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EXHIBIT 99.1
SUMMIT PROPERTIES INC.
ARTICLES SUPPLEMENTARY
2,200,000 SHARES
8.75% SERIES C CUMULATIVE REDEEMABLE PERPETUAL PREFERRED STOCK
Summit Properties Inc., a Maryland corporation (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Pursuant to Article III of the Articles of Amendment
and Restatement of the Company heretofore filed with the Department, as amended
(the "Charter"), 25,000,000 shares of preferred stock par value $.01 per share
("Preferred Stock") have been authorized as a separate class of stock.
SECOND: Pursuant to authority expressly vested in the Board of
Directors of the Company (the "Board of Directors") pursuant to Article III of
the Charter and by Section 2-208(a) of the Maryland General Corporation Law (the
"MGCL"), the Board of Directors by resolutions duly adopted on September 1, 1999
designated and authorized the issuance of a maximum of 2,200,000 shares of 8.75%
Series C Cumulative Redeemable Perpetual Preferred Stock, set all of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, terms and conditions of redemption
and other terms and conditions of such series of Preferred Stock, and designated
the same as the "8.75% Series C Cumulative Redeemable Perpetual Preferred
Stock".
THIRD: The 8.75% Series C Cumulative Redeemable Perpetual
Preferred Stock of the Company created by the resolutions duly adopted by the
Board of Directors of the Company and referred to in Article SECOND of these
Articles Supplementary shall have the following designation, number of shares,
preferences and other rights, voting powers, restrictions and limitation as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions:
SECTION 1. Designation and Number. A series of Preferred
Stock, designated the "8.75% Series C Cumulative Redeemable Perpetual Preferred
Stock" (the "Series C Preferred Stock") is hereby established. The number of
shares of Series C Preferred Stock shall be 2,200,000.
SECTION 2. Rank. The Series C Preferred Stock will, with
respect to distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of
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the Company, rank senior to all classes or series of Common Stock (as defined in
the Charter) and to all classes or series of equity securities of the Company
now or hereafter authorized, issued or outstanding (including, without
limitation, the Series A Junior Preferred Stock (as hereinafter defined) and any
equity securities ranking on parity with such Series A Junior Preferred Stock),
other than any class or series of equity securities of the Company expressly
designated as ranking on a parity with or senior to the Series C Preferred Stock
as to distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Company. For purposes of these Articles
Supplementary, the term "Parity Stock" shall be used to refer to any class or
series of equity securities of the Company now or hereafter authorized, issued
or outstanding expressly designated by the Company to rank on a parity with
Series C Preferred Stock with respect to distributions and rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Company. Without
limiting the foregoing, the Series C Preferred Stock and the Company's 8.95%
Series B Cumulative Redeemable Perpetual Preferred Stock are hereby expressly
designated by the Company to rank on a parity with each other with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Company. The term "equity securities" does not include
convertible debt securities, which will rank senior to the Series C Preferred
Stock.
SECTION 3. Distributions. (a) Payment of Distributions.
Subject to the rights of holders of Parity Stock and holders of equity
securities ranking senior to the Series C Preferred Stock, holders of Series C
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of funds legally available for the
payment of distributions, cumulative preferential cash distributions at the rate
per annum of 8.75% of the $25.00 liquidation preference per share of Series C
Preferred Stock; provided, however, that in addition to the foregoing, each
holder of a share of Series C Preferred Stock shall, as of the date of its
issuance, be entitled to receive, when, as and if declared by the Board of
Directors of the Company, out of funds legally available for the payment of
distributions, a preferential cash distribution in an amount equal to any
accrued and unpaid quarterly distributions attributable to the applicable Series
C Preferred Unit (as defined in the Amended and Restated Agreement of Limited
Partnership of Summit Property Partnership, L.P., as amended through the date
hereof (the "Partnership Agreement")), whether or not declared, up to the date
such Series C Preferred Unit was validly exchanged into such share of Series C
Preferred Stock in accordance with the provisions of such Partnership Agreement.
