1
EXHIBIT 3.6
ARTICLES OF AMENDMENT OF THE ARTICLES OF
INCORPORATION OF AMERICAN REALTY TRUST, INC.
Setting Forth the
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING OR OPTIONAL OR OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF OF
SPECIAL STOCK
OF
AMERICAN REALTY TRUST, INC.
AMERICAN REALTY TRUST, INC., a corporation organized and existing
under the laws of the State of Georgia,
DOES HEREBY CERTIFY:
THAT, pursuant to the authority conferred upon the Board of Directors
by the Articles of Incorporation, as amended, of AMERICAN REALTY TRUST, INC.
(the "Corporation"), and pursuant to the provisions of Section 14-2-602 of
the Georgia Business Corporation Code (which section provides that no
shareholder action is required in order to effect these Articles of Amendment),
said Board of Directors, by unanimous written consent dated as of April 3,
1996, adopted certain recitals and resolutions providing for the designations,
preferences and relative participating, optional or other special rights
and qualifications,limitations or restrictions thereof, of a series of
special stock of the Corporation, specifically the Series B 10% Cumulative
Preferred Stock, which recitals and resolutions are as follows:
WHEREAS, Article Five of the Articles of Incorporation, as
amended, of the Corporation authorizes the Corporation to issue not
more than 16,666,667 shares of common voting stock, $0.01 par value
per share (the "Common Stock"), and 20,000,000 shares of a special
class of stock, $2.00 par value per share (the "Special Stock"), which
Special Stock may be issued from time to time in one or more series
and shall be designated as the Board of Directors may determine to
have such voting powers, preferences, limitations and relative rights
with respect to the shares of each series of the class of Special
Stock of the Corporation as expressly provided in a resolution or
resolutions providing for the issuance of such series adopted by the
Board of Directors which is vested with the authority in respect
thereof;
WHEREAS, 500,000 shares of such Special Stock has been
2
previously designated as the Series A Cumulative Participating
Preferred Stock prior to the date hereof, none of which are now issued
and outstanding; and
WHEREAS, the Board of Directors now desires to further amend
the Articles of Incorporation to designate an additional series of the
Special Stock;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority granted
to the Board of Directors by Article Five of the Articles of Incorporation, as
amended, the Board of Directors hereby further amends the Articles of
Incorporation to provide for the issuance of one single series of Special Stock
consisting of the number of shares in such series as set forth below and,
subject to the provisions of Article Five of the Articles of Incorporation, as
amended, of the Corporation, hereby fixes and determines with respect to such
series the following designations, preferences and relative participating,
optional or other special rights, if any, and qualifications, limitations or
restrictions thereof:
1. Designation. The distinctive designation of such series
shall be the Series B 10% Cumulative Preferred Stock and each share of
the Series B 10% Cumulative Preferred Stock shall have a par value of
$2.00 per share and a preference on liquidation under paragraph 6
below of up to $100 per share. The Series B 10% Cumulative Preferred
Stock is sometimes referred to herein as the "Series B Preferred
Stock."
2. Number of Shares. The number of shares which shall
constitute the Series B Preferred Stock shall be such number as may
actually be issued by the Corporation, not to exceed a maximum of
4,000 shares, which number may be decreased (but not below the number
then outstanding), from time to time by the Board of Directors,
subject to the provisions hereof.
