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Exhibit 3
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
BY-LAWS
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ARTICLE I
MEETING OF BENEFICIARIES
SECTION 1. ANNUAL MEETING.
The annual meeting of the Beneficiaries of the Trust for the transacting of such
business as shall be specified in the notice of the meeting shall be held as
provided in the Declaration of Trust.
SECTION 2. SPECIAL MEETINGS.
Special meetings may be called at any time as provided in the Declaration of
Trust.
SECTION 3. PLACE OF MEETING.
All meetings of the Beneficiaries shall be held at the office of the Trust in
the City of Cleveland in the State of Ohio or at such other place in the State
of Ohio as may be designated, in the case of an annual meeting, by the Trustees,
or, in the case of a special meeting, by the Trustees calling such meeting or by
the person or persons requesting such meeting pursuant to the Declaration of
Trust.
SECTION 4. NOTICE OF MEETINGS.
Written notice of each annual or special meeting of the Beneficiaries, stating
the time, place and purpose thereof shall be given in accordance with the
Declaration of Trust.
SECTION 5. PROCEDURE AT MEETINGS.
At each meeting of the Beneficiaries, the Trustees shall appoint one of their
number or one of the Beneficiaries to preside thereat. The Trustees shall
appoint a Secretary for each such meeting, who shall be duly sworn to the
faithful discharge of his duties and to keep the minutes of such meeting, which
minutes shall be signed and attested by him and filed with the records of the
Trust.
SECTION 6. QUORUM.
A majority of the outstanding shares of the Trust present in person or by proxy
shall constitute a quorum for any annual or special meeting of Beneficiaries.
SECTION 7. NOMINATIONS AND BENEFICIARY BUSINESS
(a) With respect to any Annual or Special Meeting of Beneficiaries, (a
"Meeting") nominations for election to the Board of Trustees and the proposal of
matters to be considered by the Beneficiaries may be made only (I) by or at the
direction of the Board of Trustees or (ii) by any Beneficiary who was a
Beneficiary of record at the time of the giving of the notice described in this
Section 7 and at the record date for the Meeting, as defined in the Declaration
of Trust, who is entitled to vote at the Meeting and who complied with the
notice procedures set forth in this Section 7.
(b) For a nomination or proposal to be properly brought before a Meeting of
Beneficiaries, other than a shareholder proposal included in the Trust's proxy
statement pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as
amended, the Beneficiary must have given timely notice thereof in writing to the
Secretary of the Trust, and such Beneficiary or his representative must be
present in person at the Meeting. A Beneficiary's notice shall be timely if
delivered to, or mailed and received at, the principal executive offices of the
Trust (i) for an Annual Meeting, not less than 90 days nor more than 120 days
prior to the anniversary date of the immediately preceding Annual Meeting of
Beneficiaries, or Special Meeting held in lieu thereof AND (ii) for a special
meeting, not less than 90 days prior to the date requested for such meeting.
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(c) A Beneficiary's notice to the Secretary shall set forth as to each
nomination or proposal the Beneficiary intends to bring before the Meeting (I)
as to any nomination, the name and address of any proposed nominee, the
nominee's business affiliation, the information required as to nominees by Item
401 of Regulation S-K under the Securities Act of 1933 and the Securities
Exchange Act of 1934, all as may be amended from time to time, and a
certification of the proponent that such nominee meets all the qualifications
for Trustees set forth in the Declaration of Trust, including, but not limited
to, Section 8.10 thereof, (ii) as to any proposal, a brief description of the
proposal desired to be brought before the Meeting, a statement of the reasons
for making such proposal at the Meeting and a certification of the proponent
that the proposal does not conflict with or violate any provision of the
Declaration of Trust, (iii) the name and address, as they appear on the Trust's
share transfer books of the Beneficiary offering such nomination or proposal and
of the beneficial owners (if any) of the shares registered in such Beneficiary's
name and the name and address of any other Beneficiaries (or beneficial owner of
shares) known by such Beneficiary to be supporting such nomination or proposal
on the date of the Beneficiary's notice, (iv) the class and number of shares of
the Trust's capital shares which are beneficially owned by the Beneficiary and
such beneficial owners (if any) on the date of such Beneficiary's notice and by
any other Beneficiaries known by such Beneficiary to be supporting such
nomination or proposal on the date of such Beneficiary's notice, and (v) any
financial interest of the Beneficiary or any such beneficial owner in such
proposal. Nothing contained in this Subsection (e) shall be deemed to supersede
the provisions of Section 7.2 of the Declaration of Trust relating to business
that may be transacted at a Special Meeting.