Such distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable: (i) quarterly in arrears, for the first three
quarters on the last day (or, if not a Business Day (as hereinafter defined),
the next succeeding Business Day) of each of March, June and September, and for
the last quarter on December 21st (or if not a Business Day, the next succeeding
Business Day) of each year commencing on the first of such dates to occur after
the original date of issuance; and (ii) in the event of a redemption, on the
redemption date (each a "Preferred Stock Distribution Payment Date"). The amount
of the distribution payable for any period will be computed on the basis of a
360-day year of twelve (12) 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the actual number of
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days elapsed in such period; provided, however, that for each calendar year (x)
the amount of the distribution for the period November 1 through December 21
shall be computed on the basis of two 30-day months plus twenty-one (21) days
and (y) the amount of the distribution for the period December 22 through March
31 shall be computed on the basis of three 30-day months plus nine (9) days. If
any date on which distributions are to be made on the Series C Preferred Stock
is not a Business Day, then payment of the distribution to be made on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series C Preferred Stock
will be made to the holders of record of the Series C Preferred Stock on the
relevant record dates to be fixed by the Board of Directors of the Company,
which record dates shall be the twentieth (20th) day of the calendar month in
which the applicable Preferred Stock Distribution Payment Date falls or on such
earlier date designated by the Board of Directors as the record date for such
distribution that is not more than thirty (30) days prior to such Preferred
Stock Distribution Payment Date (each a "Distribution Record Date").
The term "Business Day" shall mean each day, other than a
Saturday or Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Prohibition on Distributions. No dividends on shares of
Series C Preferred Stock shall be authorized by the Board of Directors of the
Company or paid or set apart for payment by the Company at any such time as the
terms and provisions of any agreement of the Company, including any agreement
relating to its indebtedness, prohibits such authorization, payment or setting
apart for payment or provides that such authorization, payment or setting apart
for payment would constitute a breach thereof or a default thereunder, or to the
extent that such authorization or payment shall be restricted or prohibited by
law. In determining whether a distribution (other than upon voluntary
liquidation), by dividend, redemption or other acquisition of shares of stock of
the Company or otherwise, is permitted under the MGCL, amounts that would be
needed, if the Company were to be dissolved at the time of the distribution, to
satisfy the preferential rights upon dissolution of holders of shares of Series
C Preferred Stock will not be added to the Company's total liabilities.
(c) Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series C Preferred Stock will accrue whether or not the
terms and provisions of any agreement of the Company, including any agreement
relating to its indebtedness at any time prohibit the current payment of
distributions, whether or not the Company has earnings, whether or not there are
funds legally available for the payment of such distributions and whether or not
such distributions are authorized or declared. Accrued but unpaid distributions
on the Series C Preferred Stock will accumulate as of the Preferred Stock
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Preferred Stock Distribution Payment
Date to holders of record of the Series C Preferred Stock
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on the record date fixed by the Board of Directors, which date shall not exceed
thirty (30) days prior to the payment date. Accumulated and unpaid distributions
will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series C
Preferred Stock is outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Common Stock or any class or series of other stock of the
Company ranking junior as to the payment of distributions or rights upon
voluntary or involuntary dissolution, liquidation or winding up of the Company
to the Series C Preferred Stock (such Common Stock or other junior stock,
including the Series A Junior Participating Cumulative Preferred Stock
classified and designated pursuant to those certain Articles Supplementary
relating thereto and approved for recording by the Department on December 15,
1998 (the "Series A Junior Preferred Stock"), collectively, "Junior Stock"), nor
shall any cash or other property be set aside for or applied to the purchase,
redemption or other acquisition for consideration of any Series C Preferred
Stock, any Parity Stock or any Junior Stock, unless, in each case, all
distributions accumulated on all Series C Preferred Stock and all classes and
series of outstanding Parity Stock have been paid in full (or a sum sufficient
for such full payment has been irrevocably deposited in trust for payment). The
foregoing sentence will not prohibit: (A) distributions payable solely in Junior
Stock; (B) the conversion of Junior Stock or Parity Stock into Junior Stock; and
(C) purchase by the Company of such Series C Preferred Stock, Parity Stock or
Junior Stock pursuant to Section 4.5.7 of the Charter.
