EXHIBIT 3.1
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EQUITY ONE, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: Equity One, Inc., a Maryland corporation (the "Corporation"),
desires to amend and restate its Charter as currently in effect and as
hereinafter amended.
SECOND: The following provisions are all the provisions of the Charter
currently in effect and as hereinafter amended:
ARTICLE I
INCORPORATION
The corporation was formed under the general laws of the State of
Maryland on June 15, 1992.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is Equity One, Inc.
ARTICLE III
PURPOSE
The purposes for which the Corporation was formed are to engage in any
lawful act or activity (including, without limitation or obligation, engaging in
business as a real estate investment trust under the Internal Revenue Code of
1986, as amended, or any successor statute (the "Code")) for which corporations
may be organized under the general laws of the State of Maryland as now or
hereafter in force. For purposes of these Articles, "REIT" means a real estate
investment trust under Sections 856 through 860 of the Code.
ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The address of the principal office of the Corporation in the State of
Maryland is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street,
Baltimore, Maryland 21202,
Attention: James J. Hanks, Jr. The name of the resident agent of the Corporation
in the State of Maryland is James J. Hanks, Jr., whose post address is c/o
Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street, Baltimore, Maryland
21202. The resident agent is a citizen of and resides in the State of Maryland.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1 NUMBER AND CLASSIFICATION OF DIRECTORS. The business and
affairs of the Corporation shall be managed under the direction of the Board of
Directors. The number of directors of the Corporation initially shall be seven,
which number may be increased or decreased pursuant to the Bylaws, but shall
never be less than the minimum number required by the Maryland General
Corporation Law. The names of the directors who shall serve until their
successors are duly elected and qualified are:
Chaim Katzman
Doron Valero
Noam Ben-Ozer
Shaiy Pilpel
Yuval Yanai
Robert Cooney
Ronald Chase
The Board of Directors may increase the number of directors and may
fill any vacancy, whether resulting from an increase in the number of directors
or otherwise, on the Board of Directors in the manner provided in the Bylaws.
Section 5.2 EXTRAORDINARY ACTIONS. Except as specifically provided in
Section 5.8 (relating to removal of directors) and notwithstanding any provision
of law permitting or requiring any action to be taken or approved by the
affirmative vote of the holders of shares entitled to cast a greater number of
votes, any such action shall be effective and valid if taken or approved by the
affirmative vote of holders of shares entitled to cast a majority of all the
votes entitled to be cast on the matter.
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Section 5.3 AUTHORIZATION BY BOARD OF STOCK ISSUANCES. The Board of
Directors may authorize the issuance from time to time of shares of stock of the
Corporation of any class or series, whether now or hereafter authorized, or
securities or rights convertible into shares of its stock of any class or
series, whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable (or without consideration in the case of a stock
split or stock dividend), subject to such restrictions or limitations, if any,
as may be set forth in the Charter or the Bylaws.
Section 5.4 PREEMPTIVE RIGHTS. Except as may be provided by the Board
of Directors in setting the terms of classified or reclassified shares of stock
pursuant to Section 6.4 or as may be otherwise agreed by contract, no holder of
shares of stock of the Corporation shall, as such holder, have any preemptive
right to purchase or subscribe for any additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
Section 5.5 INDEMNIFICATION. The Corporation shall have the power, to
the maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to, (a) any individual who is a
present or former director or officer of the Corporation or (b) any individual
who, while a director of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, managing member, partner or trustee
of another corporation, real estate investment trust, partnership, joint
venture, trust, employee benefit plan or any other enterprise, from and against
any claim or liability to which such person may become subject or which such
person may incur by reason of his status as a present or former director or
officer of the Corporation. The Corporation shall have the power, with the
approval of the Board of Directors, to provide such indemnification and
advancement of expenses to a person who served a predecessor of the Corporation
in any of the capacities described in (a) or (b) above and to any employee or
agent of the Corporation or a predecessor of the Corporation.