(d) If the Board of Trustees, or a designated committee thereof, determines that
any Beneficiary nomination or proposal was not timely made in accordance with
the provisions of this Section 7, or that any proposed nominee does not meet the
qualifications set forth in the Declaration of Trust, or that any proposal
conflicts with or violates a provision of the Declaration of Trust, then such
nomination or proposal shall not be presented for action at the Meeting in
question. If the Board of Trustees, or a designated committee thereof,
determines that the information provided in the Beneficiary's notice does not
satisfy the informational requirements of this section in any material respect,
the Secretary of the Trust shall promptly notify such Beneficiary of the
deficiency in the notice. Such Beneficiary shall have the opportunity to cure
such deficiency by providing additional information to the Secretary within the
period of time, not to exceed five (5) days from the date such deficiency notice
is given to such Beneficiary, determined by the Board or such committee. If the
deficiency is not cured within such period, or if the Board of Trustees or such
committee determines that the additional information provided by the
Beneficiary, together with the information previously provided, does not satisfy
the requirements of this Section 7 in any material respect, then such nomination
or proposal shall not be presented for action at the Meeting in question.
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(e) Notwithstanding the procedure set forth in the preceding paragraph, if
neither the Board of Trustees nor such committee makes a determination as to the
compliance of any Beneficiary nomination or proposal with the provisions of this
Section 7, as set forth above, the presiding Officer of the Meeting shall
determine and declare at the Meeting whether the Beneficiary nomination or
proposal was made in compliance with the provisions of this Section 7, and if
such presiding Officer determines and declares that such nomination or proposal
was not made in compliance with such provisions, such nomination or proposal
shall not be acted upon at the Meeting.
ARTICLE II
SECTION 1. REGULAR MEETINGS.
Regular meetings of the Trustees may be held at such times and places within the
State of Ohio as may be provided for in resolution adopted by the Trustees.
SECTION 2. SPECIAL MEETINGS.
Special meetings of the Trustees may be held at any time or place within the
State of Ohio upon call of any two of the Trustees at the time and place
designated in the notice of meeting.
SECTION 3. NOTICE OF MEETINGS.
Notice of each meeting, regular or special, shall be given by mailing or by
sending to each Trustee (addressed to the address last furnished to the Trust by
the Trustee) a letter at least 4 days before the meeting, or a telegram at least
24 hours before the meeting. Notice of any special or regular meeting, as
provided in the Declaration of Trust, may be waived in writing or by telegram by
any Trustee either before or after such meeting, and such notice shall be deemed
to have been waived by the Trustees attending such meeting. Except as provided
in Article V hereof, unless otherwise indicated in the notice thereof, any
business may be transacted at any regular or special meeting.
SECTION 4. QUORUM.
At any meeting a majority of the Trustees then in office shall constitute a
quorum.
SECTION 5. COMPENSATION OF TRUSTEES.
The Trustees are authorized to fix a reasonable retainer for members of the
Board of Trustees and the Chairman and a reasonable fee for attendance at
meetings. In addition to such compensation there shall be reimbursement for
expenses for traveling to and from such meetings.
SECTION 6. COMMITTEES OF THE BOARD OF TRUSTEES.
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The Trustee may elect from their members committees of the Board and give them
any or all powers of the Trustees during intervals between the meetings of the
Trustees, except that such committees shall not be empowered to declare
dividends or fill vacancies in the Board of Trustees or committees. All actions
of such committees shall be reported to the Trustees at their next meeting and
shall be subject to approval by the Trustees, provided that no right of any
third person shall be affected by such alteration.
SECTION 7. QUALIFICATIONS OF NOMINEES - AGE.
