the benefit of the holders of shares of Series B Preferred Stock so
called for redemption, then from and after the redemption date, distributions
will cease to accrue on such shares of Series B Preferred Stock, such shares of
Series B Preferred Stock shall no longer be deemed outstanding and all rights of
the holders of such shares will terminate, except the right to receive the
redemption price.
(D) The holders of shares of Series B Preferred Stock at the close of
business on a Distribution Record Date will be entitled to receive the
distribution payable with respect to such
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shares of Series B Preferred Stock on the corresponding Distribution Payment
Date notwithstanding the redemption thereof between such Distribution Record
Date and the corresponding Distribution Payment Date or the Corporation's
default in the payment of the distribution due. Except as provided above, the
Corporation will make no payment or allowance for unpaid distributions, whether
or not in arrears, on shares of Series B Preferred Stock which have been called
for redemption.
(E) Series B Preferred Stock have no stated maturity and will not be
subject to any sinking fund or mandatory redemption, except as provided in
Article NINTH of the Charter of the Corporation.
(7) Voting. (A) Except as indicated in this paragraph (7), except as
may be required by applicable law, or, at any time Series B Preferred Stock are
listed on a securities exchange, as may be required by the rules of such
exchange, the holders of shares of Series B Preferred Stock will have no voting
rights.
(B) If six quarterly distributions (whether or not consecutive) payable
on shares of Series B Preferred Stock are in arrears, whether or not earned or
declared, the number of directors then constituting the Board of Directors of
the Corporation will be increased by two (except as provided in the proviso to
paragraph (c) to Article FOURTH of the Charter), and the holders of shares of
Series B Preferred Stock, voting together as a class with the holders of shares
of any other series of Preferred Stock upon which like voting rights have been
conferred and are exercisable (any such other series, the "Nonvoting Preferred
Stock"), will have the right to elect two directors to serve on the
Corporation's Board of Directors at any annual meeting of stockholders or a
special meeting of the holders of Series B Preferred Stock and such other voting
Preferred Stock called by the holders of record of at least 10% of any series of
Preferred Stock so in arrears (unless such request is received less than 90 days
before the date fixed for the next annual or special meeting of the
stockholders), until all such distributions have been declared and paid or set
aside for payment. The term of office of all directors so elected will terminate
with the termination of such voting rights.
(C) The approval of two-thirds of the outstanding Series B Preferred
Stock voting as a single class is required in order to (i) amend, alter or
repeal any provision of the Charter, so as to materially and adversely affect
the rights, preferences, privileges or voting power of the Series B Preferred
Stock; or (ii) authorize, reclassify, create or increase the authorized or
issued amount of any class or series of stock having rights senior to Series B
Preferred Stock with respect to the payment of distributions or amounts upon
liquidation, dissolution or winding up of the affairs of the Corporation or to
create, authorize or issue any obligation or security convertible into or
evidencing
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the right to purchase such shares. However, the Corporation may create
additional classes of Parity Preferred Stock and Junior Stock, increase the
authorized number of shares of Parity Preferred Stock and Junior Stock and issue
additional series of Parity Preferred Stock and Junior Stock without the consent
of any holder of Series B Preferred Stock or Voting Preferred Stock.
(D) Except as provided above, as may be required by law or as required
by the rules of any securities exchange on which the Series B Preferred Stock
are listed, the holders of Series B Preferred Stock are not entitled to vote on
any merger or consolidation involving the Corporation, on any share exchange or
on a sale of all or substantially all of the assets of the Corporation.
(E) In any matter in which the Series B Preferred Stock are entitled to
vote (as provided in this paragraph (7)), as may be required by law or as
required by the rules of any securities exchange on which the Series B Preferred
Stock are listed, including any action by written consent, each share of Series
B Preferred Stock shall be entitled to one vote.
(8) Excess Stock. Each share of Series B Preferred Stock is convertible
into Series B Excess Preferred Stock as provided in Article NINTH of the Charter
of the Corporation.
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Exhibit C
to Restated Certificate of
Incorporation of Simon
Property Group, Inc.
SIMON PROPERTY GROUP, INC.
Form of 6.50% Series A Excess Preferred Stock
---------------------------------------------
The authorized number of shares of the series of Preferred Stock
created by this Exhibit and the voting powers, preferences and relative,
participating optional or other special rights and qualifications, and the
limitations or restrictions thereof, of such series shall be as set forth in
this Exhibit herein.
For purposes of this Exhibit, capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Simon Property
Group, Inc. Restated Certificate of Incorporation (the "Charter"). In addition,
for purposes of this Exhibit:
"Corporation" shall mean Simon Property Group, Inc., a Delaware
corporation, and, with reference to periods prior to the reorganization of the
Corporation as a Delaware corporation; the Trust (as defined below); and
"Trust" shall mean Corporate Property Investors, a Massachusetts
business trust and the predecessor to the Corporation.
