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Exhibit 3.1
ARTICLES OF
AMENDMENT AND RESTATEMENT
OF
INTERSTATE HOTELS CORPORATION
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THIS IS TO CERTIFY THAT:
FIRST: Interstate Hotels Corporation, a Maryland corporation with its
principal office in the State of Maryland, and its resident agent, as set forth
below in ARTICLES IV and V, respectively, of these Articles of Amendment and
Restatement desires to amend and restate its charter as filed with the State
Department of Assessments and Taxation on May 29, 1998, as amended on October
30, 1998 and May 7, 1999, as set forth in these Articles of Amendment and
Restatement.
SECOND: The following provisions are all of the provisions of the
charter currently in effect as hereinafter amended:
ARTICLE I
INCORPORATION
The undersigned, Michael J. O'Connor, whose post office address is c/o
Goodwin, Procter & Hoar LLP, 53 State Street, Boston, Massachusetts, 02109,
being at least eighteen (18) years of age, does hereby form a corporation under
the Maryland General Corporation Law (the "MGCL").
ARTICLE II
NAME
The name of the corporation (the "Corporation") is:
Interstate Hotels Corporation
ARTICLE III
PURPOSES
The Corporation is being formed to operate and manage hotels and to
engage in any lawful act or activity for which a corporation may be organized
under the MGCL. The foregoing purposes shall be in no way limited or restricted
by reference to, or inference from, the terms of any other clause of these
Articles of Incorporation, as amended from time to time, and each shall be
regarded as independent. The foregoing purposes are also to be construed as
powers of the Corporation, and shall be in addition to and not in limitation of
the general powers of corporations under the laws of the State of Maryland.
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ARTICLE IV
PRINCIPAL OFFICE ADDRESS
The address of the principal office of the Corporation in Maryland is
c/o CSC-Lawyers Incorporating Service Company, 11 East Chase Street, Baltimore,
Maryland 21202.
ARTICLE V
THE RESIDENT AGENT
The resident agent of the Corporation in Maryland is CSC-Lawyers
Incorporating Service Company, 11 East Chase Street, Baltimore, Maryland 21202.
ARTICLE VI
BOARD OF DIRECTORS
6.1 General Powers; Action by Committee. The business and affairs of
the Corporation shall be managed under the direction of the Board of Directors
and, except as otherwise expressly provided by law, these Articles or the
bylaws, as amended from time to time (the "Bylaws"), of the Corporation, all of
the powers of the Corporation shall be vested in such Board of Directors. Any
action which the Board of Directors is empowered to take may be taken on behalf
of the Board of Directors by a duly authorized committee thereof except (i) to
the extent limited by Maryland law, these Articles or the Bylaws and (ii) for
any action which requires the affirmative vote or approval of a majority of all
Directors then in office (unless, in such case, these Articles or the Bylaws
specifically provide that a duly authorized committee can take such action on
behalf of the Board of Directors). A majority of the Board of Directors shall
constitute a quorum and, except as otherwise specifically provided in these
Articles, the affirmative vote of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
6.2 Number. Until the annual meeting of stockholders to be held in
2000, the number of Directors of the Corporation shall be fixed at six. From the
date of the annual meeting of stockholders to be held in 2000 (the "First Annual
Meeting Date") until the earliest to occur of (i) such time that there are no
shares of Class B Common Stock outstanding, (ii) such time that there are no
shares of Class C Common Stock outstanding and (iii) September 30, 2003, the
number of Directors of the Corporation shall be fixed at (x) eleven in the event
that, on the First Annual Meeting Date, Patriot American Hospitality, Inc., a
Delaware corporation ("Patriot"), qualifies as a "real estate investment trust"
(within the meaning of Section 856 of the Internal Revenue Code of 1986, as
amended) (a "REIT"), or (y) seven in the event that, on the First Annual Meeting
Date, Patriot does not exist or does not qualify as a
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REIT. After the earliest to occur of (A) such time that there are no shares of
Class B Common Stock outstanding, (B) such time that there are no shares of
Class C Common Stock outstanding and (C) September 30, 2003, the number of
Directors of the Corporation shall be fixed from time to time by a resolution
duly adopted by the Board of Directors; provided, however, that the total number
of Directors shall not be increased above (x) eleven in the event that, on the
First Annual Meeting Date, Patriot qualifies as a REIT, or (y) seven in the
event that, on the First Annual Meeting Date, Patriot does not exist or does not
qualify as a REIT, prior to September 30, 2003 without the consent of the Class
B Director, if any, or Class C Director, if any, then serving on the Board of
Directors; provided, further, that the total number of Directors shall not be
reduced below eleven prior to September 30, 2003 at any time while Patriot
qualifies as a REIT without the consent of the Class C Director, if any, then
serving on the Board of Directors; and provided, further, that the total number
of Directors shall be not fewer than three unless there are fewer than three
stockholders at the time. No reduction in the number of Directors shall cause
the removal of any Director from office prior to the expiration of his or her
term.
6.3 Initial Board; Term; Election. The initial Directors of the
Corporation (hereinafter referred to, together with their direct and indirect
successors, as the "Class A Directors") shall be Thomas F. Hewitt, Michael L.