No nominee for Trustee shall be more than 72 years of age at the time of his
election as Trustee, nor shall any Trustee nominated for a subsequent term be
more than 72 years of age at the time of his election for such subsequent term,
provided that any Trustee elected prior to attaining age 72 may continue to
serve the remainder of his term despite attaining the age of 72 before the
expiration of his term.
ARTICLE III
OFFICERS
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SECTION 1. DESIGNATION OF OFFICERS.
The Trustees shall elect a Chairman of the Board, a President, a Secretary, a
Treasurer, and such Vice Presidents and other officers, or assistant officers,
as they shall deem advisable. Each officer and assistant officer shall have such
functions and duties as the Trustees shall from time to time designate, and, in
the absence of such designation, such duties as are usually associated with such
office. Except as otherwise determined by the Trustees, any two or more offices
may be held by the same person.
SECTION 2. TENURE OF OFFICE.
The officers of the Trust shall hold office at the pleasure of the Trustees, and
until successors are chosen and qualified. A vacancy in any office, however
created, may be filled by election by the Trustees.
SECTION 3. DELEGATION OF DUTIES.
The Trustees may delegate the duties of any officer to any other officer and
generally may control the action of the officers and require the performance of
duties in addition to those mentioned herein.
SECTION 4. COMPENSATION.
The Trustees are authorized to determine or to provide the method of determining
the compensation of officers.
SECTION 5. SIGNING CHECKS AND OTHER INSTRUMENTS.
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The Trustees shall determine or provide the method of determining how checks,
notes, bills of exchange and similar instruments issued by or on behalf of the
Trust shall be signed, countersigned, or endorsed.
SECTION 6. CONTROL BY TRUSTEES.
Nothing contained herein shall be interpreted to relieve the Trustees, in any
manner, of their duty to control and manage the Trust property.
ARTICLE IV
SHARES IN TRUST
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SECTION 1. ISSUE OF CERTIFICATE OF BENEFICIAL OWNERSHIP
The Chairman shall cause to be issued to each Beneficiary one or more
certificates, under the seal of the Trust, signed as provided in Article III,
Section 5 hereof, certifying the number of shares owned by such Beneficiary in
the Trust. Such certificates shall be countersigned by the Transfer Agent and
registered by the Registrar and shall be transferable on the books of the Trust
as provided in the Declaration of Trust.
ARTICLE V
AMENDMENTS
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SECTION 1. AMENDMENT OF BY-LAWS.
The Trustees, by the affirmative vote of a majority, may at any meeting,
provided the substance of the proposed amendment shall have been stated in a
notice of the meeting, alter, change, or amend in any respect, or supersede by
new by-laws, in whole or in part, any of these by-laws.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 1. FISCAL YEAR.
The fiscal year of the Trust shall be as determined from time to time by the
Trustees.
SECTION 2. NOTICE AND WAIVER OF NOTICE.
Whenever any notice is required by these by-laws to be given, personal notice is
not required unless expressly so stated; and any notice so required shall be
deemed to be sufficient if given by depositing the same in a post-office box in
a sealed post-paid wrapper, addressed to the person entitled thereto (at his
last known post-office address as shown by the register of the Trust) and such
notice shall be deemed to have been given on the day of such mailing.
SECTION 3. CHECKS FOR MONEY.
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All checks, drafts or orders for the payment of money shall be signed by the
Treasurer or Assistant Treasurer or by such other officer, officers, Trustee or
Trustees as the Trustees may from time to time designate.
SECTION 4. FORM OF CERTIFICATE OF BENEFICIAL INTEREST.