Each share of 6.50% Series A Convertible Preferred Stock, par value
$0.0001 per share, of the Corporation ("Series A Preferred Stock"), is
convertible into 6.50% Series A Excess Preferred Stock (the "Series A Excess
Preferred Stock") of the Corporation as provided in Article NINTH of the Charter
of the Corporation. Subject in all cases to the provisions of Article NINTH of
the Charter of the Corporation with respect to Excess Stock, the following is a
description of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the Series A Excess Preferred Stock:
SECTION 1. Designation and Number. The designation of the series of
Preferred Stock of the Corporation created by this Exhibit shall be "6.50%
Series A Excess Preferred Stock". The authorized number of shares of Series A
Excess Preferred Stock shall be 209,249, with par value $.0001 per share.
SECTION 2. Dividends. (a) The holders of shares of Series A Excess
Preferred Stock, in preference to the holders of Common Stock, par value $.0001
per share, of the Corporation (the
73
"Common Stock"), any other series of Preferred Stock ranking junior to the
Series A Excess Preferred Stock either as to dividends or upon liquidation,
dissolution or winding-up ("Junior Preferred Stock") or any other class or
series of stock of the Corporation ranking junior to the Series A Excess
Preferred Stock either as to dividends or upon liquidation, dissolution or
winding-up ("Other Junior Stock"), shall be entitled to receive, when, as and if
declared by the Board of Directors, in their sole discretion, out of assets of
the Corporation legally available for payment of dividends, an annual cash
dividend of the Per Share Dividend Amount (as defined below), payable in equal
semiannual installments on March 31 and September 30, commencing on March 31,
1998 (each such date, a "Semiannual Payment Date"); provided that if any
Semiannual Payment Date is not a business day, then such semiannual installment
shall be payable on the next business day. A "business day" is a day other than
a Saturday, Sunday or other day on which banks in the State of New York are
authorized to be closed. The "Per Share Dividend Amount" shall be equal to the
product of (x) the Liquidation Preference (as defined below) and (y) the Basic
Rate (as defined below) and (z) the sum of 1.00 and a fraction, the numerator of
which shall be the Basic Rate and the denominator of which shall be 8.00. The
"Basic Rate" shall be .065. Dividends shall be payable to holders of record as
they appear on the stock register of the Corporation (or, with respect to the
first dividend payable hereon, if applicable, the Trust) on such record dates,
not more than 30 calendar days nor less than five calendar days preceding the
payment dates thereof, as shall be fixed by the Board of Directors. A dividend
shall not be payable, but shall accumulate (even if undeclared), to the extent
that it would exceed the Corporation's cash flow from operations, as determined
in good faith by the Board of Directors, for the six-month period ending
immediately before the Semiannual Payment Date.
(b) Dividends on shares of Series A Excess Preferred Stock shall be
cumulative (even if undeclared). Such dividends on shares of Series A Excess
Preferred Stock shall accumulate from the first date of issuance of any such
shares. Dividends on shares of Series A Excess Preferred Stock shall cease to
accumulate on such shares on the date of their earlier conversion or redemption.
(c) When holders of shares of Series A Excess Preferred Stock are
entitled to receive dividends pursuant to the first sentence of this Section and
such dividends and dividends on any other series of Preferred Stock ranking on a
parity both as to dividends and upon liquidation, dissolution or winding-up with
the Series A Excess Preferred Stock (the Series A Excess Preferred Stock and
such other Preferred Stock being called "Parity Preferred Stock") are not paid
in full, all dividends declared on Parity Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share on shares of Series A
Excess Preferred Stock and on such other Parity Preferred Stock bear to each
other the same ratio that unpaid
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74
dividends per share on shares of Series A Excess Preferred Stock and such other
Parity Preferred Stock bear to each other. Except as set forth in the preceding
sentence with respect to Parity Preferred Stock, unless the full amount of
cumulative dividends on shares of Series A Excess Preferred Stock have been
paid, no dividends may be paid or declared and set aside for payment or other
distribution ordered or made on the Common Stock or on any other series of
Preferred Stock or other class or series of stock of the Corporation ranking
junior to or on a parity with the Series A Excess Preferred Stock either as to
dividends or upon liquidation, dissolution or winding-up, nor may any Common
Stock or any other series of Preferred Stock or other class or series of stock
of the Corporation ranking junior to or on a parity with the Series A Excess
Preferred Stock either as to dividends or upon liquidation, dissolution or
winding-up be redeemed, repurchased or otherwise acquired for any consideration
(or any payment made to or available for a sinking fund or defeasance
Corporation for any such redemption, repurchase or acquisition) by the
Corporation or any subsidiary thereof.