3. Dividends and Dividend Rate. Holders of record on the
fifteenth day of each March, June, September and December of each year
of shares of the Series B Preferred Stock shall be entitled to receive
dividends, when and as declared by the Board of Directors of the
Corporation and to the extent permitted under the Georgia Business
Corporation Code, payable quarterly on each March 31,
-2-
3
June 30, September 30 and December 31 of each year, beginning on June
30, 1996 (each a "Dividend Reference Date" and, collectively, the
"Dividend Reference Dates"), in preference to and with priority over
dividends upon all "Junior Securities" (as defined in paragraph 6
below). Except as otherwise provided herein, dividends on each share
of Series B Preferred Stock (a "Share") will accrue (but not compound)
cumulatively on a daily basis at the rate per share of ten dollars
($10) per annum ($2.50 per calendar quarter) from and including the
date of issuance to and including the date on which the "Redemption
Price" (as defined in paragraph 4 below) of such Share is paid,
whether or not such dividends have been declared and whether or not
there are profits, surplus or other funds of the Corporation legally
available for the payment of such dividends. For purposes of this
paragraph 3, the date on which the Corporation initially issues any
Share is its date of issuance, regardless of the number of times
transfer of such Share is made on the stock records maintained by or
for the Corporation and regardless of the number of certificates that
may be issued to evidence such Share (whether by reason of transfer of
such Share or for any other reason). So long as any Shares of Series
B Preferred Stock are outstanding, the Corporation will not declare or
pay any dividends on Junior Securities (other than dividends in
respect of Common Stock payable in shares of Common Stock) or make,
directly or indirectly, any other distribution of any sort in respect
of Junior Securities, or any payment on account of the purchase or
other acquisition of the Junior Securities, unless on the date of such
declaration in the case of a dividend, or on such date of distribution
or payment, in the case of such distribution or other payment (a) all
dividends on the Series B Preferred Stock for all past quarter-yearly
dividend periods have been paid in full and the full dividends for the
then current quarter-yearly period shall have been paid or declared in
a sum sufficient for the payment thereof set apart, and (b) after
giving effect to such payment of dividends, other distributions,
purchase or redemption, the aggregate capital of the Corporation
applicable to all capital stock of the Corporation then outstanding,
plus the earned and capital surplus of the Corporation shall exceed
the aggregate amount payable on involuntary dissolution, liquidation
or
-3-
4
winding up of the Corporation on all Shares of the Special Stock and
all stock ranking prior to or on a parity with the Series B Preferred
Stock as to dividends or assets outstanding after the payment of such
dividends, other distributions, purchase or redemption. Dividends
shall not be paid or declared and set apart for payment on any series
of Special Stock for any dividend period (including the Series B
Preferred Stock) unless dividends have been or are, contemporaneously,
paid and declared and set apart for payment on all outstanding series
of Special Stock entitled thereto for all dividend periods terminating
on the same or earlier date. If at any time the Corporation pays less
than the total amount of dividends then accrued with respect to the
Series B Preferred Stock, such payment will be distributed ratably
among the then holders of Series B Preferred Stock so that an amount
equal is paid with respect to each outstanding Share.
4. Redemption. The Corporation may, at any time after the
issuance thereof and from time to time, at the election of the Board
of Directors of the Corporation redeem any or all of the Series B
Preferred Stock then outstanding by written notice given not less than
twenty (20) nor more than sixty (60) days before the date fixed for
redemption (the "Redemption Date"). If mailed, such notice shall be
deemed to be delivered when deposited in the United States Mail,
postage prepaid, addressed to the holder of shares of Series B
Preferred Stock at his address as it appears on the stock transfer
records of the Corporation. Such notice shall set forth (a) the shares
to be so redeemed, (b) the date fixed for redemption, (c) the
applicable Redemption Price, and (d) the place at which the holder(s)
may obtain payment of the applicable Redemption Price upon surrender
of the share certificate(s). If less than all shares of Series B
Preferred Stock at any time outstanding shall be called for
redemption, such shares shall be redeemed pro rata by lot drawn or
other manner deemed fair in the sole discretion of the Board of
Directors to redeem one or more such shares without redeeming all such
shares of Series B Preferred Stock. If such notice of redemption shall
have been so mailed, on or before the Redemption Date, the Corporation
may provide for payment of a sum sufficient to redeem the applicable
number of Series B
-4-
5
Preferred Stock called for redemption either (i) by setting aside the
sum required to be paid as the Redemption Price by the Corporation,
separate and apart from its other funds, in trust for the account of
the holder(s) of the shares of Series B Preferred Stock to be redeemed
or (ii) by depositing such sum in a bank or trust company (either
located in the state where the principal executive office of the
Corporation is maintained, such ):)an) or trust company having a
combined surplus of at least $20,000,000 according to its latest
statement of condition, or such other bank or trust company as may be
permitted by the Articles of Incorporation, as amended, or by law) as
a trust fund, with irrevocable instructions and authority to the bank
or trust company to give or complete the notice of redemption and to
pay, on or after the Redemption Date, the applicable Redemption Price
on surrender of certificates evidencing the share(s) of Series B
Preferred Stock so called for redemption and, in either event, from
and after the Redemption Date (A) the share(s) of Series B Preferred
Stock deemed to be redeemed, (B) such setting aside or deposit shall
be deemed to constitute full payment for such Share(s), (C) such
Share(s) so redeemed shall no longer be deemed to be outstanding, (D)
the holder(s) thereof shall cease to be a shareholder of the
Corporation with respect to such share(s), and (E) such holder(s)
shall have no rights with respect thereto except the right to receive
their proportionate share of the funds set aside pursuant hereto or
deposited upon surrender of their respective certificates. Any
interest on the funds so deposited shall be paid to the Corporation.
