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EXHIBIT 3.1
AMB PROPERTY CORPORATION
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF 8 5/8% SERIES B 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") 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 September 3, 1998, 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 September 3, 1998.
SECOND: Pursuant to the authority conferred upon the Committee as
aforesaid, the Committee has, on November 11, 1998, adopted resolutions
classifying and designating a separate class of Preferred Stock as the 8 5/8%
Series B Cumulative Redeemable Preferred
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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 8 5/8% Series B Cumulative Redeemable Preferred Stock (within
the limitations set by the Board of Directors in the resolutions adopted on
September 3, 1998 and referred to in Article First of these Articles
Supplementary) and establishing 1,300,000 as the number of shares to be so
classified and designated, and authorizing the issuance of up to 1,300,000
shares of 8 5/8% Series B 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
"8 5/8% Series B Cumulative Redeemable Preferred Stock" (the "Series B Preferred
Stock"), is hereby established. The number of shares of Series B Preferred Stock
shall be 1,300,000 (the "Series B Preferred Shares").
(2) RANK. The Series B 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 B Preferred Shares; (b) on a parity with all equity
securities issued by the Corporation other than those referred to in clauses (a)
and (c) (including the Series A Preferred Stock); and (c) junior to all equity
securities issued by the Corporation which rank senior to the Series B Preferred
Shares in accordance with Section 6(d) of this Article Third. The term "equity
securities" does not include convertible debt securities.
(3) DIVIDENDS.
(a) Holders of Series B 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 8
5/8% of the $50.00 liquidation preference per annum (equivalent to $4.3125 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,
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shall accrue from the original date of issuance and shall be payable quarterly
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 B 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 B 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 B 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 B Preferred Stock
which is outstanding on such date. In addition, notwithstanding anything to the
contrary set forth herein, each share of Series B Preferred Stock shall also
continue to accrue all accrued and unpaid distributions up to the exchange date
on any Series B Preferred Unit (as defined in the Third Amended and Restated
Limited Partnership Agreement of AMB Property, L.P. dated as of November 12,
1998, as amended and supplemented from time to time (the "Partnership
Agreement")) validly exchanged into such share of Series B Preferred Stock in
accordance with the provisions of the Partnership Agreement.
(b) No dividend on the Series B 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 B 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 dividends are declared. Accumulated
but unpaid dividends on the Series B 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.
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(d) If any Series B 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 B Preferred Shares
(including the Series A Preferred Stock) unless full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Series B 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 B
Preferred Shares and any other equity securities ranking as to distributions on
a parity with the Series B Preferred Shares (including the Series A Preferred
Stock), all dividends declared upon the Series B Preferred Shares and any other
equity securities of the Corporation ranking on a parity with the Series B
Preferred Stock as to distributions and upon voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (including the Series
A Preferred Stock) shall be declared pro rata so that the amount of dividends
declared per Series B Preferred Share and each such other equity securities
shall in all cases bear to each other the same ratio that accumulated dividends
per Series B 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 B Preferred
Shares which may be in arrears.
(e) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series B Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart 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 B 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 B Preferred Stock (including the Series A
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 B Preferred
Stock as to distributions or upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (including the Series A Preferred
Stock) be redeemed, purchased or otherwise acquired for any 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 B
Preferred Stock as to distributions and upon voluntary and involuntary
liquidation, dissolution and winding up of the Corporation, and except
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pursuant to Section 7 of this Article Third to ensure the Corporation's
continued status as a REIT or comparable Charter provisions with respect to
other classes or series of the Corporation's stock).
(f) Accumulated but unpaid dividends on the Series B Preferred Shares
will not bear interest and holders of Series B 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 B 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 Code), any portion
(the "Capital Gains Amount") of the dividends paid or made available for the
year to holders of any class or series of stock of the Corporation, the portion
of the Capital Gains Amount that shall be allocable to holders of the Series B
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
B 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 B 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 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 B
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 B 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 B Preferred
Shares as to liquidation rights (including the Series A Preferred Stock), then
the holders of the Series B 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 B 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 B 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 B Preferred Shares whose preferential rights upon dissolution are
superior to those receiving the distribution.