SECTION 3. Liquidation. The Series A Excess Preferred Stock shall rank
prior to the Common Stock, Junior Preferred Stock and any Other Junior Stock, so
that in the event of any liquidation, dissolution or winding-up of the
Corporation (a "Liquidation Transaction"), whether voluntary or involuntary, the
holders of shares of Series A Excess Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of Common Stock, Junior Preferred Stock or Other Junior
Stock, an amount equal to $1,000.00 per share (the "Liquidation Preference" of a
share of Series A Excess Preferred Stock) plus an amount equal to the full
amount of accumulated and unpaid dividends thereon on the date of final
distribution, prorating the dividend accumulated during the period commencing on
the Semiannual Payment Date immediately preceding the date of final distribution
and ending on such final distribution date (calculated on the basis of a 360-day
year of twelve 30-day months). If, upon any Liquidation Transaction, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
Parity Preferred Stock shall be insufficient to permit the payment in full to
such holders of the amounts payable to such holders upon a Liquidation
Transaction pursuant to the provisions of the Restated Certificate of
Incorporation of the Corporation, then such assets or proceeds shall be
distributed among such holders ratably in proportion to the amounts that would
be payable on such shares if all amounts payable thereon were paid in full.
After payment in full of the Liquidation Preference and accumulated and unpaid
dividends to which they are entitled, the holders of shares of Series A Excess
Preferred Stock shall not be entitled to any further participation in any
distribution of the assets of the Corporation. For purposes hereof, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares, securities
or other consideration) of all or
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substantially all the property or assets of the Corporation nor a consolidation
or merger of the Corporation with one or more other persons shall be deemed to
be a Liquidation Transaction, voluntary or involuntary.
The holder of any share of Series A Excess Preferred Stock shall not be
entitled to receive any payment owed for such shares of Series A Excess
Preferred Stock under this Section 3 until such holder shall (a) cause to be
delivered to the Corporation the certificate(s) representing such shares of
Series A Excess Preferred Stock and (b) transfer instrument(s) satisfactory to
the Corporation and sufficient to transfer such shares of Series A Excess
Preferred Stock to the Corporation free of any adverse interest. As in the case
of the Redemption Price referred to in Section 5, no interest shall accrue on
any payment upon liquidation after the date thereof.
SECTION 4. Status of Redeemed Series A Excess Preferred Stock. Upon any
redemption, repurchase or other acquisition by the Corporation of shares of
Series A Excess Preferred Stock, the shares of Series A Excess Preferred Stock
so redeemed, repurchased or acquired shall be retired and canceled.
SECTION 5. Redemption at the Option of the Corporation. (a) The Board
of Directors shall have the power to restrict transfers of shares of Series A
Excess Preferred Stock and/or to call for redemption a sufficient number of
shares of Series A Excess Preferred Stock, selected in a manner deemed
appropriate in the opinion of the Board of Directors, to maintain or bring the
direct or indirect ownership of the capital stock of the Corporation into
conformity with the requirements of Section 856(a)(6) of the Internal Revenue
Code of 1986, as amended, at the greater of (i) a price (the "Redemption Price")
equal to the Liquidation Preference of the redeemed shares of Series A Excess
Preferred Stock, plus an amount equal to the full amount of accumulated and
unpaid dividends thereon at the Redemption Date (as hereinafter defined),
prorating the dividend accumulated during the period commencing on the
Semiannual Payment Date immediately preceding the date of the payment of the
Redemption Price and ending on such payment date (calculated on the basis of a
360-day year of twelve 30-day months) and (ii) the current market price (as
defined in Section 5(c)) of the Common Stock into which shares of such redeemed
Series A Excess Preferred Stock could have been converted if a right to convert
existed at such time. In making such selection, the Board of Directors shall
take due regard of all feasible selection methods and shall only select shares
of Series A Excess Preferred Stock if, in their considered, good faith judgment,
such selection shall be an equitable way of maintaining or bringing ownership of
the capital stock of the Corporation into conformity with Section 856(a)(6) of
the Internal Revenue Code of 1986, as amended, given the burdens on the holders
of the shares of redeemed Series A Excess Preferred Stock of the various
selection methods and the consequences (including withholding tax and other tax
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76
consequences) to the Corporation and its remaining shareholders associated with
such methods, such judgment to be made without reference to the liquidation
preference, conversion rights or dividend rate of the shares of Series A Excess
Preferred Stock unless such preference, conversion rights or rate shall be
directly relevant to the conformity of the ownership of the capital stock of
the Corporation with said Section 856(a)(6).
(b) The Corporation shall give the holders of shares of Series A Excess
Preferred Stock prior written notice of a redemption pursuant to this Section 5
(a "Redemption") not more than 60 nor less than 30 calendar days prior to the
date fixed for redemption (the "Redemption Date") at the address of such holders
on the books of the Corporation (provided that failure to give such notice or
any defect therein shall not affect the validity of the proceeding for a
Redemption except as to the holder to whom the Corporation has failed to give
such notice or whose notice was defective), and shall set apart the funds
necessary to pay the aggregate Redemption Price on all shares of Series A Excess
Preferred Stock then called for redemption. Provided that such funds have been
so set apart, from and after the close of business on the Redemption Date the
shares of Series A Excess Preferred Stock shall no longer be deemed outstanding
and all rights with respect to such shares shall forthwith cease and terminate,
except the right of the holders thereof to receive the Redemption Price (without
interest) upon surrender of the certificates evidencing their shares of Series A
Excess Preferred Stock. In case fewer than all of the shares of Series A Excess
Preferred Stock represented by any such surrendered certificate are called for
redemption, a new certificate shall be issued at the expense of the Corporation
representing the unredeemed shares.
