Exhibit 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BOYKIN LODGING COMPANY
FIRST: The name of the corporation shall be Boykin Lodging Company (the
"Corporation").
SECOND: The place in the State of Ohio where the principal office of
the Corporation is located is Cleveland, Cuyahoga County.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to
1701.98, inclusive, of the Ohio Revised Code.
FOURTH: The authorized number of shares of the Corporation is
50,000,000, consisting of 40,000,000 Common Shares, without par value
(hereinafter called "Common Shares"), 5,000,000 Class A Cumulative Preferred
Shares, without par value (hereinafter called "Cumulative Preferred Shares"),
and 5,000,000 Class A Noncumulative Preferred Shares, without par value
(hereinafter called "Noncumulative Preferred Shares").
DIVISION A: PREFERRED SHARES
I. THE CLASS A CUMULATIVE PREFERRED SHARES. The Cumulative Preferred
Shares shall have the following express terms:
Section 1. SERIES. The Cumulative Preferred Shares may be issued
from time to time in one or more series. All Cumulative Preferred Shares
shall be of equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as hereinafter provided,
and each share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Cumulative Preferred Shares shall rank on a parity with the
Noncumulative Preferred Shares and shall be identical to all Noncumulative
Preferred Shares except (1) in respect of the matters that may be fixed by
the Board of Directors as provided in clauses (a) through (i), inclusive, of
this Section 1 and (2) only dividends on Cumulative Preferred Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and of Items III and IV of this Division, which
provisions shall apply to all Cumulative Preferred Shares, the Board of
Directors hereby is authorized to cause such shares to be issued in one or
more series and with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by distinguishing
number, letter or title;
(b) The authorized number of shares of the series, which number
the Board of Directors may (except when otherwise provided in the creation of
the series) increase or decrease from time to time before or after the
issuance thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series, including the means
by which such rates may be established;
(d) The date or dates from which dividends shall accrue and be
cumulative and the dates on which and the period or periods for which
dividends, if declared, shall be payable, including the means by which such
dates and periods may be established;
(e) The redemption rights and price or prices, if any, for shares
of the series;
(f) The terms and amount of the sinking fund, if any, for the
purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation;
(h) Whether the shares of the series shall be convertible into
Common Shares or shares of any other class and, if so, the conversion rate or
rates or price or prices, any adjustments thereof and all other terms and
conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth elsewhere in
these Amended and Restated Articles of Incorporation) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Amended and Restated Articles of Incorporation, as amended, fixing, with
respect to each such series, the matters described in clauses (a) through
(i), both inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. DIVIDENDS.
(a) The holders of Cumulative Preferred Shares of each series, in
preference to the holders of Common Shares and of any other class of shares
ranking junior to the Cumulative Preferred Shares, shall be entitled to
receive out of any funds legally available therefor, when and as declared by
the Board of Directors, dividends in cash at the rate or rates for such
series fixed in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such dividends shall
accrue and be cumulative, in the case of shares of each particular series,
from and after the date or dates fixed with respect to such series. Any
dividend payment made on the Cumulative Preferred Shares shall first be
credited against the earliest accrued but unpaid dividends on such Cumulative
Preferred Shares. No dividends shall be paid upon or declared or set apart
for any series of the Cumulative Preferred Shares for any dividend period
unless at the same time (i) a like proportionate dividend for the dividend
periods terminating on the same or any earlier date, ratably in proportion to
the respective annual dividend rates fixed therefor, shall have been paid
upon or declared or set apart for all Cumulative Preferred Shares of all
series then issued and outstanding and entitled to receive such dividend and
(ii) the dividends payable for the dividend periods terminating on the same
or any earlier date (but only with respect to the then current dividend
period), ratably in proportion to the respective dividend rates fixed
therefor, shall have been paid upon or declared or set apart for all
Noncumulative Preferred Shares then issued and outstanding and entitled to
receive such dividends.
(b) So long as any Cumulative Preferred Shares shall be
outstanding no dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Cumulative Preferred Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in respect of the
Common Shares or any other shares ranking junior to the Cumulative Preferred
Shares, nor shall any Common Shares or any other shares ranking junior to the
Cumulative Preferred Shares be purchased, retired or otherwise acquired by
the Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Cumulative Preferred
Shares received by the Corporation subsequent to the date of first issuance
of Cumulative Preferred Shares of any series, unless:
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(1) All accrued and unpaid dividends on Cumulative Preferred
Shares, including the full dividends for all current dividend periods, shall
have been declared and paid or a sum sufficient for payment thereof set
apart;
(2) All unpaid dividends on Noncumulative Preferred Shares
for the then current dividend period shall have been declared and paid or a
sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Cumulative Preferred Shares or Noncumulative Preferred Shares
of any series from any sinking fund provided for shares of such series in
accordance with Section 1 of this Division A.I or Section 1 of Division A.II.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption, retirement or other
acquisition of, Common Shares or any other shares ranking on a parity with or
junior to the Cumulative Preferred Shares shall be inapplicable to (i) any
payments in lieu of issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the conversion of
Cumulative Preferred Shares or Noncumulative Preferred Shares into Common
Shares, and (iii) the exercise by the Corporation of its rights pursuant to
Division C or any similar provision hereafter contained in these Amended and
Restated Articles of Incorporation with respect to any other class or series
of shares hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the "Total
Dividends"), then the portion of the Capital Gains Amount that shall be
allocable to holders of the Cumulative Preferred Shares shall be the amount
that the total dividends paid or made available to the holders of the
Cumulative Preferred Shares for the year bears to the Total Dividends.
Section 3. REDEMPTION.
(a) Subject to the express terms of each series of Cumulative
Preferred Shares, the Corporation:
(1) May, from time to time at the option of the Board of
Directors, redeem all or any part of any redeemable series of Cumulative
Preferred Shares at the time outstanding at the applicable redemption price
for such series fixed in accordance with Section 1 of this Division A.I.; and
(2) Shall, from time to time, make such redemptions of each
series of Cumulative Preferred Shares as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price fixed in accordance with Section 1
of this Division A.I.;
and shall in each case pay all accrued and unpaid dividends to the redemption
date.
