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EXHIBIT 3.1
AMB PROPERTY CORPORATION
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF 7.75% SERIES E CUMULATIVE
REDEEMABLE PREFERRED STOCK
AMB Property Corporation, a corporation organized and existing under the
laws of the State of Maryland (the "Corporation"), certifies to the State
Department of Assessments and Taxation of Maryland (the "Department") that:
FIRST: Pursuant to the authority expressly vested in the Board of Directors
of the Corporation (sometimes referred to herein as the "Board") by Article IV
of the Articles of Incorporation of the Corporation filed with the Department on
November 24, 1997, which comprises, together with the Articles Supplementary
filed by the Corporation on July 23, 1998 establishing a class of Preferred
Stock of the Corporation, par value $0.01 per share (the "Preferred Stock"),
designated as the "8 1/2% Series A Cumulative Redeemable Preferred Stock" (the
"Series A Preferred Stock"), the Articles Supplementary filed by the Corporation
on November 12, 1998 establishing a class of Preferred Stock designated as the
"8 5/8% Series B Cumulative Redeemable Preferred Stock" (the "Series B Preferred
Stock"), the Articles Supplementary filed by the Corporation on November 25,
1998 establishing a class of Preferred Stock designated as the "8.75% Series C
Cumulative Redeemable Preferred Stock" (the "Series C Preferred Stock"), the
Certificate of Correction filed by the Corporation on March 18, 1999, the
Articles Supplementary filed by the Corporation on May 5th, 1999 establishing a
class of Preferred Stock designated as the 7.75% Series D Cumulative Redeemable
Preferred Stock (the "Series D Preferred Stock") and these Articles
Supplementary, the charter (the "Charter") of the Corporation, and Section 2-105
of the Maryland General Corporation Law (the "MGCL"), the Board of Directors of
the Corporation, on June 4, 1999, adopted resolutions authorizing the
Corporation, among other things, to issue up to a stated maximum number of
shares of Preferred Stock of the Corporation, having a stated maximum aggregate
liquidation preference and dividend rate and certain other stated terms
applicable to the issuance thereof, and appointing, pursuant to the MGCL and the
powers contained in the Bylaws of the Corporation, a committee (the "Committee")
of the Board of Directors comprised of Hamid R. Moghadam and delegating to the
Committee, to the fullest extent permitted by Maryland law and the Charter and
Bylaws of the Corporation, all powers of the Board of Directors with respect to
classifying, authorizing, approving, ratifying and/or confirming the terms of
the Preferred Stock to be issued, including, without limitation, the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption, and determining the consideration per share to be
received in respect of the issuance and sale of each share of Preferred Stock to
be issued and sold, and the number of shares of Preferred Stock to be so
classified or reclassified and issued by the Corporation, subject to the
limitations set forth in the resolutions of the Board of Directors adopted on
June 4, 1999.
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SECOND: Pursuant to the authority conferred upon the Committee as aforesaid,
the Committee has, on August 31, 1999, adopted resolutions classifying and
designating a separate class of Preferred Stock as the 7.75% Series E Cumulative
Redeemable Preferred Stock, with the preferences, conversions and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption and other
terms and conditions of such 7.75% Series E Cumulative Redeemable Preferred
Stock (within the limitations set by the Board of Directors in the resolutions
adopted on June 4, 1999, and referred to in Article First of these Articles
Supplementary) and establishing 220,440 as the number of shares to be so
classified and designated, and authorizing the issuance of up to 220,440 shares
of 7.75% Series E Cumulative Redeemable Preferred Stock.
THIRD: The separate class of Preferred Stock of the Corporation created by
the resolutions duly adopted by the Board of Directors of the Corporation and by
the Committee and referred to in Articles First and Second of these Articles
Supplementary shall have the designation, number of shares, preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions as follows (and which, upon any restatement of the Charter, may
be made a part of Article IV thereof, with any necessary or appropriate changes
to the numeration or lettering of the sections or subsections hereof):
(1) DESIGNATION AND NUMBER. A class of Preferred Stock, designated the
"7.75% Series E Cumulative Redeemable Preferred Stock" (the "Series E Preferred
Stock"), is hereby established. The number of shares of Series E Preferred Stock
shall be 220,440 (the "Series E Preferred Shares").
(2) RANK. The Series E Preferred Shares will rank, with respect to dividend
rights and rights upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, (a) senior to all classes or series of Common
Stock (as defined in the Charter) and to all equity securities of the
Corporation the terms of which provide that such equity securities shall rank
junior to such Series E Preferred Shares; (b) on a parity with the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
the Series D Preferred Stock and all equity securities issued by the Corporation
other than those referred to in clauses (a) and (c) (it being the intent of the
Corporation that the Series E Preferred Stock be on a parity with the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
the Series D Preferred Stock with respect to dividend rights and rights upon
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, notwithstanding any provision contained in these Articles
Supplementary, which, if given effect, would make the Series E Preferred Stock
not in parity with the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock; and any such
provision contained in these Articles Supplementary shall be of no force or
effect); and (c) junior to all equity securities issued by the Corporation which
rank senior to the Series E Preferred Shares in accordance with Section 6(d) of
this Article Third. The term "equity securities" does not include convertible
debt securities, until the same are converted into equity securities.
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(3) DIVIDENDS.
(a) Holders of Series E Preferred Shares shall be entitled to receive,
if, when and as authorized by the Board, out of funds legally available for the
payment of dividends, cumulative preferential cash dividends at the rate of
7.75% of the $50.00 liquidation preference per annum (equivalent to $3.875 per
annum per share). Such dividends shall accumulate on a daily basis computed on
the basis of a 360-day year consisting of twelve 30-day months and be
cumulative, shall accrue from the original date of issuance and shall be payable
quarterly (such quarterly periods for purposes of payment and accrual will be
the quarterly periods ending on the dates specified in this sentence and not
calendar year quarters) in equal amounts in arrears on the 15th day of each
January, April, July and October or, if not a business day, the next succeeding
business day (each a "Dividend Payment Date"). Dividends shall be payable to
holders of record as they appear in the share records of the Corporation at the
close of business on the applicable record date (each, a "Dividend Record
Date"), which shall be the date designated by the Board for the payment of
dividends that is not more than 30 nor less than 10 days prior to the applicable
payment date therefor. Any dividend payable on the Series E Preferred Shares for
any partial dividend period shall be prorated and computed on the basis of a
360-day year consisting of twelve 30-day months. If any date on which
distributions are to be made on the Series E Preferred Stock is not a Business
Day (as defined herein), 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. Notwithstanding any provision to the contrary
contained herein, each outstanding share of Series E Preferred Stock shall be
entitled to receive, and shall receive, a dividend with respect to any Dividend
Record Date equal to the dividend paid with respect to each other share of
Series E Preferred Stock which is outstanding on such date which shall be equal
to the greatest dividend per share payable on any such share on such date. In
addition, notwithstanding anything to the contrary set forth herein, each share
of Series E Preferred Stock shall also continue to accrue all accrued and unpaid
distributions up to the exchange date on any Series E Preferred Unit (as defined
in the Fifth Amended and Restated Agreement of Limited Partnership of AMB
Property II, L.P., dated as of August 31, 1999, as amended and supplemented from
time to time (the "Subsidiary Partnership Agreement")) validly exchanged into
such share of Series E Preferred Stock in accordance with the provisions of the
Subsidiary Partnership Agreement.