Section 5.6 DETERMINATIONS BY BOARD. The determination as to any of the
following matters, made in good faith by or pursuant to the direction of the
Board of Directors consistent with the Charter and in the absence of actual
receipt of an improper benefit in money, property or services or active and
deliberate dishonesty established by a court, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of its stock:
the
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amount of the net income of the Corporation for any period and the amount of
assets at any time legally available for the payment of dividends, redemption of
its stock or the payment of other distributions on its stock; the amount of
paid-in surplus, net assets, other surplus, annual or other net profit, net
assets in excess of capital, undivided profits or excess of profits over losses
on sales of assets; the amount, purpose, time of creation, increase or decrease,
alteration or cancellation of any reserves or charges and the propriety thereof
(whether or not any obligation or liability for which such reserves or charges
shall have been created shall have been paid or discharged); the fair value, or
any sale, bid or asked price to be applied in determining the fair value, of any
asset owned or held by the Corporation; any matter relating to the acquisition,
holding or disposition of any assets by the Corporation; or any other matter
relating to the business and affairs of the Corporation.
Section 5.7 REIT QUALIFICATION. The Corporation has elected to qualify
for federal income tax treatment as a REIT. The Board of Directors shall use its
reasonable best efforts to take such actions as are necessary or appropriate to
preserve the status of the Corporation as a REIT; however, if the Board of
Directors determines that it is no longer in the best interests of the
Corporation to continue to be qualified as a REIT, the Board of Directors may
revoke or otherwise terminate the Corporation's REIT election pursuant to
Section 856(g) of the Code. The Board of Directors also may determine that
compliance with any restriction or limitation on stock ownership and transfers
set forth in Article VII is no longer required for REIT qualification.
Section 5.8 REMOVAL OF DIRECTORS. Subject to the rights of holders of
one or more classes or series of Preferred Stock, if any, to elect or remove one
or more directors, any director, or the entire Board of Directors, may be
removed from office at any time, but only for Cause and then only by the
affirmative vote of at least two-thirds (2/3) of the votes entitled to be cast
generally in the election of directors. For the purpose of this paragraph,
"Cause" shall mean, with respect to any particular director, conviction of a
felony or a final judgment of a court of competent jurisdiction holding that
such director caused demonstrable, material harm to the Corporation through bad
faith or active and deliberate dishonesty.
Section 5.9 ADVISOR AGREEMENTS. Subject to such approval of
stockholders and other conditions, if any, as may be required by any applicable
statute, rule or regulation, the Board of Directors may authorize the execution
and performance by the Corporation of one or
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more agreements with any person, corporation, association, company, trust,
partnership (limited or general) or other organization whereby, subject to the
supervision and control of the Board of Directors, any such other person,
corporation, association, company, trust, partnership (limited or general) or
other organization shall render or make available to the Corporation managerial,
investment, advisory and/or related services, office space and other services
and facilities (including, if deemed advisable by the Board of Directors, the
management or supervision of the investments of the Corporation) upon such terms
and conditions as may be provided in such agreement or agreements (including, if
deemed fair and equitable by the Board of Directors, the compensation payable
thereunder by the Corporation).
ARTICLE VI
STOCK
Section 6.1 AUTHORIZED SHARES. The Corporation shall have the authority
to issue one hundred and ten million (110,000,000) shares of stock, consisting
of one hundred million (100,000,000) shares of Common Stock, par value $0.01 per
share ("Common Stock"), and ten million (10,000,000) shares of Preferred Stock,
par value $0.01 per share ("Preferred Stock"). The aggregate par value of all
authorized shares of stock having par value is $1,100,000. If shares of one
class of stock are classified or reclassified into shares of another class of
stock pursuant to Sections 6.2, 6.3, or 6.4 of this Article VI, the number of
authorized shares of the former class shall be automatically decreased and the
number of shares of the latter class shall be automatically increased, in each
case by the number of shares so classified or reclassified, so that the
aggregate number of shares of stock of all classes that the Corporation has the
authority to issue shall not be more than the total number of shares of stock
set forth in the first sentence of this paragraph. To the extent permitted by
Maryland law, the Board of Directors, without any action by the stockholders of
the Corporation, may amend the charter from time to time to increase or decrease
the aggregate number of shares of stock or the number of shares of stock of any
class or series that the Corporation has the authority to issue.
Section 6.2 COMMON STOCK. Subject to the provisions of Article VII,
each share of Common Stock shall entitle the holder thereof to one vote. The
Board of Directors may reclassify any unissued shares of Common Stock from time
to time in one or more classes or series of stock.
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Section 6.3 PREFERRED STOCK. The Board of Directors may classify any
unissued shares of Preferred Stock and reclassify any previously classified but
unissued shares of Preferred Stock of any series from time to time, in one or
more classes or series of stock.
