Exhibit 3.1
ANTHRACITE CAPITAL, INC.
ARTICLES SUPPLEMENTARY
Anthracite Capital, Inc., a Maryland corporation (the "Corporation"),
certifies as follows:
FIRST: Under the authority set forth in Article V of the
charter of the Corporation, as amended (which, as hereinafter amended,
restated or supplemented from time to time is herein called the "Charter"),
the Pricing Committee of the Board of Directors of the Corporation (the "Board
of Directors") under authority delegated to it by the Board of Directors, by
resolution duly adopted at a meeting duly called and held on May 21, 2003,
designated and classified 4,400,000 shares of the authorized but unissued
shares of Preferred Stock, par value $.001 per share, of the Corporation as
the "9.375% Series C Cumulative Redeemable Preferred Stock."
SECOND: The preferences, conversions and other rights, voting
powers, restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption of shares of Series C
Preferred Stock shall be included as part of Article V of the Charter and are
as follows:
(1) Designation and Number. A series of shares of Preferred
Stock, designated as the "9.375% Series C Cumulative Redeemable Preferred
Stock" (the "Series C Preferred Stock"), is hereby established. The number of
shares of Series C Preferred Stock shall be 4,400,000 shares. The par value of
Series C Preferred Stock shall be $.001 per share.
(2) Rank. The Series C Preferred Stock will, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of the
Corporation, rank (a) senior to all classes or series of Common Stock, par
value $.001 per share, of the Corporation (the "Common Stock") and to all
equity securities the terms of which provide that such equity securities shall
rank junior to the Series C Preferred Stock; (b) on a parity with all equity
securities issued by the Corporation other than those referred to in clauses
(a) and (c); and (c) junior to all equity securities issued by the Corporation
the terms of which specifically provide that such equity securities rank
senior to the Series C Preferred Stock. The 10% Series B Cumulative
Convertible Redeemable Preferred Stock of the Corporation shall be deemed to
rank pari passu with shares of the Series C Preferred Stock. The term "equity
securities" shall not include convertible debt securities.
(3) Dividends.
(a) Holders of Series C Preferred Stock shall be entitled
to receive, when, as and if authorized by the Board of Directors, out of
legally available funds, cumulative preferential cash dividends at the rate of
9.375% of the Initial Liquidation Preference (as defined hereinafter) per
share of Series C Preferred Stock per annum (which is equivalent to a fixed
annual amount of $2.34375 per share of Series C Preferred Stock). Such
dividends shall accrue and cumulate from the date of original issuance (May
29, 2003) and shall be payable quarterly in arrears on January 31, April 30,
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July 31 and October 31 of each year or, if not a business day, the next
succeeding business day, commencing July 31, 2003 (each a "Dividend Payment
Date"). Any dividend payable on the Series C Preferred Stock for any partial
dividend period shall be prorated and computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends shall be payable to holders of
record as they appear in the stock records of the Corporation at the close of
business on the applicable dividend record date, which shall be the first day
of the calendar month in which the applicable Dividend Payment Date falls or
such other date designated by the Board of Directors for the payment of
dividends that is not more than 30 nor less than 10 calendar days immediately
preceding such Dividend Payment Date (each, a "Dividend Record Date").
(b) Notwithstanding anything to the contrary contained
herein, dividends on the Series C Preferred Stock shall accrue and cumulate
whether or not the Corporation has earnings, whether or not there are funds
legally available for the payment of such dividends and whether or not such
dividends are authorized by the Board of Directors. Accumulated but unpaid
dividends on the Series C Preferred Stock shall cumulate as of the Dividend
Payment Date on which they first become payable or on the date of redemption,
as the case may be. No interest shall be payable in respect of any dividend on
the Series C Preferred Stock that may be in arrears.