(b) No dividend on the Series E Preferred Shares shall be authorized by the
Board or be paid or set apart for payment by the Corporation at such time as the
terms and provisions of any agreement of the Corporation, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof, or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law.
(c) Notwithstanding anything to the contrary contained herein, dividends on
the Series E Preferred Shares shall accumulate whether or not restrictions exist
in respect thereof, whether or not there are funds legally available for the
payment thereof and whether or not such
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dividends are declared or authorized. Accrued but unpaid dividends on the Series
E Preferred Shares will accumulate as of the Dividend Payment Date on which they
first become payable or on the date of redemption, as the case may be.
(d) If any Series E Preferred Shares are outstanding, no full dividends will
be declared or paid or set apart for payment on any other equity securities of
the Corporation of any other class or series ranking, as to distributions or
upon voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, junior to or on a parity with the Series E Preferred Shares
(including the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock) unless full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof irrevocably set apart in
trust for such payment on the Series E Preferred Shares for all dividend
periods. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the Series E Preferred Shares and any other
equity securities ranking as to distributions on a parity with the Series E
Preferred Shares (including the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock and the Series D Preferred Stock), all
dividends declared upon the Series E Preferred Shares and any other equity
securities of the Corporation ranking on a parity with the Series E Preferred
Stock as to distributions and upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (including the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series
D Preferred Stock) shall be declared pro rata so that the amount of dividends
declared per Series E Preferred Share and each such other equity securities
shall in all cases bear to each other the same ratio that accumulated dividends
per Series E Preferred Share and such other equity securities (which shall not
include any accumulation in respect of unpaid dividends for prior dividend
periods if such other equity securities do not have a cumulative dividend) bear
to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Series E Preferred
Shares which may be in arrears.
(e) Except as provided in the immediately preceding paragraph, unless full
cumulative dividends on the Series E Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is irrevocably set apart in trust for payment for all dividend
periods, no dividends (other than in Common Stock or other equity securities of
the Corporation ranking junior to the Series E Preferred Shares as to
distributions and upon voluntary or involuntary liquidation, dissolution and
winding up of the Corporation) shall be declared or paid or set aside for
payment nor shall any other dividend be declared or made upon the Common Stock
or any other equity securities of the Corporation ranking as to distributions or
upon voluntary or involuntary liquidation, dissolution or winding up of the
Corporation junior to or on a parity with the Series E Preferred Stock
(including the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock), nor shall any Common
Stock or any other equity securities of the Corporation ranking junior to or on
a parity with the Series E Preferred Stock as to distributions or upon voluntary
or involuntary liquidation, dissolution or winding up of the Corporation
(including the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock) be redeemed,
purchased or otherwise acquired for any
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consideration (or any monies be paid to or made available for a sinking fund for
the redemption of any such securities) by the Corporation (except by conversion
into or exchange for other equity securities of the Corporation ranking junior
to the Series E Preferred Stock as to distributions and upon voluntary and
involuntary liquidation, dissolution and winding up of the Corporation, and
except pursuant to Section 7 of this Article Third to ensure the Corporation's
continued status as a real estate investment trust (a "REIT") for Federal income
tax purposes or comparable Charter provisions with respect to other classes or
series of the Corporation's stock).
(f) Accumulated but unpaid dividends on the Series E Preferred Shares will
not bear interest and holders of Series E Preferred Shares shall not be entitled
to any dividend in excess of full cumulative dividends as described above. Any
dividend payment made on the Series E Preferred Shares shall first be credited
against the earliest accumulated but unpaid dividend due with respect to such
shares which remains payable.
(g) If, for any taxable year, the Corporation elects to designate as a
"capital gain dividend" (as defined in Section 857 of the Internal Revenue Code
of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders of every class or
series of stock of the Corporation, the portion of the Capital Gains Amount that
shall be allocable to holders of the Series E Preferred Stock shall be the
amount that the total dividends (as determined for Federal income tax purposes)
paid or made available to the holders of the Series E Preferred Stock for the
year bears to the aggregate amount of dividends (as determined for Federal
income tax purposes) paid or made available to the holders of all classes or
series of stock of the Corporation for such year.
(4) LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of Series E Preferred Shares then
outstanding shall be entitled to receive out of the assets of the Corporation
legally available for distribution to its stockholders remaining after payment
or provision for payment of all debts and liabilities of the Corporation, a
liquidation preference in cash of $50.00 per share, plus an amount equal to any
accumulated or accrued and unpaid dividends to the date of such payment, before
any distribution of assets is made to holders of Common Stock or any other
equity securities of the Corporation that rank junior to the Series E Preferred
Shares as to liquidation rights.
(b) If, upon any such voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation are insufficient to
make full payment to holders of Series E Preferred Shares and the corresponding
amounts payable on all shares of other classes or series of equity securities of
the Corporation ranking on a parity with the Series E Preferred Shares as to
liquidation rights (including the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock),
then the holders of the Series E Preferred Shares and all other such classes or
series of equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
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(c) Written notice of any such liquidation, dissolution or winding up of the
Corporation, 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 first class mail, postage pre-paid, not less than 30 nor more than
60 days prior to the payment date stated therein, to each record holder of the
Series E Preferred Shares at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(d) After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Series E Preferred Shares will have no
right or claim to any of the remaining assets of the Corporation.
(e) The consolidation or merger of the Corporation with or into any other
entity, a merger of another entity with or into the Corporation, a statutory
share exchange by the Corporation or a sale, lease, transfer or conveyance of
all or substantially all of the property or business of the Corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Corporation.
(f) In determining whether a distribution (other than upon voluntary or
involuntary liquidation, dissolution or winding up of the Corporation) by
dividend, redemption or other acquisition of shares of stock of the Corporation
or otherwise is permitted under the MGCL, no effect shall be given to amounts
that would be needed, if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
the Series E Preferred Shares whose preferential rights upon dissolution are
superior to those receiving the distribution.