(5) OPTIONAL REDEMPTION.
(a) The Series B Preferred Shares are not redeemable prior to November
12, 2003. To ensure that the Corporation remains a qualified real estate
investment trust ("REIT") for federal income tax purposes, however, the Series B
Preferred Shares shall be subject to the provisions of Section 7 of this Article
Third pursuant to which Series B 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 November 12, 2003, the
Corporation, at its option, upon giving notice as provided below, may redeem the
Series B 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 B Preferred Shares to the date fixed for redemption.
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(b) The redemption price of the Series B 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
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 B Preferred Shares are
to be redeemed, the shares to be redeemed shall be selected pro rata (as nearly
as practicable without creating fractional shares) or by lot or by any other
equitable method determined by the Corporation. If such redemption is to be by
lot and, as a result of such redemption, any holder of Series B Preferred Shares
would become a holder of a number of Series B Preferred Shares in excess of the
Ownership Limit (or other limitations set forth in Section 7 of this Article
Third) because such holder's Series B Preferred Shares were not redeemed, or
were only redeemed in part, then, except as otherwise provided in the Charter,
the Corporation will redeem the requisite number of Series B Preferred Shares of
such holder such that no holder will hold in excess of the Ownership Limit (or
such other limits) subsequent to such redemption.
(d) Notwithstanding anything to the contrary contained herein, unless
full cumulative dividends on all Series B 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 B Preferred Shares shall be redeemed unless
all outstanding Series B Preferred Shares are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase by the Corporation of
Series B 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 B Preferred Shares pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series B Preferred Shares. In addition,
unless full cumulative dividends on all outstanding Series B Preferred Shares
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all dividend
periods, the Corporation shall not purchase or otherwise acquire directly or
indirectly any Series B Preferred Shares or any equity securities of the
Corporation ranking junior to or on a parity with the Series B Preferred Shares
as to dividends or upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (including the Series A Preferred Stock) (except
by conversion into or exchange for equity securities of the Corporation ranking
junior to the Series B Preferred Shares as to dividends and upon voluntary or
involuntary liquidation, dissolution or winding up of the
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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 B 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 B 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 B 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 mailed by
the Corporation, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series B 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 B 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 B 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 B Preferred Shares to be
redeemed; (D) the place or places where the certificates evidencing shares of
Series B Preferred Shares are to be surrendered for payment of the redemption
price; and (E) that dividends on the Series B Preferred Shares to be redeemed
will cease to accumulate on such redemption date. If fewer than all of the
Series B Preferred Shares held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of Series B Preferred Shares
to be redeemed from such holder.
(iii) On or after the redemption date, each holder of Series B
Preferred Shares to be redeemed shall present and surrender the certificates
representing such holder's Series B Preferred Shares to the Corporation at the
place designated in the notice of redemption and shall be entitled to the
redemption price and any 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
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the person whose name appears on such certificate representing Series B
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 B Preferred Shares are to be redeemed, a new certificate
shall be issued representing the unredeemed shares.
(iv) If notice of redemption of any Series B Preferred Shares has
been given and if the funds necessary for such redemption have been 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 B Preferred Shares shall
cease to accumulate and any such Series B 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 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 B 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 B
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 accumulated and unpaid dividends
to the redemption date). Any monies so deposited which remain unclaimed by the
holders of the Series B Preferred 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 B 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 B Preferred Shares will not have any voting
rights, except as set forth below.
(b) Whenever dividends on any Series B Preferred Shares shall remain
unpaid for six or more quarterly periods (whether or not consecutive) (a
"Preferred Dividend Default"), the holders of such Series B Preferred Shares
(voting as a single class with all other equity securities of the Corporation
ranking on a parity with the Series B Preferred Shares as to dividends and
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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 ("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 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 B 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 B 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 set aside for payment in
full.