(c) The "current market price" per share of share of Common Stock on
any day shall be the average of the closing per share sales prices of the Common
Stock during the last twenty trading days as reported on the Composite Tape of
the New York Stock Exchange, Inc. (the "NYSE") or, if shares of Common Stock are
not then listed on the NYSE, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on which
shares of Common Stock are then listed or, if shares of Common Stock are not
then listed on any such stock exchange, the average of the average closing bid
and ask quotations with respect to a share of Common Stock during the last
twenty trading days on the NASDAQ Stock Market or any successor system then in
use or, if no such quotations are then available, the average of the bid and
asked prices with respect to a share of Common Stock for such trading days, as
furnished by a member of the NYSE regularly making a market in the Common Stock
selected by the Board of Directors of the Corporation, or, if no such member
firm is then making a market in the Common Stock, the fair market value on such
date of a share of Common Stock as determined in good faith by a majority of the
members of
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77
the Board of Directors of the Corporation after consultation with an independent
financial advisor of recognized national standing.
SECTION 6. Voting. (a) In addition to any rights provided by law, each
holder of shares of Series A Excess Preferred Stock shall be entitled to such
number of votes per share held as shall equal the number (rounded to the nearest
whole vote) obtained by dividing $1,000.00 by the lesser of (x) the Conversion
Price and (y) the Alternative Conversion Price. Except as provided in paragraph
(b) below, the holders of shares of Series A Excess Preferred Stock shall be
entitled to vote on all matters as to which holders of shares of Common Stock
shall be entitled to vote, in the same manner and with the same effect as such
holders of shares of Common Stock, voting together with the holders of shares of
Common Stock as one class.
(b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least two-thirds of the shares of Series A Excess
Preferred Stock then outstanding, voting separately as a class, given by written
consent in lieu of a meeting or by vote at a meeting called for such purpose for
which notice shall have been given to the holders of shares of Series A Excess
Preferred Stock, (i) authorize any class of stock ranking prior to the Series A
Excess Preferred Stock with respect to the payment of dividends or distribution
of assets upon dissolution, liquidation or winding-up; (ii) amend, alter or
repeal any of the provisions of the Restated Certificate of Incorporation of the
Corporation so as to affect adversely the powers, preferences or rights of the
holders of shares of Series A Excess Preferred Stock then outstanding or reduce
the minimum time required for any notice to which only the holders of shares of
Series A Excess Preferred Stock then outstanding may be entitled (an amendment
of the Restated Certificate of Incorporation of the Corporation to authorize or
create, or to increase the authorized amount of, any shares of any class ranking
junior or on a parity with shares of Series A Excess Preferred Stock shall be
deemed not to affect adversely the powers, preferences or rights of the holders
of shares of Series A Excess Preferred Stock); (iii) authorize or create, or
increase the authorized amount of, any shares, or any security convertible into
stock, of any class ranking prior to the Series A Excess Preferred Stock with
respect to the payment of dividends or distribution of assets upon dissolution,
liquidation or winding-up; (iv) merge or consolidate with or into any other
person, unless each holder of shares of Series A Excess Preferred Stock
immediately preceding such merger or consolidation shall receive or continue to
hold in the resulting person the same number of shares, with substantially the
same rights and preferences, as correspond to shares of Series A Excess
Preferred Stock so held; (v) increase the number of authorized shares of Series
A Excess Preferred Stock above 209,249; (vi) amend, alter or modify any of the
provisions of this Exhibit; or (vii) otherwise alter or change the powers,
preferences, or rights, or qualifications,
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limitations or restrictions of the shares of Series A Excess Preferred Stock so
as to affect them adversely.
SECTION 7. Notice of Certain Events. (a) In case at any time the
Corporation shall propose
(i) to pay any dividend payable in shares of Common Stock upon
its shares of Common Stock, or to make any distribution (other than a
dividend or distribution of cash from Cash Flow) to the holders of
shares of Common Stock;
(ii) to make any dividend or distribution of cash to the
holders of shares of Common Stock from Cash Flow but to retain a
portion of such Cash Flow in the Corporation;
(iii) to offer for subscription pro rata to the holders of
shares of Common Stock any additional shares of beneficial interest of
any class or any other rights or warrants;
(iv) to consolidate or merge with or into another person; or
(v) to effect any reorganization, reclassification,
liquidation, dissolution or winding-up of the Corporation;
and the effect of such proposed action would be to cause there to be made an
adjustment in the Conversion Price of the Series A Convertible Preferred Stock
pursuant to the Charter, then, and in any one or more of such cases, the
Corporation shall cause at least ten calendar days' notice thereof to be filed
with the Transfer Agent and to be given to each holder of shares of Series A
Excess Preferred Stock as of the date on which (x) the books of the Corporation
shall close, or a record be taken, for such dividend or distribution on shares
of Common Stock, dividend or distribution or offering of rights or warrants or
(y) such consolidation, merger, reorganization, reclassification, liquidation,
dissolution or winding-up shall be effective, as the case may be.