(ii) At any time when the Company is in arrears on
the payment of distributions on the Series C Preferred Stock for a prior
distribution period (and a sum sufficient for the full distribution then payable
is not irrevocably deposited in trust for payment), all distributions authorized
and declared on the Series C Preferred Stock and all classes or series of
outstanding Parity Stock with respect to distributions shall be authorized and
declared so that the amount of distributions authorized and declared per share
of Series C Preferred Stock and such other classes or series of Parity Stock
shall in all cases bear to each other the same ratio that accrued distributions
per share on the Series C Preferred Stock and such other classes or series of
Parity Stock (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of Parity
Stock does not have cumulative distribution rights) bear to each other. Any
distribution payment made on the Series C Preferred Stock shall be credited
against the earliest accrued but unpaid distribution due with respect to such
Series C Preferred Stock which remains payable.
(e) No Further Rights. Holders of Series C Preferred Stock
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
SECTION 4. Liquidation Preference. (a) Payment of Liquidating
Distributions. Subject to the rights of holders of Parity Stock with respect to
rights upon any voluntary or involuntary liquidation, dissolution or winding-up
of the Company and subject to equity securities ranking senior to the Series C
Preferred Stock with respect to rights upon any
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voluntary or involuntary liquidation, dissolution or winding-up of the Company,
the holders of Series C Preferred Stock shall be entitled to receive out of the
assets of the Company legally available for distribution or the proceeds
thereof, after payment or provision for debts and other liabilities of the
Company, but before any payment or distributions of the assets shall be made to
holders of Common Stock or any other class or series of shares of the Company
that ranks junior to the Series C Preferred Stock as to rights upon liquidation,
dissolution or winding-up of the Company, an amount equal to the sum of: (i) a
liquidation preference of $25.00 per share of Series C Preferred Stock; and (ii)
an amount equal to any accumulated and unpaid distributions thereon, whether or
not declared, to the date of payment. In the event that, upon such voluntary or
involuntary liquidation, dissolution or winding-up, there are insufficient
assets to permit full payment of liquidating distributions to the holders of
Series C Preferred Stock and any Parity Stock as to rights upon liquidation,
dissolution or winding-up of the Company, all payments of liquidating
distributions on the Series C Preferred Stock and such Parity Stock shall be
made so that the payments on the Series C Preferred Stock and such Parity Stock
shall in all cases bear to each other the same ratio that the aggregate amounts
to which such holder of the Series C Preferred Stock and such other Parity Stock
(which shall not include any accumulation in respect of unpaid distributions for
prior distribution periods if such Parity Stock does not have cumulative
distribution rights) would otherwise be respectively entitled upon liquidation,
dissolution or winding-up of the Company bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Company, stating the
payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than thirty (30) and
not more than sixty (60) days prior to the payment date stated therein, to each
record holder of the Series C Preferred Stock at the respective addresses of
such holders as the same shall appear on the share transfer records of the
Company.
(c) No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series C
Preferred Stock will have no right or claim to any of the remaining assets of
the Company.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Company to, or the consolidation or merger or other
business combination of the Company with or into, any other corporation, trust
or other entity (or of any corporation, trust or other entity with or into the
Company) or a statutory share exchange shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Company.
SECTION 5. Optional Redemption. (a) Right of Optional
Redemption. Subject to Article IV of the Charter as supplemented by Section 7
hereof, which shall apply in its entirety to the Series C Preferred Stock, the
Series C Preferred Stock may not be redeemed prior to SEPTEMBER 3, 2004. On or
after such date, the Company shall have the right to
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redeem the Series C Preferred Stock, in whole or in part, at any time or from
time to time, upon not less than thirty (30) nor more than sixty (60) days'
written notice, at a redemption price, payable in cash, equal to $25.00 per
share of Series C Preferred Stock plus accumulated and unpaid distributions,
whether or not declared, to the date of redemption. If fewer than all of the
outstanding shares of Series C Preferred Stock are to be redeemed pursuant to
this Section 5(a), the shares of Series C Preferred Stock to be redeemed shall
be selected pro rata (as nearly as practicable without creating fractional
shares).
(b) Limitation on Redemption. (i) The redemption price of the
Series C Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions and other than for redemptions pursuant to
Article IV of the Charter as supplemented by Section 7 hereof) will be payable
solely out of the sale proceeds of capital stock of the Company and from no
other source. For purposes of the preceding sentence, "capital stock" means any
equity securities (including Common Stock and Preferred Stock), shares,
depositary receipts, participation or other ownership interests (however
designated) and any rights (other than debt securities convertible into or
exchangeable for equity securities) or options to purchase any of the foregoing.
