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EXHIBIT 3.1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
FELCOR SUITE HOTELS, INC.
FelCor Suite Hotels, Inc., a Maryland corporation (the "Corporation"),
certifies as follows:
FIRST: The Corporation desires to amend and restate its Charter as
currently in effect, and, upon acceptance for record of these Articles of
Amendment and Restatement by the State Department of Assessments and Taxation
of the State of Maryland, the provisions set forth in these Articles of
Amendment and Restatement will be all of the provisions of the Charter of the
Corporation as currently in effect.
SECOND: The Charter of the Corporation is hereby amended and restated
in its entirety to read as set forth in Exhibit A attached hereto.
THIRD: The amendment and restatement of the charter of the
Corporation set forth in these Articles of Amendment and Restatement was
advised by the Board of Directors of the Corporation and was approved by the
sole stockholder of the Corporation.
FOURTH: The current address of the principal office of the Corporation
is 11 East Chase Street, Baltimore, Maryland 21202.
FIFTH: The name and address of the current resident agent of the
Corporation is CSC-Lawyers Incorporating Service Company, 11 East Chase Street,
Baltimore, Maryland 21202.
SIXTH: The current number of directors of the Corporation is one (1),
which number may be increased or decreased from time to
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time pursuant to the Charter and the Bylaws of the Corporation. The name of
the current sole director of the Corporation is Thomas J. Corcoran, Jr.
SEVENTH: The amendment set forth in these Articles of
Amendment and Restatement does not increase the authorized capital stock of the
Corporation.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment and Restatement to be executed in its name and on its behalf as of
the 22nd day of June 1995, by its President, who acknowledges that these
Articles of Amendment and Restatement are the act of the Corporation and
certifies that, to the best of his knowledge, information and belief and under
penalties for perjury, all matters and facts contained in these Articles of
Amendment and Restatement are true in all material respects.
ATTEST: FELCOR SUITE HOTELS, INC.
By: (SEAL)
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Nicholas R. Peterson Thomas J. Corcoran, Jr.
Assistant Secretary President
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EXHIBIT A
ARTICLE I.
I, David A. Gibbons, whose post office address is 10 Light Street,
Baltimore, Maryland 21202, being at least 18 years of age, hereby form a
corporation under the Maryland General Corporation Law.
ARTICLE II.
NAME
The name of the Corporation is:
FelCor Suite Hotels, Inc.
ARTICLE III.
NATURE OF BUSINESS OR PURPOSES
The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the Maryland General Corporation Law.
In addition to the powers and privileges conferred upon the
Corporation by law and those incidental thereto, the Corporation shall possess
and may exercise all the powers and privileges which are necessary or
convenient to the conduct, promotion or attainment of the business or purposes
of the Corporation.
Without limiting the generality of the foregoing purpose, at such time
or times as the Board of Directors determines that it is in the interest of the
Corporation and its stockholders that the Corporation engage in the business
of, and conduct its business and affairs so as to qualify as, a real estate
investment trust (as that phrase is defined in the Internal Revenue Code of
1986, as amended (the "Code")), the purpose of the Corporation shall include
engaging in the business of a real estate investment trust ("REIT"). This
reference to such purpose shall not make unlawful or unauthorized any otherwise
lawful act or activity that the Corporation may take that is inconsistent with
such purpose.
ARTICLE IV.
PRINCIPAL OFFICE AND RESIDENT AGENT
The address of the Corporation's principal office in the State
of Maryland is 11 East Chase Street, Baltimore, Maryland 21202. The name and
address of its resident agent is CSC-Lawyers Incorporating Service Company, 11
East Chase Street, Baltimore, Maryland 21202.
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ARTICLE V.
CAPITAL STOCK
A. Authorized Shares. The total number of shares of capital
stock that the Corporation shall have authority to issue is Sixty Million
(60,000,000) shares, consisting of Fifty Million (50,000,000) shares of Common
Stock, of the par value of One Cent ($0.01) each, and Ten Million (10,000,000)
shares of Preferred Stock, of the par value of One Cent ($0.01) each, amounting
in aggregate par value of $600,000.
B. The following is a description of each class of the capital
stock that the Corporation shall have authority to issue, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption thereof to the extent applicable thereto:
Common Stock.
(1) Dividend Rights. Subject to the rights of any series
of Preferred Stock created pursuant to the further provisions of this Section B
of this Article and subject to the terms of Article V hereto, the holders of
shares of Common Stock shall be entitled to receive such dividends as may be
declared thereon by the Board of Directors out of funds legally available
therefor.
(2) Voting Rights. Subject to the rights of the holders
of any series of Preferred Stock created pursuant to the further provisions of
this Section B of this Article, the holders of shares of the Common Stock shall
possess all of the voting power of the capital stock of the Corporation and
shall have the exclusive right to vote upon, authorize and approve any and all
matters which may properly come before the stockholders of the Corporation.
Each holder of shares of Common Stock shall be entitled to one vote for each
share of Common Stock held by such stockholder.
(3) Rights Upon Liquidation. Subject to the rights of
any series of Preferred Stock created pursuant to the further provisions of
this Section B of this Article and subject to the terms of Article V hereto, in
the event of any voluntary or involuntary liquidation, dissolution or winding
up of, or any distribution of the assets of, the Corporation, each holder of
shares of Common Stock shall be entitled to receive, ratably with each other
holder of shares of Common Stock, that portion of the assets of the Corporation
available for distribution to the holders of its Common Stock.
Preferred Stock.
Subject to the provisions of sections D. and E. of this
Article V, the Board of Directors of the Corporation is hereby authorized and
empowered to classify or reclassify, in one or more series, any of the unissued
shares of the Preferred Stock of the Corporation by establishing the number of
shares of such series and by setting, changing or eliminating any of the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms and condition of
redemption of such shares, all of which shall be set forth in articles
supplementary to this Charter executed, acknowledged, filed and recorded in the
manner required by the Maryland General Corporation Law ("Articles
Supplementary"), and as may be permitted by the Maryland General Corporation
Law.
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C. Issuance of Stock. The Board of Directors is hereby
authorized and empowered to authorize the issuance by the Corporation from time
to time of shares of any class of capital stock of the Corporation, whether now
or hereafter authorized, or securities convertible into shares of capital stock
of any class or classes, whether now or hereafter authorized, for such
consideration and on such terms and conditions as may be deemed advisable by
the Board of Directors and without any action by the stockholders.
D. Restrictions on Transfer; Designation of Shares-in-Trust.
(1) Definitions. For purposes of this Section D, the
following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Equity
Stock by a Person who would be treated as an owner of such shares of Equity
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. The terms
"Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have
correlative meanings.
"Beneficiary" shall mean, with respect to any Trust,
one or more organizations described in each of Section 170(b)(1)(A) and Section
170(c) of the Code which are named by the Corporation as the beneficiary or
beneficiaries of such Trust, in accordance with the provisions of subsection
E.(1) of this Article V.
"Board of Directors" shall mean the Board of
Directors of the Corporation.
"Bylaws" shall mean the Bylaws of the Corporation, as
amended.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Constructive Ownership" shall mean ownership of
Equity Stock by a Person who would be treated as an owner of such shares of
Equity Stock either directly or indirectly through the application of Section
318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Owns" and "Constructively Owned" shall
have correlative meanings.
"Equity Stock" shall mean authorized capital stock of
the Corporation that is either Preferred Stock or Common Stock and shall
include all shares of Preferred Stock or Common Stock that are held as
Shares-in-Trust in accordance with the provisions of section E. of this Article
V.
"Market Price" shall mean, on any date and with
respect to any Equity Stock, the average of the Closing Price for the five
consecutive Trading Days ending on such date. The "Closing Price" shall mean,
on any date and with respect to any Equity Stock, the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, of such Equity Stock, in either case
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if such Equity Stock is not listed or admitted to trading on the
New York
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Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such Equity Stock is listed or admitted to trading or, if
such Equity Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or, if such system is no longer in use, the principal other automated
quotations system that may then be in use or, if such Equity Stock is not
quoted by any such organization, the average of the closing bid and asked
prices of such Equity Stock as furnished by a professional market maker,
selected by the Board of Directors of the Company, then making a market in such
Equity Stock. "Trading Day" shall mean a day on which the principal national
securities exchange on which such Equity Stock is listed or admitted to trading
is open for the transaction of business or, if such Equity 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.
"Merger" shall mean the merger of FelCor Suite
Hotels, Inc., a Delaware corporation, with and into the Corporation.
"Ownership Limit" shall mean, with respect to each
class of Equity Stock of the Corporation outstanding as of any particular time,
9.9% of the total number of such shares of such class of Equity Stock
outstanding as of such time.
"Non-Transfer Event" shall mean an event other than a
purported Transfer that would cause any Person to Beneficially Own or
Constructively Own shares of Equity Stock in excess of the Ownership Limit,
including, but not limited to, the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Equity Stock or the
sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Equity Stock.
"Permitted Transferee" shall mean any Person
designated as a Permitted Transferee in accordance with the provisions of
subsection E.(5) of this Article V.
"Person" shall mean an individual, corporation,
partnership, limited liability company, estate, trust, association, joint stock
company, government or agency or subdivision thereof, charitable organization,
or other entity and also includes a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Prohibited Owner" shall mean, with respect to any
purported Transfer or Non-Transfer Event, any Person who, but for the
provisions of subsection D.(3) of this Article V, would own record title to
shares of Equity Stock.
"REIT" shall mean a Real Estate Investment Trust
under Section 856 of the Code.
"Restriction Termination Date" shall mean the first
day after the date of the Merger on which the Board of Directors and the
stockholders of the Corporation determine, in
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accordance with the provisions of Article VII hereof, that it is no longer in
the best interests of the Corporation to attempt to, or continue to, qualify as
a REIT.
"Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Equity Stock, whether voluntary or
involuntary, whether of record, constructively or beneficially and whether by
operation of law or otherwise.
"Trust" shall mean any separate trust created
pursuant to subsection D.(3) of this Article V and administered in accordance
with the terms of section E. of this Article V, for the exclusive benefit of
any Beneficiary.
"Trustee" shall mean any person or entity
unaffiliated with both the Corporation and any Prohibited Owner, such Trustee
to be designated by the Corporation to act as trustee of any Trust, or any
successor trustee thereof.
(2) Restriction on Transfers.
(a) Except as provided in subsection D.(9) of
this Article V, from the date of the Merger and prior to the
Restriction Termination Date, no Person shall Beneficially Own or
Constructively Own shares of the outstanding Equity Stock in excess of
the Ownership Limit.
(b) Except as provided in subsection D.(9) of
this Article V, from the date of the Merger and prior to the
Restriction Termination date, any Transfer that, if effective, would
result in any Person Beneficially Owning or Constructively Owning
Equity Stock in excess of the Ownership Limit shall be void ab initio
as to the Transfer of that number of shares of Equity Stock which
would be otherwise Beneficially Owned or Constructively Owned by such
Person in excess of the Ownership Limit; and the intended transferee
shall acquire no rights in such excess shares of Equity Stock.
(c) Notwithstanding any other provision herein,
from the date of the Merger and prior to the Restriction Termination
Date, any Transfer that, if effective, would result in the Equity
Stock being directly or indirectly owned by fewer than 100 Persons
(determined without reference to any rules of attribution) shall be
void ab initio in its entirety; and the intended transferee shall
acquire no rights in such shares of Equity Stock.