(b) (1) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Cumulative Preferred Shares to be
redeemed at their respective addresses then appearing on the books of the
Corporation, not less than 30 days nor more than 60 days prior to the date
fixed for such redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of this Division
prior to the issuance thereof. At any time after notice as provided above
has been deposited in the mail, the Corporation may deposit the aggregate
redemption price of Cumulative Preferred Shares to be redeemed, together with
accrued and unpaid dividends thereon to the redemption date, with any bank or
trust company in Cleveland, Ohio, or New York, New York,
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having capital and surplus of not less than $100,000,000, named in such
notice and direct that there be paid to the respective holders of the
Cumulative Preferred Shares so to be redeemed amounts equal to the redemption
price of the Cumulative Preferred Shares so to be redeemed, together with
such accrued and unpaid dividends thereon, on surrender of the share
certificate or certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of money with such
bank or trust company, such holders shall cease to be shareholders with
respect to such shares; and from and after the time such notice shall have
been so deposited and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation with respect to
such shares, except only the right to receive such money from such bank or
trust company without interest or to exercise before the redemption date any
unexpired privilege of conversion. If less than all of the outstanding
Cumulative Preferred Shares are to be redeemed, the Corporation shall select
by lot the shares so to be redeemed in such manner as shall be prescribed by
the Board of Directors.
(2) If the holders of Cumulative Preferred Shares which have
been called for redemption shall not within six years after such deposit
claim the amount deposited for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the Corporation such unclaimed
amounts and thereupon such bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and to such holders.
(c) Any Cumulative Preferred Shares which are (1) redeemed by the
Corporation pursuant to this Section, (2) purchased and delivered in
satisfaction of any sinking fund requirement provided for shares of such
series, (3) converted in accordance with the express terms thereof, or (4)
otherwise acquired by the Corporation, shall resume the status of authorized
but unissued Cumulative Preferred Shares without serial designation.
(d) Except in connection with the exercise of the Corporation's
rights pursuant to Division C or any similar provisions hereafter contained
in these Amended and Restated Articles of Incorporation, the Corporation may
not purchase or redeem (for sinking fund purposes or otherwise) less than all
of the Cumulative Preferred Shares then outstanding except in accordance with
a purchase offer made to all holders of record of Cumulative Preferred
Shares, unless all dividends on all Cumulative Preferred Shares then
outstanding for all previous and current dividend periods shall have been
declared and paid or funds therefor set apart and all accrued sinking fund
obligations applicable thereto shall have been complied with.
Section 4. LIQUIDATION.
(a) (1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
Cumulative Preferred Shares of any series shall be entitled to receive in
full out of the assets of the Corporation, including its capital, before any
amount shall be paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Cumulative Preferred Shares, the
amounts fixed with respect to shares of such series in accordance with
Section 1 of this Division A.I., plus an amount equal to all dividends
accrued and unpaid thereon to the date of payment of the amount due pursuant
to such liquidation, dissolution or winding up of the affairs of the
Corporation. If the net assets of the Corporation legally available therefor
are insufficient to permit the payment upon all outstanding Cumulative
Preferred Shares and Noncumulative Preferred Shares of the full preferential
amount to which they are respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Cumulative Preferred Shares and
Noncumulative Preferred Shares in proportion to the full preferential amount
to which each such share is entitled.
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(2) After payment to the holders of Cumulative Preferred
Shares of the full preferential amounts as aforesaid, the holders of
Cumulative Preferred Shares, as such, shall have no right or claim to any of
the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with
any other Corporation, the merger of any other Corporation into it, or the
sale, lease or conveyance of all or substantially all the assets of the
Corporation, shall not be deemed to be a dissolution, liquidation or winding
up for purposes of this Section.
Section 5. VOTING.
(a) The holders of Cumulative Preferred Shares shall have no
voting rights, except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in default
in the payment of dividends on any series of Cumulative Preferred Shares at
the time outstanding, whether or not earned or declared, for a number of
dividend payment periods (whether or not consecutive) which in the aggregate
contain at least 540 days, the holders of all series of Cumulative Preferred
Shares, voting separately as a class, shall be entitled to elect, as herein
provided, two members of the Board of Directors of the Corporation; but the
holders of the Cumulative Preferred Shares shall not exercise such special
class voting rights except at meetings of such shareholders for the election
of directors at which the holders of not less than 50% of the Cumulative
Preferred Shares are present in person or by proxy; and the special class
voting rights provided for in this paragraph when the same shall have become
vested shall remain so vested until all accrued and unpaid dividends on the
Cumulative Preferred Shares then outstanding shall have been paid or declared
and a sum sufficient for the payment thereof set aside for payment, whereupon
the holders of the Cumulative Preferred Shares shall be divested of their
special class voting rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights in the event
above specified in this paragraph.
(2) On a dividend payment default entitling holders of
Cumulative Preferred Shares to elect two directors as specified in paragraph
(1) of this Subsection, a special meeting of such holders for the purpose of
electing such directors shall be called by the Secretary of the Corporation
upon written request of, or may be called by, the holders of record of at
least 10% of the Cumulative Preferred Shares with respect to which such
default exists and notice thereof shall be given in the same manner as that
required for the annual meeting of shareholders; but the Corporation shall
not be required to call such special meeting if the annual meeting of
shareholders shall be called to be held within 90 days after the date of
receipt of the foregoing written request from the holders of Cumulative
Preferred Shares. At any meeting at which the holders of Cumulative
Preferred Shares shall be entitled to elect directors, holders of 50% of the
Cumulative Preferred Shares, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there shall be such a
quorum shall be sufficient to elect the members of the Board of Directors
which the holders of Cumulative Preferred Shares are entitled to elect as
herein provided. Notwithstanding any provision of these Articles of
Incorporation or the Code of Regulations of the Corporation or any action
taken by the holders of any class of shares fixing the number of directors of
the Corporation, the two directors who may be elected by the holders of
Cumulative Preferred Shares pursuant to this Subsection shall serve in
addition to any other directors then in office or proposed to be elected
otherwise than pursuant to this Subsection. Nothing in this Subsection shall
prevent any change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require the resignation
of any director elected otherwise than pursuant to this Subsection.
Notwithsanding any classification of the other directors of the Corporation,
the two directors elected by the holders of Cumulative Preferred Shares shall
be elected annually for terms expiring at the next succeeding annual meeting
of shareholders.
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(3) Upon any divesting of the special class voting rights of
the holders of the Cumulative Preferred Shares in respect of elections of
directors as provided in this Subsection, the terms of office of all
directors then in office elected by such holders shall terminate immediately
thereupon. If the office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal from office or
otherwise, the remaining director elected by such holders voting as a class
may elect a successor who shall hold office for the unexpired term in respect
of which such vacancy occurred.
(c) The affirmative vote of the holders of at least two-thirds of
the Cumulative Preferred Shares at the time outstanding, voting separately as
a class, given in person or by proxy either in writing or at a meeting called
for the purpose, shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Amended and
Restated Articles of Incorporation or of the Code of Regulations of the
Corporation which affects adversely and materially the preferences or voting
or other rights of the holders of Cumulative Preferred Shares which are set
forth in these Amended and Restated Articles of Incorporation; but neither an
amendment of these Amended and Restated Articles of Incorporation so as to
authorize, create or change the authorized or outstanding number of
Cumulative Preferred Shares or of any shares ranking on a parity with or
junior to the Cumulative Preferred Shares nor an amendment of the Code of
Regulations so as to change the number or classification of directors of the
Corporation shall be deemed to affect adversely and materially preferences or
voting or other rights of the holders of Cumulative Preferred Shares; or
(2) The authorization, creation or increase in the authorized
number of any shares, or of any security convertible into shares, in either
case ranking prior to such Cumulative Preferred Shares.