(c) Except as provided in the following sentence, if any
shares of Series C Preferred Stock are outstanding, no dividends, other than
distributions in kind of the Corporation's Common Stock or other shares of the
Corporation's equity securities ranking junior to the Series C Preferred Stock
as to dividends and upon liquidation, may be authorized or paid or set apart
for payment on, and no other dividend may be authorized or made upon, the
Common Stock or any other shares of equity securities of the Corporation of
any other class or series ranking, as to dividends and upon liquidation, on a
parity with or junior to the Series C Preferred Stock unless full cumulative
dividends have been or contemporaneously are authorized and paid, or a sum
sufficient for the payment thereof is set apart for such payment, on the
Series C Preferred Stock for all past dividend periods and the then current
dividend period. When dividends are not paid in full (or a sum sufficient for
such full payment is not so set apart) upon the Series C Preferred Stock and
all other equity securities ranking on a parity, as to dividends, with the
Series C Preferred Stock, all dividends authorized upon the Series C Preferred
Stock and any other equity securities ranking on a parity, as to dividends,
with the Series C Preferred Stock, shall be authorized pro rata so that the
amount of dividends authorized per share of Series C Preferred Stock and each
such other equity security shall in all cases bear to each other the same
ratio that accumulated dividends per share of Series C Preferred Stock and
such other equity security (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 C Preferred Stock which may be in
arrears.
(d) Except as provided in clause (c), unless full
cumulative dividends on the Series C Preferred Stock have been or
contemporaneously are authorized and paid, or a sum sufficient for the payment
thereof is set apart for payment for all past dividend periods and the then
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current dividend period, no Common Stock or any other shares of equity
securities of the Corporation ranking junior to or on a parity with the Series
C Preferred Stock as to dividends or upon liquidation shall 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 shares)
by the Corporation (except by conversion into or exchange for Common Stock or
other shares of equity securities of the Corporation ranking junior to the
Series C Preferred Stock as to dividends and amounts upon liquidation).
(e) Holders of Series C Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or shares, in
excess of full cumulative dividends on the Series C Preferred Stock as
described above. Any dividend payment made on the Series C Preferred Stock
shall first be credited against the earliest accumulated but unpaid dividend
due with respect to the Series C Preferred Stock which remains payable.
(4) Liquidation Preference.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (referred to herein
sometimes as a "liquidation"), the holders of Series C Preferred Stock then
outstanding shall be entitled to receive out of the assets of the Corporation
available for distribution to stockholders (after payment or provision for
payment of all debts and other liabilities of the Corporation) an amount equal
to $25.00 (the "Initial Liquidation Preference") per share, plus any
accumulated and unpaid dividends thereon to the date of payment, whether or
not authorized, before any distribution of assets is made to holders of Common
Stock and any other shares of equity securities of the Corporation that rank
junior to the Series C Preferred Stock 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 the Series C Preferred
Stock and any shares of other classes or series of equity securities of the
Corporation ranking on a parity with the Series C Preferred Stock as to
liquidation rights, then the holders of the Series C Preferred Stock and all
other such classes or series of equity securities ranking on a parity with the
Series C Preferred Stock as to liquidation rights shall share ratably in any
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(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 calendar days immediately preceding the payment date
stated therein, to each record holder of the Series C Preferred Stock at the
respective addresses of such holders as the same shall appear on the share
transfer records of the Corporation.
(d) After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series C Preferred
Stock shall have no right or claim to any of the remaining assets of the
Corporation.
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(e) None of a consolidation or merger of the Corporation
with or into another entity, the 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 Corporation's
property or business shall be considered a liquidation, dissolution or winding
up of the Corporation.
(f) In determining whether a distribution (other than upon
voluntary or involuntary dissolution) by dividend, redemption or other
acquisition of shares of the Corporation or otherwise is permitted under
Maryland law, 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 the holders of Series C Preferred Stock will not be added
to the Corporation's total liabilities.
(5) Redemption.
(a) Except as set forth in this Section 5(a), Section 5(c)
hereof and Article VI of the Charter, the Series C Preferred Stock is not
redeemable prior to May 29, 2008. On or after May 29, 2008 the Corporation, at
its option, upon giving notice as provided below, may redeem the Series C
Preferred Stock, in whole or from time to time in part, for cash, at a
redemption price of $25.00 per share, plus all accumulated and unpaid
dividends thereon to the date of redemption, whether or not authorized (the
"Redemption Right").