(d) Notwithstanding any other provision herein,
from the date of the Merger and prior to the Restriction Termination
Date, any Transfer of shares of Equity Stock that, if effective, would
result in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code shall be void ab initio as to the Transfer
of that number of shares of Equity 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 excess shares of Equity Stock.
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(e) Notwithstanding any other provision herein,
from the date of the Merger and prior to the Restriction Termination
Date, any Transfer of shares of Equity Stock that, if effective, would
result in the Corporation Constructively Owning 10% or more of the
ownership interests in any tenant or subtenant of the Corporation's
real property (including the real property held by FelCor Suites
Limited Partnership and any other partnership in which the Corporation
owns an interest subsequent to the Merger), within the meaning of
Section 856(d)(2)(B) of the Code, shall be void ab initio as to the
Transfer of that number of shares of Equity Stock in excess of the
number that could have been Transferred without such result; and the
intended transferee shall acquire no rights in such excess shares of
Equity Stock.
(f) Notwithstanding any other provision herein,
from the date of the Merger and prior to the Restriction Termination
Date, any Transfer of shares of Equity Stock that, if effective,
would cause the Corporation to fail to qualify as a REIT shall be void
ab initio as to the Transfer of that number of shares of Equity Stock
in excess of the number that could have been Transferred without such
result; and the intended transferee shall acquire no rights in such
excess shares of Equity Stock.
(3) Transfer in Trust.
(a) If, notwithstanding the other provisions
contained in this Article V, at any time after the date of the Merger
and prior to the Restriction Termination Date, there is a purported
Transfer or Non-Transfer Event such that any Person would either
Beneficially Own or Constructively Own Equity Stock in excess of the
Ownership Limit, then, (i) except as otherwise provided in subsection
D.(9) of this Article V, the purported transferee shall acquire no
right or interest (or, in the case of a Non-Transfer Event, the person
holding record title to the Equity Stock Beneficially Owned or
Constructively Owned by such Beneficial Owner or Constructive Owner,
shall cease to own any right or interest) in such number of shares of
Equity Stock which would cause such Beneficial Owner or Constructive
Owner to Beneficially Own or Constructively Own shares of Equity Stock
in excess of the Ownership Limit; and (ii) such number of shares of
Equity Stock in excess of the Ownership Limit (rounded up to the
nearest whole share) shall be designated Shares-in-Trust and, in
accordance with the provisions of section E. of this Article V,
transferred automatically and by operation of law to and held in a
Trust. Such transfer to a Trust and the designation of the shares as
Shares-in-Trust shall be effective as of the close of business on the
business day next preceding the date of the purported Transfer or
Non-Transfer Event, as the case may be.
(b) If, notwithstanding the other provisions
contained in this Article V, at any time after the date of the Merger
and prior to the Restriction Termination Date, there is a purported
Transfer or Non-Transfer Event that, if effective, would cause the
Corporation either to become "closely held" within the meaning of
Section 856(h) of the Code, to Constructively Own 10% or more of the
ownership interests in any tenant or subtenant of the Corporation's
real property (including the real property held by FelCor Suites
Limited Partnership and any other partnership in which the Corporation
owns an
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interest subsequent to the Merger) within the meaning of Section
856(d)(2)(B) of the Code, or otherwise to fail to qualify as a REIT
(other than as a result of a violation of the requirement, contained
in Section 856 (a)(5) of the Code, that a REIT have at least 100
shareholders), then (i) the purported transferee shall acquire no
right or interest (or, in the case of a Non-Transfer Event, the person
holding record title to the Equity Stock with respect to which such
Non-Transfer Event occurred, shall cease to own any right or interest)
in such number of shares of Equity Stock, the ownership of which by
such purported transferee or record holder would cause the Corporation
either to be "closely held" within the meaning of Section 856(h) of
the Code, to violate the 10% limitation of Section 856(d)(2)(B) of the
Code or otherwise to fail to qualify as a REIT (other than as a result
of a violation of the 100 shareholder requirement of Section 865(a)(5)
of the Code; and (ii) such number of shares of Equity Stock (rounded
up to the nearest whole share) shall be designated Shares-in-Trust
and, in accordance with the provisions of section E. of this Article
V, transferred automatically and by operation of law to a Trust to be
held therein in accordance with that section E. Such transfer to a
Trust and the designation of shares as Shares-in-Trust shall be
effective as of the close of business on the business day next
preceding the date of the Transfer or Non-Transfer Event, as the case
may be.
(4) Remedies For Breach. If the Corporation or its
designees at any time shall determine in good faith that a Transfer has taken
place in violation of subsection D.(2) of this Article V or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership or
Constructive Ownership of any shares of Equity Stock in violation of subsection
D.(2) of this Article V, the Board of Directors shall be authorized and
empowered to take such action as it deems advisable to refuse to give effect to
or to prevent such Transfer or acquisition, including, but not limited to,
refusing to give effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer or acquisition.
(5) Notice of Restricted Transfer. Any Person who
attempts to acquire or acquires shares of Equity Stock in violation of
subsection D.(2) of this Article V, or any Person who holds record title to any
shares of Equity Stock that were transferred to a Trust pursuant to the
provisions of subsection D.(3) of this Article V, shall immediately give
written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such purported Transfer or the Non-Transfer
Event, as the case may be, on the Corporation's status as a REIT.
(6) Owners Required To Provide Information. From the
date of the Merger and prior to the Restriction Termination Date:
(a) Each person who is a Beneficial Owner or
Constructive Owner of more than 5% (or such lower percentage as may be
required pursuant to the Code or regulations issued under the Code) of
the outstanding Equity Stock of the Corporation shall, no later than
January 30 of each year, give written notice to the Corporation
stating the name and address of such Beneficial Owner or Constructive
Owner, the number of shares of Equity Stock Beneficially Owned or
Constructively Owned, and a description of how such shares are held.
Each such Beneficial Owner or Constructive Owner shall
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provide to the Corporation such additional information as the
Corporation may request in order to determine the effect, if any, of
such Beneficial Ownership on the Corporation's status as a REIT and to
ensure compliance with the Ownership Limit.
(b) Each Person who is a Beneficial Owner or
Constructive Owner of Equity Stock and each Person (including a
stockholder of record) who is holding Equity Stock for a Beneficial
Owner or Constructive Owner shall provide to the Corporation, promptly
following any request therefor, such information as the Corporation
may deem necessary in order to determine the Corporation's status as a
REIT and to ensure compliance with the Ownership Limit.
(7) Remedies Not Limited. Nothing contained in this
Article V shall limit the authority of the Board of Directors to take any and
all lawful actions, whether or not specifically set forth herein, as it deems
necessary or advisable to protect the Corporation and the interests of its
stockholders by preserving the Corporation's status as a REIT and by ensuring
compliance with the Ownership Limit.
(8) Ambiguity. In the case of an ambiguity in the
application of any of the provisions of sections D. or E., including but not
limited to any definition contained in subsection D.(1), of this Article V, the
Board of Directors shall have the power to finally resolve such ambiguity and
interpret the provisions hereof with respect to any situation, based on the
facts known to it.
(9) Exception. The ownership limitations set forth in
subsections D.(2) and/or D.(3) of this Article V shall not apply to the
acquisition of shares of Equity Stock of the Corporation by an underwriter in a
public offering of those shares or in any transaction involving the issuance of
shares of Equity Stock by the Corporation in which the Board of Directors
determines that the underwriter or other person or party initially acquiring
those shares will timely distribute those shares to or among others so that,
following such distribution, the ownership of those shares will not be in
violation of subsections D.(2) and/or D.(3) of this Article V. The Board of
Directors, in the exercise of its sole and absolute discretion, may exempt from
the operation of subsections D.(2) and/or D.(3) of this Article V certain
specified shares of Equity Stock of the Corporation proposed to be transferred
to, and/or owned by, a person who has provided the Board of Directors with
such evidence, undertakings and assurances as the Board of Directors may
require that such transfer to, and/or ownership by, such person of the
specified shares will not prevent the continued qualification of the
Corporation as a REIT under the Code and the regulations issued under the Code.
The Board of Directors may, but shall not be required, to condition the grant
of any such exemption upon the obtaining of an opinion of counsel, a ruling
from the Internal Revenue Service or such other assurances as the Board of
Directors shall deem to be satisfactory.
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(10) Legend. Each certificate for Equity Stock, in
addition to any other legend that may be placed thereon, shall bear the
following legend:
"The shares of Equity Stock represented by this certificate
are subject to restrictions on transfer for the purpose of maintaining
the Corporation's status as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"). No Person may
at any time (1) Beneficially Own or Constructively Own shares of any
class of Equity Stock in excess of 9.9% (or such other percentage as
may be determined by the Board of Directors of the Corporation) of the
total number of shares of such class of Equity Stock outstanding as of
such time; (2) Beneficially Own Equity Stock which would result in the
Corporation being "closely held" under Section 856(h) of the Code; or
(3) Constructively Own Equity Stock which would result in the
Corporation Constructively Owning 10% or more of the ownership
interests in any tenant or subtenant of the Corporation's real
property (including the real property held by FelCor Suites Limited
Partnership and any other partnership in which the Corporation owns an
interest), within the meaning of Section 856(d)(2)(B) of the Code.
Any Person who attempts to Beneficially Own or Constructively Own
shares of Equity Stock in excess of the above limitations must
immediately notify the Corporation in writing. If the restrictions
above are violated, the shares of Equity Stock represented hereby will
be transferred automatically and by operation of law to a Trust and
shall be designated Shares-in-Trust. All capitalized terms in this
legend have the meanings assigned to them in the Corporation's
Charter, as the same may be further amended from time to time. The
shares of Equity Stock represented by this certificate are subject to
all of the provisions of the Charter and Bylaws of the Corporation,
each as amended from time to time, to all of which the holder, by
acceptance hereof, assents.
The Corporation will furnish to any stockholder, upon request
and without charge, a copy of its Charter and Bylaws, and all
amendments thereto, setting forth the restrictions on transfer and a
statement of (i) the designations and any preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption of
the stock of each class which the Corporation is authorized to issue,
(ii) the differences in the relative rights and preferences between
the shares of each series of each class of the stock which the
Corporation is authorized to issue to the extent they have been set by
the Board of Directors and (iii) the authority of the Board of
Directors to set the relative rights and preferences of subsequent
series of stock of the Corporation."
(11) Severability. If any provision of this Article V 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.
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E. Shares-in-Trust.
(1) Trust. Any shares of Equity Stock transferred to a
Trust and designated Shares-in-Trust pursuant to subsection D.(3) of this
Article V shall be held by the Trustee for the exclusive benefit of the
Beneficiary. The Corporation shall name a beneficiary or beneficiaries of each
Trust within five (5) business days after receipt of written notice of the
existence thereof. Any transfer to a Trust and designation of shares of Equity
Stock as Shares-in-Trust, pursuant to subsection D.(3) of this Article V, shall
be effective as of the close of business on the business day next preceding the
date of the purported Transfer or Non-Transfer Event that results in the
transfer to such Trust. Shares-in-Trust shall remain issued and outstanding
shares of Equity Stock of the Corporation and shall be entitled to the same
rights and privileges on identical terms and conditions as are all other issued
and outstanding shares of Equity Stock of the same class and series. When
transferred to a Permitted Transferee, in accordance with the provisions of
subsection E.(5) of this Article V, such Shares-in-Trust shall be released from
the Trust and cease to be designated as Shares-in-Trust.