Ashner, Benjamin D. Holloway, Phillip H. McNeill, Sr. and Anne L. Raymond. The
Class A Directors shall be further classified, with respect to the term for
which they severally hold office, into three classes, as nearly equal in number
as possible. The initial Class A-I Director of the Corporation, who shall serve
a term expiring at the annual meeting of stockholders to be held in 2000, shall
be Anne L. Raymond; the initial Class A-II Directors of the Corporation, who
shall serve terms expiring at the annual meeting of stockholders to be held in
2001, shall be Michael L. Ashner and Benjamin D. Holloway; and the initial Class
A-III Directors of the Corporation, who shall serve terms expiring at the annual
meeting of stockholders to be held in 2002, shall be Thomas F. Hewitt and
Phillip H. McNeill, Sr. On the First Annual Meeting Date, if Patriot qualifies
as a REIT, four additional Class A Directors shall be elected to the Board and
such additional Directors shall be classified by the Board of Directors into
appropriate classes so that the classes of the Board of Directors will
thereafter be as nearly equal in number as possible. At each annual meeting of
stockholders, the successor or successors of the group of Class A Directors
whose term expires at that meeting shall be elected by the vote of holders of a
plurality of the shares of Class A Common Stock present in person or represented
by proxy at such meeting and entitled to vote on the election of Class A
Directors, and shall hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of his or their election.
One Director of the Corporation (hereinafter referred to, together with his
direct and indirect successors, as the "Class B Director") shall, in accordance
with and subject to Section 7.5 hereof, be elected by the holders of shares of
Class B Common Stock. The initial Class B Director of the Corporation shall be
Stephen P. Joyce, and shall serve a term expiring at the annual meeting of
stockholders to be held in 2001. Thereafter, the Class B Director shall serve
one-year terms expiring at each subsequent annual meeting of stockholders. At
each meeting of stockholders at which a Class B Director is to be elected, the
Class B Director shall be elected by the vote of holders of a plurality of the
shares of Class B Common Stock present
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in person or represented by proxy at such meeting and entitled to vote on the
election of Class B Directors. Upon the First Annual Meeting Date, one Director
of the Corporation (hereinafter referred to, together with his direct and
indirect successors, as the "Class C Director") shall, in accordance with and
subject to Section 7.6 hereof, be elected by the holders of shares of Class C
Common Stock. The initial Class C Director of the Corporation shall be elected
on the First Annual Meeting Date at either a meeting of holders of shares of
Class C Common Stock or by the unanimous written consent of such holders, and
shall serve a term expiring at the annual meeting of stockholders to be held in
2001. Thereafter, the Class C Director shall serve one-year terms expiring at
each subsequent annual meeting of stockholders. At each meeting of stockholders
at which a Class C Director is to be elected, the Class C Director shall be
elected by the vote of holders of a plurality of the shares of Class C Common
Stock present in person or represented by proxy at such meeting and entitled to
vote on the election of Class C Directors. The Directors shall hold office until
their successors are duly elected and qualified or until their earlier death,
disqualification, resignation or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
these Articles or any articles supplementary thereto, the holders of any one or
more series of Stock shall have the right, voting separately as a series or
together with holders of other such series, to elect Directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of such provisions and any articles supplementary applicable thereto, to
the extent applicable, and, except for Class A Directors, such Directors so
elected shall not be divided into classes pursuant to this Section 6.3.
During any period when the holders of any series of Stock have the
right to elect additional Directors as provided for or fixed pursuant to the
provisions of these Articles or any articles supplementary thereto, then upon
commencement and for the duration of the period during which such right
continues: (a) the then otherwise total authorized number of Directors of the
Corporation shall automatically be increased by such specified number of
Directors, and the holders of such Stock shall be entitled to elect the
additional Directors so provided for or fixed pursuant to said provisions and
(b) each such additional Director shall serve until such Director's successor
shall have been duly elected and qualified, or until such Director's right to
hold such office terminates pursuant to said provisions, whichever occurs
earlier, subject to such Director's earlier death, disqualification, resignation
or removal. Except as otherwise provided by the Board of Directors in the
resolution or resolutions establishing such series, whenever the holders of any
series of Stock having such right to elect additional Directors are divested of
such right pursuant to the provisions of such Stock, the terms of office of all
such additional Directors elected by the holders of such Stock, or elected to
fill any vacancies resulting from the death, resignation, disqualification or
removal of such additional Directors, shall forthwith terminate and the total
authorized number of Directors of the Corporation shall be reduced accordingly.
6.4 Resignation or Removal of Directors. Any Director may resign from
the Board of Directors or any committee thereof at any time by written notice to
the Board of Directors,
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effective upon execution and delivery to the Corporation of such notice or upon
any future date specified in the notice. Subject to the rights, if any, of the
holders of any class or series of Stock to elect Directors and to remove any
Director whom such holders have the right to elect, and except as otherwise
provided in Section 7.5.1 and Section 7.6.1, any Director (including persons
elected by Directors to fill vacancies in the Board of Directors) may be removed
from office (a) only with cause and (b) only by the affirmative vote of the
holders of at least 75% of the shares then entitled to vote at a meeting of the
stockholders called for that purpose. At least 30 days prior to any meeting of
stockholders at which it is proposed that any Director be removed from office,
written notice of such proposed removal shall be sent to the Director whose
removal will be considered at the meeting. For purposes of these Articles,
"cause," with respect to the removal of any Director, shall mean only (i)
conviction of a felony, (ii) declaration of unsound mind by order of a court,
(iii) gross dereliction of duty, (iv) commission of any act involving moral
turpitude or (v) commission of an act that constitutes intentional misconduct or
a knowing violation of law if such action in either event results both in an
improper substantial personal benefit to such Director and a material injury to
the Corporation.
6.5 Vacancies. Subject to the rights, if any, of the holders of any
class or series of Stock to elect Directors and to fill vacancies on the Board
of Directors relating thereto, (i) any vacancy on the Board of Directors which
results from the removal of a Director for cause may be filled by the
affirmative vote of a majority of votes cast by the holders of Class A Common
Stock, (ii) any vacancy occurring on the Board of Directors for any reason,
except as a result of an increase in the number of Directors, may be filled by a
majority vote of the remaining Directors, notwithstanding that such majority is
less than a quorum, and (iii) any vacancy occurring on the Board of Directors as
a result of an increase in the number of Directors may be filled by a majority
vote of the entire Board of Directors. A Director elected by the Board of
Directors to fill a vacancy shall hold office until the next annual meeting of
stockholders and until his or her successor is elected and qualified. A Director
elected by the stockholders to fill a vacancy which results from the removal of
a Director shall hold office for the balance of the term of the removed
Director. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law or by these Articles or by the
Bylaws, may exercise the powers of the full Board of Directors until such
vacancy is filled.