(d) If, and only to the extent, that (1) Cumulative Preferred
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of shares to vote separately as a class, the
affirmative vote of the holders of at least two-thirds of each series of
Cumulative Preferred Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting called
for the purpose of voting on such matters, shall be required for any
amendment, alteration or repeal, whether by merger, consolidation or
otherwise, of any of the provisions of these Amended and Restated Articles of
Incorporation or of the Code of Regulations of the Corporation which affects
adversely and materially the preferences or voting or other rights of the
holders of such series which are set forth in these Amended and Restated
Articles of Incorporation; but neither an amendment of these Amended and
Restated Articles of Incorporation, so as to authorize, create or change the
authorized or outstanding number of Cumulative Preferred Shares or of any
shares ranking on a parity with or junior to the Cumulative Preferred Shares
nor an amendment of the Code of Regulations so as to change the number or
classification of directors of the Corporation, shall be deemed to affect
adversely and materially the preferences or voting or other rights of the
holders of such series.
II. THE CLASS A NONCUMULATIVE PREFERRED SHARES. The Noncumulative
Preferred Shares shall have the following express terms:
Section 1. SERIES. The Noncumulative Preferred Shares may be
issued from time to time in one or more series. All Noncumulative Preferred
Shares shall be of equal rank and shall be identical, except in respect of
the matters that may be fixed by the Board of Directors as hereinafter
provided, and each share of a series shall be identical with all other shares
of such series, except as to the dates on which and the periods for which
dividends may be payable. All Noncumulative Preferred Shares shall rank on a
parity with the Cumulative Preferred Shares and shall be identical to all
Cumulative Preferred Shares
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except (1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this Section
1 and (2) only dividends on the Cumulative Preferred Shares are cumulative as
set forth in Division A.I. herein. Subject to the provisions of Sections 2
through 5, both inclusive, and of Items III and IV of this Division, which
provisions shall apply to all Noncumulative Preferred Shares, the Board of
Directors hereby is authorized to cause such shares to be issued in one or
more series and with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by distinguishing
number, letter or title;
(b) The authorized number of shares of the series, which number
the Board of Directors may (except when otherwise provided in the creation of
the series) increase or decrease from time to time before or after the
issuance thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series, including the means
by which such rates may be established;
(d) The dates on which and the period or periods for which
dividends, if declared, shall be payable, including the means by which such
dates and periods may be established;
(e) The redemption rights and price or prices, if any, for shares
of the series;
(f) The terms and amount of the sinking fund, if any, for the
purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation;
(h) Whether the shares of the series shall be convertible into
Common Shares or shares of any other class and, if so, the conversion rate or
rates or price or prices, any adjustments thereof and all other terms and
conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth elsewhere in
these Amended and Restated Articles of Incorporation) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Amended and Restated Articles of Incorporation, as amended, fixing, with
respect to each such series, the matters described in clauses (a) through
(i), both inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. DIVIDENDS.
(a) The holders of Noncumulative Preferred Shares of each series,
in preference to the holders of Common Shares and of any other class of
shares ranking junior to the Noncumulative Preferred Shares, shall be
entitled to receive out of any funds legally available therefor, if, when and
as declared by the Board of Directors, dividends in cash at the rate or rates
for such series fixed in accordance with the provisions of Section 1 above
and no more, payable on the dates fixed for such series. Such dividends
shall accrue, in the case of shares of each particular series, from and after
the date or dates fixed with respect to such series; provided, however, that
if the Board of Directors fails to declare a dividend payable on a dividend
payment date on any Noncumulative Preferred Shares, the holders of the
Noncumulative Preferred Shares shall have no right to receive a dividend in
respect of the dividend period ending on such
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dividend payment date, and the Corporation shall have no obligation to pay
the dividend accrued for such period, whether or not dividends on such
Noncumulative Preferred Shares are declared payable on any future dividend
payment date. Any dividend payment made on the Noncumulative Preferred
Shares shall first be credited against the earliest declared but unpaid
dividend on such Noncumulative Preferred Shares. No dividends shall be paid
upon or declared or set apart for any series of the Noncumulative Preferred
Shares for any dividend period unless at the same time (i) a like
proportionate dividend for the then current dividend period, ratably in
proportion to the respective annual dividend rates fixed therefor, shall have
been paid upon or declared or set apart for all Noncumulative Preferred
Shares of all series then issued and outstanding and entitled to receive such
dividend and (ii) the dividends payable for the dividend periods terminating
on the same or any earlier date, ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or declared and set
part for all Cumulative Preferred Shares then issued and outstanding and
entitled to receive such dividends.
(b) So long as any Noncumulative Preferred Shares shall be
outstanding no dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Noncumulative Preferred Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in respect of the
Common Shares or any other shares ranking junior to the Noncumulative
Preferred Shares, nor shall any Common Shares or any other shares ranking
junior to the Noncumulative Preferred Shares be purchased, retired or
otherwise acquired by the Corporation, except out of the proceeds of the sale
of Common Shares or other shares of the Corporation ranking junior to the
Noncumulative Preferred Shares received by the Corporation subsequent to the
date of first issuance of Noncumulative Preferred Shares of any series,
unless:
(1) All accrued and unpaid dividends on Cumulative Preferred
Shares, including the full dividends for all current dividend periods, shall
have been declared and paid or a sum sufficient for payment thereof set
apart;
(2) All unpaid dividends on Noncumulative Preferred Shares
for the then current dividend period shall have been declared and paid or a
sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Cumulative Preferred Shares or Noncumulative Preferred Shares
of any series from any sinking fund provided for shares of such series in
accordance with the provisions of Section 1 of this Division A.II or Section
1 of Division A.I.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption, retirement or other
acquisition of, Common Shares or any other shares ranking on a parity with or
junior to the Noncumulative Preferred Shares shall be inapplicable to (i) any
payments in lieu of issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the conversion of
Cumulative Preferred Shares or Noncumulative Preferred Shares into Common
Shares, and (iii) the exercise by the Corporation of its rights pursuant to
Division C or any similar provisions hereafter contained in these Amended and
Restated Articles of Incorporation with respect to any other class or series
of shares hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the "Total
Dividends"), then the portion of the Capital Gains Amount that shall be
allocable to holders of the Noncumulative Preferred Shares shall be the
amount that the total dividends paid or made available to the holders of the
Noncumulative Preferred Shares for the year bears to the Total Dividends.