(ii) Subject to Article IV of the Charter as
supplemented by Section 7 hereof, which shall apply in its entirety to Series C
Preferred Stock, the Company may not redeem fewer than all of the outstanding
shares of Series C Preferred Stock unless all accumulated and unpaid
distributions have been paid on all outstanding Series C Preferred Stock for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will
be (y) faxed, and (z) mailed by the Company, postage prepaid, not less than
thirty (30) nor more than sixty (60) days prior to the redemption date,
addressed to the respective holders of record of the Series C Preferred Stock to
be redeemed at their respective addresses as they appear on the transfer records
of the Company. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series C Preferred Stock
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law or by the applicable rules of any
exchange upon which the Series C Preferred Stock may be listed or admitted to
trading, each such notice shall state: (A) the redemption date; (B) the
redemption price; (C) the number of shares of Series C Preferred Stock to be
redeemed; (D) the place or places where such shares of Series C Preferred Stock
are to be surrendered for payment of the redemption price; (E) that
distributions on the Series C Preferred Stock to be redeemed will cease to
accumulate on such redemption date; and (F) that payment of the redemption price
and any accumulated and unpaid distributions will be made upon presentation and
surrender of such Series C Preferred Stock. If fewer than all of the shares of
Series C Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series C
Preferred Stock held by such holder to be redeemed, which number shall equal
such holder's pro rata share (based on the percentage of the aggregate number of
outstanding shares of Series C Preferred Stock that the
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total number of shares of Series C Preferred Stock held by such holder
represents) of the aggregate number of shares of Series C Preferred Stock to be
redeemed.
(ii) If the Company gives a notice of redemption in
respect of Series C Preferred Stock (which notice will be irrevocable) then, by
12:00 noon, New York City time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the Series C Preferred Stock being
redeemed funds sufficient to pay the applicable redemption price, plus any
accumulated and unpaid distributions, whether or not declared, if any, on such
shares to the date fixed for redemption, without interest, and will give
irrevocable instructions and authority to pay such redemption price and any
accumulated and unpaid distributions, if any, on such shares to the holders of
the Series C Preferred Stock upon surrender of the certificate evidencing the
Series C Preferred Stock by such holders at the place designated in the notice
of redemption. If fewer than all Series C Preferred Stock evidenced by any
certificate is being redeemed, a new certificate shall be issued upon surrender
of the certificate evidencing all Series C Preferred Stock, evidencing the
unredeemed Series C Preferred Stock without cost to the holder thereof. On and
after the date of redemption, distributions will cease to accumulate on the
Series C Preferred Stock or portions thereof called for redemption, unless the
Company defaults in the payment or deposit, in accordance with the foregoing, of
the redemption price. If any date fixed for redemption of Series C Preferred
Stock is not a Business Day, then payment of the redemption price payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
redemption price or any accumulated or unpaid distributions in respect of the
Series C Preferred Stock is improperly withheld or refused and not paid by the
Company, distributions on such Series C Preferred Stock will continue to
accumulate from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable redemption price and any accumulated
and unpaid distributions.
(iii) The deposit of funds in trust for the purpose
of redeeming Series C Preferred shall be irrevocable except that:
(A) the Company shall be entitled to receive
from such bank or trust corporation the interest or other earnings, if
any, earned on any money so deposited in trust, and the holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(B) any balance of monies so deposited by
the Company and unclaimed by the holders of the Series C Preferred
entitled thereto at the expiration of two years from the applicable
redemption dates shall be repaid, together with any interest or other
earnings thereon, to the Company, and after any such repayment, the
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holders of the shares entitled to the funds so repaid to the Company
shall look only to the Company for payment without interest or other
earnings.
(d) Status of Redeemed Stock. Any Series C Preferred Stock
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
class or series until such shares are once more designated as part of a
particular class or Series C by the Board of Directors.
SECTION 6. Voting Rights. (a) General. Holders of the Series C
Preferred Stock will not have any voting rights, except as set forth below.