(2) Dividend Rights. The Trustee, as the record holder
of Shares-in-Trust, shall be entitled to receive all dividends and
distributions as may be declared by the Board of Directors of the Corporation
on such shares of Equity Stock and shall hold such dividends or distributions
in trust for the benefit of the Beneficiary. The Prohibited Owner with respect
to Shares-in-Trust shall repay to the Trustee the amount of any dividends or
distributions received by it that (i) are attributable to any shares of Equity
Stock designated Shares-in-Trust and (ii) the record date of which was on or
after the date that such shares became Shares-in-Trust. The Corporation shall
take all lawful measures that the Board of Directors determines to be
reasonably necessary to recover the amount of any such dividend or distribution
paid to a Prohibited Owner, including, if necessary, withholding any portion of
future dividends or distributions payable on shares of Equity Stock
Beneficially Owned or Constructively Owned by the Person who, but for the
provisions of subsection D.(3) of this Article V, would Constructively Own or
Beneficially Own the Shares-in-Trust; and, as soon as reasonably practicable
following the Corporation's receipt or withholding thereof, shall pay over to
the Trustee for the benefit of the Beneficiary the dividends so received or
withheld, as the case may be.
(3) Rights Upon Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Corporation, each Trustee of Shares-in-Trust
shall be entitled to receive, ratably with each other holder of Equity Stock of
the same class or series, that portion of the assets of the Corporation which
is available for distribution to the holders of such class and series of Equity
Stock. The Trustee shall distribute to the Prohibited Owner the amounts
received upon such liquidation, dissolution, or winding up, or distribution;
provided, however, that the Prohibited Owner shall not be entitled to receive
amounts pursuant to this subsection E.(3) in excess of, in the case of a
purported Transfer in which the Prohibited Owner gave value for shares of
Equity Stock and which Transfer resulted in the transfer of the shares to the
Trust, the price per share, if any, such Prohibited Owner paid for the Equity
Stock and, in the case of a Non-Transfer Event or Transfer in which the
Prohibited Owner did not give value for such shares (e.g., if the shares were
received through a gift or devise) and which Non-Transfer Event or Transfer, as
the case may be, resulted in the
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transfer of shares to the Trust, the price per share equal to the Market Price
on the date of such Non-Transfer Event or purported Transfer. Any remaining
amount in such Trust shall be distributed to the Beneficiary.
(4) Voting Rights. The Trustee shall be entitled to vote
all Shares-in-Trust. Any vote by a Prohibited Owner as a holder of shares of
Equity Stock prior to the discovery by the Corporation that the shares of
Equity Stock are Shares-in-Trust shall, subject to applicable law, be rescinded
and shall be void ab initio with respect to such Shares-in-Trust and the
Prohibited Owner shall be deemed to have given, as of the close of business on
the business day prior to the date of the purported Transfer or Non-Transfer
Event that results in the transfer to the Trust of the shares of Equity Stock
under subsection E.(3) of this Article V, an irrevocable proxy to the Trustee
to vote the Shares-in-Trust in the manner in which the Trustee, in its sole and
absolute discretion, desires.
(5) Designation of Permitted Transferee. The Trustee
shall have the exclusive and absolute right to designate a Permitted Transferee
of any and all Shares-in-Trust. As soon as reasonably practicable, but in an
orderly fashion so as not to materially adversely affect the Market Price of
the Shares-in-Trust, the Trustee shall designate one or more Persons as
Permitted Transferees, provided, however, that (i) each such Permitted
Transferee so designated shall purchase for valuable consideration (whether in
a public or private sale) the Shares-in-Trust and (ii) each such Permitted
Transferee so designated may acquire such Shares-in-Trust without such
acquisition resulting in a transfer to a Trust and the redesignation of such
shares of the Equity Stock so acquired as Shares-in-Trust pursuant to the
provisions of subsection D.(3) of this Article V. Upon the designation by the
Trustee of a Permitted Transferee in accordance with the provisions of this
subsection E.(5), the Trustee of a Trust shall (i) cause to be transferred to
the Permitted Transferee that number of Shares-in-Trust acquired by the
permitted Transferee; (ii) cause to be recorded on the books of the Corporation
that the Permitted Transferee is the holder of record of such number of shares
of Equity Stock; and (iii) distribute to the Beneficiary any and all amounts
held with respect to the Shares-in-Trust after making payment to the Prohibited
Owner of the amount determined pursuant to subsection E.(6) of this Article V.
(6) Compensation to Record Holder of Shares of Equity
Stock that Become Shares-In-Trust. Any Prohibited Owner shall be entitled
(after giving written notice to the Corporation of the existence of
Shares-in-Trust and following the designation of the Permitted Transferee in
accordance with subsection D.(5) of this Article V) to receive from the
Trustee, in respect of such Shares-in-Trust, the lesser of (i) in the case of
(a) a purported Transfer in which the Prohibited Owner gave value for shares of
Equity Stock and which Transfer resulted in the transfer of the shares to a
Trust, the price per share, if any, such Prohibited Owner paid for the Equity
Stock, or (b) a Non-Transfer Event or purported Transfer in which the
Prohibited Owner did not give value for such shares (e.g., if the shares were
received through a gift or devise) and which Non-Transfer Event or purported
Transfer, as the case may be, resulted in the transfer of shares to the Trust,
the price per share equal to the Market Price on the date of such Non-Transfer
Event or purported Transfer or (ii) the price per share received by the Trustee
of the Trust from the sale or other disposition of such Shares-in-Trust in
accordance with subsection E.(5) of this Article V. Any amounts received by
the Trustee in respect of such Shares-in-Trust and in excess
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of such amounts to be paid to the Prohibited Owner pursuant to this subsection
E.(6) shall be distributed to the Beneficiary in accordance with the provisions
of subsection E.(5) of this Article V. Each Beneficiary and Prohibited Owner
waive any and all claims that it may have against the Trustee and the
Corporation arising out of the transfer of any Equity Stock to a Trust, the
designation of any Equity Stock as Shares-in-Trust and the disposition of any
Shares- in-Trust, except for claims arising out of the gross negligence or
willful misconduct of, or any failure to make payments in accordance with
section E. of this Article V by, such Trustee or the Corporation.
(7) Purchase Right in Shares-in-Trust. Shares-in-Trust
shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per share
in the transaction that resulted in such shares being designated as
Shares-in-Trust (or, in the case of devise, gift or Non- Transfer Event, the
Market Price at the time of such devise, gift or Non-Transfer Event) and (ii)
the Market Price on the date the Corporation, or its designee, accepts such
offer. The Corporation shall have the right to accept such offer for a period
of ninety days after the later of (A) the date of the Non-Transfer Event or
purported Transfer which resulted in such Shares-in-Trust and (B) the date the
Corporation determines in good faith that a purported Transfer or Non-Transfer
Event resulting in the designation of any Equity Stock as Shares-in-Trust has
occurred, if the Corporation does not receive a written notice of such
purported Transfer or Non-Transfer Event pursuant to subsection D.(5) of this
Article V.
F. Preemptive Rights. 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 other than such, if any, as the Board of
Directors, in its sole discretion, may determine 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 or series of
stock or other securities at the time outstanding to the exclusion of the
holders of any or all other classes or series of stock or other securities at
the time outstanding.
G. Amendment of this Article. Notwithstanding any other
provisions of this Charter or the Bylaws of the Corporation (and
notwithstanding that some lesser percentage may be permitted by law, this
Charter or the Bylaws of the Corporation), no provision of sections D., E. or
G. of this Article V shall be amended, altered, changed or repealed unless such
amendment, alteration, change, or repeal shall have been advised and approved
by the affirmative vote of a majority of the members of the Board of Directors
and adopted by the affirmative vote of the holders of not less than 66 2/3% of
the outstanding shares of capital stock of the Corporation entitled to vote on
such matter, voting together as a single class.
ARTICLE VI.
DIRECTORS
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A. Number. The business and affairs of the Corporation shall be
managed under the direction of a Board of Directors consisting of not less than
three (3) nor more than nine (9) directors, unless otherwise determined from
time to time by resolution adopted by the affirmative vote of at least 80% of
the members of the Board of Directors; provided, however, that in no event
shall the number of directors be less than the minimum number required by the
Maryland General Corporation Law and provided further that so long as the
number of stockholders of the Corporation shall be less than three, the number
of directors may be less than three but not less than the number of
stockholders. The name of the person who will serve as the sole director of
the Corporation until the first annual meeting of the stockholders of the
Corporation and until his successor is elected and qualifies is Thomas J.
Corcoran, Jr.
B. Classification of Directors. At the first annual meeting of
the stockholders of the Corporation, the directors of the Corporation shall be
divided into three classes: Class I; Class II; and Class III; and the number of
such directors in each class shall be as nearly equal as the number of such
directors will permit. Each such director shall serve for a three-year term
ending on the date of the third annual meeting of stockholders following the
annual meeting of stockholders at which such director was elected; provided,
however, that each initial director elected to Class I at the first annual
meeting of stockholders shall serve for a term ending on the date of the annual
meeting of stockholders to be held in 1998, each initial director elected to
Class II at the first annual meeting of stockholders shall serve for a term
ending on the date of the annual meeting of stockholders to be held in 1996,
and each initial director elected to Class III at the first annual meeting of
stockholders shall serve for a term ending on the date of the annual meeting of
stockholders held in 1997.
C. Removal. Any director or the entire Board of Directors may be
removed by the holders of a majority of the shares entitled to vote at an
election of directors; provided, however, any such removal shall be for cause;
and provided, further, that if stockholders of any class of the capital stock
of the Corporation are entitled separately to elect one or more directors, such
directors may not be removed except by the affirmative vote of a majority of
all of the shares of such class or series entitled to vote for such directors.
D. Vacancies. Except with respect to any directors who have been
or may be elected separately by the holders of Preferred Stock as provided for
in any Articles Supplementary, should a vacancy in the Board of Directors occur
or be created (whether as a result of the death, retirement, resignation or
removal from office of one or more directors or an increase in the number of
authorized directors), such vacancy shall be filled by the affirmative vote of
a majority of the remaining directors, even though less than a quorum of the
Board of Directors, and each director so elected shall serve for the unexpired
term of the Class to which he is elected. Any director so elected by the
remaining directors to fill a vacancy may qualify as an Independent Director
(as hereinafter defined) only if such director has received the affirmative
vote of at least a majority of the remaining Independent Directors, if any.
E. Independent Directors. Notwithstanding anything herein to the
contrary, at all times (except during a period not to exceed sixty (60) days
following the death, retirement, resignation or removal from office of a
director prior to the expiration of the director's term of
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office), a majority of the Board of Directors shall be comprised of
"Independent Directors," being persons who are not officers or employees of the
Corporation or "Affiliates" of (1) any advisor to the Corporation under an
advisory agreement, (2) any lessee or contract manager of any property of the
Corporation, any subsidiary of the Corporation or any partnership which is an
Affiliate of the Corporation.
For purposes of this subsection E., an "Affiliate" of a person
shall mean (1) any person that, directly or indirectly, controls or is
controlled by or is under common control with such person, (2) any other person
that beneficially owns, directly or indirectly, five percent (5%) or more of
the outstanding capital stock, shares or equity interests of such person, or
(3) any officer, director, employee, partner or trustee of such person or any
person controlling, controlled by or under common control with such person
(excluding trustees and persons serving in similar capacities who are not
otherwise an Affiliate of such person). For purposes of the definition of
Affiliate herein, (a) the term "person" shall mean and include individuals,
corporations, limited liability companies, general and limited partnerships,
stock companies or associations, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts, or other entities
and governments and agencies and political subdivisions thereof and (b) the
term "control" (including the correlative meanings of the terms "controlled by"
and "under common control with"), as used with respect to any person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such person, through the
ownership of voting securities, partnership interests or other equity
interests.