(5) OPTIONAL REDEMPTION.
(a) The Series E Preferred Shares are not redeemable prior to August 31,
2004. To ensure that the Corporation remains a qualified REIT for Federal income
tax purposes, however, the Series E Preferred Shares shall be subject to the
provisions of Section 7 of this Article Third pursuant to which Series E
Preferred Shares owned by a stockholder in excess of the Ownership Limit (as
defined in Section 7 of this Article Third) or certain other limitations shall
automatically be transferred to a Trust for the benefit of a Charitable
Beneficiary (as defined in Section 7 of this Article Third) and the Corporation
shall have the right to purchase such shares, as provided in Section 7 of this
Article Third. On and after August 31, 2004, the Corporation, at its option,
upon giving notice as provided below, may redeem the Series E Preferred Shares,
in whole or from time to time in part, for cash, at a redemption price of $50.00
per share, plus all accumulated and unpaid dividends on such Series E Preferred
Shares to the date fixed for redemption.
(b) The redemption price of the Series E Preferred Shares (other than any
portion thereof consisting of accumulated and unpaid dividends) is payable
solely from the sale proceeds of other equity securities of the Corporation, and
not from any other source. For purposes of the preceding sentence, "equity
securities" means any equity securities (including Common Stock and Preferred
Stock (as defined in the Charter), depositary shares in respect of any of the
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foregoing, interests, participations 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.
(c) If fewer than all of the outstanding Series E Preferred Shares are to be
redeemed, the shares to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional shares).
(d) Notwithstanding anything to the contrary contained herein, unless full
cumulative dividends on all Series E Preferred Shares shall have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, no Series E Preferred Shares shall be redeemed unless
all outstanding Series E Preferred Shares are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase by the Corporation of
Series E Preferred Shares pursuant to Section 7 of this Article Third or
otherwise in order to ensure that the Corporation remains qualified as a REIT
for Federal or state income tax purposes or the purchase or acquisition of
Series E Preferred Shares pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series E Preferred Shares. In addition,
unless full cumulative dividends on all outstanding Series E Preferred Shares
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof irrevocably set apart in trust for payment
for all dividend periods, the Corporation shall not purchase or otherwise
acquire directly or indirectly any Series E Preferred Shares or any equity
securities of the Corporation ranking junior to or on a parity with the Series E
Preferred Shares as to dividends or upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (including the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series
D Preferred Stock) (except by conversion into or exchange for equity securities
of the Corporation ranking junior to the Series E Preferred Shares as to
dividends and upon voluntary or involuntary liquidation, dissolution or winding
up of the Corporation and except pursuant to Section 7 of this Article Third or
comparable Charter provisions with respect to other classes or series of the
Corporation's stock).
(e) The holders of shares of Series E Preferred Stock at the close of
business on a Dividend Record Date will be entitled to receive the dividend
payable with respect to the shares of Series E Preferred Stock held on the
corresponding Dividend Payment Date notwithstanding the redemption thereof
between such Dividend Record Date and the corresponding Dividend Payment Date or
the Corporation's default in the payment of the dividend due. Except as provided
herein, the Corporation will make no payment or allowance for unpaid dividends,
whether or not in arrears, on Series E Preferred Shares to be redeemed.
(f) The following provisions set forth the procedures for Redemption:
(i) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be (i) faxed and (ii) mailed
by the Corporation, postage prepaid, not
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less than 30 nor more than 60 days prior to the redemption date, addressed to
the respective holders of record of the Series E Preferred Shares to be redeemed
at their respective addresses as they appear on the share records of the
Corporation. No failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any Series E Preferred Shares except as to the holder to whom notice was
defective or not given.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which the Series E Preferred Shares may be
listed or admitted to trading, such notice shall state: (A) the redemption date;
(B) the redemption price; (C) the number of Series E Preferred Shares to be
redeemed; (D) the place or places where the certificates evidencing shares of
Series E Preferred Shares are to be surrendered for payment of the redemption
price; and (E) that dividends on the Series E Preferred Shares to be redeemed
will cease to accumulate on such redemption date. If fewer than all of the
Series E Preferred Shares held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of Series E Preferred Shares
to be redeemed from such holder.
(iii) On or after the redemption date, each holder of Series E
Preferred Shares to be redeemed shall present and surrender the certificates
representing such holder's Series E Preferred Shares to the Corporation at the
place designated in the notice of redemption and shall be entitled to the
redemption price and any accrued or accumulated and unpaid dividends payable
upon such redemption upon such surrender and thereupon the redemption price of
such shares (including all accumulated and unpaid dividends up to the redemption
date) shall be paid to or on the order of the person whose name appears on such
certificate representing Series E Preferred Shares as the owner thereof and each
surrendered certificate shall be canceled. If fewer than all the shares
represented by any such certificate representing Series E Preferred Shares are
to be redeemed, a new certificate shall be issued representing the unredeemed
shares.
(iv) If notice of redemption of any Series E Preferred Shares has been
given and if the funds necessary for such redemption have been irrevocably set
aside by the Corporation in trust for the benefit of the holders thereof, then
from and after the redemption date all dividends on such Series E Preferred
Shares shall cease to accumulate and any such Series E Preferred Shares will no
longer be deemed outstanding and all rights of the holders thereof will
terminate, except the right to receive the redemption price (including all
accrued or accumulated and unpaid dividends up to the redemption date) and such
shares shall not thereafter be transferred (except with the consent of the
Corporation) on the Corporation's stock transfer records. At its election, the
Corporation, prior to a redemption date, may irrevocably deposit the redemption
price (including accumulated and unpaid dividends to the redemption date) of the
Series E Preferred Shares so called for redemption in trust for the holders
thereof with a bank or trust company, in which case the redemption notice to
holders of the Series E Preferred Shares to be redeemed shall (A) state the date
of such deposit, (B) specify the office of such bank or trust company as the
place of payment of the redemption price and (C) require such holders to
surrender the certificates representing such shares at such place on or about
the date fixed in such redemption notice (which may not be later than the
redemption date) against payment of the redemption price (including all accrued
or accumulated and unpaid dividends to the redemption date). Any monies so
deposited which remain unclaimed by the holders of the Series E Preferred
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Shares at the end of two years after the redemption date shall be returned by
such bank or trust company to the Corporation.
(g) Any Series E Preferred Shares that shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued
Preferred Stock, without further designation as to series or class until such
shares are once more designated as part of a particular series or class by the
Board.
(6) VOTING RIGHTS.