(b) Right to Elect Directors. If the sum of (i) the number of
quarterly dividends (whether or not consecutive) payable on shares of Series C
Preferred Stock that are in arrears and (ii) the number of unpaid quarterly
distributions attributable to the applicable Series C Preferred Units for which
such shares of Series C Preferred Stock were exchanged and for which the holder
of such shares is hereunder entitled to distributions equals or exceeds six (a
"Preferred Distribution Default"), the number of directors then constituting the
Board of Directors will be automatically increased by two (2), and the holders
of the shares of Series C Preferred Stock, voting together as a single class
with the holders of shares of any other class or series of Parity Stock upon
which like voting rights have been conferred and are exercisable (the Series C
Preferred Stock and any such other class or series, the "Voting Preferred
Stock"), will have the right to elect at any annual meeting of stockholders or a
properly called special meeting of the holders of record of at least 20% of
Voting Preferred Stock two (2) additional directors (each, a "Preferred Stock
Director") who are nominees of any holder of Voting Preferred Stock to serve on
the Board of Directors, which right shall continue until all such accrued but
unpaid dividends have been authorized and paid or irrevocably set aside in trust
for payment. At any such special meeting, all of the holders of the Voting
Preferred Stock, by plurality vote, voting together as a single class without
regard to series, will be entitled to elect two (2) directors on the basis of
one vote per $25.00 of liquidation preference to which such Voting Preferred
Stock are entitled by their terms (excluding amounts in respect of accumulated
and unpaid dividends) and not cumulatively. At such time as all such accrued but
unpaid dividends have been authorized and paid or irrevocably set aside in trust
for payment, the right of the holders of the Voting Preferred Stock to elect
such additional two (2) directors shall cease (but subject to revesting in the
event of each and every Preferred Distribution Default), and the terms of office
of all persons elected as directors by the holders of the Voting Preferred Stock
shall forthwith terminate and the number of the Board of Directors shall
automatically be reduced accordingly. At any time after the voting power
described in this Section 6(b) shall have been so vested in the holders of
shares of Voting Preferred Stock and prior to the termination of such voting
power, the Secretary of the Company may, and upon the written request of the
holders of at least 20% of the Series C Preferred Stock (addressed to the
Secretary at the principal office of the Company) shall, call a special meeting
of the holders of the Voting Preferred Stock for the election of the two (2)
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
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required by law. If any such special meeting required to be called as provided
in the immediately preceding sentence shall not be called by the Secretary
within twenty (20) days after receipt of any such request, then the holders of
at least 20% of the shares of Voting 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
serve until the next annual meeting of the stockholders or special meeting held
in lieu thereof and until their respective successors are duly elected and
qualified, if such directorship shall not have previously terminated as above
provided. Any Preferred Stock Director may be removed at any time with or
without cause by the vote of, and shall not be removed otherwise than by the
vote of, the holders of record of two-thirds of the outstanding shares of the
Series C Preferred Stock when they have the voting rights set forth in Section
6(b) (voting separately as a class with all other series of Parity Stock upon
which like voting rights have been conferred and are exercisable). So long as a
Preferred Distribution Default shall continue, any vacancy in the office of a
Preferred Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office, or if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Voting Preferred
Stock when they have the voting rights set forth in Section 6(b) (voting
together as a single class with all other series of Parity Stock upon which like
voting rights have been conferred and are exercisable).