(b) In case the Board of Directors shall approve the sale or other
transfer of all or substantially all the interest of the Corporation or any
affiliate of the Corporation in any of the Specified Assets (as defined below)
to any person that is not an affiliate of the Corporation, then the Corporation
shall cause notice of such approval to be filed with the Transfer Agent and
given to each holder of shares of Series A Excess Preferred Stock as of the date
of the giving of such approval within five business days of the date of the
giving of such approval. The term "Specified Assets" shall mean the properties
commonly known as Roosevelt Field Shopping Center (Nassau County, New York),
Lenox Square Mall (Atlanta, Georgia), Town Center at Boca Raton
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(Palm Beach County, Florida), Brea Mall (Brea, California) and Rockaway
Townsquare Mall (Rockaway, New Jersey).
(c) The failure to give or receive the notice required by this Section
7 or any defect therein shall not affect the legality or validity of any such
dividend, distribution, issuance of any right or warrant or other action.
SECTION 8. Designation of Capital Gain Dividends. So long as 10,000 or
more shares of Series A Excess Preferred Stock are held of record by one or more
of (i) Stichting Pensioenfonds voor de Gezondheid Geestelijke en
Maatschappelijke belangen ("PGGM"), (ii) any affiliate of PGGM that identifies
itself to the Transfer Agent and the Corporation as such an affiliate and (iii)
any other foreign individual or entity with a record address outside the United
States of America: the Corporation shall not designate any dividends paid on
shares of the Series A Excess Preferred Stock (or dividends deemed paid pursuant
to Section 305 of the Code) as capital gain dividends for U.S. tax purposes, and
all distributions on the Common Stock of the Corporation in excess of the
Corporation's real estate investment trust taxable income (excluding net capital
gains) for any taxable year shall be designated as capital gains dividends to
the extent of the Corporation's recognized capital gains for such taxable year.
SECTION 9. Definitions and Construction. As used in this resolution:
(a) "herein", "hereof", "hereunder" and other like words mean or refer to this
resolution in its entirety; (b) "outstanding", when used with reference to
shares of stock, means issued shares of stock, excluding shares of stock held by
the Corporation or a subsidiary thereof; (c) "person" means any corporation,
partnership, trust, organization, association or other entity or individual; (d)
"affiliate" of any person means any other person controlling, controlled by or
under common control with such person; (e) "capital stock of the Corporation"
shall mean shares of the capital stock of the Corporation as described in
Article FOURTH of the Restated Certificate of Incorporation of the Corporation;
(f) "Common Stock" shall mean the stock described as Common Stock in Article
FOURTH of the Restated Certificate of Incorporation of the Corporation; (g)
"Preferred Stock" shall mean the stock described as Preferred Stock in Article
FOURTH of the Restated Certificate of Incorporation of the Corporation; (h)
"Transfer Agent" shall First Chicago Trust Company of New York or such other
successor transfer agent(s) appointed by the Board of Directors in accordance
with Section 6.02 of the Restated By-Laws of the Corporation; (i) headings are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof; and (j) references to Sections are to Sections of this
Exhibit, unless otherwise expressly provided.
In addition, whenever reference is made herein to cash flow
from operations of the Corporation, as determined in good
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faith by the Board of Directors, such determination shall be made on a basis
substantially consistent with that employed by the Corporation in computing
Funds From Operations as reported in the Corporation's filings with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, and the Securities and Exchange Act of 1934, as amended.
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Exhibit D to the Simon Property Group, Inc.
Restated Certificate of Incorporation
FORM OF
SIMON PROPERTY GROUP, INC.
SERIES B EXCESS PREFERRED STOCK
The authorized number of shares of the series of Preferred Stock
created herein and the voting powers, preferences and relative, participating
optional or other special rights and qualifications, and the limitations or
restrictions thereof, of such series shall be as set forth herein.
For purposes of this exhibit, capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Simon Property
Group, Inc. Restated Certificate of Incorporation (the "Charter").
Each share of Series B Convertible Preferred Stock, par value $0.0001
per share, of the Corporation ("Series B Preferred Stock"), is convertible into
Series B Excess Preferred Stock (the "Series B Excess Preferred Stock") of the
Corporation as provided in Article NINTH of the Charter of the Corporation.
Subject in all cases to the provisions of Article NINTH of the Charter of the
Corporation with respect to Excess Stock, the following is a description of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Series B Excess Preferred Stock:
(1) Designation and Amount. The designation of the series of Preferred
Stock of the Corporation created herein shall be "Series B Excess Preferred
Stock." The authorized number of shares of Series B Excess Preferred Stock shall
be 5,000,000, with par value $0.0001 per share.