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Section 3. REDEMPTION.
(a) Subject to the express terms of each series, the Corporation:
(1) May, from time to time at the option of the Board of
Directors, redeem all or any part of any redeemable series of Noncumulative
Preferred Shares at the time outstanding at the applicable redemption price
for such series fixed in accordance with Section 1 of this Division A.II.; and
(2) Shall, from time to time, make such redemptions of each
series of Noncumulative Preferred Shares as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price fixed in accordance with Section 1
of this Division A.II.;
and shall in each case pay all unpaid dividends for the then current dividend
period to the redemption date.
(b) (1) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Noncumulative Preferred Shares to be
redeemed at their respective addresses then appearing on the books of the
Corporation, not less than 30 days nor more than 60 days prior to the date
fixed for such redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of this Division
prior to the issuance thereof. At any time after notice as provided above
has been deposited in the mail, the Corporation may deposit the aggregate
redemption price of Noncumulative Preferred Shares to be redeemed, together
with unpaid dividends thereon for the then current dividend period to the
redemption date, with any bank or trust company in Cleveland, Ohio, or New
York, New York, having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the respective holders
of the Noncumulative Preferred Shares so to be redeemed amounts equal to the
redemption price of the Noncumulative Preferred Shares so to be redeemed
together with such accrued and unpaid dividends thereon for the then current
dividend period, on surrender of the share certificate or certificates held
by such holders; and upon the deposit of such notice in the mail and the
making of such deposit of money with such bank or trust company, such holders
shall cease to be shareholders with respect to such shares; and from and
after the time such notice shall have been so deposited and such deposit of
money shall have been so made, such holders shall have no rights or claim
against the Corporation with respect to such shares, except only the right to
receive such money from such bank or trust company without interest or to
exercise before the redemption date any unexpired privilege of conversion.
If less than all of the outstanding Noncumulative Preferred Shares are to be
redeemed, the Corporation shall select by lot the shares so to be redeemed in
such manner as shall be rescribed by the Board of Directors.
(2) If the holders of Noncumulative Preferred Shares which
have been called for redemption shall not within six years after such deposit
claim the amount deposited for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the Corporation such unclaimed
amounts and thereupon such bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and to such holders.
(c) Any Noncumulative Preferred Shares which are (1) redeemed by
the Corporation pursuant to this Section, (2) purchased and delivered in
satisfaction of any sinking fund requirement provided for shares of such
series, (3) converted in accordance with the express terms thereof, or (4)
otherwise acquired by the Corporation, shall resume the status of authorized
but unissued Noncumulative Preferred Shares without serial designation.
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(d) Except in connection with the exercise of the Corporation's
rights pursuant to Division C or any similar provisions hereafter contained
in these Amended and Restated Articles of Incorporation, the Corporation may
not purchase or redeem (for sinking fund purposes or otherwise) less than all
of the Noncumulative Preferred Shares then outstanding except in accordance
with a purchase offer made to all holders of record of Noncumulative
Preferred Shares, unless all unpaid dividends on all Noncumulative Preferred
Shares then outstanding shall have been paid or funds therefor set apart and
all accrued sinking fund obligations applicable thereto shall have been
complied with.
Section 4. LIQUIDATION.
(a) (1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
Noncumulative Preferred Shares of any series shall be entitled to receive in
full out of the assets of the Corporation, including its capital, before any
amount shall be paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Noncumulative Preferred Shares, the
amounts fixed with respect to shares of such series in accordance with
Section 1 of this Division A.II., plus an amount equal to all dividends
declared and unpaid thereon. If the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon all
outstanding Cumulative Preferred Shares and Noncumulative Preferred Shares of
the full preferential amount to which they are respectively entitled, then
such net assets shall be distributed ratably upon all outstanding Cumulative
Preferred Shares and Noncumulative Preferred Shares in proportion to the full
preferential amount to which each such share is entitled.
(2) After payment to the holders of Noncumulative Preferred
Shares of the full preferential amounts as aforesaid, the holders of
Noncumulative Preferred Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with
any other Corporation, the merger of any other Corporation into it, or the
sale, lease or conveyance of all or substantially all the assets of the
Corporation, shall not be deemed to be a dissolution, liquidation or winding
up for purposes of this Section.
Section 5. VOTING.
(a) The holders of Noncumulative Preferred Shares shall have no
voting rights, except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall not have fully
paid, or shall not have declared and set aside a sum sufficient for the
payment of, dividends on any series of Noncumulative Preferred Shares at the
time outstanding, for a number of dividend payment periods (whether or not
consecutive) which in the aggregate contain at least 540 days, the holders of
all series of such Noncumulative Preferred Shares, voting separately as a
class, shall be entitled to elect, as herein provided, two members of the
Board of Directors of the Corporation; but the holders of the Noncumulative
Preferred Shares shall not exercise such special class voting rights except
at meetings of such shareholders for the election of directors at which the
holders of not less than 50% of the Noncumulative Preferred Shares are
present in person or by proxy; and the special class voting rights provided
for in this paragraph when the same shall have become vested shall remain so
vested until the Corporation shall have fully paid, or shall have set aside a
sum sufficient for the payment of, dividends on such Noncumulative Preferred
Shares then outstanding for a number of consecutive dividend payment periods
which in the aggregate contain at least 360 days, whereupon the holders of
the Noncumulative Preferred Shares shall be divested of their special class
voting rights in respect of subsequent elections of directors, subject to the
revesting of such special class voting rights in the event above specified in
this paragraph.
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(2) On an event entitling holders of Noncumulative Preferred
Shares to elect two directors as specified in paragraph (1) of this
Subsection, a special meeting of such holders for the purpose of electing
such directors shall be called by the Secretary of the Corporation upon
written request of, or may be called by, the holders of record of at least
10% of the Noncumulative Preferred Shares of the affected series and notice
thereof shall be given in the same manner as that required for the annual
meeting of shareholders; but the Corporation shall not be required to call
such special meeting if the annual meeting of shareholders shall be called to
be held within 90 days after the date of receipt of the foregoing written
request from the holders of Noncumulative Preferred Shares. At any meeting
at which the holders of Noncumulative Preferred Shares shall be entitled to
elect directors, holders of 50% of the Noncumulative Preferred Shares,
present in person or by proxy, shall be sufficient to constitute a quorum,
and the vote of the holders of a majority of such shares so present at any
such meeting at which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which the holders of
Noncumulative Preferred Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated Articles of
Incorporation or the Code of Regulations of the Corporation or any action
taken by the holders of any class of shares fixing the number of directors of
the Corporation, the two directors who may be elected by the holders of
Noncumulative Preferred Shares pursuant to this Subsection shall serve in
addition to any other directors then in office or proposed to be elected
otherwise than pursuant to this Subsection. Nothing in this Subsection shall
prevent any change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require the resignation
of any director elected otherwise than pursuant to this Subsection.