6.6 Powers. These Articles, as amended or supplemented from time to
time, shall be construed with a presumption in favor of the grant of power and
authority to the Directors. The determination as to any of the following
matters, made in good faith by or pursuant to the direction of the Board of
Directors consistent with these Articles and in the absence of actual receipt of
an improper benefit in money, property or services or active and deliberate
dishonesty established by a court, shall be final and conclusive and shall be
binding upon the Corporation and every holder of shares of its Stock: the amount
of the net income of the Corporation for any period and the amount of assets at
any time legally available for the payment of dividends, redemption of its Stock
or the payment of other distributions on its Stock; the amount of paid-in
surplus, net assets, other surplus, annual or other net profit, net assets in
excess of capital, undivided profits or excess of profits over losses on sales
of assets;
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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); the fair value, or any sale,
bid or asked price to be applied in determining the fair value, of any asset
owned or held by the Corporation; any matter relating to the acquisition,
holding and disposition of any assets by the Corporation; or any other matter
relating to the business and affairs of the Corporation.
ARTICLE VII
STOCK
7.1 Authorized Stock. Immediately prior to the filing of these Articles
of Amendment and Restatement, the total number of shares of stock ("Stock")
which the Corporation had authority to issue was One Hundred Thousand (100,000)
shares, par value $.01 per share ("Old Common Stock"). The aggregate par value
of all of the shares of all classes of Stock was $1,000. Upon filing of these
Articles of Amendment and Restatement, the total number of shares of stock
("Stock") which the Corporation has authority to issue is seventy-five million
(75,000,000) shares, initially consisting of (i) ten million (10,000,000) shares
of Preferred Stock, par value $.01 per share; (ii) sixty-two million
(62,000,000) shares of Class A Common Stock, par value $.01 per share ("Class A
Common Stock"); (iii) one million five hundred thousand (1,500,000) shares of
Class B Common Stock, par value $.01 per share ("Class B Common Stock"); and
(iv) one million five hundred thousand (1,500,000) shares of Class C Common
Stock, par value $.01 per share ("Class C Common Stock" and, together with the
Class A Common Stock and the Class B Common Stock, the "Common Stock"). The
aggregate par value of all the shares of all classes of Stock is $750,000.
Pursuant to a Recapitalization and Subscription Agreement dated as of June 18,
1999 (the "Recapitalization Agreement"), simultaneously with the filing of these
Articles of Amendment and Restatement, each share of Old Common Stock will be
exchanged into the number of shares of Common Stock set forth in the
Recapitalization Agreement. If shares of one class of Stock are classified or
reclassified into shares of another class of Stock pursuant to this Article VII,
the number of authorized shares of the former class shall be automatically
decreased and the number of shares of the latter class shall be automatically
increased, in each case by the number of shares so classified or reclassified,
so that the aggregate number of shares of Stock of all classes that the
Corporation has authority to issue shall not be more than the total number of
shares of Stock set forth in the first sentence of this paragraph.
7.2 Preferred Stock. Subject to any limitations prescribed by law, the
Board of Directors is expressly authorized to classify any unissued shares of
Preferred Stock and reclassify any previously classified but unissued shares of
Preferred Stock of any series from time to time, in one or more classes or
series of such Stock and, by filing articles supplementary with the State
Department of Assessments and Taxation of the State of Maryland, to establish or
change from time to time the number of shares to be included in each
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such class or series, and to fix the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of each
class or series. Any action by the Board of Directors under this Section 7.2
shall require the affirmative vote of a majority of the Directors then in
office; provided, however, that by the affirmative vote of a majority of the
Directors then in office, the Board of Directors may appoint a committee to act
on behalf of the Board of Directors under this Section 7.2, and in such event
the affirmative vote of a majority of the members of such committee then in
office shall be required for any action under this Section 7.2.
7.3 Common Stock. Except as otherwise expressly provided herein, all
shares of Common Stock shall be identical and shall entitle the holders thereof
to the same rights and privileges. Subject to all of the rights, powers and
preferences of the Preferred Stock and except as provided by law or in these
Articles (or in any articles supplementary regarding any class or series of
Preferred Stock):
7.3.1 Voting Rights. Except as otherwise provided herein, the
holders of shares of Common Stock shall be entitled to vote on all
matters requiring stockholder action, and each holder of shares of
Common Stock shall be entitled to one vote for each share of Common
Stock held by such stockholder. Except as required by law or as set
forth herein, the holders of Common Stock shall vote together as a
single class on all matters submitted to stockholders for a vote.
7.3.2 Dividend Rights. Holders of Common Stock shall be
entitled to receive such dividends and other distributions in cash,
Stock or property of the Corporation as may be authorized and declared
by the Board of Directors upon the Common Stock out of any assets or
funds of the Corporation legally available therefor, but only when and
as authorized by the Board of Directors or any authorized committee
thereof from time to time.
Before payment of any dividends or other distributions, there
may be set aside out of any assets of the Corporation available for
dividends or other distributions such sum or sums as the Board of
Directors may from to time, in its absolute discretion, think proper as
a reserve fund for contingencies, for equalizing dividends or other
distributions, for repairing or maintaining any property of the
Corporation or for such other purpose as the Board of Directors shall
determine to be in the best interests of the Corporation, and the Board
of Directors may modify or abolish any such reserve in the manner in
which it was created.