All shares of Series B Excess Preferred Stock redeemed, purchased,
exchanged, unissued or otherwise acquired by the Corporation shall be retired
and canceled and, upon the taking of any action required by applicable law,
shall be restored to the status of authorized but unissued shares of capital
stock and may thereafter be issued, but not as Series B Excess Preferred Stock.
(2) Ranking. The Series B Excess Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up, dissolution, and
redemption rights, rank (A) junior to any other class or series of Preferred
Stock hereafter duly established by the Board of Directors of the Corporation,
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terms of which shall specifically provide that such series shall rank prior
to the Series B Excess Preferred Stock as to the payment of dividends,
distribution of assets upon liquidation and redemption rights (the "Senior
Preferred Stock"), (B) pari passu with the Series A Convertible Preferred Stock
of the Corporation, par value $0.0001 per share, the Series A Convertible
Preferred Excess Stock of the Corporation, par value $0.0001 per share, the
Series B Preferred Stock and any other class or series of Preferred Stock
hereafter duly established by the Board of Directors of the Corporation, the
terms of which shall specifically provide that such class or series shall rank
pari passu with the Series B Excess Preferred Stock as to the payment of
dividends, distribution of assets upon liquidation and redemption rights (the
"Parity Preferred Stock") and (C) prior to any other class or series of
preferred stock or other class or series of capital stock of or other equity
interests in the Corporation, including, without limitation, all classes of the
common stock of the Corporation, whether now or hereafter created. All of such
classes or series of capital stock and other equity interests of the
Corporation, including, without limitation, the Common Stock, the Class B Common
Stock and the Class C Common Stock are collectively referred to herein as the
"Junior Stock".
(3) Dividends. (A) Subject to the rights of series of Preferred Stock
which may from time to time come into existence, holders of the then outstanding
Series B Excess Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of funds legally available for the
payment of dividends, cumulative preferential cash dividends at the rate of
$6.50 per annum per share. Such dividends shall accrue and be cumulative from
the date of original issue and shall be payable in equal amounts quarterly in
arrears on the last day of March, June, September and December or, if not a
business day, the next succeeding business day (each, a "Distribution Payment
Date"). The first dividend, which will be paid on September 30, 1998, will be
for less than a full quarter. Such first dividend and any dividend distribution
payable on Series B Excess Preferred Stock for any partial distribution period
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. Distributions will be payable to holders of record as they appear in the
share records of the Corporation at the close of business on the applicable
record date, which shall be on the first day of the calendar month in which the
applicable Distribution Payment Date falls on or on such other date designated
by the Board of Directors of the Corporation for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Distribution
Payment Date (each, a "Distribution Record Date").
(B) Dividends on Series B Excess Preferred Stock will accrue and be
cumulative whether or not the Corporation has earnings, whether or not there are
funds legally available for the payment of such distributions and whether or not
such distributions are earned, declared or authorized. No interest,
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or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on Series B Excess Preferred Stock which may be
in arrears. Dividends paid on the Series B Excess Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a per share basis among all such
shares at the time outstanding.
(C) If, for any taxable year, the Corporation elects to designate as
capital gain distributions (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended, or any successor revenue code or section (the "Code"))
any portion (the "Capital Gains Amount") of the total distributions (as
determined for federal income tax purposes) paid or made available for the year
to holders of all classes of capital stock (the "Total Distributions"), then the
portion of the Capital Gains Amount that shall be allocable to holders of Series
B Excess Preferred Stock shall be in the same percentage that the total
distributions paid or made available to the holders of Series B Excess Preferred
Stock for the year bears to the Total Distributions.
(D) If any shares of Series B Excess Preferred Stock are outstanding,
then, except as provided in the following sentence, no distributions shall be
declared or paid or set apart for payment on any shares of any other series of
Preferred Stock of the Corporation ranking, as to distributions, on a parity
with or junior to Series B Excess Preferred Stock for any period unless full
cumulative distributions have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payments on shares of Series B Excess Preferred Stock for all past distribution
periods and the then current distribution period. When distributions are not
paid in full (or a sum sufficient for such full payment is not set apart) upon
the shares of Series B Excess Preferred Stock and the shares of any other series
of Preferred Stock ranking on parity as to distributions with shares of Series B
Excess Preferred Stock, all distributions declared upon shares of Series B
Excess Preferred Stock and any other series of Preferred Stock ranking on a
parity as to distributions with Series B Excess Preferred Stock shall be
declared pro rata so that the amount of distributions declared per share on
Series B Excess Preferred Stock and such other series of Preferred Stock shall
in all cases bear to each other the same ratio that accrued distributions per
share on Series B Excess Preferred Stock and such other series of Preferred
Stock bear to each other.
(E) Except as provided in subparagraph (3)(D) herein, unless full
cumulative distributions on shares of Series B Excess Preferred Stock have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past distribution periods and
the then current distribution period, no distributions (other than in shares of
Common Stock or other Junior Stock) shall be declared
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or paid aside for payment or other distribution shall be declared or made upon
the shares of Common Stock or any other capital stock of the Corporation ranking
junior to or on a parity with Series B Excess Preferred Stock as to
distributions or upon liquidation, nor shall any shares of Common Stock or any
other capital stock of the Corporation ranking junior to or on a parity with
Series B Excess Preferred Stock as to distributions or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any such
capital stock) by the Corporation (except by conversion into or exchange for
Junior Stock).