(b) If fewer than all of the outstanding shares of Series C
Preferred Stock are to be redeemed pursuant to the Redemption Right, the
shares to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional shares) or by lot or in such other equitable
method prescribed by the Board of Directors. If such redemption is to be by
lot and, as a result of such redemption, any holder of Series C Preferred
Stock would become a holder of a number of Series C Preferred Stock in excess
of the Ownership Limit (as defined in Article VI of the Charter) because such
holder's shares of Series C Preferred Stock were not redeemed, or were only
redeemed in part, then, except as otherwise provided in the Charter, the
Corporation shall redeem the requisite number of shares of Series C Preferred
Stock of such holder such that no holder will hold in excess of the Ownership
Limit subsequent to such redemption.
(c) Notwithstanding anything to the contrary contained
herein, unless full cumulative dividends on all shares of Series C Preferred
Stock have been or contemporaneously are authorized and paid, or a sum
sufficient for the payment thereof is set apart for payment for all past
dividend periods and the then current dividend period, no shares of Series C
Preferred Stock shall be redeemed unless all outstanding shares of Series C
Preferred Stock are simultaneously redeemed. In addition, unless full
cumulative dividends on all shares of Series C Preferred Stock have been or
contemporaneously are authorized and paid, or a sum sufficient for the payment
thereof is set apart for payment for all past dividend periods and the then
current dividend period, the Corporation shall not purchase or otherwise
acquire directly or indirectly any shares of Series C Preferred Stock or any
other shares of equity securities of the Corporation ranking junior to or on a
parity with the Series C Preferred Stock as to dividends or upon liquidation
(except by conversion into or exchange for shares of equity securities of the
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Corporation ranking junior to or on parity with the Series C Preferred Stock
as to dividends and upon liquidation). The restrictions in this Section 5 on
redemptions, purchases and other acquisitions shall not prevent the
redemption, purchase or acquisition by the Corporation of preferred stock of
any series pursuant to Article VI of the Charter or otherwise in order to
ensure that, among other things, the Corporation remains qualified as a REIT
for United States federal income tax purposes, or the redemption, purchase or
acquisition of Series C Preferred Stock pursuant to a purchase or exchange
offer made on the same terms to all holders of the Series C Preferred Stock.
(d) Immediately prior to any redemption of shares of Series
C Preferred Stock, the Corporation shall pay, in cash, any accumulated and
unpaid dividends to the redemption date, whether or not authorized, unless a
redemption date falls after a Dividend Record Date and prior to the
corresponding Dividend Payment Date, in which case each holder of Series C
Preferred Stock at the close of business on such Dividend Record Date shall be
entitled to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such shares before the Dividend
Payment Date. Except as provided in the previous sentence, the Corporation
shall make no payment or allowance for unpaid dividends, whether or not in
arrears, on Series C Preferred Stock for which a notice of redemption has been
given.
(e) The following provisions set forth the procedures for
redemption.
(i) Notice of redemption will be mailed by the
Corporation, postage prepaid, no less than 30 nor more than
60 calendar days immediately preceding the redemption date,
addressed to the respective holders of record of the Series
C Preferred Stock to be redeemed at their respective
addresses as they appear on the stock transfer records of
the Corporation. No failure to give such notice or any
defect thereto or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any
Series C Preferred Stock 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 C Preferred Stock may be listed or admitted to
trading, each notice shall state: (A) the redemption date;
(B) the redemption price; (C) the number of shares of
Series C Preferred Stock to be redeemed; (D) the place or
places where the holders of Series C Preferred Stock may
surrender certificates for payment of the redemption price;
and (E) that dividends on the Series C Preferred Stock to
be redeemed will cease to accumulate on the redemption
date. If less than all of the outstanding shares of Series
C Preferred Stock held by any holder are to be redeemed,
the notice mailed to each holder shall also specify the
number of shares of Series C Preferred Stock held by such
holder to be redeemed.