(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series B Preferred Shares shall have been paid in
full or declared by the Corporation and set aside for payment in full, the
holders of Series B 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 set aside 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 B 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 B 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 B
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 B 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 B 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 B Preferred Shares and
other classes or series of Parity Preferred Stock upon which like voting
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rights have been conferred and are exercisable (voting as a single class) when
the Series B Preferred Shares and such Parity Preferred Stock is entitled to
vote thereon.
(d) So long as any Series B Preferred Stock remains outstanding, the
Corporation shall not, without the affirmative vote of the holders of at least
two-thirds of the Series B 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 B 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 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 B
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 B Preferred Stock remains
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a corporation organized under the laws of any state and
substitutes the Series B Preferred Stock for other preferred stock having
substantially the same terms and same rights as the Series B 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 materially and adversely affect such rights, privileges or
voting powers of the holders of the Series B 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 B Preferred Stock with respect to
payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up, or (b) on a parity with the Series B Preferred Stock
with respect to payment of distributions or 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
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Series B Preferred Shares shall have been redeemed or called for redemption upon
proper notice and sufficient funds shall have been 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 these Articles
Supplementary, the following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Series B
Preferred Stock by a Person who is or would be treated as an
owner of such Series B 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.
"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
B Preferred Stock by a Person who is or would be treated as an
owner of such Series B 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 B
Preferred Stock on the trading day immediately preceding the
relevant date, or if the Series B Preferred Stock is not then
traded on the New York Stock Exchange, the last reported sales
price of the Series B Preferred Stock on the trading day
immediately preceding the relevant date as reported on any
exchange or quotation system over which the Series B Preferred
Stock may be traded, or if the Series B Preferred Stock is not
then
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traded over any exchange or quotation system, then the market
price of the Series B 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.
"Partnership Agreement" shall mean the Agreement of
Limited Partnership of the Operating Partnership, as such
agreement may be amended from time to time.
"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 B Preferred Stock
provided that the ownership of such shares of Series B Preferred
Stock by such 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 B 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 B
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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.
"Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Series B Preferred
Stock, (including (i) the granting of any option or entering
into any agreement for the sale, transfer or other disposition
of Series B Preferred Stock or (ii) the sale, transfer,
assignment or other disposition of any securities (or rights
convertible into or exchangeable for Series B 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 B Preferred
Stock), and whether such transfer has occurred by operation of
law or otherwise.
"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 B
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;
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(B) except as provided in Section 7(i) of these Articles
Supplementary, no Person shall Constructively Own Series B
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 B 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 B Preferred Stock in violation of
Section 7(b)(i) of these Articles Supplementary, (1) then that number of shares
of Series B 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 B
Preferred Stock in violation of Section 7(b)(i) of these Articles Supplementary,
then the Transfer of that number of shares of Series B 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.
(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 B 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 B Preferred Stock.
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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 17.8 of the Partnership Agreement. Notwithstanding any of
the provisions of the Partnership Agreement to the contrary, a partner of the
Operating Partnership shall not be entitled to effect an exchange of an interest
in the Operating Partnership for Series B Preferred Stock if the actual or
beneficial or Beneficial or Constructive Ownership of Series B Preferred Stock
would be prohibited under the provisions of this Section 7.
(c) Transfers of Series B Preferred Stock in Trust.
(i) Upon any purported Transfer or other event described in
Section 7(b)(ii) of these Articles Supplementary, such Series B 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 B Preferred Stock held by the Trustee shall be
issued and outstanding Series B Preferred Stock of the Corporation. The
Purported Beneficial Transferee or Purported Record Transferee shall have no
rights in the shares of Series B 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 B Preferred Stock held in the Trust.
(iii) The Trustee shall have all voting rights and rights to
dividends with respect to Series B 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 B 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 B Preferred Stock. Any dividends or distributions so paid
over to the Trustee shall be held in trust for the Charitable Beneficiary.