The form of certificate of beneficial interest representing shares of $1 par
value shall be substantially as follows:
No. Shares
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FIRST UNION
Real Estate Equity and Mortgage Investments
THIS CERTIFIES THAT ________________________ is the registered holder of ______
Fully Paid and Non-assessable Share of Beneficial Interest, $1 Par Value. in
FIRST UNION
Real Estate Equity and Mortgage Investments
a Trust established in business trust from under the laws of the State of Ohio
under a Declaration of Trust dated as of August 1, 1961, as amended from time to
time, a copy of which is on file with the Transfer Agents of the Trust by all
the terms and provisions of which the holder or transferee hereof by accepting
this certificate agrees to be bound. The Trust is not a bank or trust company
and does not and will not solicit, receive or accept deposits as a business. The
shares represented hereby are transferable on the records of the Trust only by
the registered holder hereof or by his agent duly authorized in writing on
delivery to a Transfer Agent of the Trust of this certificate properly endorsed
or accompanied by duly executed instrument of transfer together with such
evidence of the genuineness thereof and such other matters as may reasonably be
required. The transferability of the shares represented hereby is subject to
such regulation. as may from time to time be adopted by the Trustees of the
Trust and set forth in the By-Laws to which reference is hereby made to prevent
transfers of shares which would result in disqualification of the Trust for
taxation as a real estate investment trust under the Internal Revenue Code an
amended.
This certificate is not valid unless countersigned by a Transfer Agent and
registered by a Registrar of the Trust.
IN WITNESS WHEREOF, the Trustees of this Trust have caused this certificate to
be signed by facsimile signatures.
[ON REVERSE SIDE]
The By-Laws of the Trust provide, among other things, that no person may acquire
Trust securities (including these securities) if, thereafter, he would
beneficially own more than 9.8% of the Trust's shares of beneficial interest. In
applying this restriction, convertible securities of the Trust beneficially
owned by such person (including convertible securities) are to be treated as if
already converted into shares of beneficial
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interest. A copy of the By-Laws and information about the limitation on
ownership may be obtained from the Secretary of the Trust.
SECTION 5. REGULATIONS ON TRANSFER OF SHARES TO PREVENT DISCLAIM
Notification of the Trust Under the Internal Revenue Code.
The Chief Executive Officer of the Trust or an officer designated by him shall:
a) From time to time cause to be prepared a list of holders of record (with
their holdings) of shares of the Trust (preferred and common) and shall
designate those holders which the officer acting shall have reason to believe
are not also the beneficial owners of the holdings of record in their respective
names;
b) Review the list with counsel and impose such restrictions on transfer of
shares as counsel shall advise should be imposed to prevent disqualification of
the Trust as a Real Estate Investment Trust under Section 856 et seq.
of the Internal Revenue Code.
SECTION 6. RESTRICTIONS ON ISSUANCE AND TRANSFER OF SECURITIES.
a) No person may own more than 9.8% of the outstanding Shares (the Limit), and
no Securities shall be issued or transferred to any person if, following such
issuance or transfer, such person's ownership of Shares would exceed the Limit.
For purposes of computing the Limit, Convertible Securities owned by such person
shall be treated as if the Convertible Securities owned by such person had been
converted into Shares.
b) If any Securities in excess of the Limit are issued or transferred to any
person in violation of Paragraph a) hereof (the "Excess Securities"), such
issuance or transfer shall be valid only with respect to such amount of
Securities as does not result in a violation of Paragraph a) hereof, and such
issuance or transfer shall be null and void with respect to such Excess
Securities.
If the last clause of the foregoing sentence is determined to be invalid by
virtue of any legal decision, statute, rule or regulation, such person shall be
conclusively deemed to have acted as an agent on behalf of the Trust in
acquiring the Excess Securities and to hold such Excess Securities on behalf of
the Trust. As the equivalent of treasury Securities for such purposes, the
Excess Securities shall not be entitled to any voting rights; shall not be
considered to be outstanding for quorums or voting purposes; and shall not be
entitled to receive dividends. interest or any other distribution with respect
to the Securities. Any person who receives dividends, interest or any other
distribution in respect to Excess Securities shall hold the same as agent for
the Trust and (following a permitted transfer) for the transferee thereof.
Notwithstanding the foregoing, any holder of Excess Securities may transfer the
same (together with any distributions thereon) to any person who, following such
transfer, would not own Shares (within the meaning of Paragraph a) in excess of
the Limit. Upon such permitted transfer, the Trust shall pay or distribute to
the transferee any distributions on the Excess Securities not previously paid or
distributed.