Section 6.4 CLASSIFIED OR RECLASSIFIED SHARES. Prior to issuance of
classified or reclassified shares of any class or series, the Board of Directors
by resolution shall: (a) designate that class or series to distinguish it from
all other classes and series of stock of the Corporation; (b) specify the number
of shares to be included in the class or series; (c) set or change, subject to
the provisions of Article VII and subject to the express terms of any class or
series of stock of the Corporation outstanding at the time, the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms and conditions of
redemption for each class or series; and (d) cause the Corporation to file
articles supplementary with the State Department of Assessments and Taxation of
Maryland ("SDAT"). Any of the terms of any class or series of stock set or
changed pursuant to clause (c) of this Section 6.4 may be made dependent upon
facts or events ascertainable outside the Charter (including determinations by
the Board of Directors or other facts or events within the control of the
Corporation) and may vary among holders thereof, provided that the manner in
which such facts, events or variations shall operate upon the terms of such
class or series of stock is clearly and expressly set forth in the articles
supplementary filed with the SDAT.
Section 6.5 CHARTER AND BYLAWS. All persons who shall acquire stock in
the Corporation shall acquire the same subject to the provisions of the Charter
and the Bylaws.
ARTICLE VII
RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES
Section 7.1 DEFINITIONS. For the purpose of this Article VII, the
following terms shall have the following meanings:
AGGREGATE STOCK OWNERSHIP LIMIT. The term "Aggregate Stock Ownership
Limit" shall mean not more than 9.9% in value of the aggregate outstanding
shares of Capital Stock. The value of the outstanding shares of Capital Stock
shall be determined by the Board of Directors of the Corporation in good faith,
which determination shall be conclusive for all purposes hereof.
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BENEFICIAL OWNERSHIP. The term "Beneficial Ownership" shall mean
ownership of Capital Stock by a Person, whether the interest in the shares of
Capital Stock is held directly or indirectly (including by a nominee), and shall
include interests that would be treated as owned 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.
BUSINESS DAY. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.
CAPITAL STOCK. The term "Capital Stock" shall mean all classes or
series of stock of the Corporation, including, without limitation, Common Stock
and Preferred Stock.
CHARITABLE BENEFICIARY. The term "Charitable Beneficiary" shall mean
one or more beneficiaries of the Trust as determined pursuant to Section 7.3.6,
provided that each such organization must be described in Section 501(c)(3) of
the Code and contributions to each such organization must be eligible for
deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
CHARTER. The term "Charter" shall mean the charter of the Corporation,
as that term is defined in the MGCL.
CODE. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
COMMON STOCK OWNERSHIP LIMIT. The term "Common Stock Ownership Limit"
shall mean not more than 9.9% (in value or in number of shares, whichever is
more restrictive) of the aggregate outstanding shares of Common Stock of the
Corporation. The number and value of outstanding shares of Common Stock of the
Corporation shall be determined by the Board of Directors of the Corporation in
good faith, which determination shall be conclusive for all purposes hereof.
CONSTRUCTIVE OWNERSHIP. The term "Constructive Ownership"
shall mean ownership of Capital Stock by a Person, whether the interest in the
shares of Capital Stock is held directly or indirectly (including by a nominee),
and shall include interests that would be treated as owned through the
application of Section 318(a) of the Code, as modified by
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Section 856(d)(5) of the Code. The terms "Constructive Owner," "Constructively
Owns" and "Constructively Owned" shall have the correlative meanings.
EXCEPTED HOLDER. The term "Excepted Holder" shall mean a stockholder of
the Corporation for whom an Excepted Holder Limit is created by these Articles
or by the Board of Directors pursuant to Section 7.2.7.
EXCEPTED HOLDER LIMIT. The term "Excepted Holder Limit" shall mean,
provided that the affected Excepted Holder agrees to comply with the
requirements established by the Board of Directors pursuant to Section 7.2.7,
and subject to adjustment pursuant to Section 7.2.8, the percentage limit
established by the Board of Directors pursuant to Section 7.2.7.
INITIAL DATE. The term "Initial Date" shall mean the date upon which
the Articles of Amendment and Restatement containing this Article VII are filed
with the SDAT.