F. Ballots not Required. Elections of directors need not be by
ballot unless the Bylaws of the Corporation shall so provide.
G. Amendment of this Article. Notwithstanding any other
provisions of this Charter or the Bylaws of the Corporation (and
notwithstanding that some lesser percentage may be permitted by law, this
Charter or the Bylaws of the Corporation), the provisions of this Article VI
shall not be amended, altered, changed or repealed unless such amendment,
alteration, change, or repeal shall have been advised and approved by the
affirmative vote of at least 80% of the members of the Board of Directors and
approved by the affirmative vote of the holders of not less than 75% of the
outstanding shares of capital stock of the Corporation entitled to vote on such
matter, voting together as a single class.
ARTICLE VII.
REIT STATUS
The Corporation shall seek to elect and maintain its status as
a REIT under the Code. It shall be the duty of the Board of Directors to take
such actions as are permitted by law and as it may deem necessary or advisable
to cause the Corporation to satisfy the requirements for qualification as a
REIT under the Code, including, but not limited to, the requirements relating
to the ownership of its outstanding capital stock, the nature of its assets,
the sources of its income, and the amount and timing of its distributions to
its stockholders. The Board of Directors shall take no affirmative action to
cause the Corporation not to qualify as a REIT or to otherwise revoke the
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Corporation's election to be taxed as a REIT without the affirmative vote of
the holders of 66 2/3% of the outstanding shares of capital stock of the
Corporation entitled to vote on such matter.
ARTICLE VIII.
REGISTERED HOLDERS OF SHARES
Except as may be otherwise provided by applicable law, the
Corporation shall be entitled to treat the registered holder of any shares of
capital stock of the Corporation as the owner of such shares and of all rights
derived from or relating to such shares for all purposes, and the Corporation
shall not be obligated to recognize any equitable or other claim to or interest
in such shares or rights on the part of any other person, including, but
without limiting the generality of the term "person", a purchaser, pledgee,
assignee or transferee of such shares or rights, unless and until such person
becomes the registered holder of such shares. The foregoing shall apply
whether or not the Corporation shall have either actual or constructive notice
of the interest of such person.
ARTICLE IX.
LIMITATION ON INDEBTEDNESS
The Corporation may not incur or suffer to exist as of the end
of any month Indebtedness (as defined below) in an amount in excess of 40% of
the Corporation's investment in hotel properties, at its cost, after giving
effect to the Corporation's use of proceeds from any Indebtedness. The
Corporation's investment in hotel properties shall include all investments by
the Corporation constituting, evidencing or secured by an interest in property,
whether tangible or intangible and whether real, personal or mixed, that is
used or intended for use in, or in any manner connected with or relating to,
the ownership or leasing of hotels. In determining its cost of such
investments, there shall be included (1) the amount of all cash paid and the
value (as determined by the Board of Directors for purposes of such investment)
of any other property transferred therefor by the Corporation, (2) the amount
of all Indebtedness and other obligations assumed or incurred by the
Corporation or to which the Corporation takes subject, and (3) the value (as
determined by the Board of Directors for the purposes of such investment) of
all equity securities of which the issuer is an entity that is, or upon such
investment will be, included within the Corporation and which are issued
(otherwise than for cash) to, or retained by, any person other than the
Corporation in connection with such investment. For purposes of the foregoing
restrictions, (A) "Indebtedness" of the Corporation shall mean the consolidated
liabilities of the Corporation for borrowed money (including all notes payable
and drafts accepted representing extensions of credit) and all obligations
evidenced by bonds, debentures, notes or other similar instruments on which
interest charges are customarily paid, including obligations under capital
leases, and (B) "Corporation" shall mean this Corporation and any subsidiary
entity consolidated therewith, under generally accepted accounting principals.
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ARTICLE X.
POWERS OF DIRECTORS; BYLAWS
A. Powers Vested in the Board of Directors. All of the
powers of the Corporation, insofar as the same may be lawfully vested by this
Charter in the Board of Directors, are hereby conferred upon the Board of
Directors. In furtherance and not in limitation of that power, the Board of
Directors shall, in addition to those powers specifically conferred upon the
Board of Directors as set forth herein, possess the following powers:
(1) The Board of Directors shall, in connection
with the exercise of its business judgment involving a Business Combination (as
defined in Section 3-601 of Title 3 of the Corporations and Associations
Article of the Annotated Code of Maryland) or any actual or proposed
transaction which would or may involve a change in control of the Corporation
(whether by purchases of shares of stock or any other securities of the
Corporation in the open market, or otherwise, tender offer, merger,
consolidation, dissolution, liquidation, sale of all or substantially all of
the assets of the Corporation, proxy solicitation or otherwise), in determining
what is in the best interests of the Corporation and its stockholders and in
making any recommendation to its stockholders, give due consideration to all
relevant factors, including, but not limited to (A) the economic effect, both
immediate and long-term, upon the Corporation's stockholders, including
stockholders, if any, who do not participate in the transaction; (B) the social
and economic effect on the employees, customers of, and other dealing with, the
Corporation and its subsidiaries and on the communities in which the
Corporation and its subsidiaries operate or are located; (C) whether the
proposal is acceptable based on the historical and current operating results or
financial condition of the Corporation; (D) whether a more favorable price
could be obtained for the Corporation's stock or other securities in the
future; (E) the reputation and business practices of the offeror and its
management and affiliates as they would affect the employees of the Corporation
and its subsidiaries; (F) the future value of the stock or any other securities
of the Corporation; (G) any antitrust or other legal and regulatory issues that
are raised by the proposal; and (H) the business and financial condition and
earnings prospects of the acquiring person or entity, including, but not
limited to, debt service and other existing financial obligations, financial
obligations to be incurred in connection with the acquisition, and other likely
financial obligations of the acquiring person or entity. If the Board of
Directors determines that any proposed Business Combination (as defined in
Section 3-601 of Title 3 of the Corporations and Associations Article of the
Annotated Code of Maryland) or actual or proposed transaction which would or
may involve a change in control of the Corporation should be rejected, it may
take any lawful action to defeat such transaction, including, but not limited
to, any or all of the following: advising stockholders not to accept the
proposal; instituting litigation against the party making the proposal; filing
complaints with governmental and regulatory authorities; acquiring the stock or
any of the securities of the Corporation; selling or otherwise issuing
authorized but unissued stock, other securities or granting options or rights
with respect thereto; acquiring a company to create an antitrust or other
regulatory problem for the party making the proposal; and obtaining a more
favorable offer from another individual or entity.
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(2) The Board of Directors shall have the sole
and exclusive power and authority to make, alter or repeal the Bylaws of the
Corporation.
The enumeration and definition of particular powers of the Board of Directors
included in the foregoing shall in no way be limited to 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 Laws of the State of Maryland now or hereafter
in force.
ARTICLE XI.
INDEMNIFICATION; LIMITATION OF LIABILITY
A. Power to Indemnify. The Corporation may agree to the terms
and conditions upon which any director, officer, employee or agent accepts his
office or position and in its Bylaws, by contract or in any other manner may
agree to indemnify and protect any director, officer, employee or agent of the
Corporation, or any person who serves at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted from time
to time by the Maryland General Corporation Law., as the same exists or may be
hereafter amended or reenacted.
B. Obligation to Provide Indemnification. The Corporation, to
the fullest extent permitted by the Maryland General Corporation Law as the
same exists or may hereafter be amended or reenacted, shall indemnify, and
advance expenses on behalf of, any and all persons who it shall have the power
to indemnify under such law from and against any and all of the expenses,
liabilities or other matters referred to in or covered by such law and, in
addition thereto, shall indemnify, and advance expenses on behalf of, all such
persons to the extent permitted under any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action by any
such person in his director or officer capacity and as to action in another
capacity while holding any such office, and shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
C. Limitation of Liability. To the fullest extent permitted by
Maryland statutory or decisional law, as amended or interpreted, no director or
officer of the Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment of the Charter of the Corporation
or repeal of any of its provisions shall limit or eliminate the benefits
provided to directors and officers under this provision with respect to any act
or omission which occurred prior to such amendment or repeal. Any repeal or
modification of the foregoing sentence shall not adversely affect any right or
protection of a director of the Corporation existing hereunder with respect to
any act or omission occurring prior to such repeal or modification.
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ARTICLE XII.
BUSINESS COMBINATIONS
The provisions of Section 3-602 of Title 3 of the Corporations
and Associations Article of the Annotated Code of the State of Maryland, as the
same may be amended or reenacted, or any successor statute thereto, shall not
apply to any Business Combination (as defined in Section 3-601 of Title 3 of
the Corporations and Associations Article of the Annotated Code of the State of
Maryland) involving the Corporation and FelCor Suite Hotels, Inc., a Delaware
corporation, Mr. Hervey A. Feldman or Thomas J. Corcoran, Jr. (or any present
or future affiliates or associates of Mr. Feldman or Mr. Corcoran or other
person acting in concert or as a group with either or both of them).
ARTICLE XIII.
CONTROL SHARES
The provisions of Title 3, Subtitle 7 of the Maryland General
Corporation Law entitled "Voting Rights of Certain Control Shares," as amended
or reenacted from time to time, or any successor statute thereto, shall not
apply to any existing or future type or class of the capital stock of the
Corporation.
ARTICLE XIV.
REDUCED PERCENTAGE OF VOTES REQUIRED TO
APPROVE CERTAIN CORPORATE ACTIONS
Except as may be otherwise provided in the Charter of the
Corporation, notwithstanding any provision of law which may be applicable to
the Corporation which purports to require for any purpose the affirmative vote
of a greater proportion than a majority of all other votes entitled to be cast
on a particular matter by the holders of capital stock of the Corporation, the
affirmative vote of a majority of the votes entitled to be cast on any matter
upon which the holders of shares of the capital stock of the Corporation shall
be entitled to vote shall be, subject to the due authorization, approval or
advice or the Board of Directors, valid, sufficient and effective to approve or
authorize any such matter.
ARTICLE XV.
AMENDMENTS
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Charter, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
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ARTICLES OF MERGER
BETWEEN
FELCOR SUITE HOTELS, INC., A DELAWARE CORPORATION
AND
FELCOR SUITE HOTELS, INC., A MARYLAND CORPORATION
These ARTICLES OF MERGER are made and entered into as of the 23rd day
of June 1995, by and between FelCor Suite Hotels, Inc., a Delaware corporation
(the "Merging Corporation"), and FelCor Suite Hotels, Inc., a Maryland
corporation (the "Surviving Corporation"), each of which certify as follows:
FIRST: The Merging Corporation and the Surviving Corporation agree to
merge in accordance with the terms and conditions set forth herein and in the
Agreement and Plan of Merger dated as of May 30, 1995 by and between the
Surviving Corporation and the Merging Corporation (the "Merger").
SECOND: The Merger shall be effective upon the later of (i) the
acceptance of these Articles of Merger by the State Department of Assessments
and Taxation of the State of Maryland and (ii) the acceptance of a Certificate
of Merger by the Secretary of State of Delaware (the "Effective Date").