(F) Any distribution payment made on shares of Series B Excess
Preferred Stock shall first be credited against the earliest accrued but unpaid
distribution due with respect to shares of Series B Excess Preferred Stock which
remain payable.
(G) No distributions on the Series B Excess Preferred Stock shall be
authorized by the Board of Directors of the Corporation or be paid or set apart
for payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such authorization, payment or setting apart for payment
or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder if such authorization or
payment shall be restricted or prohibited by law.
(H) Except as provided in this paragraph (3) and in paragraph (4), the
Series B Excess Preferred Stock shall not be entitled to participate in the
earnings or assets of the Corporation.
(4) Liquidation, Dissolution or Winding Up. (A) Subject to the rights
of series of Preferred Stock which may from time to time come into existence,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any Junior Stock, the holders of shares of Series B
Excess Preferred Stock shall be entitled to receive out of assets of the
Corporation legally available for distribution to stockholders, liquidation
distributions in the amount of the liquidation preference of $100.00 per share
in cash or property having a fair market value as determined by the Board of
Directors valued at $100.00 per share, plus an amount equal to all distributions
accrued and unpaid at the date of such liquidation, dissolution or winding up.
After payment of the full amount of the liquidating distributions to which they
are entitled, the holders of shares of Series B Excess Preferred Stock will have
no right or claim to any of the remaining assets of the Corporation. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the available assets of the
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Corporation are insufficient to pay the amount of the liquidation distributions
on all outstanding shares of Series B Excess Preferred Stock and the
corresponding amounts payable on all shares of Parity Preferred Stock, then the
holders of shares of Series B Excess Preferred Stock and Parity Preferred Stock
shall share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
(B) A consolidation or merger of the Corporation with or into any other
entity or entities, or a sale, lease, transfer, conveyance or disposition of all
or substantially all of the assets of the Corporation or a statutory share
exchange in which stockholders of the Corporation may participate, shall not be
deemed to be a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this paragraph (4).
(5) Redemption. (A) Shares of Series B Excess Preferred Stock are not
redeemable prior to [the fifth anniversary of the Closing Date]. On and after
[the fifth anniversary of the Closing Date], the Corporation at its option upon
not less than 30 nor more than 60 days' written notice, may redeem outstanding
shares of Series B Excess Preferred Stock, in whole or in part, at any time or
from time to time, for cash at the following redemption prices (expressed as a
percentage of liquidation value) after [the anniversary of the Closing Date] in
the following years:
Year Percentage
---- ----------
2003 105
2004 104
2005 103
2006 102
2007 101
2008 and thereafter 100
plus an amount equal to all distributions accrued and unpaid thereon to the date
fixed for redemption, without interest to the extent the Corporation will have
funds legally available therefor. The redemption price of shares of Series B
Excess Preferred Stock (other than the portion hereof consisting of accrued and
unpaid distributions) is payable solely out of proceeds from the sale of other
capital stock of the Corporation, which may include Common Stock, Preferred
Stock, depository shares, interests, participations or other ownership interests
in the Corporation however designated, and any rights (other than debt
securities converted into or exchangeable for capital stock), warrants or
options to purchase any thereof, and not from any other source. Holders of
shares of Series B Excess Preferred Stock to be redeemed shall surrender such
shares of Series B Excess Preferred Stock at the place designated in such notice
and shall be entitled to the redemption price and any accrued and unpaid
distributions payable upon such redemption following such
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surrender. If fewer than all of the outstanding shares of Series B Excess
Preferred Stock are to be redeemed, the number of shares to be redeemed will be
determined by the Corporation and such shares may be redeemed pro rata from the
holder of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares or by
lot in a manner determined by the Corporation).
(B) Unless cumulative distributions on all shares of Series B Excess
Preferred Stock and Parity Stock shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof for
payment for all past distribution periods and the current distribution period,
no shares of Series B Excess Preferred Stock or Parity Stock shall be redeemed
unless all outstanding shares of Series B Excess Preferred Stock and Parity
Preferred Stock are simultaneously redeemed; the foregoing shall not prevent the
purchase or acquisition of shares of Series B Excess Preferred Stock or Parity
Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding shares of Series B Excess Preferred Stock or Parity Preferred
Stock, as the case may be. Furthermore, unless full cumulative distributions on
all outstanding shares of Series B Excess Preferred Stock and Parity Preferred
Stock have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire directly or indirectly any shares of
Series B Excess Preferred Stock or Parity Preferred Stock (except by conversion
into or exchange for shares of capital stock of the Corporation ranking junior
to Series B Excess Preferred Stock and Parity Preferred Stock as to
distributions and upon liquidation).