Notithstanding any classification of the other directors of the Corporation,
the two directors elected by the holders of Noncumulative Preferred Shares
shall be elected annually for terms expiring at the next succeeding annual
meeting of shareholders.
(3) Upon any divesting of the special class voting rights of
the holders of the Noncumulative Preferred Shares in respect of elections of
directors as provided in this Subsection, the terms of office of all
directors then in office elected by such holders shall terminate immediately
thereupon. If the office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal from office or
otherwise, the remaining director elected by such holders voting as a class
may elect a successor who shall hold office for the unexpired term in respect
of which such vacancy occurred.
(c) The affirmative vote of the holders of at least two-thirds of
the Noncumulative Preferred Shares at the time outstanding, voting separately
as a class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Amended and
Restated Articles of Incorporation or of the Code of Regulations of the
Corporation which affects adversely and materially the preferences or voting
or other rights of the holders of Noncumulative Preferred Shares which are
set forth in these Amended and Restated Articles of Incorporation; but
neither an amendment of these Amended and Restated Articles of Incorporation
so as to authorize, create or change the authorized or outstanding number of
Noncumulative Preferred Shares or of any shares ranking on a parity with or
junior to the Noncumulative Preferred Shares nor an amendment of the Code of
Regulations so as to change the number or classification of directors of the
Corporation shall be deemed to affect adversely and materially preferences or
voting or other rights of the holders of Noncumulative Preferred Shares; or
(2) The authorization, creation or increase in the authorized
number of any shares, or any security convertible into shares, in either case
ranking prior to such Noncumulative Preferred Shares.
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(d) If, and only to the extent, that (1) Noncumulative Preferred
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of shares to vote separately as a class, the
affirmative vote of the holders of at least two-thirds of each series of the
Noncumulative Preferred Shares at the time outstanding, voting separately as
a class, given in person or by proxy either in writing or at a meeting called
for the purpose of voting on such matters, shall be required for any
amendment, alteration or repeal, whether by merger, consolidation or
otherwise, of any of the provisions of these Amended and Restated Articles of
Incorporation or of the Code of Regulations of the Corporation which affects
adversely and materially the preferences or voting or other rights of the
holders of such series which are set forth in these Amended and Restated
Articles of Incorporation; but neither an amendment of these Amended and
Restated Articles of Incorporation, so as to authorize, create or change the
authorized or outstanding number of Noncumulative Preferred Shares or of any
shares remaining on a parity with or junior to the Noncumulative Preferred
Shares nor an amendment of the Code of Regulations so as to change the number
or classification of directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights of the holders
of such series.
III. DEFINITIONS. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to"
Cumulative Preferred Shares or Noncumulative Preferred Shares, such reference
shall mean all shares of the Corporation in respect of which the rights of
the holders thereof as to the payment of dividends or as to distributions in
the event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation are given preference over the rights of
the holders of Cumulative Preferred Shares or Noncumulative Preferred Shares,
as the case may be;
(b) Whenever reference is made to shares "on a parity with"
Cumulative Preferred Shares or Noncumulative Preferred Shares, such reference
shall mean all shares of the Corporation in respect of which the rights of
the holders thereof as to the payment of dividends or as to distributions in
the event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation rank equally (except as to the amounts
fixed therefor) with the rights of the holders of Cumulative Preferred Shares
or Noncumulative Preferred Shares, as the case may be; and
(c) Whenever reference is made to shares "ranking junior to"
Cumulative Preferred Shares or Noncumulative Preferred Shares, such reference
shall mean all shares of the Corporation other than those defined under
Subsections (a) and (b) of this Section as shares "ranking prior to" or "on a
parity with" Cumulative Preferred Shares or Noncumulative Preferred Shares,
as the case may be.
IV. RESTRICTIONS ON TRANSFER TO PRESERVE TAX BENEFIT. The Cumulative
Preferred Shares and the Noncumulative Preferred Shares are subject to the
restrictions on transfer set forth with respect to those shares in Division C
of this Article FOURTH.
DIVISION B: COMMON SHARES
The Common Shares are subject to the express terms of the Cumulative
Preferred Shares and any series thereof and to the express terms of the
Noncumulative Preferred Shares and any series thereof, and have the following
express terms:
Section 1. DIVIDEND RIGHTS. The holders of Common Shares shall be
entitled to receive, when, as and if declared by the Board of Directors of
the Corporation, out of the assets of the Corporation which are by law
available therefor, dividends or distributions payable in cash, in property
or in securities of the Corporation.
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Section 2. RIGHTS UPON LIQUIDATION. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of, or any distribution
of the assets of, the Corporation, each holder of Common Shares shall be
entitled to receive, ratably with each other holder of Common Shares, that
portion of the assets of the Corporation available for distribution to its
holders of Common Shares as the number of Common Shares held by such holder
bears to the total number of Common Shares then outstanding.
Section 3. VOTING RIGHTS. The holders of Common Shares shall be
entitled to vote on all matters presented to the shareholders of the
Corporation (except any matter expressly reserved in these Amended and
Restated Articles of Incorporation to holders of shares other than Common
Shares), and shall be entitled to one vote for each Common Share entitled to
vote thereon.
Section 4. RESTRICTIONS ON TRANSFER TO PRESERVE TAX BENEFIT. The
Common Shares are subject to the restrictions on transfer set forth with
respect to those shares in Division C of this Article FOURTH.
DIVISION C: RESTRICTIONS ON TRANSFER OF PREFERRED SHARES
AND COMMON SHARES
I. RESTRICTIONS ON TRANSFER.
Section 1. DEFINITIONS. For purposes of this Division C of this
Article FOURTH, the following terms shall have the following meanings set
forth below:
"Beneficial Ownership" shall mean ownership of Equity Shares by a
Person who would be treated as an owner of such Equity Shares either directly
or indirectly through the application of Section 544 of the Internal Revenue
Code, as modified by Section 856(h)(1)(B) of the Internal Revenue Code. The
terms "Beneficial Owner," "Beneficially Owns," and "Beneficially Owned" shall
have correlative meanings.
"Beneficiary" shall mean, with respect to any Trust, one or more
organizations described in each of Section 170(b)(1)(A) (other than clause
(vii) or (viii) thereof) and Section 170(c)(2) of the Internal Revenue Code
that are named by the Corporation as the beneficiary or beneficiaries of such
Trust, in accordance with Section (1) of Division C.II. hereof.
"Board of Directors" shall mean the Board of Directors of the
Corporation.