(a) Holders of the Series E Preferred Shares will not have any voting
rights, except as set forth below.
(b) (i) Whenever dividends on any Series E Preferred Shares shall remain
unpaid for six or more quarterly periods (whether or not consecutive) (a
"Preferred Dividend Default"), the holders of such Series E Preferred Shares
(voting as a single class with all other equity securities of the Corporation
ranking on a parity with the Series E Preferred Shares as to dividends and upon
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation upon which like voting rights have been conferred and are
exercisable, including the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock and the Series D Preferred Stock ("Parity
Preferred Stock")) will be entitled to vote for the election of two additional
directors of the Corporation (the "Preferred Stock Directors"), who will be
elected by a plurality of the votes cast in such election for a one-year term
and until their successors are duly elected and shall qualify (or until such
director's right to hold such office terminates as provided herein, whichever
occurs earlier, subject to such director's earlier death, disqualification,
resignation or removal), at a special meeting called by the holders of at least
20% of the outstanding Series E Preferred Shares or the holders of shares of any
other class or series of Parity Preferred Stock with respect to which dividends
are so unpaid (unless such request is received less than 90 days before the date
fixed for the next annual or special meeting of stockholders) or, if the request
for a special meeting is received by the Corporation less than 90 days before
the date fixed for the next annual or special meeting of stockholders, at the
next annual or special meeting of stockholders, and at each subsequent annual
meeting until all dividends accumulated on the Series E Preferred Shares for all
past dividend periods and the dividend for the then current dividend period
shall have been fully paid or declared and a sum sufficient for the payment
thereof irrevocably set aside in trust for payment in full.
(ii) At any time when the voting rights described in Section 6(b)(i) above
shall have vested, a proper officer of the Corporation shall call or cause to be
called, a special meeting of the holders of Series E Preferred Stock and all the
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable (collectively, the "Parity Securities") by mailing
or causing to be mailed to such holders a notice of such special meeting to be
held not less than ten and not more than 45 days after the date such notice is
given. The record date for determining holders of the Parity Securities entitled
to notice of and to vote at such special meeting will be the close of business
on the third business day preceding the day on which such notice is mailed. At
any such special meeting, all of the holders of the Parity Securities, by
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plurality vote, voting together as a single class without regard to series will
be entitled to elect two directors on the basis of one vote per $25.00 of
liquidation preference to which such Parity Securities are entitled by their
terms (excluding amounts in respect of accumulated and unpaid dividends) and not
cumulatively. Notice of all meetings at which holders of the Series E Preferred
Shares shall be entitled to vote will be given to such holders at their
addresses as they appear in the transfer records. If a Preferred Dividend
Default shall terminate after the notice of a special meeting has been given but
before such special meeting has been held, the Corporation shall, as soon as
practicable after such termination, mail or cause to be mailed notice of such
termination to holders of the Series E Preferred Shares that would have been
entitled to vote at such special meeting.
(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series E Preferred Shares shall have been paid in
full or declared by the Corporation and irrevocably set aside in trust for
payment in full, the holders of Series E Preferred Shares shall be divested of
the voting rights set forth in Section 6(b) of this Article Third (subject to
revesting in the event of each and every Preferred Dividend Default) and, if all
accumulated dividends have been paid in full or declared by the Corporation and
irrevocably set aside in trust for payment in full on all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall forthwith terminate. Any Preferred Stock Director
elected by the holders of Series E Preferred Shares and any other such Parity
Preferred Shares 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 a
majority of the outstanding Series E Preferred Shares when they only have the
voting rights set forth, or like those set forth, in Section 6(b) of this
Article Third, and by the majority vote of the Series E Preferred Shares and all
other classes or series of Parity Preferred Stock upon which like voting rights
have been conferred and are exercisable (voting as a single class) when the
Series E Preferred Shares and such Parity Preferred Stock is entitled to vote
thereon. So long as a Preferred Dividend Default shall continue, any vacancy in
the office of a Preferred Stock Director so elected may be filled by written
consent of the Preferred Stock Director so elected remaining in office or, if
none remains in office, by a vote of the holders of a majority of the
outstanding Series E Preferred Shares when they only have the voting rights set
forth, or like those set forth, in Section 6(b) of this Article Third, and by
the majority vote of the Series E Preferred Shares and other classes or series
of Parity Preferred Stock upon which like voting rights have been conferred and
are exercisable (voting as a single class) when the Series E Preferred Shares
and such Parity Preferred Stock is entitled to vote thereon.
(d) So long as any Series E Preferred Stock remains outstanding, the
Corporation shall not, without the affirmative vote of the holders of at least
two-thirds of the Series E Preferred Stock outstanding at the time (i) authorize
or create, or increase the authorized or issued amount of, any class or series
of shares ranking senior to the Series E Preferred Stock with respect to payment
of distributions or rights upon liquidation, dissolution or winding-up or
reclassify any authorized shares of the Corporation into any such shares, or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such shares, (ii) designate or create, or
increase the authorized or issued amount of, any Parity
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Preferred Stock or reclassify any authorized shares of the Corporation into any
such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, but only
to the extent such Parity Preferred Stock is issued to an affiliate of the
Corporation, 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 Corporation's
Charter (including these Articles Supplementary) or Bylaws, whether by merger,
consolidation or otherwise, in each case that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series E Preferred Stock or the holders thereof; provided, however, that
with respect to the occurrence of any event set forth in (iii) above, so long as
(a) the Corporation is the surviving entity and the Series E Preferred Stock
remains outstanding with the terms thereof unchanged, or (b) the resulting,
surviving or transferee entity is a corporation, a business trust or like entity
organized under the laws of any state and substitutes for the Series E Preferred
Stock other preferred stock or preferred shares having substantially the same
terms and same rights as the Series E 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 not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series E Preferred Stock 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 any increase in an amount of
authorized shares of each class or series, in each case ranking either (a)
junior to the Series E Preferred Stock with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up, or
(b) on a parity with the Series E Preferred Stock with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock is not issued to an affiliate of
the Corporation, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(e) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series E Preferred Shares shall have been
redeemed or called for redemption upon proper notice and sufficient funds shall
have been irrevocably deposited in trust to effect such redemption.
(7) RESTRICTIONS ON OWNERSHIP AND TRANSFER TO PRESERVE TAX BENEFIT.
(a) Definitions. for the purposes of Section 7 of Article Third of these
Articles Supplementary, the following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Series E Preferred
Stock by a Person who is or would be treated as an owner of such Series
E Preferred Stock either actually or constructively 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 the correlative meanings.