Any and all such redemption deposits shall be irrevocable except to
the following extent: any funds so deposited which shall not be
required for the redemption of any shares of Series B Preferred Stock
because of any prior sale or purchase by the Corporation other than
through the redemption process, subsequent to the date of deposit but
prior to the Redemption Date, shall be repaid to the Corporation
forthwith and any balance of the funds so deposited and unclaimed by
the holder(s) of any shares of Series B Preferred Stock entitled
thereto at the expiration of one calendar year from the Redemption
Date shall be repaid to the Corporation upon its request or demand
therefor and after any such repayment the holder(s) of the share(s) so
-5-
6
called for redemption shall look only to the Corporation for payment
of the Redemption Price thereof. In addition to the redemption under
this paragraph 4, the Corporation may redeem or repurchase shares of
the Series B Preferred Stock from any holder(s) thereof who consents
in writing to such redemption and the provisions of this paragraph 4
will not apply to any such consented redemption. All shares of Series
B Preferred Stock redeemed shall be cancelled and retired and no
shares shall be issued in place thereof, but such shares shall be
restored to the status of authorized but unissued shares of Special
Stock. The "Redemption Price" (herein so called) shall be an amount
equal to the "Liquidation Value" (as defined in paragraph 6 below) of
$100 per Share plus the amount of all accrued but unpaid dividends
thereon to the Redemption Date, which shall include all cumulative
dividends in arrears and also the proportionate part of the dividend
accrued since the last Dividend Reference Date preceding the
Redemption Date and whether or not earned or declared, but without
interest.
5. Sinking Fund. The Corporation shall not be required to
maintain any so-called "Sinking Fund" for the retirement on any basis
of the Series B Preferred Stock.
6. Rights on Liquidation. In the event of any liquidation,
dissolution or winding-up of the Corporation, and after paying and
providing for the payment of all creditors of the Corporation, the
holders of shares of the Series B Preferred Stock then outstanding
shall be entitled, before any distribution or payment is made upon any
"Junior Securities" (defined to be and mean the Common Stock and any
other equity security of any kind which the Corporation at any time
has issued, issues or is authorized to issue if the Series B Preferred
Stock has priority over such securities as to dividends or upon
liquidation), to receive a liquidation preference in an amount in cash
equal to the aggregate Liquidation Value of all shares of Series B
Preferred Stock then outstanding, whether any such liquidation,
dissolution or winding up is voluntary or involuntary and the holders
of the Series B Preferred Stock shall not be entitled to any other or
further distributions of assets. The term "Liquidation Value" shall
be and mean, as of any particular date, an amount per Share of Series
B
-6-
7
Preferred Stock equal to the Redemption Price if such share were so
redeemed in accordance with the provisions of paragraph 5 above, but
in no event shall exceed $100 per share, plus any accrued and unpaid
cumulative dividends. If, upon any dissolution, liquidation or
winding-up of the affairs of the Corporation, the net assets available
for distribution shall be insufficient to permit payment to the
holders of all outstanding shares of all series of Special Stock of
the amounts to which they respectively shall be entitled, then the
assets of the Corporation to be distributed to such holders will be
distributed ratably among them based upon the amounts payable on the
shares of each such series of Special Stock in the event of voluntary
or involuntary dissolution, liquidation or winding-up, as the case may
be, in proportion to the full preferential amounts, together with any
and all arrearages to which they are respectively entitled. Upon any
such liquidation, dissolution or winding-up of the Corporation, after
the holders of Special Stock have been paid in full the amounts to
which they are entitled, the remaining assets of the Corporation may
be distributed to the holders of Junior Securities, including Common
Stock, of the Corporation. The Corporation will mail written notice of
such liquidation, dissolution or winding-up, not less than twenty (20)
nor more than fifty (50) days prior to the payment date stated therein
to each record holder of Series B Preferred Stock. Neither the
consolidation nor merger of the Corporation into or with any other
corpo- ration or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, nor a reduction of the
capital stock of the Corporation, nor the purchase or redemption by
the Corporation of any shares of its Special Stock or Common Stock or
any other class of its stock will be deemed to be a liquidation,
dissolution or winding-up of the Corporation within the meaning of
this paragraph 6.