MARKET PRICE. The term "Market Price" on any date shall mean, with
respect to any class or series of outstanding shares of Capital Stock, the
Closing Price for such Capital Stock on such date. The "Closing Price" on any
date shall mean the last sale price for such Capital Stock, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, for such Capital Stock, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if such Capital Stock
is not listed or admitted to trading on the NYSE, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such Capital Stock is listed
or admitted to trading or, if such Capital Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or, if such system is no longer in use,
the principal other automated quotation system that may then be in use or, if
such Capital Stock is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such Capital Stock selected by the Board of Directors of the
Corporation or, in the event that no trading price is available for such Capital
Stock, the fair market value of the Capital Stock, as determined in good faith
by the Board of Directors of the Corporation.
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MGCL. The term "MGCL" shall mean the Maryland General Corporation Law,
as amended from time to time.
NYSE. The term "NYSE" shall mean the New York Stock Exchange.
PERSON. The term "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Sections 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 and also includes a group as that term
is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, and a group to which an Excepted Holder Limit applies.
PROHIBITED OWNER. The term "Prohibited Owner" shall mean, with respect
to any purported Transfer, any Person who, but for the provisions of Section
7.2.1, would Beneficially Own or Constructively Own shares of Capital Stock, and
if appropriate in the context, shall also mean any Person who would have been
the record owner of the shares that the Prohibited Owner would have so owned.
REIT. The term "REIT" shall mean a real estate investment trust within
the meaning of Section 856 of the Code.
RESTRICTION TERMINATION DATE. The term "Restriction Termination Date"
shall mean the first day after the Initial Date on which the Corporation
determines pursuant to Section 5.6 of the Charter that it is no longer in the
best interests of the Corporation to attempt to, or continue to, qualify as a
REIT or that compliance with the restrictions and limitations on Beneficial
Ownership, Constructive Ownership and Transfers of shares of Capital Stock set
forth herein is no longer required in order for the Corporation to qualify as a
REIT.
TENANT. The term "Tenant" shall mean a tenant, subtenant or any other
Person that is a subtenant through a chain of subtenancies of a property owned
by the Corporation.
TRANSFER. The term "Transfer" shall mean any issuance, sale, transfer,
gift, assignment, devise or other disposition, as well as any other event that
causes any Person to acquire Beneficial Ownership or Constructive Ownership, or
any agreement to take any such actions or cause any such events, of Capital
Stock or the right to vote or receive dividends on Capital Stock, including (a)
the granting or exercise of any option (or any disposition of any option), (b)
any disposition of any securities or rights convertible into or exchangeable for
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Capital Stock or any interest in Capital Stock or any exercise of any such
conversion or exchange right and (c) Transfers of interests in other entities
that result in changes in Beneficial or Constructive Ownership of Capital Stock;
in each case, whether voluntary or involuntary, whether owned of record,
Constructively Owned or Beneficially Owned and whether by operation of law or
otherwise. The terms "Transferring" and "Transferred" shall have the correlative
meanings.
TRUST. The term "Trust" shall mean any trust provided for in Section
7.3.1.
TRUSTEE. The term "Trustee" shall mean a Person unaffiliated with the
Corporation and a Prohibited Owner that is appointed by the Corporation to serve
as trustee of a Trust.
Section 7.2 CAPITAL STOCK.
Section 7.2.1 OWNERSHIP LIMITATIONS. During the period
commencing on the Initial Date and prior to the Restriction Termination Date:
(a) BASIC RESTRICTIONS.
(i) (1) No Person, other than an Excepted Holder,
shall Beneficially Own or Constructively Own shares of Capital Stock in excess
of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted
Holder, shall Beneficially Own or Constructively Own shares of Common Stock in
excess of the Common Stock Ownership Limit and (3) no Excepted Holder shall
Beneficially Own or Constructively Own shares of Capital Stock in excess of the
Excepted Holder Limit for such Excepted Holder.
(ii) No Person shall Beneficially or
Constructively Own shares of Capital Stock to the extent that such Beneficial or
Constructive Ownership of Capital Stock would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code (without regard
to whether the ownership interest is held during the last half of a taxable
year), 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 (substituting, solely for purposes of this
determination, "Section 856(d)(5)" for Section 897(c)(6)(C)" in the definition
of Constructive Ownership)) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code).
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(iii) Subject to Section 7.4 of the Charter, any
Transfer of shares of Capital Stock (whether or not such Transfer is the result
of a transaction entered into through the facilities of the NYSE or any other
national securities exchange or automated inter-dealer quotation system) that,
if effective, would result in the Capital Stock being beneficially owned by less
than 100 Persons (determined under the principles of Section 856(a)(5) of the
Code) shall be void AB initio, and the intended transferee shall acquire no
rights in such shares of Capital Stock.