THIRD: The name of the Merging Corporation is "FelCor Suite Hotels,
Inc." which is incorporated under the laws of the State of Delaware. The name
of the Surviving Corporation is "FelCor Suite Hotels, Inc." which is
incorporated under the laws of the State of Maryland.
FOURTH: The Merging Corporation was incorporated under the general
laws of the State of Delaware on May 16, 1994. The Merging Corporation is not
registered or qualified to do business in the State of Maryland.
22
FIFTH: The principal office in Maryland of the Surviving Corporation
is located in Baltimore City at 11 East Chase Street, Baltimore, Maryland
21202. The Merging Corporation does not have an office in Maryland.
SIXTH: Neither the Merging Corporation nor the Surviving Corporation
owns any interest in land in the State of Maryland, the title to which could be
affected by recording an instrument in the land records.
SEVENTH: The total number of shares of stock that the Merging
Corporation has authority to issue is 50,000,000 shares of Common Stock, par
value $0.01 per share, and 10,000,000 shares of Preferred Stock, par value
$0.01 per share. The total number of shares of stock that the Surviving
Corporation has authority to issue is 50,000,000 shares of Common Stock, par
value $0.01 per share, and 10,000,000 shares of Preferred Stock, par value
$0.01 per share.
EIGHTH: The Merging Corporation owns of record and beneficially all
of the issued and outstanding capital stock of the Surviving Corporation.
NINTH:: The manner and basis of converting or exchanging issued stock
of the Merging Corporation and the Surviving Corporation into different stock
of a corporation or other consideration and the treatment of any issued stock
not to be converted or exchanged shall be as follows:
(a) At the Effective Date, each issued share of the Common Stock
of the Merging Corporation shall be converted into and become one share of
Common Stock, par value $0.01 per share, of the Surviving Corporation.
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(b) At the Effective Date, each issued share of the Common Stock
of the Surviving Corporation shall be cancelled and cease to exist.
TENTH: The other provisions necessary to effect the Merger are as
follows:
(a) At the Effective Date, each share of the Common Stock of the
Merging Corporation issued and outstanding or held as treasury shares on the
Effective Date shall, without any action on the part of either the Merging
Corporation or the Surviving Corporation or any holder of such stock, be
changed and converted into an equal number of fully paid and nonassessable
shares of the Common Stock of the Surviving Corporation.
(b) Each stock certificate which, prior to the Effective Date,
represented issued shares of the Common Stock of the Merging Corporation shall
be and become, on the Effective Date, a certificate representing an identical
number of shares of Common Stock of the Surviving Corporation automatically by
virtue of the Merger and without any action on the part of the holder thereof.
(c) Each stock option granted by the Merging Corporation (under or
subject to the Restricted Stock and Stock Option Plan of the Merging
Corporation (the "1994 Plan")) and outstanding immediately prior to the
Effective Date shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and become a stock option to
purchase, upon the same terms and conditions, the number of shares of the
Surviving Corporation's Common Stock (subject to further adjustment as may be
provided in the 1994 Plan) which is equal to the number of shares of the
Merging Corporation's Common Stock which the holder thereof
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would have received had such holder exercised the option in full immediately
prior to the Effective Date (whether or not such option was then exercisable).
The price per share payable upon exercise under each of said options shall
(subject to future adjustments as provided in the 1994 Plan) be equal to the
exercise price per share thereunder immediately prior to the Effective Date. A
number of shares of the Surviving Corporation's Common Stock shall be reserved
for issuance upon the exercise of options equal to the number of shares of the
Merging Corporation's Common Stock so reserved immediately prior to the
Effective Date.
(d) The 1994 Plan, and all outstanding stock options thereunder,
shall, immediately prior to the Effective Date of the Merger, be amended to the
extent necessary to permit continuance of the 1994 Plan and continuance and
convergence of said stock options into those of the Surviving Corporation
following the Merger, notwithstanding any provisions heretofore contained in
such 1994 Plan.
(e) On the Effective Date, all of the shares of stock of the
Surviving Corporation issued and outstanding on the Effective Date of the
Merger shall be cancelled and returned to the status of authorized but unissued
shares.
(f) On the Effective Date, each employee benefit plan and
incentive compensation plan to which the Merging Corporation is then a party
shall be assumed by, and continue to be the plan of, the Surviving Corporation.
To the extent any employee benefit plan or incentive compensation plan of the
Merging Corporation or any of its subsidiaries provides for the issuance or
purchase of, or otherwise relates to, the Merging Corporation's Common Stock,
after
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the Effective Date such plan shall be deemed to provide for the issuance or
purchase of, or otherwise relate to, the Surviving Corporation's Common Stock
upon the same terms and conditions.
(g) The officers and directors of the Surviving Corporation on the
Effective Date shall be and continue to be the officers and directors of the
Surviving Corporation thereafter, until their successors are duly appointed or
elected and qualify.
(h) The Charter and Bylaws of the Surviving Corporation, as they
exist immediately prior to the Effective Date, shall remain in effect as the
Charter and Bylaws of the Surviving Corporation thereafter, unaffected by the
Merger.
(i) On the Effective Date, the Merging Corporation shall be merged
with and into the Surviving Corporation, which shall continue its corporate
existence under the laws of the State of Maryland. The separate existence and
corporate organization of the Merging Corporation shall cease upon the
Effective Date, and the Surviving Corporation shall possess all of the rights,
privileges, immunities and franchises, as well as those of a public or of a
private nature, of each of the Merging Corporation and the Surviving
Corporation; and all property, real, personal and mixed, and all debts due on
whatever account, including subscriptions to shares, and all other choses in
action, and all and every other interest, of or belonging to or due to each of
the Merging Corporation or the Surviving Corporation, shall be taken and deemed
to be transferred to and vested in the Surviving Corporation without further
act or deed; and the title to any real estate or any interest therein, vested
in either of the Merging Corporation or the Surviving Corporation shall not
revert or be in any way
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26
impaired by reason of such Merger. The Surviving Corporation shall thenceforth
be responsible and liable for all the liabilities and obligations of each of
the Merging Corporation and the Surviving Corporation, and any claims existing
or action or proceeding pending by or against the Merging Corporation or the
Surviving Corporation may be prosecuted to judgment as if such Merger had not
taken place. Neither the rights of creditors nor any liens upon the property of
either the Merging Corporation or the Surviving Corporation shall be impaired
by the Merger.
ELEVENTH: The terms and conditions of the transaction set forth in
these Articles of Merger were advised, authorized and approved by the Merging
Corporation in the manner and by the vote required by its charter and by-laws
and the laws of the State of Delaware. The terms and conditions of the
transaction set forth in these Articles of Merger were advised, authorized and
approved by the Surviving Corporation in the manner and by the vote required by
its charter and by-laws and the laws of the State of Maryland. The manner of
approval by the Merging Corporation and the Surviving Corporation of the
transaction set forth in these Articles of Merger was as follows:
(a) The board of directors of the Merging Corporation adopted a
resolution by unanimous vote consent on April 10, 1995, which declared that the
transaction set forth in these Articles of Merger is advisable and directed
that the transaction be submitted for consideration by the stockholders of the
Merging Corporation at the annual meeting of the stockholders of the Merging
Corporation held on May 30, 1995. Notice which stated that a purpose of the
annual meeting was to act on the Merger contemplated by these Articles of
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27
Merger was given in the manner required by the applicable provisions of the
Delaware General Corporation Law to each stockholder entitled to such notice.
The transaction set forth in these Articles of Merger was approved by the
stockholders of the Merging Corporation at the annual meeting of the
stockholders of the Merging Corporation held on May 30, 1995 by the affirmative
vote of a majority of all the votes entitled to be cast on the matter in
accordance with the Charter of the Merging Corporation and the Delaware General
Corporation Law.
(b) The sole director of the Surviving Corporation adopted a
resolution by written consent as of May 2, 1995, which declared that the
transaction set forth in these Articles of Merger is advisable and directed
that the transaction be submitted for consideration of the sole stockholder of
the Surviving Corporation. The transaction set forth in these Articles of
Merger was approved by the sole stockholder of the Surviving Corporation by
written consent dated as of May 2, 1995.
TWELFTH: No amendment to the charter of the Surviving Corporation,
the survivor in the Merger, will be affected by the Merger.
IN WITNESS WHEREOF, the Merging Corporation and the Surviving
Corporation have caused these Articles of Merger to be signed in their
respective corporate names and on their behalf by their respective Presidents
and attested to by their respective corporate Secretaries as of the ____ day of
June, 1995.
ATTEST: FELCOR SUITE HOTELS, INC.,
a Maryland corporation
By:
- ----------------------- ------------------------
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Nicholas R. Peterson Thomas J. Corcoran, Jr.
Assistant Secretary President
FELCOR SUITE HOTELS, INC.,
a Delaware corporation
By:
- ------------------------ ------------------------
Nicholas R. Peterson Thomas J. Corcoran, Jr.
Assistant Secretary President
The undersigned, being the duly elected and acting President of FelCor
Suite Hotels, Inc., a Maryland corporation, hereby acknowledges that the
foregoing Articles of Merger, of which this Certificate is a part, are the act
of FelCor Suite Hotels, Inc., a Maryland corporation, and certifies that, to
the best of his knowledge, information and belief, and under penalties for
perjury, all matters and facts contained in these Articles of Merger relating
to FelCor Suite Hotels, Inc., a Maryland corporation, are true in all material
respects.
---------------------------
Thomas J. Corcoran, Jr.
The undersigned, being the duly elected and acting President of FelCor
Suite Hotels, Inc., a Delaware corporation, hereby acknowledges that the
foregoing Articles of Merger, of which this Certificate is a part, are the act
of FelCor Suite Hotels, Inc., a Delaware corporation, and certifies that, to
the best of his knowledge, information, and belief, and under penalties for
perjury, all matters and facts contained in these Articles of Merger relating
to FelCor Suite Hotels, Inc., a Delaware corporation, are true in all material
respects.
-----------------------------
Thomas J. Corcoran, Jr.
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ARTICLES SUPPLEMENTARY
OF
FELCOR SUITE HOTELS, INC.
FELCOR SUITE HOTELS, INC., a Maryland corporation (hereinafter
referred to as the "Company"), hereby certifies as follows:
FIRST: Under the authority set forth in Article V of the Charter of
the Company, the Board of Directors of the Company on April 11, 1996,
classified 6,900,000 unissued shares of the "$1.95 Series A Cumulative
Convertible Preferred Stock."
SECOND: A description of the $1.95 Series A Cumulative Convertible
Preferred Stock (the "Series A Preferred Stock"), including the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption as set or
changed by the Board of Directors of the Company is as follows:
Section 1. NUMBER OF SHARES AND DESIGNATION. This series of
preferred stock shall be designated as Series A Cumulative Convertible
Preferred Stock, and 6,900,000 shall be the number of shares of preferred stock
constituting of such series.
Section 2. DEFINITIONS. For purposes of the Series A Preferred
Stock, the following terms shall have the meanings indicated:
"Act" shall have the meaning set forth in paragraph (g) of Section 5 hereof.
"Board of Directors" shall mean the Board of Directors of the Company or any
committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Series A Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in Texas or New York
are not required to be open.
"Call Date" shall have the meaning set forth in paragraph (c) of Section 5
hereof.
"Common Stock" shall mean the common stock of the Company, par value $0.01 per
share.
"Constituent Person" shall have the meaning set forth in paragraph (e) of
Section 7 hereof.