Notwithstanding any other provision of these Articles, no
dividend or other distribution may be declared or paid upon any class
of Common Stock, whether payable in cash or in shares of such class or
any other class of Common Stock or otherwise, unless a comparable
dividend shall be declared and paid upon each other class of Common
Stock then outstanding. If a dividend declared upon Class A Common
Stock is payable in shares of Class A Common Stock, the comparable
dividend declared upon
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Class B Common Stock shall be payable in shares of Class B Common Stock
and the comparable dividend declared upon Class C Common Stock shall be
payable in shares of Class C Common Stock, and vice versa.
7.3.3 Rights Upon Liquidation. Upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
subject to the rights of holders of any shares of Preferred Stock, the
net assets of the Corporation available for distribution to the holders
of Common Stock shall be distributed pro rata to such holders in
proportion to the number of shares of Common Stock held by each.
7.4 Class A Common Stock. The holders of the outstanding shares of
Class A Common Stock shall be entitled, as a class, to initially elect five
Class A Directors of the Corporation. At each annual meeting of stockholders,
the presence in person or by proxy of the holders of a majority of the
outstanding shares of Class A Common Stock shall be required and be sufficient
to constitute a quorum of such class for the election of Directors by such
class. Class A Directors may be removed from office in accordance with Section
6.4. In addition, the holders of the outstanding shares of Class A Common Stock
shall be entitled, as a class, to elect additional Class A Directors of the
Corporation if so permitted by these Articles, including, without limitation, as
permitted by Section 6.3, Section 7.5 and Section 7.6.
7.5 Class B Common Stock.
7.5.1 Voting Rights.
(a) The holders of the outstanding shares of Class B
Common Stock shall be entitled, as a class, to elect one Class
B Director of the Corporation. A Class B Director shall be
removed from office (i) with or without cause only by the
affirmative vote of the holders of a majority of the shares of
Class B Common Stock then entitled to vote at a meeting of
such stockholders called for the purpose or by the unanimous
written consent of holders of shares of Class B Common Stock,
(ii) automatically upon the occurrence of a Class B Conversion
Event (as defined below) or (iii) in accordance with Section
6.4. Upon the occurrence of a Class B Conversion Event, the
number of Class A Directors shall be automatically increased
by one and the vacancy created thereby may be filled in
accordance with Section 6.5 either by the remaining Directors
or by the holders of Class A Common Stock. If such vacancy is
filled by the remaining Directors, such remaining Directors
shall classify the new Director into the class of Directors
whose terms expire at the next annual meeting of stockholders.
If such vacancy is filled by the holders of Class A Common
Stock, the remaining Directors shall classify the new Director
into an appropriate class so that the classes of the Board of
Directors will thereafter be as nearly equal in number as
possible. Any Class B Director who dies, resigns, is removed
in accordance with Section 6.4 or otherwise ceases to be a
Director for any reason other than a Class B Conversion Event
shall be replaced by the
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vote of holders of a plurality of the shares of Class B Common
Stock then entitled to vote at a meeting of such stockholders
called for the purpose or by the unanimous written consent of
holders of Class B Common Stock.
(b) So long as any shares of Class B Common Stock are
outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of
Class B Common Stock then entitled to vote, voting as a class,
at a meeting of such stockholders called for the purpose or by
the unanimous written consent of holders of shares of Class B
Common Stock, enter into a definitive agreement with respect
to, or authorize the corporate action necessary to carry out,
a Patriot Related Transaction (as defined below), if at the
time of the vote of the Board of Directors authorizing the
entry into such agreement or the effectuation of such
corporate action Patriot and Wyndham International, Inc., a
Delaware corporation ("Wyndham"), together with the respective
Affiliates (as defined below) of Patriot and Wyndham, own in
the aggregate at least 10% of the outstanding Common Stock.
For purposes of this Article VII, "Patriot Related
Transaction" shall mean (i) a merger, consolidation, or share
exchange with Patriot or Wyndham or any Affiliate of Patriot
or Wyndham; (ii) the sale, lease, transfer or other
disposition of a substantial portion of the Corporation's
assets to Patriot or Wyndham or any Affiliate of Patriot or
Wyndham in one transaction or a series of transactions within
a 12 month period; (iii) the issuance or transfer by the
Corporation, in one transaction or a series of transactions,
of any equity securities of the Corporation which have an
aggregate market value of 10% or more of the total market
value of the outstanding Stock of the Corporation to Patriot
or Wyndham or any Affiliate of Patriot or Wyndham; (iv) the
adoption of any plan or proposal for the liquidation or
dissolution of the Corporation in which anything other than
cash or a pro rata distribution of assets will be received by
Patriot or Wyndham or any Affiliate of Patriot or Wyndham; or
(v) a reverse stock split which has the effect, directly or
indirectly, in one transaction or a series of transactions, of
increasing by 5% or more the proportionate amount of the
outstanding shares of Common Stock owned by Patriot or Wyndham
or any Affiliate of Patriot or Wyndham. For purposes of this
Article VII, an "Affiliate" of a specified individual or
entity is an individual or entity that directly, or indirectly
through one or more intermediaries, controls or is controlled
by, or is under common control with, such specified individual
or entity.
(c) For the purposes of taking the actions specified
in this Section 7.5.1, special meetings of holders of Class B
Common Stock shall be called by the Secretary of the
Corporation upon the written request of the holders of not
less than a majority of the shares of Class B Common Stock
then outstanding. Any such request shall state the purpose of
such meeting and the matters proposed to be acted upon at such
meeting. The Secretary shall inform such
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holders of Class B Common Stock of the reasonably estimated
cost of preparing and mailing notice of the meeting and, upon
payment to the Corporation by such stockholders of such costs,
the Secretary shall give notice to each holder of Class B
Common Stock entitled to notice of the meeting. At any such
meeting, the presence in person or by proxy of holders of a
majority of the outstanding shares of Class B Common Stock
shall be required and be sufficient to constitute a quorum for
the taking of action at such meeting. Holders of Class B
Common Stock shall also be entitled to take any action
specified in this Section 7.5.1 without a meeting upon the
unanimous written consent of holders of Class B Common Stock.