"Boykin Hotel Properties, L.P. Agreement" shall mean the Amended
and Restated Agreement of Limited Partnership of Boykin Hotel Properties,
L.P., an Ohio limited partnership.
"Constructive Ownership" shall mean ownership of Equity Shares by a
Person who would be treated as an owner of such Equity Shares either directly
or indirectly through the application of Section 318 of the Internal Revenue
Code, as modified by Section 856(d)(5) of the Internal Revenue Code. The
terms "Constructive Owner," "Constructively Owns," and "Constructively Owned"
shall have correlative meanings.
"Equity Shares" shall mean Cumulative Preferred Shares,
Noncumulative Preferred Shares and Common Shares of the Corporation. The
term "Equity Shares" shall include all Cumulative Preferred Shares,
Noncumulative Preferred Shares and Common Shares of the Corporation that are
held as Shares-in-Trust in accordance with this Division C of this Article
FOURTH.
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"Initial Public Offering" means the sale of Common Shares pursuant
to the Corporation's first effective registration statement for Common Shares
filed under the Securities Act of 1933, as amended.
"Market Price" on any date shall mean the average of the Closing
Price for the five consecutive Trading Days ending on such date. The
"Closing Price" on any date shall mean the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the applicable
Equity Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which those Equity Shares are listed or admitted to trading or,
if those Equity Shares are 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 quotations system that may then be in use or, if the shares of
Equity Shares are 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 those Equity Shares selected by the Board of Directors.
"Non-Transfer Event" shall mean an event other than a purported
Transfer that would cause any Person to Beneficially Own or Constructively
Own Equity Shares in excess of the Ownership Limit, including, but not
limited to, the issuance, granting of any option or entering into of any
agreement for the sale, transfer or other disposition of Equity Shares or the
sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Equity Shares.
"Ownership Limit" shall mean 9% of the number of outstanding shares
of any class of Equity Shares.
"Permitted Transferee" shall mean any Person designated as a
Permitted Transferee in accordance with this Division C.
"Person" shall mean an individual, corporation, partnership,
estate, trust, a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Internal
Revenue Code, association, private foundation within the meaning of Section
509(a) of the Internal Revenue Code, joint stock company or other entity and
also includes a "group" as that term is used for purposes of Section 12(d)(3)
of the Securities Exchange Act of 1934, as amended.
"Prohibited Owner" shall mean, with respect to any purported
Transfer or Non-Transfer Event, any Person who, but for this Division C of
this Article FOURTH, would own record title to Equity Shares.
"Redemption Rights" shall mean the rights granted under the Boykin
Hotel Properties, L.P. Agreement to the limited partners to exchange, under
certain circumstances, their limited partnership interests for cash (or, at
the option of the Corporation, for Common Shares).
"Restriction Termination Date" shall mean the first day after the
date of the Initial Public Offering on which the Board of Directors
determines that it is no longer in the best interests of the Corporation to
attempt to, or continue to, qualify as a REIT.
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"Shares-in-Trust" shall mean any Equity Shares designated as
Shares-in-Trust pursuant to this Division C.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the applicable Equity Shares are listed or
admitted to trading is open for the transaction of business or, if those
Equity Shares are not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Transfer" (as a noun) shall mean any sale, transfer, gift,
assignment, devise or other disposition of Equity Shares, whether voluntary
or involuntary, whether of record, constructively or beneficially and whether
by operation of law or otherwise. "Transfer" (as a verb) shall have the
correlative meaning.
"Trust" shall mean any separate trust created pursuant to this
Division C for the exclusive benefit of any Beneficiary.
"Trustee" shall mean any Person or entity unaffiliated with both
the Corporation and any Prohibited Owner, such Trustee to be designated by
the Corporation to act as trustee of any Trust, or any successor trustee
thereof.
Section 2. RESTRICTION ON TRANSFERS AND NON-TRANSFER EVENT.
(a) Except as set forth in Section 7 below and subject to Section
8 below, from the date of the Initial Public Offering to the Restriction
Termination Date, (i) no Person shall Beneficially Own or Constructively Own
outstanding Equity Shares in excess of the Ownership Limit, but any Transfer
or Non-Transfer Event that, if effective, would result in any Person
Beneficially Owning or Constructively Owning outstanding Equity Shares in
excess of the Ownership Limit shall be void AB INITIO as to the Transfer or
Non-Transfer Event affecting that number of Equity Shares which would be
otherwise Beneficially Owned or Constructively Owned by such Person in excess
of the Ownership Limit and the intended transferee shall acquire no rights in
such excess Equity Shares.
(b) Except as set forth in Section 7 below, from the date of the
Initial Public Offering to the Restriction Termination Date, any Transfer or
Non-Transfer Event that, if effective, would result in any class of Equity
Shares being beneficially owned by fewer than 100 Persons (determined without
reference to any rules of attribution) shall be void AB INITIO as to the
Transfer or Non-Transfer Event affecting that number of shares which would be
otherwise beneficially owned (determined without reference to any rules of
attribution) by the transferee, and the intended transferee shall acquire no
rights in such Equity Shares.
(c) From the date of the Initial Public Offering to the
Restriction Termination Date, any Transfer of or Non-Transfer Event affecting
Equity Shares that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Internal Revenue
Code shall be void AB INITIO as to the Transfer of or Non-Transfer Event
affecting that number of Equity Shares which would cause the Corporation to
be "closely held" within the meaning of Section 856(h) of the Internal
Revenue Code, and the intended transferee shall acquire no rights in such
Equity Shares.
(d) From the date of the Initial Public Offering to the
Restriction Termination Date, any Transfer of or Non-Transfer Event affecting
Equity Shares that, if effective, would cause the Corporation to
Constructively Own 10% or more of the ownership interests in a tenant of the
real property of the Corporation or of any direct or indirect subsidiary of
the Corporation (a "Subsidiary"), within the
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meaning of Section 856(d)(2)(B) of the Internal Revenue Code, shall be void
AB INITIO as to the Transfer of or Non-Transfer Event affecting that number
of Equity Shares which would cause the Corporation to Constructively Own 10%
or more of the ownership interests in a tenant of the Corporation's or of a
Subsidiary's real property, within the meaning of Section 856(d)(2)(B) of the
Internal Revenue Code, and the intended transferee shall acquire no rights in
such excess Equity Shares.
Section 3. TRANSFER TO TRUST.