(c) Certain Voting Rights. So long as any Series C Preferred
Stock or Series C Preferred Units remains outstanding, the Company shall not,
without the affirmative vote of the holders of the Series C Preferred Stock
outstanding and the Series C Preferred Units outstanding at the time, if any,
which if the Series C Preferred Stock and Series C Preferred Units voted
together as a single class would represent two-thirds of the combined
outstanding Series C Preferred Shares and Series C Preferred Units: (i)
designate or create, or increase the authorized or issued amount of, any class
or series of shares ranking senior to the Series C Preferred Stock with respect
to payment of distributions or rights upon liquidation, dissolution or
winding-up or reclassify any authorized shares of the Company into any such
senior shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such senior shares;
(ii) issue any shares of Parity Stock to a Company Affiliate (as hereinbelow
defined), reclassify any authorized shares of the Company held by a Company
Affiliate into any such shares of Parity Stock or issue any obligation or
security convertible into or evidencing the right to purchase any such shares of
Parity Stock to a Company Affiliate (any such issuance or reclassification,
referred to as an "Affiliate Parity Placement"); provided, however, that
notwithstanding the foregoing provisions of this clause (ii) the Company may
effect any Affiliate Parity Placement to the extent such placement is upon terms
no more favorable to such Company Affiliate than those that Company, in the good
faith determination of its Board of Directors, would be willing to offer to an
unrelated party in an arm's length transaction (such placement, an "Exempt
Affiliate Parity Placement"); or (iii) either (A) consolidate, merge into or
with, or convey, transfer or lease its assets substantially as an entirety, to
any corporation or other entity, or (B) amend, alter or repeal the provisions of
the Charter (including these Articles Supplementary) or Bylaws, whether by
merger, consolidation or otherwise, in each case that would materially and
adversely affect the
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powers, special rights, preferences, privileges or voting powers of the Series C
Preferred Stock or the holders thereof as set forth in these Articles
Supplementary; provided, however, that with respect to the occurrence of a
merger, consolidation or a sale or lease of all of the Company's assets as an
entirety, so long as (1) the Company is the surviving entity and the Series C
Preferred Stock remains outstanding with the terms thereof unchanged, or (2) the
resulting, surviving or transferee entity is organized under the laws of any
state and substitutes the Series C Preferred Stock for other preferred stock
having substantially the same terms and same rights as the Series C Preferred
Stock, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall be deemed not to materially and adversely to affect such powers, special
rights, preferences, privileges or voting powers of the Series C Preferred Stock
or the holders thereof and provided further that any increase in the amount of
authorized Preferred Stock or the creation or issuance of any other class or
series of Preferred Stock or obligation or security convertible into or
evidencing the right to purchase any such Preferred Stock, or any increase in an
amount of authorized shares of each class or series, in each case ranking either
(y) junior to the Series C Preferred Stock with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (z) on a parity with the Series C Preferred Stock with respect to
payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up (other than for Affiliate Parity Placements that are
not Exempt Affiliate Parity Placements), shall be deemed not to materially and
adversely affect such powers, special rights, preferences, privileges or voting
powers of the Series C Preferred Stock or the holders thereof. For purposes
hereof (i) "Company Affiliate" shall mean any Person controlled by, controlling
or under common control with the Company; (ii) "control" means the power to
direct the actions of a Person, regardless of whether the same shall involve an
ownership interest in such Person and (iii) "Person" means a natural person,
partnership (whether general or limited), trust, estate, association,
corporation, limited liability company, unincorporated organization, custodian,
nominee or any other individual entity in its own or representative capacity.
SECTION 7. Excess Share Provisions. (a) The Series C Preferred
Stock is subject to the provisions of Article IV of the Charter, including,
without limitation, the provision therein for the redemption of Excess Stock as
supplemented by the provisions of this Section 7(a).
(b) For purposes of applying the Ownership Limit
contained in Section 4.2 of the Charter to holders of any class or series of
Preferred Stock, (i) shares of Common Stock and all other classes and series of
Preferred Stock shall be deemed to have no value, the effect of this provision
being that the Ownership Limit with respect to each class or series of Preferred
Stock shall be 9.8% of the number of outstanding shares of such class or series
of Preferred Stock and (ii) a person shall be deemed to own any shares
beneficially owned by such person pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended.
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SECTION 8. No Conversion Rights. The holders of the Series C
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Company.
SECTION 9. No Sinking Fund. No sinking fund shall be
established for the retirement or redemption of Series C Preferred Stock.
SECTION 10. No Preemptive Rights. No holder of the Series C
Preferred Stock shall, as such holder, have any preemptive rights to purchase or
subscribe for additional shares of stock of the Company or any other security of
the Company which it may issue or sell.
FOURTH: The Series C Preferred Stock have been classified and
designated by the Board of Directors under the authority contained in the
Charter.
FIFTH: These Articles Supplementary have been approved by the
Board of Directors in the manner and by the vote required by law.
SIXTH: The undersigned President of the Company acknowledges
these Articles Supplementary to be the corporate act of the Company and, as to
all matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Company has caused Articles
Supplementary to be executed under seal in its name and on its behalf by its
Vice President and attested to by its Secretary on this 3rd day of September,
1999.
SUMMIT PROPERTIES INC.
By: /s/ Michael G. Malone
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Michael G. Malone
Senior Vice President and General Counsel
[SEAL]
ATTEST:
/s/ Judith M. Roller
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Name: Judith M. Roller
Title: Asst. Secretary
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