7.5.2 Voluntary Conversion into Class A Common Stock. Subject
to and upon compliance with the provisions of Section 7.7, each share
of Class B Common Stock shall be convertible, at the option of the
holder thereof, into one fully paid and non-assessable share of Class A
Common Stock. Each holder of Class B Common Stock shall be entitled to
convert shares of Class B Common Stock if such holder provides a
written request for conversion to the Corporation at least ten business
days prior to the date on which such holder desires to convert his
Class B Common Stock stating the date on which such holder desires to
convert his Class B Common Stock, which notice shall be binding and
irrevocable on the holder and, to the extent the holder otherwise
complies with the provisions of Section 7.7, the Corporation.
7.5.3 Automatic Conversion into Class A Common Stock. Each
share of Class B Common Stock shall automatically be converted into one
fully paid and non-assessable share of Class A Common Stock upon the
sale or other transfer, whether by operation of law or otherwise, of
such share of Class B Common Stock to any individual or entity other
than an Affiliate of Marriott International, Inc., a Delaware
corporation ("Marriott"), or any successor of Marriott or of any
Affiliate of Marriott. In addition, each share of Class B Common Stock
then outstanding shall automatically be converted into one fully paid
and non-assessable share of Class A Common Stock upon the occurrence of
a Class B Conversion Event. A "Class B Conversion Event" shall mean
such time that Marriott, together with its Affiliates, shall cease to
own at least two percent of the outstanding Common Stock. Each owner of
record of shares of Class B Common Stock shall provide to the
Corporation, as promptly as practicable, a written statement or
affidavit stating such information as the Corporation may request in
order to determine whether a Class B Conversion Event has occurred
(including, if requested by the Corporation, information relating to
the level of Beneficial Ownership (as defined below) of any class of
Common Stock by such owner of record and such other party or parties
necessary to determine whether a Class B Conversion Event has occurred
(to the extent such information is known to such owner of record)).
7.5.4 Record Ownership. All shares of Class B Common Stock
outstanding shall be owned of record at all times by Marriott, an
Affiliate of Marriott, or a successor of Marriott or of an Affiliate of
Marriott. The direct Beneficial Owner of
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shares of Class B Common Stock shall at all times be the owner of
record of such shares. "Beneficial Ownership," when used with respect
to ownership of shares of Stock by any person, shall mean all shares of
Stock which are (i) directly owned by such person or (ii) beneficially
owned by such person pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided,
however, that in determining the number of shares Beneficially Owned by
a person or group, no share shall be counted more than once although
applicable to both clauses (i) and (ii) of this definition or (in the
case of a group) although Beneficially Owned by more than one person in
such group. If a person Beneficially Owns shares of Stock that are not
actually outstanding (e.g., shares issuable upon the exercise of an
option or convertible security) ("Option Shares"), then, whenever these
Articles require a determination of the percentage of outstanding
shares of a class of Stock Beneficially Owned by that person, the
Option Shares Beneficially Owned by that person shall also be deemed to
be outstanding.
7.6 Class C Common Stock.
7.6.1 Voting Rights.
(a) Upon the First Annual Meeting Date, the holders
of the outstanding shares of Class C Common Stock shall be
entitled, as a class, to elect one Class C Director of the
Corporation. A Class C Director shall be removed from office
(i) with or without cause only by the affirmative vote of the
holders of a majority of the shares of Class C Common Stock
then entitled to vote at a meeting of such stockholders called
for the purpose or by the unanimous written consent of holders
of shares of Class C Common Stock, (ii) automatically upon the
occurrence of a Class C Conversion Event (as defined below) or
(iii) in accordance with Section 6.4. Upon the occurrence of a
Class C Conversion Event, the number of Class A Directors
shall be automatically increased by one and the vacancy
created thereby may be filled in accordance with Section 6.5
either by the remaining Directors or by the holders of Class A
Common Stock. If such vacancy is filled by the remaining
Directors, such remaining Directors shall classify the new
Director into the class of Directors whose terms expire at the
next annual meeting of stockholders. If such vacancy is filled
by the holders of Class A Common Stock, the remaining
Directors shall classify the new Director into an appropriate
class so that the classes of the Board of Directors will
thereafter be as nearly equal in number as possible. Any Class
C Director who dies, resigns, is removed in accordance with
Section 6.4 or otherwise ceases to be a Director for any
reason other than a Class C Conversion Event shall be replaced
by the vote of holders of a plurality of the shares of Class C
Common Stock then entitled to vote at a meeting of such
stockholders called for the purpose or by the unanimous
written consent of holders of Class C Common Stock.
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(b) So long as any shares of Class C Common Stock are
outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of
Class C Common Stock then entitled to vote, voting as a class,
at a meeting of such stockholders called for the purpose or by
the unanimous written consent of holders of shares of Class C
Common Stock, enter into a definitive agreement with respect
to, or authorize the corporate action necessary to carry out,
a Marriott Related Transaction (as defined below), if at the
time of the vote of the Board of Directors authorizing the
entry into such agreement or the effectuation of such
corporate action Marriott, together with its Affiliates, owns
in the aggregate at least 10% of the outstanding Common Stock.