"Conversion Price" shall mean the conversion price per share of Common Stock
for which the Series A Preferred Stock is convertible, as such Conversion Price
may be adjusted pursuant to Section 7. The initial conversion price shall be
$32.25 (equivalent to a conversion rate of 0.7752 shares of Common Stock for
each share of Series A Preferred Stock).
30
"Current Market Price" of publicly traded shares of Common Stock or any other
class of capital stock or other security of the Company or any other issuer for
any day shall mean the last reported sales price, regular way on such day, or,
if not sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the
New York Stock Exchange ("NYSE") or, if such security is not listed or admitted
for trading or, if not listed or admitted for trading on any national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or, if such
security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over the counter market as
reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices on such day as furnished by any NYSE member firm regularly making a
market in such security selected for such purpose by the Chief Executive
Officer or the Board of Directors.
"Dividend Payment Date" shall mean the last calendar day of January, April,
July and October in each year, commencing on July 31, 1996; PROVIDED, HOWEVER,
that if any Dividend Payment Date falls on any day other than a Business Day,
the dividend payment due on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing January 1,
March 1, June 1 and September 1 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period (other than
the initial Dividend Period, which shall commence on May 6, 1996 and end on and
include June 30, 1996).
"Fair Market Value" shall mean the average of the daily Current Market Prices
of a share of Common Stock during the five (5) consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with respect to any issuance or
distribution, means the first day on which the Common Stock trades regular way,
without the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's current Market
Price.
"Issue Date" shall mean the date on which the Company first issues a share of
Series A Preferred Stock.
"Junior Stock" shall mean the Common Stock and any other class or series of
shares of the Company over which the Series A Preferred Stock has preference or
priority in the payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Company.
"Non-Electing Share" shall have the meaning set forth in paragraph (e) of
Section 7 hereof.
"Parity Stock" shall have the meaning set forth in paragraph (b) of Section 8
hereof.
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"Permitted Common Stock Cash Distributions" means cash dividends and
distributions paid after December 31, 1995, not in excess of the Company's
cumulative undistributed net earnings at December 31, 1995, plus the cumulative
amount of funds from operations, as determined by the Board of Directors on a
basis consistent with the financial reporting practices of the Company, after
December 31, 1995, minus the cumulative amount of dividends accrued or paid on
the Series A Preferred Stock or any other class of Preferred Stock after
January 1, 1996.
"Person" shall mean any individual, partnership, limited liability company,
corporation or other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Press Release" shall have the meaning set forth in paragraph (b) of Section 5
hereof.
"Securities" shall have the meaning set forth in paragraph (d) (iii) of Section
7 hereof.
"Series A Preferred Stock" shall have the meaning set forth in the Recitals
hereof.
"set apart for payment" shall be deemed to include, without any action other
than the following, the recording by the Company in its accounting ledgers of
any accounting or bookkeeping entry which indicates, pursuant to a declaration
of dividends or other distribution by the Board of Directors, the allocation of
funds to be so paid on any series or class of capital stock of the Company;
PROVIDED, HOWEVER, that if any funds for a class or series of Junior Stock or
any class or series of stock ranking on a parity with the Series A Preferred
Stock as to the payment of dividends are placed in a separate account of the
Company or delivered to a disbursing, paying or other similar agent, then "set
apart for payment" with respect to the Series A Preferred Stock shall mean
placing such funds in a separate account or delivering such funds to a
disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question are traded
on the NYSE, or if such securities are not listed or admitted for trading on
the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading of
any national securities exchange, on the National Market System of NASDAQ, or
if such securities are not quoted on such National Market System, in the
applicable securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in paragraph (e) of Section 7
hereof.
"Transfer Agent" means SunTrust Bank, Atlanta, Georgia, or such other agent or
agents of the Company as may be designated by the Board of Directors or their
designee as the transfer agent for the Series A Preferred Stock.
"Voting Preferred Stock" shall have the meaning set forth in Section 9(a)
hereof.
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Section 3. DIVIDENDS.
(a) The Holders of shares of the Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for that purpose, dividends payable in cash in an
amount per share of Series A Preferred Stock equal to the greater of $1.95 per
annum or the cash distributions declared or paid for the corresponding period
(determined on each Dividend Payment Date) on the number of shares of Common
Stock, or portion thereof, into which a share of Series A Preferred Stock is
convertible (under Section 7 hereof). Such dividends shall be cumulative from
May 6, 1996, whether or not in any Dividend Period or Periods there shall be
funds of the Company legally available for the payment of such dividends, and
shall be payable quarterly, when, as and if declared by the Board of Directors,
in arrears on Dividend Payment Dates, commencing on the first Dividend Payment
Date after the Issue Date. Each such dividend shall be payable in arrears to
the holders of record of shares of the Series A Preferred Stock, as they appear
on the stock records of the Company at the close of business on such record
dates, not more than 60 days preceding such Dividend Payment Dates thereof, as
shall be fixed by the Board of Directors. Accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any time, without reference
to any regular Dividend Payment Date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed by the
Board of Directors.
(b) The amount of dividends payable for each full Dividend Period
for the Series A Preferred Stock shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for any period shorter
or longer than a full Dividend Period, on the Series A Preferred Stock shall be
computed on the basis of twelve 30-day months and a 360-day year. Holders of
the Preferred Stock shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of cumulative dividends, as herein provided,
on the Series A Preferred Stock. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
the Series A Preferred Stock that may be in arrears.
(c) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment on any class or
series of Parity Stock for any period unless full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Series A
Preferred Stock for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Stock. When dividends
are not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon shares of the Series A Preferred Stock
and all dividends declared upon any other class or series of Parity Stock shall
be declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series A Preferred Stock and accumulated and
unpaid on such Parity Stock.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock), shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Stock, nor shall Junior Stock be
redeemed, purchased or
4
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otherwise acquired (other than a redemption, purchase or other acquisition of
shares of Common Stock made for purposes of an employee incentive or benefit
plan of the Company or any subsidiary) for any consideration (or any moneys be
paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the Company, directly or indirectly (except by conversion
into or exchange for Junior Stock), unless in each case (i) the full cumulative
dividends on all outstanding shares of the Series A Preferred Stock and any
other Parity Stock of the Company shall have been paid or set apart for payment
for all past Dividend Periods with respect to the Series A Preferred Stock and
all past dividend periods with respect to such Parity Stock and (ii) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the Series A Preferred Stock and the
current dividend period with respect to such Parity Stock. Notwithstanding the
foregoing limitations, the Company may at any time acquire shares of its
capital stock, without regard to rank, for the purpose of preserving its status
as a REIT.
Section 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, before any payment or
distribution of the assets of the Company (whether capital or surplus) shall be
made to or set apart for the holders of Junior Stock, the holders of the shares
of Series A Preferred Stock shall be entitled to receive twenty-five dollars
($25.00) per share of Series A Preferred Stock plus an amount equal to all
dividends (whether or not earned or declared) accrued and unpaid thereon to the
date of final distribution to such holders, but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the Company, the assets of the Company, or proceeds thereof,
distributable among the holders of the shares of Series A Preferred Stock shall
be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of any class or series of Parity
Stock, then such assets, or the proceeds thereof, shall be distributed among
the holders of shares of Series A Preferred Stock and any such other Parity
Stock ratably in accordance with the respective amounts that would be payable
on such shares of Series A Preferred Stock and any such other Parity Stock if
all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Company with one or more
corporations, (ii) a sale or transfer of all or substantially all of the
Company's assets, or (iii) a statutory share exchange shall not be deemed to be
a liquidation, dissolution or winding up, voluntary or involuntary, of the
Company.
(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or prior to the Series A
Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Company, after payment shall have
been made in full to the holders of the Series A Preferred Stock, as provided
in this Section 4, any other series or class or classes of Junior Stock shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series A Preferred Stock shall not be entitled to share
therein.
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Section 5. REDEMPTION AT THE OPTION OF THE COMPANY
(a) The Series A Preferred Stock shall not be redeemable by the
Company prior to April 30, 2001. On and after April 30, 2001, the Company, at
its option, may redeem the shares of Series A Preferred Stock in whole or in
part, as set forth herein, subject to the provisions described below.
(b) The Series A Preferred Stock may be redeemed, in whole or in
part, at the option of the Company, at any time, only if for 20 Trading Days,
within any period of 30 consecutive Trading Days, including the last Trading
Day of such period, the Current Market Price of the Common Stock on each of
such 20 Trading Days equals or exceeds the Conversion Price in effect on such
Trading Day. In order to exercise its redemption option, the Company must
issue a press release announcing the redemption (the "Press Release") prior to
the opening of business on the second Trading Day after the condition in the
preceding sentence has, from time to time, been met. The Company may not issue
a Press Release prior to April 30, 2001. The Press Release shall announce the
redemption and set forth the number of shares of Series A Preferred Stock which
the Company intends to redeem. The Call Date shall be selected by the Company,
shall be specified in the notice of redemption and shall be not less than 30
days or more than 60 days after the date on which the Corporation issues the
Press Release.
(c) Upon redemption of Series A Preferred Stock by the Corporation
on the date specified in the notice to holders required under subparagraph (e)
of this Section 5 (the "Call Date"), each share of Series A Preferred Stock so
redeemed shall, at the option of the Company (i) be converted into a number of
shares of Common Stock equal to the liquidation preference (excluding any
accrued and unpaid dividends) of the shares of Series A Preferred Stock being
redeemed divided by the Conversion Price as of the opening of business on the
Call Date or (ii) be redeemed in cash at a price per share equal the aggregate
market value (determined as of the date of the notice of redemption) of the
number of shares of Common Stock into which the Series A Preferred Stock is
then convertible divided by the then current Conversion Price.
Upon any redemption of Series A Preferred Stock, the Company shall pay
any accrued and unpaid dividends in arrears for any full Dividend Period ending
on or prior to the Call Date. If the Call Date falls after a dividend payment
record date and prior to the corresponding Dividend Payment Date, then each
holder of Series A Preferred Stock at the close of business on such dividend
payment record date shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date. Except as provided above, the Company
shall make no payment or allowance for unpaid dividends, whether or not in
arrears, on shares of Series A Preferred Stock called for redemption or on the
shares of Common Stock issued upon such redemption.
(d) If full cumulative dividends on the Series A Preferred Stock
and any other class or series of Parity Stock of the Company have not been paid
or declared and set apart for payment, the Series A Preferred Stock may not be
redeemed in part and the Company may not purchase or acquire shares of Series A
Preferred Stock, otherwise than pursuant to a purchase or exchange offer made
on the same terms to all holders of shares of Series A Preferred Stock.
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(e) If the Company shall redeem shares of Series A Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given not more than four Business Days after the date on which the Corporation
issues the Press Release to each holder of record of the shares to be redeemed.