The Purported Record Transferee and Purported Beneficial
Transferee shall have no voting rights with respect to the Series B Preferred
Stock held in the Trust and, subject to
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Maryland law, effective as of the date the Series B 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 B Preferred Stock prior to the
discovery by the Corporation that the Series B 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 B 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 B Preferred Stock have been transferred to the Trust, the
Trustee of the Trust shall sell the shares of Series B Preferred Stock held in
the Trust to a Person, designated by the Trustee, whose ownership of the shares
of Series B 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 B 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 B 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 B Preferred Stock at Market Price, the Market Price of such
shares of Series B Preferred Stock on the day of the event which resulted in the
transfer of such shares of Series B 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 B
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 B Preferred Stock have been transferred to the Trustee, such shares of
Series B Preferred Stock are sold by a Purported Record Transferee then (i) such
shares of Series B 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 B 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.
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(v) Series B 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 B 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 B
Preferred Stock at Market Price, the Market Price of such shares of Series B
Preferred Stock on the day of the event which resulted in the transfer of such
shares of Series B 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 B 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 B 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 B 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 B 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 B 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 B 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 B Preferred Stock in violation of Section
7(b) of these Articles Supplementary,
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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 B Preferred Stock and each Person (including the
shareholder of record) who is holding Series B Preferred Stock for a beneficial
owner or Beneficial Owner or Constructive Owner shall provide 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 B Preferred Stock in violation of Section 7(b)(i), such remedies (as
applicable) shall apply first to the shares of Series B Preferred Stock which,
but for such remedies, would have been actually owned by such Person, and second
to shares of Series B 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 B
Preferred Stock based upon the relative number of the shares of Series B
Preferred Stock held by each such Person.
(i) Exceptions.
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(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 B 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 B 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 such 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 B 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 B Preferred Stock in violation of Section
7(b)(i)(B), if the Corporation obtains any 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 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 B 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 B 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.
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(j) Legends. Each certificate for Series B Preferred Stock shall
bear substantially the following legends in addition to any legends required to
comply with federal and state securities laws:
CLASS 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
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 B 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
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FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE ARTICLES
SUPPLEMENTARY FOR THE SERIES B PREFERRED STOCK, (i) NO PERSON MAY
BENEFICIALLY OWN SHARES OF THE CORPORATION'S SERIES B 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 B 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 B 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 B 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 B PREFERRED STOCK
WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY
OWN SERIES B 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 B PREFERRED STOCK
REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A
TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN
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
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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 B 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 B 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 B Preferred Units. So long as the Corporation
remains the general partner of the Operating Partnership, the Board of Directors
of the Corporation is hereby expressly vested with authority (subject to the
restrictions on ownership, transfer and redemption of Series B Preferred Stock
set forth in this Section 7) to issue, and shall issue to the extent provided in
the Partnership Agreement, Series B Preferred Stock in exchange for Series B
Preferred Units (as defined in the Partnership Agreement) (the "Series B
Preferred Units").
(l) Reservation of Shares. Pursuant to the obligations of the
Corporation under the Partnership Agreement to issue Series B Preferred Stock in
exchange for Series B Preferred Units, the Board of Directors is hereby required
to reserve and authorize for issuance a number of authorized but unissued shares
of Series B Preferred Stock not less than the number of Series B Preferred Units
issued to permit the Corporation to issue Series B Preferred Stock in exchange
for Series B Preferred Units that may be exchanged for or converted into Series
B Preferred Stock as provided in the 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 B 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 B Preferred Stock notwithstanding any
contrary provisions of the Series B Preferred Stock provided for elsewhere in
these Articles Supplementary.
(8) CONVERSION. The Series B 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 B Preferred Stock.
(10) NO PREEMPTIVE RIGHTS. No holder of the Series B 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 B 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 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 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)
24
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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 Assistant Secretary on this 11th day of
November, 1998.
AMB PROPERTY CORPORATION
BY: /s/ HAMID R. MOGHADAM
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Hamid R. Moghadam
President and Chief Executive Officer
[SEAL]
ATTEST:
/s/ MICHAEL A. COKE
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Michael A. Coke
Assistant Secretary