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(iii) On or after the redemption date, each holder of
Series C Preferred Stock to be redeemed shall present and
surrender the certificates representing his Series C
Preferred Stock to the Corporation at the place designated
in the notice of redemption and thereupon the redemption
price of such shares (including all accumulated and unpaid
dividends up to the redemption date) shall be paid to or on
the order of the person whose name appears on such
certificate representing Series C Preferred Stock as the
owner thereof and each surrendered certificate shall be
canceled. If fewer than all the shares represented by any
such certificate representing Series C Preferred Stock are
to be redeemed, a new certificate shall be issued
representing the unredeemed shares.
(iv) From and after the redemption date (unless the
Corporation defaults in payment of the redemption price),
all dividends on the Series C Preferred Stock designated
for redemption and all rights of the holders thereof,
except the right to receive the redemption price thereof
and all accumulated and unpaid dividends up to the
redemption date, shall terminate with respect to such
shares and such shares shall not thereafter be transferred
(except with the consent of the Corporation) on the
Corporation's stock transfer records, and such shares shall
not be deemed to be outstanding for any purpose whatsoever.
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 C Preferred Stock 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 C Preferred Stock 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 C Preferred Stock at
the end of two years after the redemption date shall be
returned by such bank or trust company to the Corporation.
(f) Any shares of Series C Preferred Stock that shall at
any time have been redeemed shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without designation as to
series until such shares are once more designated as part of a particular
series by the Board of Directors.
(6) Voting Rights.
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(a) Holders of the Series C Preferred Stock shall not have
any voting rights, except as set forth below.
(b) Whenever dividends on the Series C Preferred Stock are
in arrears for six or more quarterly periods (whether or not consecutive) (a
"Preferred Dividend Default"), then, in accordance with the bylaws of the
Corporation, the Board of Directors shall take all requisite action in
accordance with the Maryland General Corporation Law to increase by two the
number of directors of the Corporation, and the holders of Series C Preferred
Stock (voting together as a single class with all other equity securities of
the Corporation upon which like voting rights have been conferred and are
exercisable ("Parity Preferred Stock")) shall be entitled to elect a total of
two additional directors to the Corporation's Board of Directors (the
"Preferred Stock Directors") to fill such newly created directorships at an
annual meeting of stockholders or a special meeting held in place thereof or
at a properly called special meeting of the holders of the shares of the
Series C Preferred Stock and of any such Parity Preferred Stock, and at each
subsequent annual meeting of stockholders or special meeting held in place
thereof, until all dividends accumulated on the Series C Preferred Stock for
the past dividend periods and the then current dividend period shall have been
fully paid or authorized and a sum sufficient for the payment thereof set
aside for payment.
(c) If and when all accumulated dividends and the dividend
for the then current dividend period on the Series C Preferred Stock shall
have been paid in full or authorized and a sum sufficient for the payment
thereof set aside for payment in full, the holders of Series C Preferred Stock
shall be divested of the voting rights set forth in clause (b) above (subject
to revesting in the event of each and every Preferred Dividend Default) and,
if all accumulated dividends and the dividend for the then current dividend
period have been paid in full or authorized by the Board of Directors and set
aside for payment in full on all other 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 expire. Upon the
expiration of the terms of the Preferred Stock Directors in accordance with
the immediately preceding sentence, the number of directors of the Corporation
shall automatically be reduced to the number of directors serving on the Board
of Directors immediately preceding the Preferred Dividend Default. Any
Preferred Stock Director may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the
holders of a majority of the outstanding Series C Preferred Stock when they
have the voting rights set forth in clause (b) above and all other series of
Parity Preferred Stock (voting as a single class). So long as a Preferred
Dividend Default shall continue, any vacancy in the office of a Preferred
Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office, or if none remains in office, by a vote of the
holders of a majority of the outstanding Series C Preferred Stock when they
have the voting rights set forth in clause (b) above and all other series of
Parity Preferred Stock (voting as a single class). The Preferred Stock
Directors shall each be entitled to one vote per director on any matter. The
provisions contained in Section 6(b) hereof and in this Section 6(c)
constitute an election by the Corporation not to be subject to Section
3-804(c) of the Maryland General Corporation Law to the extent that holders of
Series C Preferred Stock and Parity Preferred Stock are entitled to elect the
Preferred Stock Directors to the Board of Directors during a Preferred
Dividend Default.