Such notice shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the Company, or by
publication in THE WALL STREET JOURNAL or THE NEW YORK TIMES, or if neither
such newspaper is then being published, any other daily newspaper of national
circulation. If the Company elects to provide such notice of publication, it
shall also promptly mail notice of such redemption to the holders of the Series
A Preferred Stock to be redeemed. Neither the failure to mail any notice
required by this paragraph (e), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the notice
or the validity of the proceedings for redemption with respect to the other
holders. Any notice which was mailed in the manner herein provided shall be
conclusively presumed to have been duly given on the date mailed whether or not
the holder receives the notice. Each such mailed or published notice shall
state, as appropriate: (1) the Call Date: (2) the number of shares of Series A
Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the number of shares of Common Stock to be issued, or the cash
redemption price, as the case may be, with respect to each share of Series A
Preferred Stock; (4) the place or places at which certificates for such shares
are to be surrendered for certificates representing shares of Common Stock; (5)
the then-current Conversion Price; and (6) that dividends on the shares to be
redeemed shall cease to accrue on such Call Date except as otherwise provided
herein. Notice having been published or mailed as aforesaid, from and after
the Call Date (unless the Company shall fail to make available a number of
shares of Common Stock or amount of cash necessary to effect such redemption),
(i) except as otherwise provided herein, dividends on the shares of the Series
A Preferred Stock so called for redemption shall cease to accrue, (ii) said
shares shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Series A Preferred Stock of the Company shall
cease (except the rights to receive the shares of Common Stock and cash payable
upon such redemption, without interest thereon, upon surrender and endorsement
of their certificates if so required to receive any dividends payable thereon).
The Company's obligation to provide shares of Common Stock and cash in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the Call Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Company) that has an office in the
Borough of Manhattan, City of New York and that has, or is an affiliate of a
bank or trust company that has, a capital and surplus of at least $50,000,000,
shares of Common Stock and/or any cash necessary for such redemption, in trust,
with irrevocable instructions that such shares of Common Stock and/or cash be
applied to the redemption of the shares of Series A Preferred Stock so called
for redemption. At the close of business on the Call Date, each holder of
Series A Preferred Stock to be redeemed pursuant to Section 5(c)(i) (unless the
Company defaults in the delivery of the shares of Common Stock or cash payable
on such Call Date) shall be deemed to be the record holder of the number of
shares of Common Stock into which such Series A Preferred Stock is to be
redeemed, regardless of whether such holder has surrendered the certificates
representing the Series A Preferred Stock. No interest shall accrue for the
benefit of the holders of Series A Preferred Stock to be redeemed on any cash
so set aside by the Company. Subject to applicable escheat laws, any such cash
unclaimed at the end of two years from the Call Date shall
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36
revert to the general funds of the Company, after which reversion the holders
of such shares so called for redemption shall look only to the general funds of
the Company for the payment of such cash.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed
or assigned for transfer, if the Company shall so require and if the notice
shall so state), such shares shall be exchanged for certificates of shares of
Common Stock and any cash (without interest thereon) for which such shares have
been redeemed. If fewer than all the outstanding shares of Series A Preferred
Stock are to be redeemed, shares to be redeemed shall be selected by the
Company from outstanding shares of Series A Preferred Stock not previously
called for redemption by lot or pro rata (as nearly as may be) or by any other
method determine by the Company in its sole discretion to be equitable. If
fewer than all the shares of Series A Preferred Stock represented by any
certificate are redeemed, then new certificates representing the unredeemed
shares shall be issued without cost to the holder thereof.
(f) No fractional shares or scrip representing fractions of shares
of Common Stock shall be issued upon redemption of the Series A Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the redemption of a share of Series A
Preferred Stock, the Company shall pay to the holder of such share an amount in
cash (computed to the nearest cent) based upon the Current Market Price of
Common Stock on the Trading Day immediately preceding the Call Date. If more
than one share shall be surrendered for redemption at one time by the same
holder, the number of full shares of Common Stock issuable, or cash paid, upon
redemption thereof shall be computed on the basis of the aggregate number of
shares of Series A Preferred Stock so surrendered.
(g) The Company covenants that any shares of Common Stock issued
upon redemption of the Series A Preferred Stock shall be validly issued, fully
paid and non-assessable. The Company shall endeavor to list the shares of
Common Stock required to be delivered upon redemption to the Series A Preferred
Stock, prior to such redemption, upon each national securities exchange, if
any, upon which the outstanding Common Stock is listed at the time of such
delivery.
The Company shall endeavor to take any action necessary to ensure that
any shares of Common Stock issued upon the redemption of Series A Preferred
Stock are freely transferable and not subject to any resale restrictions under
the Securities Act of 1933, as amended (the "Act"), of any applicable state
securities or blue sky laws (other than any shares of Common Stock issued upon
redemption of any Series A Preferred Stock which are held by an "affiliate" (as
defined in Rule 144 under the Act) of the Company). Notwithstanding the
foregoing limitations, the Company may at any time acquire shares of its
capital stock, without regard to rank, for the purpose of preserving its status
as a REIT.
Section 6. SHARES TO BE RETIRED.
All shares of Series A Preferred Stock which shall have been issued
and reacquired in any manner by the Company shall be restored to the status of
authorized but unissued shares of Preferred Stock, without designation as to
series. The Company may also retire any unissued shares of
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37
Series A Preferred Stock, and such shares shall then be restored to the status
of authorized but unissued shares of Preferred Stock, without designation as to
series.
Section 7. CONVERSION.
Holders of shares of Series A Preferred Stock shall have the right to
convert all or a portion of such shares in to shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series A Preferred Stock shall have the right,
at his or her option, at any time to convert such shares into the number of
fully paid and non-assessable shares of Common Stock obtained by dividing the
aggregate liquidation preference (excluding any accrued and unpaid dividends)
of such shares by the Conversion Price (as in effect at the time and on the
date provided for in the last paragraph or paragraph (b) of this Section 7) by
surrendering such shares to be converted, such surrender to be made in the
manner provided in Section 7, paragraph (b); PROVIDED, HOWEVER, that the right
to convert shares called for redemption pursuant to Section 5 shall terminate
at the close of business on the Call Date fixed for such redemption, unless the
Company shall default in making payment of the shares of Common Stock and any
cash payable upon such redemption under Section 5 hereof.
(b) In order to exercise the conversion right, the holder of each
share of Series A Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the Company
or in blank, at the office of the Transfer Agent; accompanied by written notice
to the Company that the holder thereof elects to convert such Series A
Preferred Stock. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Series A Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Company, duly executed by
the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax (or evidence reasonably satisfactory to the
Company demonstrating that such taxes have been paid).
Holders of shares of Series A Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment date. However, shares of Series A
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment record date and the opening of business on
the corresponding Dividend Payment Date (except shares converted after the
issuance of notice of redemption with respect to a Call Date during such
period, such shares of Series A Preferred Stock being entitled to such dividend
on the Dividend Payment Date) must be accompanied by a payment of an amount
equal to the dividend payable on such shares on such Dividend Payment Date. A
holder of shares of Series A Preferred Stock on a dividend payment record date
who (or whose transferee) tenders any such shares for conversion into shares of
Common Stock on such Dividend Payment Date will receive the dividend payable by
the Company on such shares of Series A Preferred Stock on such date, and the
converting holder need not include
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payment of the amount of such dividend upon surrender of shares of Series A
Preferred Stock for conversion. Except as provided above, the Company shall
make no payment or allowance for unpaid dividends, whether or not in arrears,
on converted shares or for dividends on the shares of Common Stock issued upon
such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series A Preferred Stock as aforesaid, the Company shall issue and
shall deliver at such office to such holder, or on his or her written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with provisions of
this Section 7, and any factional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph
(c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which certificates for shares of
Series A Preferred Stock shall have been surrendered and such notice (and if
applicable, payment of an amount equal to the dividend payable on such shares)
received by the Company as aforesaid, and the person or persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date
and such conversion shall be at the Conversion Price in effect at such time on
such date unless the stock transfer books of the Company shall be closed on
that date, in which event such person or persons shall be deemed to have become
holder or holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall be at
the Conversion Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Company.
(c) No fractional shares of scrip representing of shares of Common
Stock shall be issued upon conversion of the Shares A Preferred Stock. Instead
of any fractional interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of a share of Series A Preferred Stock, the
Company shall pay to the holder of such share an amount in cash based upon the
Current Market Price of Common Stock on the Trading Day immediately preceding
the date of conversion. If more than one share shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Series A Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Company shall after the Issue Date (A) pay a
dividend or make a distribution of its capital stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by reclassification of its
Common Stock, the Conversion Price in effect at the opening of business on the
following day following the date fixed for the determination of stockholders
entitled to receive such dividend or distribution or at the opening of business
on the day following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted so
that the holder of any share
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of Series A Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder would
have owned or have been entitled to receive after the happening of any of the
events described above had such shares of Series A Preferred Stock been
converted immediately prior to the record date in the case of a dividend or
distribution or the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this subparagraph (i) shall
become effective immediately after the opening of business on the day next
following the record date (except as provided in paragraph (h) below) in the
case of a dividend or distribution and shall become effective immediately after
the opening of business on the day next following the effective date in the
case of a subdivision, combination or reclassification.
(ii) If the Company shall, after the Issue Date, issue
rights, options or warrants to all holders of Common Stock entitling them (for
a period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the Fair
Market Value per share of Common Stock on the record date for the determination
of stockholders entitled to receive such rights or warrants, then the
Conversion Price in effect at the opening of business on the day next following
such record date shall be adjusted to equal the price determined by multiplying
(I) the Conversion Price in effect immediately prior to the opening of business
on the day following the date fixed for such determination by (II) a fraction,
the numerator of which shall be the sums of (A) the number of shares of Common
Stock outstanding on the close of business on the date fixed for such
determination and (B) the number of shares that the aggregate proceeds to the
Company from the exercise of such rights or warrants for Common Stock would
purchase at such Fair Market Value, and the denominator of which shall be the
sums of (A) the number of Shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (B) on the number of
additional shares of Common Stock offered for subscription or purchase pursuant
to such rights or warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such record date
(except as provided in paragraph (h) below). In determining whether any rights
or warrants entitle the holders of Common Stock to subscribe for or purchase
shares of Common Stock at less than such Fair Market Value, there shall be
taken into account any consideration received by the Company upon issuance and
upon exercise of such rights warrants, the value of such consideration, if
other than cash, to be determined by the Chief Executive Officer or the Board
of Directors.
(iii) If the Company shall distribute to all holders of its
Common Stock any shares of capital stock of the Company (other than Common
Stock) or evidence of its indebtedness or assets (excluding Permitted Common
Stock Cash Distributions) or rights warrants to subscribe for or purchase any
of its securities (excluding those rights and warrants issued to all holders of
Common Stock entitling them for a period expiring within 45 days after the
record date referred to in subparagraph (ii) above to subscribe for or purchase
Common Stock, which rights and warrants are referred to in and treated under
subparagraph (ii) above) (any of the foregoing being hereinafter in this
subparagraph (iii) called the "Securities"), then in each such case the
Conversion Price shall be adjusted so that it shall equal the price determined
by multiplying (I) the Conversion Price in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by (II) a fraction, the numerator of
which shall be the Fair Market Value per share of the Common Stock on the
record date mentioned below less the then fair market
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value (as determined by the Chief Executive Officer or the Board of Directors,
whose determination shall be conclusive), of the portion of the capital stock
or assets or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock, and the denominator of which
shall be the Fair Market Value per share of the Common Stock on the record date
mentioned below. Such adjustment shall become effective immediately at the
opening of business on the Business Day next following (except as provided in
paragraph (h) below) the record date for the determination of shareholders
entitled to receive such distribution. For the purposes of this clause (iii),
the distribution of a Security, which is distributed not only to the holders of
the Common Stock on the date fixed for the determination of stockholders
entitled to such distribution of such Security, but also is distributed with
each share of Common Stock delivered to a Person converting a share of Series A
Preferred Stock after such determination date, shall not require an adjustment
of the Conversion Price pursuant to this clause (iii); PROVIDED that on the
date, if any, on which a person converting a share of Series A Preferred Stock
would no longer be entitled to receive such Security with a share of Common
Stock (other than as a result of the termination of all such Securities), a
distribution of such Securities shall be deemed to have occurred and the
Conversion Price shall be adjusted ass provided in this clause (iii) and such
day shall be deemed to be "the date fixed for the determination of the
stockholders entitled to receive such distribution" and "the record date"
within the meaning of the two preceding sentences.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such; PROVIDED, HOWEVER, that any adjustments that by reason
of this subparagraph (iv) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made; and PROVIDED,
FURTHER, that any adjustment shall be required and made in accordance with the
provisions of this Section 7 (other than this subparagraph (iv) not later than
such time as may be required in order to preserve the tax-free nature of a
distribution to the holders of shares of Common Stock. Notwithstanding any
other provisions of this Section 7, the Company shall not be required to make
any adjustment of the Conversion Price for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under such plan. All calculations
under this Section 7 shall be made to the nearest cent (with $.005 being
rounded upward) or to the nearest one-tenth of a share (with .05 of a share
being rounded upward), as the case may be. Anything in this paragraph (d) to
the contrary notwithstanding, the Company shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in addition
to those required by this paragraph (d), as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivision of
shares, reclassification or combination of shares, distribution of rights or
warrants to purchase stock or securities, or a distribution or other assets
(other than cash dividends) hereafter made by the Company to its stockholders
shall not be taxable, or if that is not possible, to diminish any income taxes
that are otherwise payable because of such event.