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"Charitable Beneficiary" shall mean one or more beneficiaries of a
Trust, as determined pursuant to Section 7(c)(vi) of these Articles
Supplementary, each of which shall be an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended. All
section references to the Code shall include any successor provisions
thereof as may be adopted from time to time.
"Constructive Ownership" shall mean ownership of Series E Preferred
Stock by a Person who is or would be treated as an owner of such Series
E Preferred Stock either actually or constructively 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 the correlative meanings.
"IRS" means the United States Internal Revenue Service.
"Market Price" shall mean the last reported sales price reported on
the New York Stock Exchange of the Series E Preferred Stock on the
trading day immediately preceding the relevant date, or if the Series E
Preferred Stock is not then traded on the New York Stock Exchange, the
last reported sales price of the Series E Preferred Stock on the trading
day immediately preceding the relevant date as reported on any exchange
or quotation system over which the Series E Preferred Stock may be
traded, or if the Series E Preferred Stock is not then traded over any
exchange or quotation system, then the market price of the Series E
Preferred Stock on the relevant date as determined in good faith by the
Board of Directors of the Corporation.
"MGCL" shall mean the Maryland General Corporation Law, as amended
from time to time, and any successor statute hereafter enacted.
"Operating Partnership" shall mean AMB Property, L.P., a Delaware
limited partnership.
"Ownership Limit" shall mean 9.8% (by value) of the outstanding
shares of capital stock of the Corporation.
"Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust (including a trust qualified under
Section 401(a) or 501(c)(17) of the Code), a portion of a trust
permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation
within the meaning of Section 509(a) of the Code, joint stock company or
other entity; but does not include an underwriter acting in a capacity
as such in a public offering of shares of Series E Preferred Stock
provided that the ownership of such shares of Series E Preferred Stock
by such
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underwriter would not result in the Corporation being "closely held"
within the meaning of Section 856(h) of the Code, or otherwise result in
the Corporation failing to qualify as a REIT.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer (or other event) which results in a transfer to a
Trust, as provided in Section 7(b)(ii) of these Articles Supplementary,
the Purported Record Transferee, unless the Purported Record Transferee
would have acquired or owned shares of Series E Preferred Stock for
another Person who is the beneficial transferee or owner of such shares,
in which case the Purported Beneficial Transferee shall be such Person.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer (or other event) which results in a transfer to a
Trust, as provided in Section 7(b)(ii) of these Articles Supplementary,
the record holder of the Series E Preferred Stock if such Transfer had
been valid under Section 7(b)(i) of these Articles Supplementary.
"REIT" shall mean a real estate investment trust under Sections 856
through 860 of the Code and, for purposes of taxation of the Corporation
under applicable state law, comparable provisions of the law of such
state.
"Restriction Termination Date" shall mean the first day after the
date hereof on which the Board of Directors of the Corporation
determines that it is no longer in the best interests of the Corporation
to attempt to, or continue to, qualify as a REIT.
"Subsidiary Operating Partnership" shall mean AMB Property II, L.P.,
a Delaware limited partnership.
"Subsidiary Partnership Agreement" shall mean the Fifth Amended and
Restated Agreement of Limited Partnership of AMB Property II, L.P.,
dated as of August 31, 1999, as such agreement may be amended from time
to time.
"Transfer" shall mean any sale, transfer, gift, assignment, devise
or other disposition of Series E Preferred Stock, including (i) the
granting of any option or entering into any agreement for the sale,
transfer or other disposition of Series E Preferred Stock or (ii) the
sale, transfer, assignment or other disposition of any securities (or
rights convertible into or exchangeable for Series E Preferred Stock),
whether voluntary or involuntary, whether such transfer has occurred of
record or beneficially or Beneficially or Constructively (including but
not limited to transfers of interests in other entities which result in
changes in Beneficial or Constructive Ownership of Series E Preferred
Stock), and whether such transfer has occurred by operation of law or
otherwise.
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"Trust" shall mean each of the trusts provided for in Section 7(c)
of these Articles Supplementary.
"Trustee" shall mean any Person unaffiliated with the Corporation,
or a Purported Beneficial Transferee, or a Purported Record Transferee,
that is appointed by the Corporation to serve as trustee of a Trust.
(b) Restriction on Ownership and Transfers.
(i) Prior to the Restriction Termination Date:
(A) except as provided in Section 7(i) of these Articles
Supplementary, no Person shall Beneficially Own Series E Preferred Stock which,
taking into account any other capital stock of the Corporation Beneficially
Owned by such Person, would cause such ownership to exceed the Ownership Limit;
(B) except as provided in Section 7(i) of these Articles
Supplementary, no Person shall Constructively Own Series E Preferred Stock
which, taking into account any other capital stock of the Corporation
Constructively Owned by such Person, would cause such ownership to exceed the
Ownership Limit;
(C) no Person shall Beneficially or Constructively Own Series E
Preferred Stock which, taking into account any other capital stock of the
Corporation Beneficially or Constructively Owned by such Person, would result in
the Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or otherwise failing to qualify as a REIT (including but not limited to
Beneficial or Constructive Ownership that would result in the Corporation owning
(actually or Constructively) an interest in a tenant that is described in
Section 856(d)(2)(B) of the Code if the income derived by the Corporation
(either directly or indirectly through one or more partnerships or limited
liability companies) from such tenant would cause the Corporation to fail to
satisfy any of the gross income requirements of Section 856(c) of the Code or
comparable provisions of state law).
(ii) If, prior to the Restriction Termination Date, any Transfer or
other event occurs that, if effective, would result in any Person Beneficially
or Constructively Owning Series E Preferred Stock in violation of Section
7(b)(i) of these Articles Supplementary, (1) then that number of shares of
Series E Preferred Stock that otherwise would cause such Person to violate
Section 7(b)(i) of these Articles Supplementary (rounded up to the nearest whole
share) shall be automatically transferred to a Trust for the benefit of a
Charitable Beneficiary, as described in Section 7(c), effective as of the close
of business on the business day prior to the date of such Transfer or other
event, and such Purported Beneficial Transferee shall thereafter have no rights
in such shares or (2) if, for any reason, the transfer to the Trust described in
clause (1) of this sentence is not automatically effective as provided therein
to prevent any Person from Beneficially or Constructively Owning Series E
Preferred Stock in violation of Section 7(b)(i) of these Articles Supplementary,
then the Transfer of that number of shares of Series E Preferred Stock that
otherwise would cause any Person to violate Section 7(b)(i) shall be void ab
initio, and the Purported Beneficial Transferee shall have no rights in such
shares.