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c) Ownership of Securities is conditional upon the owner or prospective owner
having provided to the Trust definitive written information respecting his
ownership of Securities. Failure to provide such information, upon reasonable
request shall result in the Securities so owned being treated as Excess
Securities pursuant to Paragraph b) for so long as such failure continues.
d) For purposes of this Section 6:
(i) Person. includes an individual, corporation, partnership, association, joint
stock company, trust, unincorporated association or other entity.
(ii) Shares. means Shares of Beneficial Interest, par value $1 per share.
(iii) Convertible Securities. means any securities of the Trust that are
convertible into Shares.
(iv) Securities. means Shares and Convertible Securities.
(v) Ownership. means beneficial ownership. Beneficial ownership, for this
purpose, may be determined on the basis of the beneficial ownership rules
applicable under the Securities Exchange Act of 1934, as amended, or such other
basis as management reasonably determines to be appropriate to effectuate the
purposes hereof.
e) Nothing herein contained shall limit the ability of the Trust to impose, or
to seek judicial or other imposition of additional restrictions if deemed
necessary or advisable to protect the Trust and the interests of its security
holders by preservation of the Trust's status as a qualified real estate
investment trust under the Code.
f) These restrictions on issuance and transfer of Securities shall be applied
only on a prospective basis. Accordingly, Paragraphs a) and b) hereof shall not
apply to Shares in excess of the limit that were owned (within the meaning of
Paragraph a) by any person at the close of business on June 3, 1981, but
Paragraph a) and b) shall prospectively apply to the transfer of such Shares and
to further acquisitions of Securities by any such person. Similarly, Paragraphs
a) and b) shall not apply to the conversion of Convertible Securities that were
owned by any person at the close of business on such date or to the resultant
Shares owned by such person, but Paragraph a) and b) shall prospectively apply
to such Shares and to such person.
g) Notwithstanding any other provision of this Section 6, a lower percentage
(the Temporary Limit) shall operate in place of the 9.81 ownership Limit set
forth in Paragraph a) hereof for so long as there are outstanding Securities
excepted from the restrictions of this Section 6 pursuant to Paragraph f) hereof
("Exempt Securities"). The Temporary Limit shall initially be 6%, but upon the
transfer of Exempt Securities the Temporary Limit shall be fixed by the Trustees
from time to time but shall in no event exceed an amount equal to 25% of the
difference between (i) 49% of the Shares outstanding and (ii) the number of
Shares owned by any person who owns Exempt Securities. For purposes of this
calculation, Convertible Securities owned by such person shall be treated as if
the Convertible Securities owned by such person had been converted into Shares.
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h) If any provision of this Section 6 or any application of any such provision
is determined to be invalid by any federal or state court having jurisdiction
over the issue, the validity of the remaining provisions shall not be affected
and other applications of such provision shall be affected only to the extent
necessary to comply with the determination of such court.
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INDEX
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ARTICLE I - MEETING OF BENEFICIARIES
Section 1. Annual Meeting 35
Section 2. Special Meetings 35
Section 3. Place of Meetings 35
Section 4. Notice of Meetings 35
Section 5. Procedure at Meetings 35
Section 6. Quorum 35
Section 7. Nominations and Beneficiary Business 35
ARTICLE II - TRUSTEES
Section 1. Regular Meetings 35
Section 2. Special Meetings 36
Section 3. Notice of Meetings 36
Section 4. Quorum 36
Section 5. Compensation of Trustees 36
Section 6. Committees of the Board of Trustees 36
Section 7. Qualifications of Nominees-Age 36
ARTICLE III OFFICERS
Section 1. Designation of Officers 37
Section 2. Tenure of Office 37
Section 3. Delegation of Duties 37
Section 4. Compensation 37
Section 5. Signing Checks and Other Instruments 37
Section 6. Control by Trustees 37
ARTICLE IV SHARES IN TRUST
Section 1. Issue of Certificate of Beneficial
Ownership 37
ARTICLE V AMENDMENTS
Section 1. Amendment of By-Laws 38
ARTICLE VI MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year 38
Section 2. Notice and Waiver of Notice 38
Section 3. Checks for Money 38
Section 4. Form of Certificate of Beneficial Interest 38
Section 5. Regulations on Transfer of Shares to
Prevent Disclaim 39
Section 6. Restrictions on Issuance and Transfer
Of Securities 40