For purposes of this Article VII, "Marriott Related
Transaction" shall mean (i) a merger, consolidation, or share
exchange with Marriott or any Affiliate of Marriott; (ii) the
sale, lease, transfer or other disposition of a substantial
portion of the Corporation's assets to Marriott or any
Affiliate of Marriott in one transaction or a series of
transactions within a 12 month period; (iii) the issuance or
transfer by the Corporation, in one transaction or a series of
transactions, of any equity securities of the Corporation
which have an aggregate market value of 10% or more of the
total market value of the outstanding Stock of the Corporation
to Marriott or any Affiliate of Marriott; (iv) the adoption of
any plan or proposal for the liquidation or dissolution of the
Corporation in which anything other than cash or a pro rata
distribution of assets will be received by Marriott or any
Affiliate of Marriott; or (v) a reverse stock split which has
the effect, directly or indirectly, in one transaction or a
series of transactions, of increasing by 5% or more the
proportionate amount of the outstanding shares of Common Stock
owned by Marriott or any Affiliate of Marriott.
(c) For the purposes of taking the actions specified
in this Section 7.6.1, special meetings of holders of Class C
Common Stock shall be called by the Secretary of the
Corporation upon the written request of the holders of not
less than a majority of the shares of Class C Common Stock
then outstanding. Any such request shall state the purpose of
such meeting and the matters proposed to be acted upon at such
meeting. The Secretary shall inform such holders of Class C
Common Stock of the reasonably estimated cost of preparing and
mailing notice of the meeting and, upon payment to the
Corporation by such stockholders of such costs, the Secretary
shall give notice to each holder of Class C Common Stock
entitled to notice of the meeting. At any such meeting, the
presence in person or by proxy of holders of a majority of the
outstanding shares of Class C Common Stock shall be required
and be sufficient to constitute a quorum for the taking of
action at such meeting. Holders of Class C Common Stock shall
also be entitled to take any action specified in this Section
7.6.1 without a meeting upon the unanimous written consent of
holders of Class C Common Stock.
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7.6.2 Voluntary Conversion into Class A Common Stock. Subject
to and upon compliance with the provisions of Section 7.7, each share
of Class C Common Stock shall be convertible, at the option of the
holder thereof, into one fully paid and non-assessable share of Class A
Common Stock. Each holder of Class C Common Stock shall be entitled to
convert shares of Class C Common Stock if such holder provides a
written request for conversion to the Corporation at least ten business
days prior to the date on which such holder desires to convert his
Class C Common Stock stating the date on which such holder desires to
convert his Class C Common Stock, which notice shall be binding and
irrevocable on the holder and, to the extent the holder otherwise
complies with the provisions of Section 7.7, the Corporation.
7.6.3 Automatic Conversion into Class A Common Stock. Each
share of Class C Common Stock shall automatically be converted into one
fully paid and non-assessable share of Class A Common Stock upon the
sale or other transfer, whether by operation of law or otherwise, of
such share of Class C Common Stock to any individual or entity other
than Patriot, Wyndham, any Affiliate of Patriot or Wyndham, or any
successor of Patriot or Wyndham or of any Affiliate of Patriot or
Wyndham. In addition, each share of Class C Common Stock then
outstanding shall automatically be converted into one fully paid and
non-assessable share of Class A Common Stock upon the occurrence of a
Class C Conversion Event. A "Class C Conversion Event" shall mean such
time that Patriot and Wyndham, together with their respective
Affiliates and the successors of Patriot and Wyndham and their
respective Affiliates, shall cease to own at least two percent of the
outstanding Common Stock. Each owner of record of shares of Class C
Common Stock shall provide to the Corporation, as promptly as
practicable, a written statement or affidavit stating such information
as the Corporation may request in order to determine whether a Class C
Conversion Event has occurred (including, if requested by the
Corporation, information relating to the level of Beneficial Ownership
(as defined in Section 7.5.4) of any class of Common Stock by such
owner of record and such other party or parties necessary to determine
whether a Class C Conversion Event has occurred (to the extent such
information is known to such owner of record)).
7.6.4 Record Ownership. All shares of Class C Common Stock
outstanding shall be owned of record at all times by Patriot, Wyndham,
an Affiliate of Patriot or Wyndham, or a successor of Patriot or
Wyndham or of an Affiliate of Patriot or Wyndham. The direct Beneficial
Owner (as defined in Section 7.5.4) of shares of Class C Common Stock
shall at all times be the owner of record of such shares.
7.7 Voluntary Conversion Procedures.
7.7.1 Surrender of Certificates. Each conversion of shares of
Class B or Class C Common Stock into shares of Class A Common Stock
pursuant to Section 7.5.2 or Section 7.6.2 shall be effected by the
surrender of the certificate or certificates representing the shares of
Class B or Class C Common Stock to be converted, duly
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assigned or endorsed for transfer to the Corporation (or accompanied by
duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer
agent for the Common Stock or such office or offices in the continental
United States of an agent for conversion as may from time to time be
designated by notice to the holders of the Class B and/or Class C
Common Stock by the Corporation, together with written notice by the
holder of such Class B or Class C Common Stock stating that such holder
desires to convert the shares, or a stated number of the shares, of
Class B or Class C Common Stock represented by such certificate(s) into
Class A Common Stock, which notice shall also state the name or names
(with addresses) and denominations in which the certificate or
certificates for Class A Common Stock shall be issued and shall include
instructions for delivery thereof. Upon surrender of a certificate
representing Class B or Class C Common Stock for conversion, the
Corporation shall issue and send by hand delivery, by courier or by
first class mail (postage prepaid) to the holder thereof or to such
holder's designee, at the address designated by such holder, a
certificate or certificates for the number of shares of Class A Common
Stock to which such holder shall be entitled upon conversion. In the
event that there shall have been surrendered a certificate or
certificates representing Class B or Class C Common Stock, only part of
which are to be converted, the Corporation shall issue and send to such
holder or such holder's designee, in the manner set forth in the
preceding sentence, a new certificate or certificates representing the
number of shares of Class B or Class C Common Stock which shall not
have been converted. If the certificate or certificates for Class A
Common Stock are to be issued in a name other than the name of the
registered holder of the stock surrendered for conversion, the
Corporation shall not be obligated to issue or deliver any certificate
unless and until the holder of the stock surrendered has paid to the
Corporation the amount of any tax that may be payable in respect of any
transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.