7. Ranking. The Series B Preferred Stock shall rank on a
parity as to dividends and upon liquidation, dissolution or winding up
with all other shares of Special Stock issued by the Corporation;
provided, however, that the Corporation shall not issue any shares of
Special Stock of any series which are superior to the Series B
Preferred Stock as to dividends or rights upon
-7-
8
liquidation, dissolution or winding up of the Corporation as long as
any shares of the Series B Preferred Stock are issued and outstanding,
without the prior written consent of the holders of a majority of such
shares of Series B Preferred Stock then outstanding voting separately
as a class.
8. Voting Rights. The holders of the shares of Series B
Preferred Stock shall only have the voting rights specifically
required by law under Section 14-2- 1004 of the Georgia Business
Corporation Code, and shall have the following additional voting
rights subject to and after compliance with any applicable laws and
rules or actual requirements of any exchange upon which any securities
of the Corporation are listed:
(a) except as may otherwise be specifically required by law
under Section 14-2-1004 of the Georgia Business Corporation Code, the
holders of the shares of Series B Preferred Stock shall not have the
right to vote such stock, directly or indirectly, at any meeting of
the shareholders of the Corporation and such shares of stock shall not
be counted in determining the total number of outstanding shares to
constitute a quorum at any meeting of shareholders;
(b) in the event that, under any circumstance, the holders of
the Series B Preferred Stock are required by law to vote upon any
matter, the approval of such series shall be deemed to have been
obtained upon the affirmative vote of the holders of only a majority
of the shares of the Series B Preferred Stock then outstanding;
(c) except as set forth herein, or as otherwise provided by
the Articles of Incorporation, as amended, or by law, holders of the
Series B Preferred Stock shall have no special voting rights and their
consent shall not be required for the taking of any corporate action.
9. Conversion Rights. The Series B Preferred Stock may be
converted at any time at the option of the holders thereof during a
thirty (30) calendar day period
-8-
9
(the "Conversion Period" as defined below) at the "Conversion Price"
(as defined below) in the manner hereinafter provided, into fully paid
and non-assessable Common Stock of the Corporation by multiplying the
number of Shares of Series B Preferred Stock to be converted by $100
and dividing the result by the Conversion Price; provided, however,
that as to any shares of Series B Preferred Stock which shall have
been called for redemption, the right of conversion shall terminate at
the close of business on the second full business day prior to the
date fixed for redemption and that, on the commencement of any
liquidation, dissolution or winding up of the Corporation or the
adoption by the stockholders of the Corporation of any resolution
authorizing the commencement thereof, the right of conversion shall
terminate.
(a) For the purposes of this paragraph 9, the following terms
shall have the meanings ascribed below:
(i) "Conversion Period" shall be a period in time
which commences at 7:00 a.m. local Dallas, Texas time on the
day which is two calendar years after the date of original
issuance of the first certificate, issued by the Corporation,
representing shares of Series B Preferred Stock and expire at
3:00 p.m. local Dallas, Texas time on the thirtieth (30th)
calendar day thereafter.
(ii) "Conversion Price" shall be and mean the amount
determined (rounded upward to the nearest cent) by multiplying
0.9 times the simple average of the daily closing price of the
Common Stock for the thirty (30) trading days immediately
preceding the first day of the Conversion Period on the market
where the shares of Common Stock of the Corporation are then
regularly traded (which is currently the New York Stock
Exchange, Inc.); provided, however, if the shares of Common
Stock of the Corporation have not traded on such market for at
least thirty (30) days during the six calendar months
preceding the first day of the
-9-
10
Conversion Period, then such average shall be of the actual
number of trading days in excess of three (3) as may be
available; provided further that if only three or fewer
trading days exist during the six months immediately preceding
the first day of the Conversion Period, the Conversion Price
shall be equal to the greater of (x) the Liquidation Value of
$100 per share, or (y) the simple average of the closing
prices of the shares of Common Stock during such shorter
period of three or fewer days on such market. The Conversion
Price shall not be subject to any adjustment for the issuance
of any shares of Common Stock by the Corporation for any
purpose.