(a) If, notwithstanding the other provisions contained in this
Division C, at any time after the Initial Public Offering and prior to the
Restriction Termination Date there is a purported Transfer or Non-Transfer
Event such that any Person would either Beneficially Own or Constructively
Own Equity Shares in excess of the Ownership Limit, then, (i) except as set
forth in Section 7 below, the purported transferee shall acquire no right or
interest (or, in the case of a Non-Transfer Event, the Person holding record
title to the Equity Shares Beneficially Owned or Constructively Owned by such
Beneficial Owner or Constructive Owner, shall cease to own any right or
interest) in such number of Equity Shares which would cause such Beneficial
Owner or Constructive Owner to Beneficially Own or Constructively Own Equity
Shares in excess of the Ownership Limit, (ii) such number of Equity Shares in
excess of the Ownership Limit (rounded up to the nearest whole share) shall
be designated Shares-in-Trust and, in accordance with this Division C,
transferred automatically by operation of the terms of this Section IV.C.I.3.
to a Trust to be held in accordance with this Division C, and (iii) the
Prohibited Owner shall submit such number of Equity Shares to the Corporation
for registration in the name of the Trustee. Such transfer to a Trust and
the designation of shares as Shares-in-Trust shall be effective as of the
close of business on the business day prior to the date of the Transfer or
Non-Transfer Event, as the case may be.
(b) If, notwithstanding the other provisions contained in this
Division C, at any time after the Initial Public Offering and prior to the
Restriction Termination Date, there is a purported Transfer or Non-Transfer
Event that, if effective, would (i) result in any class of the Equity Shares
being beneficially owned by fewer than 100 Persons (determined without
reference to any rules of attribution), (ii) result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Internal Revenue
Code, or (iii) cause the Corporation to Constructively Own 10% or more of the
ownership interests in a tenant of the Corporation's or of a Subsidiary's
real property, within the meaning of Section 856(d)(2)(B) of the Internal
Revenue Code, then (x) the purported transferee shall not acquire any right
or interest (or, in the case of a Non-Transfer Event, the Person holding
record title to the Equity Shares with respect to which such Non-Transfer
Event occurred, shall cease to own any right or interest) in such number of
Equity Shares, the ownership of which by such purported transferee or record
holder would (A) result in any class of Equity Shares being beneficially
owned by fewer than 100 Persons (determined without reference to any rules of
attribution), (B) result in the Corporation being "closely held" within the
meaning of Section 856(h) of the Internal Revenue Code, or (C) cause the
Corporation to Constructively Own 10% or more of the ownership interests in a
tenant of the Corporation's or of a Subsidiary's real property, within the
meaning of Section 856(d)(2)(B) of the Internal Revenue Code, (y) such number
of Equity Shares (rounded up to the nearest whole share) shall be designated
Shares-in-Trust and, in accordance with this Division C, transferred
automatically by operation of the terms of this Section IV.C.I.3. to a Trust
to be held in accordance with this Division C, and (z) the Prohibited Owner
shall submit such number of Equity Shares to the Corporation for registration
in the name of the Trustee. Such transfer to a Trust and the designation of
shares as Shares-in-Trust shall be effective as of the close of business on
the business day prior to the date of the Transfer or Non-Transfer Event, as
the case may be.
Section 4. REMEDIES FOR BREACH. If the Corporation, or its
designee, shall at any time determine in good faith that a Transfer or
Non-Transfer Event has taken place in violation of this Division C or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership or
Constructive Ownership of any Equity Shares in violation of this Division C,
the Corporation shall take such action as
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it considers advisable to refuse to give effect to or to prevent such
Transfer or Non-Transfer Event or acquisition, including, but not limited to,
refusing to give effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer or Non-Transfer Event or
acquisition.
Section 5. NOTICE OF RESTRICTED TRANSFER. Any Person who acquires
or attempts to acquire Equity Shares in violation of this Division C, or any
Person who owned Equity Shares that were transferred to a Trust pursuant to
this Division C, shall immediately give written notice to the Corporation of
such event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
event on the Corporation's status as a REIT.
Section 6. OWNERS REQUIRED TO PROVIDE INFORMATION. From the date
of the Initial Public Offering to the Restriction Termination Date:
(a) Every Beneficial Owner or Constructive Owner of more than 5%,
or such lower percentage as is specified pursuant to regulations issued under
the Internal Revenue Code, of the outstanding shares of any class of shares
of the Corporation shall, within 30 days after January 1 of each year,
provide to the Corporation a written statement or affidavit stating the name
and address of such Beneficial Owner or Constructive Owner, the number of
Equity Shares Beneficially Owned or Constructively Owned, and a description
of how such shares are held.
(b) Each Person who is a Beneficial Owner or Constructive Owner of
Equity Shares and each Person (including the shareholder of record) who is
holding Equity Shares for a Beneficial Owner or Constructive Owner shall
provide to the Corporation a written statement or affidavit stating such
information as the Corporation may request in order to determine the
Corporation's status as a REIT and to ensure compliance with the Ownership
Limit as applicable.
Section 7. EXCEPTIONS. The Ownership Limit shall not apply to the
acquisition of Equity Shares by an underwriter that participates in a public
offering of such shares for a period of 90 days following the purchase by
such underwriter of such shares. In addition, the Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of
counsel, in either case to the effect that the Corporation's status as a REIT
would not be jeopardized thereby, may allow a Person to own a certain amount
in excess of the Ownership Limit if (i) the Board of Directors obtains such
representations and undertakings from such Person as are reasonably necessary
to ascertain that no Person's Beneficial Ownership or Constructive Ownership
of Equity Shares could result in the REIT (a) losing its REIT status for
federal income tax purposes, or (b) being "related" to any tenant or lessee
under the REIT rules of the Internal Revenue Code, and (ii) such Person
agrees in writing that any violation or attempted violation that could cause
such a result will cause a transfer to a Trust of Equity Shares pursuant to
this Division C.
Section 8. NEW YORK STOCK EXCHANGE TRANSACTIONS. Notwithstanding
any provision contained herein to the contrary, nothing in these Amended and
Restated Articles of Incorporation shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock
Exchange.
II. SHARES-IN-TRUST.
Section 1. TRUST. Any Equity Shares transferred to a Trust and
designated Shares-in-Trust pursuant to this Division C shall be held for the
exclusive benefit of the Beneficiary. The Corporation shall name a
Beneficiary for each Trust within five days after the Corporation first has
actual notice of the existence thereof. Any transfer to a Trust, and
designation of Equity Shares as Shares-in-Trust, shall be effective as of the
close of business on the business day prior to the date of the Transfer or
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Non-Transfer Event that results in the transfer to the Trust.
Shares-in-Trust shall continue to constitute issued and outstanding Equity
Shares of the Corporation and shall be entitled to the same rights and
privileges as are all other issued and outstanding Equity Shares of the same
class and series. When transferred to a Permitted Transferee in accordance
with this Division C, such Shares-in-Trust shall cease to be designated as
Shares-in-Trust.