(b) TRANSFER IN TRUST. Subject to Section 7.4 of
the Charter, if any Transfer of shares of Capital Stock (whether or not such
Transfer is the result of a transaction entered into through the facilities of
the NYSE or any other national securities exchange or automated inter-dealer
quotation system) occurs which, if effective, would result in any Person
Beneficially Owning or Constructively Owning shares of Capital Stock in
violation of Section 7.2.1(a)(i) or (ii),
(i) then that number of shares of the Capital
Stock the Beneficial or Constructive Ownership of which otherwise would cause
such Person to violate Section 7.2.1(a)(i) or (ii)(rounded to the nearest whole
share) shall be automatically transferred to a Trust for the benefit of a
Charitable Beneficiary, as described in Section 7.3, effective as of the close
of business on the Business Day prior to the date of such Transfer, and such
Person shall acquire no rights in such shares; or
(ii) if the transfer to the Trust described in
clause (i) of this sentence would not be effective for any reason to prevent the
violation of Section 7.2.1(a)(i) or (ii), then the Transfer of that number of
shares of Capital Stock that otherwise would cause any Person to violate Section
7.2.1(a)(i) or (ii) shall be void AB INITIO, and the intended transferee shall
acquire no rights in such shares of Capital Stock.
Section 7.2.2 REMEDIES FOR BREACH. If the Board of Directors
of the Corporation or any duly authorized committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place that
results in a violation of Section 7.2.1 or that a Person intends to acquire or
has attempted to acquire Beneficial or Constructive Ownership of any shares of
Capital Stock in violation of Section 7.2.1 (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such action
as it deems advisable to refuse to give effect to or to prevent such Transfer or
other event, including, without
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limitation, causing the Corporation to redeem shares, refusing to give effect to
such Transfer on the books of the Corporation or instituting proceedings to
enjoin such Transfer or other event; PROVIDED, HOWEVER, that any Transfer or
attempted Transfer or other event in violation of Section 7.2.1 shall
automatically result in the transfer to the Trust described above, and, where
applicable, such Transfer (or other event) shall be void AB INITIO as provided
above irrespective of any action (or non-action) by the Board of Directors or a
committee thereof.
Section 7.2.3 NOTICE OF RESTRICTED TRANSFER. Any Person who
acquires or attempts or intends to acquire Beneficial Ownership or Constructive
Ownership of shares of Capital Stock that will or may violate Section 7.2.1(a)
or any Person who would have owned shares of Capital Stock that resulted in a
transfer to the Trust pursuant to the provisions of Section 7.2.1(b) shall
immediately give written notice to the Corporation of such event, or in the case
of such a proposed or attempted transaction, give at least 15 days prior written
notice, 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 on the Corporation's status as a REIT.
Section 7.2.4 OWNERS REQUIRED TO PROVIDE INFORMATION. From the
Initial Date and prior to the Restriction Termination Date:
(a) every Person who Beneficially Owns more than five
percent (or such lower percentage as required by the Code or the Treasury
Regulations promulgated thereunder) of the outstanding shares of Capital Stock,
within 30 days after the end of each taxable year, shall give written notice to
the Corporation stating the name and address of such owner, the number of shares
of Capital Stock Beneficially Owned and a description of the manner in which
such shares are held. Each such Person shall provide to the Corporation such
additional information as the Corporation may request in order to determine the
effect, if any, of such Beneficial Ownership on the Corporation's status as a
REIT and to ensure compliance with the Aggregate Stock Ownership Limit; and
(b) each Person who is a Beneficial or Constructive
Owner of Capital Stock and each Person (including the stockholder of record) who
is holding Capital Stock for a Beneficial or Constructive Owner shall provide to
the Corporation such information as the Corporation may request, in good faith,
in order to determine the Corporation's status as a REIT and to comply with
requirements of any taxing authority or governmental authority or to determine
such compliance.
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Section 7.2.5 REMEDIES NOT LIMITED. Subject to Sections 5.6
and 7.4 of the Charter, nothing contained in this Section 7.2 shall limit the
authority of the Board of Directors of the Corporation to take such other action
as it deems necessary or advisable to protect the Corporation and the interests
of its stockholders in preserving the Corporation's status as a REIT.