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(iii) Subject to Section 7(n) of this Article Third and notwithstanding
any other provisions contained herein, prior to the Restriction Termination
Date, any Transfer of Series E Preferred Stock that, if effective, would result
in the capital stock of the Corporation being beneficially owned by less than
100 Persons (determined without reference to any rules of attribution) shall be
void ab initio, and the intended transferee shall acquire no rights in such
Series E Preferred Stock.
It is expressly intended that the restrictions on ownership and
Transfer described in this Section 7(b) shall apply to the exchange rights
provided in Section 18.8 of the Subsidiary Partnership Agreement.
Notwithstanding any of the provisions of the Subsidiary Partnership Agreement to
the contrary, a partner of the Subsidiary Operating Partnership shall not be
entitled to effect an exchange of an interest in the Subsidiary Operating
Partnership for Series E Preferred Stock if the actual or beneficial or
Beneficial or Constructive Ownership of Series E Preferred Stock would be
prohibited under the provisions of this Section 7.
(c) Transfers of Series E Preferred Stock in Trust.
(i) Upon any purported Transfer or other event described in Section
7(b)(ii) of these Articles Supplementary, such Series E Preferred Stock shall be
deemed to have been transferred to the Trustee in his capacity as trustee of a
Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such
transfer to the Trustee shall be deemed to be effective as of the close of
business on the business day prior to the purported Transfer or other event that
results in a transfer to the Trust pursuant to Section 7(b)(ii). The Trustee
shall be appointed by the Corporation and shall be a Person unaffiliated with
the Corporation, any Purported Beneficial Transferee, or any Purported Record
Transferee. Each Charitable Beneficiary shall be designated by the Corporation
as provided in Section 7(c)(vi) of these Articles Supplementary.
(ii) Series E Preferred Stock held by the Trustee shall be issued and
outstanding Series E Preferred Stock of the Corporation. The Purported
Beneficial Transferee or Purported Record Transferee shall have no rights in the
shares of Series E Preferred Stock held by the Trustee. The Purported Beneficial
Transferee or Purported Record Transferee shall not benefit economically from
ownership of any shares held in trust by the Trustee, shall have no rights to
dividends and shall not possess any rights to vote or other rights attributable
to the shares of Series E Preferred Stock held in the Trust.
(iii) The Trustee shall have all voting rights and rights to dividends
with respect to Series E Preferred Stock held in the Trust, which rights shall
be exercised for the exclusive benefit of the Charitable Beneficiary. Any
dividend or distribution paid prior to the discovery by the Corporation that
shares of Series E Preferred Stock have been transferred to the Trustee shall be
paid to the Trustee upon demand, and any dividend or distribution declared but
unpaid shall be paid when due to the Trustee with respect to such Series E
Preferred Stock. Any dividends or distributions so paid over to the Trustee
shall be held in trust for the Charitable Beneficiary.
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The Purported Record Transferee and Purported Beneficial Transferee
shall have no voting rights with respect to the Series E Preferred Stock held in
the Trust and, subject to Maryland law, effective as of the date the Series E
Preferred Stock has been transferred to the Trustee, the Trustee shall have the
authority (at the Trustee's sole discretion) (i) to rescind as void any vote
cast by a Purported Record Transferee with respect to such Series E Preferred
Stock prior to the discovery by the Corporation that the Series E Preferred
Stock has been transferred to the Trustee and (ii) to recast such vote in
accordance with the desires of the Trustee acting for the benefit of the
Charitable Beneficiary; provided, however, that if the Corporation has already
taken irreversible corporate action, then the Trustee shall not have the
authority to rescind and recast such vote. Notwithstanding any other provision
of these Articles Supplementary to the contrary, until the Corporation has
received notification that the Series E Preferred Stock has been transferred
into a Trust, the Corporation shall be entitled to rely on its share transfer
and other stockholder records for purposes of preparing lists of stockholders
entitled to vote at meetings, determining the validity and authority of proxies
and otherwise conducting votes of stockholders.
(iv) Within 20 days of receiving notice from the Corporation that
shares of Series E Preferred Stock have been transferred to the Trust, the
Trustee of the Trust shall sell the shares of Series E Preferred Stock held in
the Trust to a Person, designated by the Trustee, whose ownership of the shares
of Series E Preferred Stock will not violate the ownership limitations set forth
in Section 7(b)(i). Upon such sale, the interest of the Charitable Beneficiary
in the shares of Series E Preferred Stock sold shall terminate and the Trustee
shall distribute the net proceeds of the sale to the Purported Record Transferee
and to the Charitable Beneficiary as provided in this Section 7(c)(iv). The
Purported Record Transferee shall receive the lesser of (1) the price paid by
the Purported Record Transferee for the shares of Series E Preferred Stock in
the transaction that resulted in such transfer to the Trust (or, if the event
which resulted in the transfer to the Trust did not involve a purchase of such
shares of Series E Preferred Stock at Market Price, the Market Price of such
shares of Series E Preferred Stock on the day of the event which resulted in the
transfer of such shares of Series E Preferred Stock to the Trust) and (2) the
price per share received by the Trustee (net of any commissions and other
expenses of sale) from the sale or other disposition of the shares of Series E
Preferred Stock held in the Trust. Any net sales proceeds in excess of the
amount payable to the Purported Record Transferee shall be immediately paid to
the Charitable Beneficiary together with any dividends or other distributions
thereon. If, prior to the discovery by the Corporation that shares of such
Series E Preferred Stock have been transferred to the Trustee, such shares of
Series E Preferred Stock are sold by a Purported Record Transferee then (i) such
shares of Series E Preferred Stock shall be deemed to have been sold on behalf
of the Trust and (ii) to the extent that the Purported Record Transferee
received an amount for such shares of Series E Preferred Stock that exceeds the
amount that such Purported Record Transferee was entitled to receive pursuant to
this Section 7(c)(iv), such excess shall be paid to the Trustee upon demand.
(v) Series E Preferred Stock transferred to the Trustee 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 paid by the Purported Record
Transferee for the shares of Series E Preferred Stock in the transaction that
resulted in such transfer to the Trust (or, if the event which resulted in the
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transfer to the Trust did not involve a purchase of such shares of Series E
Preferred Stock at Market Price, the Market Price of such shares of Series E
Preferred Stock on the day of the event which resulted in the transfer of such
shares of Series E Preferred Stock to the Trust) 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 until the Trustee has sold the shares
of Series E Preferred Stock held in the Trust pursuant to Section 7(c)(iv). Upon
such a sale to the Corporation, the interest of the Charitable Beneficiary in
the shares of Series E Preferred Stock sold shall terminate and the Trustee
shall distribute the net proceeds of the sale to the Purported Record Transferee
and any dividends or other distributions held by the Trustee with respect to
such Series E Preferred Stock shall thereupon be paid to the Charitable
Beneficiary.