7.7.2 Date of Conversion. Such conversion shall be deemed to
have been effected as of the later of (i) the close of business on the
date on which such certificate or certificates shall have been
surrendered or (ii) the date on which the holder shall have fully
complied with the provisions of this Section 7.7, and at such time the
rights of the holder of such Class B or Class C Common Stock (or
specified portion thereof) as to such converted shares shall cease and
the person or persons in whose name or names any certificate or
certificates for shares of Class A Common Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of
record of the shares of Class A Common Stock represented thereby.
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7.7.3 Reservation of Class A Common Stock. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Class A Common Stock, solely for the purpose of
issuance upon the conversion of the Class B and Class C Common Stock,
such number of shares of Class A Common Stock as are issuable upon the
conversion of all outstanding shares of Class B and Class C Common
Stock.
7.7.4 No Reissuance. No share or shares of the Class B or
Class C Common Stock acquired by the Corporation by reason of
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation
shall be authorized to issue. The Corporation may from time to time
take such appropriate corporate action as may be necessary to reduce
the authorized number of shares of the Class B or Class C Common Stock
accordingly.
7.7.5 No Limitation of Automatic Conversion. Nothing in this
Section 7.7 or otherwise shall in any way limit the right of the
Corporation to effect the automatic conversion of shares of Class B or
Class C Common Stock in accordance with the provisions of Sections
7.5.3 and 7.6.3 hereof, and all of such shares shall be deemed
automatically converted into shares of Class A Common Stock in
accordance with such Sections regardless of whether any holder of Class
B or Class C Common Stock to be converted surrenders his or her stock
certificates or otherwise complies with this Section 7.7.
7.8 Classification of Stock. The Board of Directors may classify or
reclassify any unissued shares of Stock from time to time by setting or changing
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, and terms
and conditions of redemption for each class or series, including, but not
limited to, the reclassification of unissued shares of Common Stock to shares of
Preferred Stock or unissued shares of Preferred Stock to shares of Common Stock
or the issuance of any rights plan or similar plan.
7.9 Issuance of Stock. The Board of Directors may authorize the
issuance from time to time of shares of Stock of any class or series, whether
now or hereafter authorized, or securities or rights convertible into shares of
Stock, for such consideration as the Board of Directors may deem advisable (or
without consideration in the case of a share split or dividend), subject to such
restrictions or limitations, if any, as may be set forth in these Articles or
the Bylaws of the Corporation.
7.10 Dividends or Distributions. The Directors may from time to time
authorize and declare and pay to stockholders such dividends or distributions in
cash, property or other assets of the Corporation or in securities of the
Corporation or any other entity or from any other source as the Directors in
their discretion shall determine.
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7.11 Ambiguity. In the case of an ambiguity in the application of any
of the provisions of this Article VII, the Board of Directors shall have the
power to determine the application of the provisions of this Article VII with
respect to any situation based on the facts known to it.
7.12 Severability. Each provision of this Article VII shall be
severable and an adverse determination as to any such provision shall in no way
affect the validity of any other provision of this Article VII or any other
Article.
7.13 Articles and Bylaws. All persons who shall acquire Stock in the
Corporation shall acquire the same subject to the provisions of these Articles
and the Bylaws.
ARTICLE VIII
LIMITATION ON PREEMPTIVE RIGHTS
No holder of any Stock or any other securities of the Corporation,
whether now or hereafter authorized, shall have any preferential or preemptive
rights to subscribe for or purchase any Stock or any other securities of the
Corporation other than such rights, if any, as the Board of Directors, in its
sole discretion, may fix by articles supplementary, by contract or otherwise;
and any Stock or other securities which the Board of Directors may determine to
offer for subscription may, within the Board of Directors' sole discretion, be
offered to one or more of the holders of any class, series or type of Stock or
other securities at the time outstanding to the exclusion of other holders of
such class, series or type of Stock or other securities or the holders of any or
all other classes, series or types of Stock or other securities at the time
outstanding.
ARTICLE IX
RIGHTS AND POWERS OF CORPORATION,
BOARD OF DIRECTORS AND OFFICERS
In carrying on its business, or for the purpose of attaining or
furthering any of its objects, the Corporation shall have all of the rights,
powers and privileges granted to corporations by the laws of the State of
Maryland, as well as the power to do any and all acts and things that a natural
person or partnership could do as now or hereafter authorized by law, either
alone or in partnership or conjunction with others. In furtherance and not in
limitation of the powers conferred by statute, the powers of the Corporation and
of the Directors and stockholders shall include the following:
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9.1 Conflicts of Interest. Any Director or officer individually, or any
firm of which any Director or officer may be a member, or any corporation or
association of which any Director or officer may be a director or officer or in
which any Director or officer may be interested as the holder of any amount of
its Stock or otherwise, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Corporation, and, in the
absence of fraud, no contract or other transaction shall be thereby affected or
invalidated; provided, however, that (a) such fact shall have been disclosed or
shall have been known to the Board of Directors or the committee thereof that
approved such contract or transaction and such contract or transaction shall
have been approved or ratified by the affirmative vote of a majority of the
disinterested Directors, or (b) such fact shall have been disclosed or shall
have been known to the stockholders entitled to vote, and such contract or
transaction shall have been approved or ratified by a majority of the votes cast
by the stockholders entitled to vote, other than the votes of shares owned of
record or beneficially by the interested Director or officer or corporation,
firm or other entity, or (c) the contract or transaction is fair and reasonable
to the Corporation. Any Director of the Corporation who is also a director or
officer of or interested in such other corporation or association, or who, or
the firm of which he is a member, is so interested, may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation which shall authorize any such contract or transaction, with
like force and effect as if he were not such director or officer of such other
corporation or association or were not so interested or were not a member of a
firm so interested.