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(d) So long as any Series C Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two-thirds of the Series C Preferred Stock outstanding at
the time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize, create or increase the
authorized or issued amount of any class or series of equity securities
ranking senior to the outstanding Series C Preferred Stock with respect to the
payment of dividends or the distribution of assets upon voluntary or
involuntary liquidation, dissolution or winding up of the Corporation or
reclassify any authorized equity securities of the Corporation into any such
senior equity securities, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such senior
equity securities; or (ii) amend, alter or repeal the provisions of the
Charter (including these Articles Supplementary), whether by merger or
consolidation (in either case, an "Event") or otherwise, so as to materially
and adversely affect any right, preference or voting power of the Series C
Preferred Stock; provided, however, that with respect to any such amendment,
alteration or repeal of the provisions of the Charter (including these
Articles Supplementary) upon the occurrence of an Event, so long as shares of
the Series C Preferred Stock remain outstanding with the terms thereof
materially unchanged in any adverse respect, taking into account that, upon
the occurrence of an Event, the Corporation may not be the surviving entity
and such surviving entity may thereafter be the issuer of the Series C
Preferred Stock, the occurrence of any such Event shall not be deemed to
materially and adversely affect the rights, preferences or voting powers of
the Series C Preferred Stock; and provided further that any increase in the
amount of authorized Series C Preferred Stock or any other class or series of
the Corporation's equity securities, in each case ranking on a parity with or
junior to the Series C Preferred Stock with respect to the payment of
dividends and the distribution of assets upon voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, shall not be deemed
to materially and adversely affect the rights, preferences or voting powers of
the Series C Preferred Stock.
(e) The foregoing voting provisions shall not apply if, at
or prior to the time when the action with respect to which such vote would
otherwise be required shall be effected, all outstanding Series C Preferred
Stock 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) Conversion. The shares of Series C Preferred Stock are not
convertible into or exchangeable for any other property or securities of the
Corporation.
(8) Application of Article VI. The shares of Series C Preferred
Stock are subject to the provisions of Article VI of the Charter.
(9) Status. Upon any redemption of shares of Series C Preferred
Stock, the shares of Series C Preferred Stock which are redeemed will be
reclassified as authorized and unissued shares of Preferred Stock, and the
Board of Directors shall reduce the number of shares of Series C Preferred
Stock which the Corporation has the authority to issue by the number of shares
of Series C Preferred Stock redeemed by the Corporation and file a certificate
pursuant to the Maryland General Corporation Law stating that such reduction
has been so authorized.
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(10) Exclusion of Other Rights. The shares of Series C
Preferred Stock shall not have any preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than
those specifically set forth in these Articles Supplementary. The shares of
Series C Preferred Stock shall have no preemptive or subscription rights.
(11) Headings of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
(12) Severability of Provisions. If any preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications or terms or conditions of redemption of
the Series C Preferred Stock set forth in the Charter is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy, all
other preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of Series C Preferred Stock set forth in the Charter
which can be given effect without the invalid, unlawful or unenforceable
provision thereof shall, nevertheless, remain in full force and effect, and no
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of Series C Preferred Stock herein set forth shall be
deemed dependent upon any other provision thereof unless so expressed therein.
THIRD: The undersigned officer of the Corporation acknowledges
these Articles Supplementary to be the corporate act of the Corporation and,
as to all matters or facts required to be verified under oath, the undersigned
officer acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that
this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and Chief Executive Officer and attested to by its Secretary on this
21st day of May, 2003.
ATTEST: ANTHRACITE CAPITAL, INC.
/s/ Robert L. Friedberg By: /s/ Hugh R. Frater (SEAL)
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Robert L. Friedberg, Secretary Hugh R. Frater
President and Chief Executive
Officer