(vi) By written notice to the Trustee, the Corporation shall designate
one or more nonprofit organizations to be the Charitable Beneficiary of the
interest in the Trust such that the Series E Preferred Stock held in the Trust
would not violate the restrictions set forth in Section 7(b)(i) in the hands of
such Charitable Beneficiary.
(d) Remedies For Breach. If the Board of Directors or a committee thereof or
other designees if permitted by the MGCL shall at any time determine in good
faith that a Transfer or other event has taken place in violation of Section
7(b) of these Articles Supplementary or that a Person intends to acquire, has
attempted to acquire or may acquire beneficial ownership (determined without
reference to any rules of attribution), Beneficial Ownership or Constructive
Ownership of any shares of Series E Preferred Stock of the Corporation in
violation of Section 7(b) of these Articles Supplementary, the Board of
Directors or a committee thereof or other designees if permitted by the MGCL
shall take such action as it deems advisable to refuse to give effect or to
prevent such Transfer, including, but not limited to, causing the Corporation to
redeem shares of Series E Preferred Stock, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer; provided, however, that any Transfers (or, in the case of events
other than a Transfer, ownership or Constructive Ownership or Beneficial
Ownership) in violation of Section 7(b)(i) of these Articles Supplementary,
shall automatically result in the transfer to a Trust as described in Section
7(b)(ii) and any Transfer in violation of Section 7(b)(iii) shall automatically
be void ab initio irrespective of any action (or non-action) by the Board of
Directors.
(e) Notice of Restricted Transfer. Any Person who acquires or attempts to
acquire shares of Series E Preferred Stock in violation of Section 7(b) of these
Articles Supplementary, or any Person who is a Purported Beneficial Transferee
such that an automatic transfer to a Trust results under Section 7(b)(ii) of
these Articles Supplementary, 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 Transfer or attempted Transfer on the Corporation's status as a
REIT.
(f) Owners Required To Provide Information. Prior to the Restriction
Termination Date each Person who is a beneficial owner or Beneficial Owner or
Constructive Owner of Series E Preferred Stock and each Person (including the
shareholder of record) who is holding Series E Preferred Stock for a beneficial
owner or Beneficial Owner or Constructive Owner shall provide
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to the Corporation such information that the Corporation may request, in good
faith, in order to determine the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in these Articles Supplementary
(but subject to Section 7(n) of these Articles Supplementary) shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the interests of its
shareholders by preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application of any of the
provisions of this Section 7 of these Articles Supplementary, including any
definition contained in Section 7(a), the Board of Directors shall have the
power to determine the application of the provisions of this Section 7 with
respect to any situation based on the facts known to it (subject, however, to
the provisions of Section 7(n) of these Articles Supplementary). In the event
Section 7 requires an action by the Board of Directors and these Articles
Supplementary fail to provide specific guidance with respect to such action, the
Board of Directors shall have the power to determine the action to be taken so
long as such action is not contrary to the provisions of Section 7. Absent a
decision to the contrary by the Board of Directors (which the Board may make in
its sole and absolute discretion), if a Person would have (but for the remedies
set forth in Section 7(b)) acquired Beneficial or Constructive Ownership of
Series E Preferred Stock in violation of Section 7(b)(i), such remedies (as
applicable) shall apply first to the shares of Series E Preferred Stock which,
but for such remedies, would have been actually owned by such Person, and second
to shares of Series E Preferred Stock which, but for such remedies, would have
been Beneficially Owned or Constructively Owned (but not actually owned) by such
Person, pro rata among the Persons who actually own such shares of Series E
Preferred Stock based upon the relative number of the shares of Series E
Preferred Stock held by each such Person.
(i) Exceptions.
(i) Subject to Section 7(b)(i)(C), the Board of Directors, in its sole
discretion, may exempt a Person from the limitation on a Person Beneficially
Owning shares of Series E Preferred Stock in violation of Section 7(b)(i)(A) if
the Board of Directors obtains any representations and undertakings from such
Person as are reasonably necessary in the opinion of the Board of Directors to
ascertain that no individual's Beneficial Ownership of such shares of Series E
Preferred Stock will violate Section 7(b)(i)(A) or that any such violation will
not cause the Corporation to fail to qualify as a REIT under the Code, and that
any violation of any representations or undertakings (or other action which is
contrary to the restrictions contained in Section 7(b) of these Articles
Supplementary) or attempted violation will result in such Series E Preferred
Stock being transferred to a Trust in accordance with Section 7(b)(ii) of these
Articles Supplementary.
(ii) Subject to Section 7(b)(i)(C), the Board of Directors, in its sole
discretion, may exempt a Person from the limitation on a Person Constructively
Owning Series E Preferred Stock in violation of Section 7(b)(i)(B), if the
Corporation obtains such representations and undertakings from such Person as
are reasonably necessary in the opinion of the Board of Directors to ascertain
that such Person does not and will not own, actually or Constructively, an
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interest in a tenant of the Corporation (or a tenant of any entity owned in
whole or in part by the Corporation) that would cause the Corporation to own,
actually or Constructively, more than a 9.8% interest (as set forth in Section
856(d)(2)(B) of the Code) in such tenant and that any violation or attempted
violation will result in such Series E Preferred Stock being transferred to a
Trust in accordance with Section 7(b)(ii) of these Articles Supplementary.
Notwithstanding the foregoing, the inability of a Person to make the
certification described in this Section 7(i)(ii) shall not prevent the Board of
Directors, in its sole discretion, from exempting such Person from the
limitation on a Person Constructively Owning Series E Preferred Stock in
violation of Section 7(b)(i)(B) if the Board of Directors determines that the
resulting application of Section 856(d)(2)(B) of the Code would affect the
characterization of less than 0.5% of the gross income (as such term is used in
Section 856(c)(2) of the Code) of the Corporation in any taxable year, after
taking into account the effect of this sentence with respect to all other
capital stock of the Corporation to which this sentence applies.
(iii) Prior to granting any exception pursuant to Section 7(i)(i) or
(ii) of these Articles Supplementary, the Board of Directors may require a
ruling from the Internal Revenue Service, or an opinion of counsel, in either
case in form and substance satisfactory to the Board of Directors in its sole
discretion, as it may deem necessary or advisable in order to determine or
ensure the Corporation's status as a REIT.