Section 7.2.6 AMBIGUITY. In the case of an ambiguity in the
application of any of the provisions of this Section 7.2, Section 7.3, or any
definition contained in Section 7.1, the Board of Directors of the Corporation
shall have the power to determine the application of the provisions of this
Section 7.2 or Section 7.3 with respect to any situation based on the facts
known to it. In the event Section 7.2 or 7.3 requires an action by the Board of
Directors and the Charter fails 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 Sections
7.1, 7.2 or 7.3.
Section 7.2.7 EXCEPTIONS.
(a) Subject to Section 7.2.1(a)(ii), the Board of
Directors of the Corporation, in its sole discretion, may exempt a Person from
the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, as the
case may be, and may establish or increase an Excepted Holder Limit for such
Person if:
(i) the Board of Directors obtains such
representations and undertakings from such Person as are reasonably necessary to
ascertain that no individual's Beneficial or Constructive Ownership of such
shares of Capital Stock will violate Section 7.2.1(a)(ii);
(ii) such Person does not and represents that it
will not own, actually or Constructively, an interest in a Tenant of the
Corporation (or a Tenant of any entity owned or controlled by the Corporation)
that would cause the Corporation to own, actually or Constructively, more than a
9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such Tenant
and the Board of Directors obtains such representations and undertakings from
such Person as are reasonably necessary to ascertain this fact (for this
purpose, a Tenant from whom the Corporation (or an entity owned or controlled by
the Corporation) derives (and is expected to continue to derive) a sufficiently
small amount of revenue such that, in the opinion of the Board of Directors of
the Corporation, rent from such Tenant would not adversely affect the
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Corporation's ability to qualify as a REIT need not be treated as a Tenant of
the Corporation); and
(iii) such Person agrees that any violation or
attempted violation of such representations or undertakings (or other action
which is contrary to the restrictions contained in Sections 7.2.1 through 7.2.6)
will result in such shares of Capital Stock being automatically transferred to a
Trust in accordance with Sections 7.2.1(b) and 7.3.
(b) Prior to granting any exception pursuant to
Section 7.2.7(a), the Board of Directors of the Corporation 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. Notwithstanding the receipt of any
ruling or opinion, the Board of Directors may impose such conditions or
restrictions as it deems appropriate in connection with granting such exception.
(c) Subject to Section 7.2.1(a)(ii), an underwriter
which participates in a public offering or a private placement of Capital Stock
(or securities convertible into or exchangeable for Capital Stock) may
Beneficially Own or Constructively Own shares of Capital Stock (or securities
convertible into or exchangeable for Capital Stock) in excess of the Aggregate
Stock Ownership Limit, the Common Stock Ownership Limit, or both such limits,
but only to the extent necessary to facilitate such public offering or private
placement.
(d) The Board of Directors may only reduce the
Excepted Holder Limit for an Excepted Holder: (1) with the written consent of
such Excepted Holder at any time, or (2) pursuant to the terms and conditions of
the agreements and undertakings entered into with such Excepted Holder in
connection with the establishment of the Excepted Holder Limit for that Excepted
Holder. No Excepted Holder Limit shall be reduced to a percentage that is less
than the Common Stock Ownership Limit.
Section 7.2.8 INCREASE IN AGGREGATE STOCK OWNERSHIP AND COMMON
STOCK OWNERSHIP LIMITS. The Board of Directors may from time to time increase
the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit.
Section 7.2.9 LEGEND. Each certificate for shares of Capital
Stock shall bear substantially the following legend:
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The shares represented by this certificate are subject to restrictions
on Beneficial and Constructive Ownership and Transfer for the purpose
of the Corporation's maintenance of its status as a Real Estate
Investment Trust under the Internal Revenue Code of 1986, as amended
(the "Code"). Subject to certain further restrictions and except as
expressly provided in the Corporation's Charter, (i) no Person may
Beneficially or Constructively Own shares of the Corporation's Common
Stock in excess of five percent (in value or number of shares) of the
outstanding shares of Common Stock of the Corporation unless such
Person is an Excepted Holder (in which case the Excepted Holder Limit
shall be applicable); (ii) no Person may Beneficially or Constructively
Own shares of Capital Stock of the Corporation in excess of five
percent of the value of the total outstanding shares of Capital Stock
of the Corporation, unless such Person is an Excepted Holder (in which
case the Excepted Holder Limit shall be applicable); (iii) no Person
may Beneficially or Constructively Own Capital Stock that 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 Capital 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
shares of Capital Stock which causes or will cause a Person to
Beneficially or Constructively Own shares of Capital Stock in excess or
in violation of the above limitations must immediately notify the
Corporation. If any of the restrictions on transfer or ownership are
violated, the shares of Capital Stock represented hereby will be
automatically transferred to a Trustee of a Trust for the benefit of
one or more Charitable Beneficiaries. In addition, upon the occurrence
of certain events, attempted Transfers in violation of the restrictions
described above may be void AB INITIO. All capitalized terms in this
legend have the meanings defined in the Charter, 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 Capital
Stock of the Corporation on request and without charge.