9.2 Amendment of Articles. The Corporation reserves the right, from
time to time, to make any amendment of its Articles, now or hereafter authorized
by law, including any amendment which alters the contract rights, as expressly
set forth in its Articles, of any outstanding Stock.
No amendment or repeal of these Articles shall be made unless the same
is first approved by the Board of Directors pursuant to a resolution adopted by
the Board of Directors in accordance with the MGCL, and, except as otherwise
provided by law, thereafter approved by the stockholders.
Whenever any vote of the holders of voting stock is required to amend
or repeal any provision of these Articles, then in addition to any other vote of
the holders of voting stock that is required by these Articles, the affirmative
vote of the holders of a majority of the outstanding shares of Stock of the
Corporation entitled to vote on such amendment or repeal, voting together as a
single class, and the affirmative vote of the holders of a majority of the
outstanding shares of each class entitled to vote thereon as a class, shall be
required to amend or repeal any provision of these Articles; provided, however,
that the affirmative vote of the holders of not less than two-thirds of the
outstanding shares entitled to vote on such amendment or repeal, voting together
as a single class, and the affirmative vote of the holders of not less than
two-thirds of the outstanding shares of Class B Common Stock, voting as a single
class, and Class C Common Stock, voting as a single class, shall be required to
amend
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or repeal any of the provisions of Sections 6.2, 6.3, 6.4 or 6.5 of Article VI,
Sections 7.3, 7.5, 7.6 or 7.7 of Article VII, Article IX or Article XI of these
Articles.
ARTICLE X
INDEMNIFICATION
The Corporation (which for the purpose of this Article X shall include
predecessor entities of the Corporation as set forth in Section 2-418 of the
MGCL) shall have the power to the maximum extent permitted by Maryland law in
effect from time to time, to obligate itself to indemnify, and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to, (a) any individual who is a present or former Director or officer of the
Corporation or (b) any individual who, while a Director of the Corporation and
at the request of the Corporation, serves or has served as a director, officer,
partner or trustee of another corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or any other enterprise
from and against any claim or liability to which such person may become subject
or which such person may incur by reason of his status as a present or former
Director or officer of the Corporation. The Corporation shall have the power,
with the approval of the Board of Directors, to provide such indemnification and
advancement of expenses to a person who served a predecessor of the Corporation
in any of the capacities described in (a) or (b) above and to any employee or
agent of the Corporation or a predecessor of the Corporation.
ARTICLE XI
LIMITATION OF LIABILITY
To the fullest extent permitted under the MGCL as in effect on the date
of filing these Articles or as the MGCL is thereafter amended from time to time,
no Director or officer shall be liable to the Corporation or its stockholders
for money damages. Neither the amendment or the repeal of this Article, nor the
adoption of any other provision in the Corporation's Articles inconsistent with
this Article, shall eliminate or reduce the protection afforded by this Article
to a Director or officer of the Corporation with respect to any matter which
occurred, or any cause of action, suit or claim which but for this Article would
have accrued or arisen, prior to such amendment, repeal or adoption.
ARTICLE XII
EXEMPTION FROM BUSINESS COMBINATION STATUTE
Pursuant to Section 3-603(e)(1)(iii) of the MGCL, the Corporation
expressly elects not to be governed by the provisions of Section 3-602 of the
MGCL with respect to any business combination (as defined in Section 3-601 of
the MGCL).
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ARTICLE XIII
MISCELLANEOUS
13.1 Provisions in Conflict with Law or Regulations.
(a) The provisions of these Articles are severable, and if the
Board of Directors shall determine that any one or more of such provisions are
in conflict with applicable federal or state laws, the conflicting provisions
shall be deemed never to have constituted a part of these Articles, even without
any amendment of these Articles pursuant to Section 9.2 hereof; provided,
however, that such determination by the Directors shall not affect or impair any
of the remaining provisions of these Articles or render invalid or improper any
action taken or omitted prior to such determination. No Director shall be liable
for making or failing to make such a determination.
(b) If any provision of these Articles or any application of
such provision shall be held invalid or unenforceable by any federal or state
court having jurisdiction, such holding shall not in any manner affect or render
invalid or unenforceable such provision in any other jurisdiction, and the
validity of the remaining provisions of these Articles shall not be affected.
Other applications of such provision shall be affected only to the extent
necessary to comply with the determination of such court.
THIRD: The amendment to and restatement of the Charter as hereinabove
set forth has been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
FOURTH: The current address of the principal office of the Corporation
is as set forth in Article IV of the foregoing amendment and restatement of the
charter.
FIFTH: The name and address of the Corporation's current resident agent
is as set forth in Article V of the foregoing amendment and restatement of the
charter.
SIXTH: The number of directors of the Corporation and the names of
those currently in office are as set forth in Article VI of the foregoing
amendment and restatement of the Charter.
SEVENTH: The undersigned Chairman of the Board of Directors and Chief
Executive Officer acknowledges these Articles of Amendment and Restatement to be
the corporate act of the Corporation and as to all matters or facts required to
be verified under oath, the undersigned Chairman of the Board of Directors and
Chief Executive Officer acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment and Restatement to be signed in its name and on its behalf by its
Chairman of the Board of Directors and Chief Executive Officer and attested to
by its Secretary on this 18th day of June, 1999.
ATTEST: INTERSTATE HOTELS
CORPORATION
/s/ Timothy Q. Hudak By: /s/ Thomas F. Hewitt
- - ------------------------------- ----------------------------
Timothy Q. Hudak Thomas F. Hewitt
Secretary Chairman of the Board of Directors
and Chief Executive Officer
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