(j) Legends. Each certificate for Series E Preferred Stock shall bear
substantially the following legends in addition to any legends required to
comply with federal and state securities laws:
CLASSES OF STOCK
"THE CORPORATION IS AUTHORIZED TO ISSUE CAPITAL STOCK OF MORE THAN ONE
CLASS, CONSISTING OF COMMON STOCK AND ONE OR MORE CLASSES OF PREFERRED
STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE PREFERENCES,
LIMITATIONS AND RELATIVE RIGHTS OF ANY CLASS OF PREFERRED STOCK BEFORE THE
ISSUANCE OF SHARES OF SUCH CLASS OF PREFERRED STOCK. THE CORPORATION WILL
FURNISH, WITHOUT CHARGE, TO ANY STOCKHOLDER MAKING A WRITTEN REQUEST
THEREFOR, A COPY OF THE CORPORATION'S CHARTER AND A WRITTEN STATEMENT OF THE
DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, CONVERSION OR OTHER RIGHTS,
VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER
DISTRIBUTIONS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE
STOCK OF EACH CLASS WHICH THE CORPORATION HAS THE AUTHORITY TO ISSUE AND, IF
THE CORPORATION IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN
SERIES, (i) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN
THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (ii) THE AUTHORITY OF THE
BOARD OF
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DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. REQUESTS
FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO THE SECRETARY OF THE
CORPORATION AT ITS PRINCIPAL OFFICE."
RESTRICTION ON OWNERSHIP AND TRANSFER
"THE SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND
TRANSFER FOR THE PURPOSE OF THE CORPORATION'S MAINTENANCE OF ITS STATUS AS A
REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS
EXPRESSLY PROVIDED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES E PREFERRED
STOCK, (i) NO PERSON MAY BENEFICIALLY OWN SHARES OF THE CORPORATION'S SERIES
E PREFERRED STOCK WHICH, TAKING INTO ACCOUNT ANY OTHER CAPITAL STOCK OF THE
CORPORATION BENEFICIALLY OWNED BY SUCH PERSON, WOULD CAUSE SUCH OWNERSHIP TO
EXCEED THE OWNERSHIP LIMIT OF 9.8%; (ii) NO PERSON MAY CONSTRUCTIVELY OWN
SHARES OF THE CORPORATION'S SERIES E PREFERRED STOCK WHICH, TAKING INTO
ACCOUNT ANY OTHER CAPITAL STOCK OF THE CORPORATION CONSTRUCTIVELY OWNED BY
SUCH PERSON, WOULD CAUSE SUCH OWNERSHIP TO EXCEED THE OWNERSHIP LIMIT OF
9.8%; (iii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE
CORPORATION'S SERIES E PREFERRED STOCK THAT, TAKING INTO ACCOUNT ANY OTHER
CAPITAL STOCK OF THE CORPORATION BENEFICIALLY OR CONSTRUCTIVELY OWNED BY
SUCH PERSON, WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD" UNDER
SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO
QUALIFY AS A REIT; AND (iv) NO PERSON MAY TRANSFER SHARES OF SERIES E
PREFERRED STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE
CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO
BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR
CONSTRUCTIVELY OWN SERIES E PREFERRED STOCK WHICH CAUSES OR WILL CAUSE A
PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES E PREFERRED STOCK IN
EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF
ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SERIES E
PREFERRED STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE
TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES.
IN
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ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS
SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF
DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE
THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF
CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS
DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL TERMS IN THIS LEGEND WHICH ARE
DEFINED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES E PREFERRED STOCK SHALL
HAVE THE MEANINGS ASCRIBED TO THEM IN SUCH ARTICLES SUPPLEMENTARY, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE
RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF
SERIES E PREFERRED STOCK ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A
COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL
OFFICE."
(k) Exchange of Series E Preferred Units. The Corporation is hereby
expressly vested with authority (subject to the restrictions on ownership,
transfer and redemption of Series E Preferred Stock set forth in this Section 7)
to issue, and so long as AMB Property Holding Corporation, a Maryland
corporation, remains the general partner of the Subsidiary Operating
Partnership, and the Operating Partnership remains a limited partner of the
Subsidiary Operating Partnership, the Corporation shall issue to the extent
provided in the Subsidiary Partnership Agreement, Series E Preferred Stock in
exchange for Series E Preferred Units (as defined in the Subsidiary Partnership
Agreement).
(l) Reservation of Shares. Pursuant to the obligations of the Corporation
under the Subsidiary Partnership Agreement to issue Series E Preferred Stock in
exchange for Series E Preferred Units, the Board of Directors is hereby required
to reserve and authorize for issuance a number of authorized but unissued shares
of Series E Preferred Stock not less than the number of Series E Preferred Units
issued to permit the Corporation to issue Series E Preferred Stock in exchange
for Series E Preferred Units that may be exchanged for or converted into Series
E Preferred Stock as provided in the Subsidiary Partnership Agreement.
(m) Severability. If any provision of this Section 7 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.
(n) New York Stock Exchange. Nothing in this Section 7 shall preclude the
settlement of any transaction entered into through the facilities of the New
York Stock Exchange. The shares of Series E Preferred Stock that are the subject
of such transaction shall continue to be subject to the provisions of this
Section 7 after such settlement.
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(o) Applicability of Section 7. The provisions set forth in this Section 7
shall apply to the Series E Preferred Stock notwithstanding any contrary
provisions of the Series E Preferred Stock provided for elsewhere in these
Articles Supplementary.
(8) CONVERSION. The Series E Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation.
(9) NO SINKING FUND. No sinking fund shall be established for the retirement
or redemption of Series E Preferred Stock.
(10) NO PREEMPTIVE RIGHTS. No holder of the Series E Preferred Stock of the
Corporation shall, as such holder, have any preemptive rights to purchase or
subscribe for additional shares of stock of the Corporation or any other
security of the Corporation which it may issue or sell.
FOURTH: The Series E Preferred Stock has been classified and designated by
the Board under the authority contained in the Charter.
FIFTH: These Articles Supplementary have been approved by the Board in the
manner and by the vote required by law.
SIXTH: These Articles Supplementary shall be effective at the time the State
Department of Assessments and Taxation of Maryland accepts these Articles
Supplementary for record
SEVENTH: The undersigned Senior Vice President of the Corporation
acknowledges these Articles Supplementary to be the act of the Corporation and,
as to all matters or facts required to be verified under oath, the undersigned
Senior Vice 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.
(Signature Page Follows)
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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to
be executed under seal in its name and on its behalf by its President and
attested to by its Secretary on this 31st day of August, 1999.
AMB PROPERTY CORPORATION
By: _____________________________
Michael A. Coke
Senior Vice President and
Chief Financial Officer
[SEAL]
ATTEST:
__________________________________
David S. Fries
Secretary
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