Instead of the foregoing legend, the certificate may state that the
Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge.
Section 7.3 TRANSFER OF CAPITAL STOCK IN TRUST.
Section 7.3.1 OWNERSHIP IN TRUST. Upon any purported Transfer
or other event described in Section 7.2.1(b) that would result in a transfer of
shares of Capital Stock to a Trust, such shares of Capital Stock shall be deemed
to have been transferred to the Trustee 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 the transfer to
the Trust pursuant to
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Section 7.2.1(b). The Trustee shall be appointed by the Corporation and shall be
a Person unaffiliated with the Corporation and any Prohibited Owner. Each
Charitable Beneficiary shall be designated by the Corporation as provided in
Section 7.3.6.
Section 7.3.2 STATUS OF SHARES HELD BY THE TRUSTEE.
Shares of Capital Stock held by the Trustee shall be issued and outstanding
shares of Capital Stock of the Company. The Prohibited Owner shall have no
rights in the shares held by the Trustee. The Prohibited Owner shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends or other distributions and shall not possess any
rights to vote or other rights attributable to the shares held in the Trust.
Section 7.3.3 DIVIDEND AND VOTING RIGHTS. The Trustee
shall have all voting rights and rights to dividends or other distributions with
respect to shares of Capital Stock held in the Trust, which rights shall be
exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend
or other distribution paid prior to the discovery by the Corporation that the
shares of Capital Stock have been transferred to the Trustee shall be paid by
the recipient of such dividend or distribution to the Trustee upon demand and
any dividend or other distribution authorized but unpaid shall be paid when due
to the Trustee. Any dividend or distribution so paid to the Trustee shall be
held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no
voting rights with respect to shares held in the Trust and, subject to Maryland
law, effective as of the date that the shares of Capital Stock have 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 Prohibited
Owner prior to the discovery by the Corporation that the shares of Capital Stock
have 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 the provisions of this Article
VII, until the Corporation has received notification that shares of Capital
Stock have 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.
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Section 7.3.4 SALE OF SHARES BY TRUSTEE. Within 20
days of receiving notice from the Corporation that shares of Capital Stock have
been transferred to the Trust, the Trustee of the Trust shall sell the shares
held in the Trust to a person, designated by the Trustee, whose ownership of the
shares will not violate the ownership limitations set forth in Section 7.2.1(a).
Upon such sale, the interest of the Charitable Beneficiary in the shares sold
shall terminate and the Trustee shall distribute the net proceeds of the sale to
the Prohibited Owner and to the Charitable Beneficiary as provided in this
Section 7.3.4. The Prohibited Owner shall receive the lesser of (1) the price
paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not
give value for the shares in connection with the event causing the shares to be
held in the Trust (E.G., in the case of a gift, devise or other such
transaction), the Market Price of the shares on the day of the event causing the
shares to be held in the Trust and (2) the price per share received by the
Trustee from the sale or other disposition of the shares held in the Trust. Any
net sales proceeds in excess of the amount payable to the Prohibited Owner shall
be immediately paid to the Charitable Beneficiary. If, prior to the discovery by
the Corporation that shares of Capital Stock have been transferred to the
Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall
be deemed to have been sold on behalf of the Trust and (ii) to the extent that
the Prohibited Owner received an amount for such shares that exceeds the amount
that such Prohibited Owner was entitled to receive pursuant to this Section
7.3.4, such excess shall be paid to the Trustee upon demand.