(e) If the Company shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or substantially all shares of Common Stock, sale of all
or substantially all of the Company's assets or recapitalization of the
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Common Stock and excluding any transaction as to which subparagraph (d)(i) of
this Section 7 applies) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which shares of Common Stock shall
be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each share of Series A Preferred
Stock which is not converted into the right to receive stock, securities or
other property in connection with such Transaction shall thereafter be
convertible into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivables upon the
consummation of such Transaction by a holder of that number of shares of Common
Stock into which one share of Series A Preferred Stock was convertible
immediately prior to such Transaction, assuming such holder of Common Stock (i)
is not a Person with which the Company consolidated or into which the Company
merged or which merged into the Company or to which such sale or transfer was
made, as the case may be ("Constituent Person"), or an affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if any,
as to the kind of amount of stock, securities and other property (including
cash) receivable upon such Transaction (provided that if the kind or amount of
stock, securities and other property (including cash) receivable upon such
Transaction is not the same for each share of Common Stock of the Company held
immediately prior to such Transaction by other than a Constituent Person or an
affiliate thereof and in respect of which such rights of election shall not
have been exercised ("Non-Electing Share"), then for the purpose of this
paragraph (e) the kind and amount of stock, securities and other property
(including cash) receivable upon such Transaction by each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-election shares). The Company shall not be a party to any
Transaction unless the terms of such Transaction are consistent with the
provisions of this paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Company has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of
the holders of the Series A Preferred Stock that will contain provisions
enabling the holders of the Series A Preferred Stock that remains outstanding
after such Transaction to convert into the consideration received by holders of
Common Stock at the Conversion Price in effect immediately prior to such
Transaction. The provisions of the paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Company shall declare a dividend (or any other
distribution) on the Common Stock (other than Permitted Common Stock Cash
Distributions); or
(ii) the Company shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or
(iii) there shall be any reclassification of the Common
Stock (other than any event to which subparagraph (d)(i) of this Section 7
applies) or any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or a statutory
share exchange, or self tender offer by the Company for all or substantially
all of its outstanding shares of Common Stock or the sale or transfer of all
substantially all of the assets of the Company as an entity; or
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42
(iv) there shall occur the involuntary liquidation,
dissolution or winding up of the Company,
then the Company shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of the Service A Preferred Stock at
their addresses as shown on the stock records of the Company, as promptly as
possible, but at least 15 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights or warrants are
to be determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up. Failure to
give or receive such notice of any defect therein shall not affect the legality
or validity of the proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date of such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the holder of each share of Series A Preferred Stock at
such holder's last address as shown on the stock records of the Company.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective on the day next following the record
date for an event, the Company may defer until the occurrence of such event (A)
issuing to the holder of any share of Series A Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount of cash in lieu of any fraction pursuant to paragraph (c) of
this Section 7.
(i) There shall be no adjustment of the Conversion Price in case
of the issuance of any stock of the Company in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 7.
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 7, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has
the highest absolute value.
(j) If the Company shall take any action affecting the Common
Stock, other than action described in this Section 7, that in the opinion of
the Board of Directors would materially adversely
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affect the conversion rights of the holders of the shares of Series A Preferred
Stock, the Conversion Price for the Series A Preferred Stock may be adjusted,
to the extent permitted by law, in such manner, if any, and at such time, as
the Board of Directors, in its sole discretion, may determine to be equitable
in the circumstances.
(k) The Company covenants that it will at all times reserve and
keep available, free form preemptive rights, out the aggregate of its
authorized but unissued shares of Common Stock for the purpose of effecting
conversion of the Series A Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series A
Preferred Stock not theretofore converted. For purposes of this paragraph (k),
the number of shares of Common Stock shall be deliverable upon the conversion
of all outstanding shares of Series A Preferred Stock shall be computed as if
at the time of computation all such outstanding shares were held by a single
holder.
The Company covenants that any shares of Common Stock issued upon the
conversion of the Series A Preferred Stock shall be validly issued, fully paid
and non-assessable.
The Company shall endeavor to list the shares of Common Stock required
to be delivered upon conversion of the Series A Preferred Stock, prior to such
delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Company shall be
obligated to deliver upon conversion of the Series A Preferred Stock, the
Company shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof, by any governmental
authority.
(l) The Company will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares
of Common Stock or other securities or property on conversion of the Series A
Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the Company shall not
be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the Series A Preferred
Stock to be converted, and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Company the
amount of any such tax or established, to the reasonable satisfaction of the
Company, that such tax has been paid.
Section 8. RANKING. Any class or series of stock of the Company
shall be deemed to rank:
(a) prior to the Series A Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Series A Preferred Stock;
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(b) on a parity with the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Series A Preferred Stock, if the holders of such class of stock or
series and the Series A Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority one over
the other ("Parity Stock"); the Series A Preferred Stock and the Series B
Preferred Stock shall be Parity Stock with respect to the Series A Preferred
Stock; and
(c) junior to the Series A Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Series A Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of such stock or
series.
Section 9. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series A Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of a similar arrearage with respect to any Parity Stock) and the holders
of shares of Series A Preferred Stock, together with the holders of shares of
every other series of Parity Stock (any such other series, the "Voting
Preferred Stock"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the Board of
Directors at any annual meeting of stockholders or special meeting held in
place thereof, or at a special meeting of the holders of the Series A Preferred
Stock and the Voting Preferred Stock called as hereinafter provided. Whenever
all arrears in dividends on the Series A Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Series A Preferred
Stock and the Voting Preferred Stock to elect such additional two directors
shall cease (but subject always to the same provision for the vesting of such
voting rights in the case of any similar future arrearages in six quarterly
dividends), and the terms of office of all persons elected as directors by the
holders of the Series A Preferred Stock and the Voting Preferred Stock shall
forthwith terminate and the number of the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of shares of Series A Preferred Stock and the Voting Preferred
Stock, the secretary of the Company may, and upon the written request of any
holder of Series A Preferred Stock (addressed to the secretary at the principal
office of the corporation) shall, call a special meeting of the holders of the
Series A Preferred Stock and of the Voting Preferred Stock for the election of
the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the Bylaws of the Company for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
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45
secretary within 20 days after receipt of any such request, then any holder of
shares of Series A Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock books of the
Company. The directors elected at any such special meeting shall hold office
until the next annual meeting of the stockholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the
holders of the Series A Preferred Stock and the Voting Preferred Stock, a
successor shall be elected by the Board of Directors, upon the nomination of
the then- remaining director elected by the holders of the Series A Preferred
Stock and the Voting Preferred Stock or the successor of such remaining
director, to serve until the next annual meeting of the stockholders or special
meeting held in place thereof if such office shall not have previously
terminated as provided above.
(b) So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter, as amended, the affirmative vote of at least 66 2/3%
of the votes entitled to be cast by the holders of the shares of Series A
Preferred Stock and the Voting Preferred Stock, at the time outstanding, acting
as a single class regardless of series, at any meeting called for the purpose,
shall be necessary for effecting or validation:
(i) Any amendment, alteration or repeal of any of the
provisions of these Articles Supplementary that materially adversely affects
the voting powers, rights or preferences of the holders of the Series A
Preferred Stock or the Voting Preferred Stock; PROVIDED, HOWEVER, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount, of any Junior Stock or any shares of any class
ranking on a parity with the Series A Preferred Stock or the Voting Preferred
Stock shall not be deemed to materially adversely affect the voting powers,
rights or preferences of the holders of Series A Preferred Stock, and PROVIDED,
FURTHER, that if any such amendment, alteration or repeal would materially
adversely affect any voting powers, rights of preferences of the Series A
Preferred Stock or another series of Voting Preferred Stock that are not
enjoyed by some or all of the other series which otherwise would be entitled to
vote in accordance herewith, the affirmative vote of least 66 2/3% of the votes
entitled to be cast by holders of all series similarly affected, similarly
given, shall be required in lieu of the affirmative vote of at least 66 2/3% of
the votes entitled to be cast by the holders of the shares of Series A
Preferred Stock and the Voting Preferred Stock which otherwise would be
entitled to vote in accordance herewith; or
(ii) The authorization or creation of, or the increase in
the authorized amount of, any shares of any class or any security convertible
into shares of any class ranking prior to the Series A Preferred Stock in the
distribution of assets on any liquidation, dissolution or winding up of the
Company or in the payment of dividends; PROVIDED, HOWEVER, that no such vote of
the holders of Series A Preferred Stock shall be required if, at or prior to
the time when such amendment, alteration or repeal is to take effect, or when
the issuance of any such prior shares of convertible security is to be made, as
the case may be, provision is made for the redemption of all shares of Series A
Preferred Stock at the time outstanding.
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46
For purposes of the foregoing provisions of this Section 9, each share
of Series A Preferred Stock shall have one (1) vote per share, except that when
any other series of preferred stock shall have the right to vote with the
Series A Preferred Stock as a single class on any matter, then the Series A
Preferred Stock and such other series shall have with respect to such matters
one (1) vote per $25.00 of stated liquidation preference. Except as otherwise
required by applicable law or as set forth herein, the shares of Series A
Preferred Stock shall not have any relative, participating, optional or other
special voting rights and powers other than as set forth herein, and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
Section 10. RECORD HOLDERS. The Company and the Transfer Agent may
deem and treat the record holder of any shares of Series A Preferred Stock as
the true and lawful owner thereof for all purposes, and neither the Company nor
the Transfer Agent shall be affected by any notice to the contrary.
IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be signed in its name and on its behalf on this 30th day of
April, 1996, by its President who acknowledges that these Articles
Supplementary are the act of the Company and that to the best of his knowledge,
information and belief and under penalties for perjury all matters and facts
contained in these Articles Supplementary are true in all material respects.
FELCOR SUITE HOTELS, INC.
By:
------------------------------------
Name: Thomas J. Corcoran, Jr.
Title: President
Attest:
By:
------------------------------------
Name: Thomas L. Wiese
Title: Secretary
(Corporate Seal)
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