(C) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be mailed, postage prepaid,
at least 30 days but not more than 90 days before the redemption date, to each
holder of record of shares of Series B Excess Preferred Stock at the address
shown on the share transfer books of the Corporation. Each notice shall state:
(i) the redemption date; (ii) the number of shares of Series B Excess Preferred
Stock to be redeemed; (iii) the redemption price per share; (iv) the place or
places where certificates for shares of Series B Excess Preferred Stock are to
be surrendered for payment of the redemption price; and (v) that distributions
on shares of Series B Excess Preferred Stock will cease to accrue on such
redemption date. No failure to give such notice or any defect thereto or in the
mailing thereof shall affect the validity of the proceeding for the redemption
of any Series B Excess Preferred Stock except as to the holder to whom notice
was defective or not given. If fewer than all shares of Series B Excess
Preferred Stock are to be redeemed, the notice mailed to
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each such holder thereof shall also specify the number of shares of Series B
Excess Preferred Stock to be redeemed from each such holder. If notice of
redemption of any shares of Series B Excess Preferred Stock has been given and
if the funds necessary for such redemption have been set aside by the
Corporation in trust for the benefit of the holders of shares of Series B Excess
Preferred Stock so called for redemption, then from and after the redemption
date, distributions will cease to accrue on such shares of Series B Excess
Preferred Stock, such shares of Series B Excess Preferred Stock shall no longer
be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price.
(D) The holders of shares of Series B Excess Preferred Stock at the
close of business on a Distribution Record Date will be entitled to receive the
distribution payable with respect to such shares of Series B Excess Preferred
Stock on the corresponding Distribution Payment Date notwithstanding the
redemption thereof between such Distribution Record Date and the corresponding
Distribution Payment Date or the Corporation's default in the payment of the
distribution due. Except as provided above, the Corporation will make no payment
or allowance for unpaid distributions, whether or not in arrears, on shares of
Series B Excess Preferred Stock which have been called for redemption.
(E) Series B Excess Preferred Stock have no stated maturity and will
not be subject to any sinking fund or mandatory redemption, except as provided
in Article NINTH of the Charter of the Corporation.
(6) Voting. (A) Except as indicated in this paragraph (6), except as
may be required by applicable law, or, at any time Series B Excess Preferred
Stock are listed on a securities exchange, as may be required by the rules of
such exchange, the holders of shares of Series B Excess Preferred Stock will
have no voting rights.
(B) If six quarterly distributions (whether or not consecutive) payable
on shares of Series B Preferred Stock or Series B Excess Preferred Stock are in
arrears, whether or not earned or declared, the number of directors then
constituting the Board of Directors of the Corporation will be increased by two
(except as provided in the proviso to paragraph (c) to Article FOURTH of the
Charter), and the holders of shares of Series B Preferred Stock and Series B
Excess Preferred Stock, voting together as a class with the holders of shares of
any other series of Preferred Stock upon which like voting rights have been
conferred and are exercisable (any such other series, the "Nonvoting Preferred
Stock"), will have the right to elect two directors to serve on the
Corporation's Board of Directors at any annual meeting of stockholders or a
special meeting of the holders of Series B Preferred Stock and Series B Excess
Preferred Stock and such other voting Preferred Stock called by the holders
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of record of at least 10% of any series of Preferred Stock so in arrears (unless
such request is received less than 90 days before the date fixed for the next
annual or special meeting of the stockholders), until all such distributions
have been declared and paid or set aside for payment. The term of office of all
directors so elected will terminate with the termination of such voting rights.
(C) The approval of two-thirds of the outstanding Series B Excess
Preferred Stock voting as a single class is required in order to (i) amend,
alter or repeal any provision of the Charter, so as to materially and adversely
affect the rights, preferences, privileges or voting power of the Series B
Excess Preferred Stock; or (ii) authorize, reclassify, create or increase the
authorized or issued amount of any class or series of stock having rights senior
to Series B Excess Preferred Stock with respect to the payment of distributions
or amounts upon liquidation, dissolution or winding up of the affairs of the
Corporation or to create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase such shares. However, the
Corporation may create additional classes of Parity Preferred Stock and Junior
Stock, increase the authorized number of shares of Parity Preferred Stock and
Junior Stock and issue additional series of Parity Preferred Stock and Junior
Stock without the consent of any holder of Series B Excess Preferred Stock or
Voting Preferred Stock.
(D) Except as provided above, as may be required by law or as required
by the rules of any securities exchange on which the Series B Excess Preferred
Stock are listed, the holders of Series B Excess Preferred Stock are not
entitled to vote on any merger or consolidation involving the Corporation, on
any share exchange or on a sale of all or substantially all of the assets of the
Corporation.
(E) In any matter in which the Series B Excess Preferred Stock are
entitled to vote (as provided in this paragraph (6)), as may be required by law
or as required by the rules of any securities exchange on which the Series B
Excess Preferred Stock are listed, including any action by written consent, each
share of Series B Excess Preferred Stock shall be entitled to one vote.
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