Section 7.3.5 PURCHASE RIGHT IN STOCK TRANSFERRED TO
THE TRUSTEE. Shares of Capital 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 per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift, the
Market Price at the time of such devise or gift) 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
held in the Trust pursuant to Section 7.3.4. Upon such a sale to the
Corporation, the interest of the Charitable Beneficiary in the shares sold shall
terminate and the Trustee shall distribute the net proceeds of the sale to the
Prohibited Owner.
Section 7.3.6 DESIGNATION OF CHARITABLE
BENEFICIARIES. 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 (i) the shares of Capital Stock held in
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the Trust would not violate the restrictions set forth in Section 7.2.1(a) in
the hands of such Charitable Beneficiary and (ii) each such organization must be
described in Section 501(c)(3) of the Code and contributions to each such
organization must be eligible for deduction under each of Sections 170(b)(1)(A),
2055 and 2522 of the Code.
Section 7.4 NYSE TRANSACTIONS. Nothing in this Article VII shall
preclude the settlement of any transaction entered into through the facilities
of the NYSE or any other national securities exchange or automated inter-dealer
quotation system. The fact that the settlement of any transaction occurs shall
not negate the effect of any other provision of this Article VII and any
transferee in such a transaction shall be subject to all of the provisions and
limitations set forth in this Article VII.
Section 7.5 ENFORCEMENT. The Corporation is authorized specifically
to seek equitable relief, including injunctive relief, to enforce the provisions
of this Article VII.
Section 7.6 NON-WAIVER. No delay or failure on the part of the
Corporation or the Board of Directors in exercising any right hereunder shall
operate as a waiver of any right of the Corporation or the Board of Directors,
as the case may be, except to the extent specifically waived in writing.
ARTICLE VIII
AMENDMENTS
The Corporation reserves the right from time to time to make
any amendment to its Charter, now or hereafter authorized by law, including any
amendment altering the terms or contract rights, as expressly set forth in this
Charter, of any shares of outstanding stock. All rights and powers conferred by
the Charter on stockholders, directors and officers are granted subject to this
reservation. Except as otherwise provided in the Charter, any amendment to the
Charter shall be valid only if approved by the affirmative vote of a majority of
all votes entitled to be cast on the matter. However, any amendment to Section
5.7 or this Article VIII of the Charter shall be valid only if approved by the
affirmative vote of two-thirds of all the votes entitled to be cast on the
matter.
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ARTICLE IX
LIMITATION OF LIABILITY
To the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of directors and officers of a corporation,
no director or officer of the Corporation shall be liable to the Corporation or
its stockholders for money damages. Neither the amendment nor repeal of this
Article IX, nor the adoption or amendment of any other provision of the Charter
or Bylaws inconsistent with this Article IX, shall apply to or affect in any
respect the applicability of the preceding sentence with respect to any act or
failure to act which occurred prior to such amendment, repeal or adoption.
THIRD: The amendment to and restatement of the Charter as hereinabove
set forth has been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
FOURTH: The current address of the principal office of the Corporation
is as set forth in Article IV of the foregoing amendment and restatement of the
Charter.
FIFTH: The name and address of the Corporation's current resident agent
is as set forth in Article IV of the foregoing amendment and restatement of the
Charter.
SIXTH: The number of directors of the Corporation and the names of
those currently in office are as set forth in Article V of the foregoing
amendment and restatement of the Charter.
SEVENTH: The total number of shares of stock which the Corporation had
authority to issue immediately prior to this amendment was 40,000,000 shares of
common stock, par value $0.01 per share, and 5,000,000 shares of preferred
stock, $0.01 per share, having an aggregate par value of $450,000.
EIGHTH: The total number of shares of stock which the Corporation has
authority to issue, pursuant to the Charter of the Corporation as hereby amended
and restated, is 40,000,000 shares of Common Stock, $.01 par value per share,
and 5,000,000 shares of Preferred Stock, $.01 par value per share, having an
aggregate par value of $450,000.
NINTH: The undersigned President acknowledges these Articles of
Amendment and Restatement to be the corporate 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.
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IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment and Restatement to be signed in its name and on its behalf by its
Chairman of the Board, President and Chief Executive Officer and attested to by
its Secretary on this 22nd day of April 2002.
ATTEST: EQUITY ONE, INC.
/s/ ALAN J. MARCUS By: /s/ CHAIM KATZMAN
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Alan J. Marcus, Secretary Chaim Katzman, Chairman of the Board,
President and Chief Executive Officer
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