(b) Upon any conversion, fractional shares shall not be issued
but any fractions shall be adjusted by the delivery of one additional
share of Common Stock in lieu of any cash on the basis of the
"closing" market price for Common Stock at the close of business on
the date of conversion unless the Board of Directors shall determine
to adjust by the issuance of fractional scrip certificates or in some
other manner. Upon any conversion, no adjustment shall be made for
dividends on the Series B Preferred Stock surrendered for conversion
or on the Common Stock delivered (i.e., any dividends not previously
paid on the Shares of Series B Preferred Stock shall be forfeited at
the time of conversion). The Corporation shall pay all issue taxes, if
any, incurred in respect to the issuance of Common Stock on
conversion, provided, however, that the Corporation shall not be
required to pay any transfer or other taxes incurred by reason of the
issuance of such Common Stock in names other than those in which the
Series B Preferred Stock surrendered for conversion may stand.
(c) Any conversion of Series B Preferred Stock into Common
Stock shall be made by the surrender to the Corporation, at the office
of any Transfer Agent for the Common Stock, of the certificate or
certificates representing the Series
-10-
11
B Preferred Stock to be converted, duly endorsed or assigned (unless
such endorsement or assignment be waived by the Corporation), together
with a written request for conversion.
(d) All Series B Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares of
stock, including the rights, if any, to receive notices and to vote,
shall forthwith cease except only the rights of the holders thereof to
receive Common Stock in exchange therefor. Any Series B Preferred
Stock so converted shall be permanently retired, shall no longer be
deemed outstanding and shall not under any circumstances be reissued
and the Corporation may from time to time take such appropriate
corporate action as may be necessary to reduce the authorized Series B
Preferred Stock accordingly.
(e) A number of authorized shares of Common Stock sufficient
to provide for the conversion of the Series B Preferred Stock
outstanding upon the basis hereinbefore provided shall at all times be
reserved for such conversion. If the Corporation shall propose to
issue any securities or to make any change in its capital structure
which would change the number of shares of Common Stock into which
each share of Series B Preferred Stock shall be convertible as herein
provided, the Corporation shall at the same time also make proper
provision so that thereafter there shall be a sufficient number of
shares of Common Stock authorized and reserved for conversion of the
outstanding Series B Preferred Stock on the new basis.
(f) The term "Common Stock" as used in this paragraph 9 shall
mean stock of the class designated as Common Stock of the Corporation
on the date the Series B Preferred Stock is created or stock of any
class or classes resulting from any reclassification or
reclassifications thereof, the right of which to share in
distributions of both earnings and assets is without limitation in the
-11-
12
Certificate of Incorporation (or other similar documents) of the
Corporation as to any fixed amount or percentage and which are not
subject to redemption; provided, that if at any time there shall be
more than one such resulting class, the shares of each such class then
issuable on conversion of the Series B Preferred Stock shall be
substantially in the proportion which the total number of shares of
stock of each such class resulting from all such reclassifications
bears to the total number of shares of stock of all such classes
resulting from all such reclassifications.
(g) In case the Corporation shall propose at any time during
the Conversion Period:
(i) to pay any dividend on the Common Stock
outstanding payable in Common Stock or to make any other
distribution, other than cash dividends, to the holders of the
Common Stock outstanding; or
(ii) to offer for subscription to the holders of the
Common Stock outstanding any additional shares of any class or
any other rights or option; or
(iii) to effect any re-classification or
re-capitalization of the Common Stock outstanding involving a
change in the Common Stock, other than a subdivision or
combination of the Common Stock outstanding; or
(iv) to merge or consolidate with or into any other
corporation, or to sell, lease, or convey all or substantially
all its property or business, or to liquidate, dissolve or
wind up;
then, in each such case, the Corporation shall mail to the holders of
record of each of the shares of Series B Preferred Stock at their last
known post office addresses as shown by the Corporation's records a
statement, signed by an officer of the Corporation, with respect to
the proposed action,
-12-
13
such statement to be so mailed at least ten (10) days prior to the
date of the taking of such action or the record date for holders of
the Common Stock for the purposes thereof, whichever is earlier. If
such statement relates to any proposed action referred to in clauses
(iii) or (iv) of this subparagraph 9, it shall set forth such facts
with respect thereto as shall reasonably be necessary to inform the
holders of the Series B Preferred Stock and the holders of such stock
as to the effect of such action upon the conversion rights of such
holders.
10. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall, upon cancellation, become
authorized but unissued shares of Special Stock and may be re-issued
as part of a new series of Special Stock subject to the conditions and
restrictions on issuance set forth in the Articles of Incorporation,
as amended, or as otherwise required by law.
IN WITNESS WHEREOF, these Articles of Amendment are executed on behalf
of the Corporation by its President as of the 4th day of April, 1996.
AMERICAN REALTY TRUST, INC.
By:
---------------------------
Karl L. Blaha
President
-13-