Section 2. DIVIDEND RIGHTS. The Trust, as record holder of
Shares-in-Trust, shall be entitled to receive all dividends and distributions
declared by the Board of Directors on such Shares-in-Trust and shall hold
such dividends and distributions in trust for the benefit of the Beneficiary.
The Prohibited Owner with respect to Shares-in-Trust shall repay to the
Trust the amount of any dividends or distributions received by it that (i)
are attributable to those Shares-in-Trust and (ii) the record date of which
was on or after the date that such shares became Shares-in-Trust. The
Corporation shall take all measures that it determines reasonably necessary
to recover the amount of any such dividend or distribution paid to a
Prohibited Owner, including, if necessary, withholding any portion of future
dividends or distributions payable on Equity Shares Beneficially Owned or
Constructively Owned by the Person who, but for the provisions of this
Division C, would Constructively Own or Beneficially Own the Shares-in-Trust;
and, as soon as reasonably practicable following the Corporation's receipt or
withholding thereof, shall pay over to the Trust for the benefit of the
Beneficiary the dividends so received or withheld, as the case may be.
Section 3. RIGHTS UPON LIQUIDATION. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of, or any distribution
of the assets of, the Corporation, each holder of Shares-in-Trust shall be
entitled to receive, ratably with each other holder of Equity Shares of the
same class or series, that portion of the assets of the Corporation which is
available for distribution to the holders of such class and series of Equity
Shares. The Trust shall distribute to the Prohibited Owner the amounts
received upon such liquidation, dissolution, or winding up, or distribution;
PROVIDED, HOWEVER, that the Prohibited Owner shall not be entitled to receive
amounts pursuant to this Division C in excess of, in the case of a purported
Transfer in which the Prohibited Owner gave value for Equity Shares and which
Transfer resulted in the transfer of the shares to the Trust, the price per
share, if any, such Prohibited Owner paid for the Equity Shares and, in the
case of a Non-Transfer Event or Transfer in which the Prohibited Owner did
not give value for such shares (E.G., if the shares were received through a
gift or devise) and which Non-Transfer Event or Transfer, as the case may be,
resulted in the transfer of shares to the Trust, the price per share equal to
the Market Price on the date of such Non-Transfer Event or Transfer. Any
remaining amount in such Trust shall be distributed to the Beneficiary.
Section 4. VOTING RIGHTS. The Trustee shall be entitled to vote
all Shares-in-Trust. Any vote by a Prohibited Owner as a holder of Equity
Shares prior to the discovery by the Corporation that the Equity Shares are
Shares-in-Trust shall, so far as is practicable under applicable law, be
rescinded and shall be void AB INITIO with respect to such Shares-in-Trust
and the Prohibited Owner shall be deemed to have given, as of the close of
business on the business day prior to the date of the Transfer or
Non-Transfer Event that results in the transfer to the Trust of Equity Shares
pursuant to this Division C, an irrevocable proxy to the Trustee to vote the
Shares-in-Trust in the manner in which the Trustee, in its sole and absolute
discretion, considers advisable.
Section 5. DESIGNATION OF PERMITTED TRANSFEREE. The Trustee shall
have the exclusive and absolute right to designate a Permitted Transferee of
any Shares-in-Trust. In an orderly fashion so as not to materially adversely
affect the Market Price of the Shares-in-Trust, the Trustee shall designate a
Person as Permitted Transferee, so long as (i) the Permitted Transferee so
designated purchases for valuable consideration (whether in a public or
private sale) the Shares-in-Trust and (ii) the Permitted Transferee so
designated can acquire such Shares-in-Trust without such acquisition
resulting in a transfer to a Trust and the redesignation of such Equity
Shares as Shares-in-Trust. Upon the designation by the
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Trustee of a Permitted Transferee, the Trustee shall (i) cause to be
transferred to the Permitted Transferee that number of Shares-inTrust
acquired by the Permitted Transferee, (ii) cause to be recorded on the books
of the Corporation that the Permitted Transferee is the holder of record of
such number of Equity Shares, (iii) cause the Shares-in-Trust to be canceled,
and (iv) distribute to the Beneficiary any and all amounts held by the
Trustee with respect to the Shares-in-Trust after making any payment to the
Prohibited Owner required under Sections IV.C.II.3. and IV.C.II.6.
Section 6. COMPENSATION TO RECORD HOLDER OF EQUITY SHARES THAT
BECOME SHARES-IN-TRUST. Any Prohibited Owner shall be entitled (following
designation of Equity Shares proposed or purported to be held by that
Prohibited Owner as Shares-in-Trust and subsequent designation of a Permitted
Transferee or the Trustee's acceptance of an offer to purchase such shares)
to receive from the Trustee following the sale or other disposition of such
Shares-in-Trust the lesser of (i) in the case of (a) a purported Transfer in
which the Prohibited Owner gave value for Equity Shares and which Transfer
resulted in the transfer of the shares to the Trust, the price per share, if
any, such Prohibited Owner paid for the Equity Shares, or (b) a Non-Transfer
Event or Transfer in which the Prohibited Owner did not give value for such
shares (E.G., if the shares were received through a gift or devise) and which
Non-Transfer Event or Transfer, as the case may be, resulted in the transfer
of shares to the Trust, the price per share equal to the Market Price on the
date of such Non-Transfer Event or Transfer, and (ii) the price per share
received by the Trustee from the sale or other disposition of such
Shares-in-Trust. Any amounts received by the Trustee in respect of such
Shares-in-Trust and in excess of such amounts to be paid to the Prohibited
Owner shall be distributed to the Beneficiary. Each Beneficiary and
Prohibited Owner waive any and all claims that they may have against the
Trustee and the Trust arising out of the disposition of Shares-in-Trust,
except for claims arising out of the gross negligence or willful misconduct
of, or any failure to make payments in accordance with this Division C, by
such Trustee or the Corporation.
Section 7. PURCHASE RIGHT IN SHARES-IN-TRUST. Shares-in-Trust
shall be considered to have been offered for sale to the Corporation, or its
designee, on the date of the event that created such Shares-in-Trust status
at a price per share equal to the lesser of (i) the price per share in the
event that created such Shares-in-Trust status (or, in the case of a devise,
gift or Non-Transfer Event, the Market Price at the time of such devise, gift
or Non-Transfer Event) 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 for a period of ninety days after the later of (i) the date
of the event which created such Shares-in-Trust status and (ii) the date the
Corporation determines in good faith that an event occurred that created such
Shares-in-Trust status, if the Corporation does not receive a notice of such
event.
III. REMEDIES NOT LIMITED. Subject to Article I, Sections 7 and 8,
nothing contained in this Division C shall limit the authority of the
Corporation to take such other action as it deems necessary or advisable to
protect the Corporation and the interests of its shareholders by preservation
of the Corporation's status as a REIT and to ensure compliance with the
Ownership Limit.
IV. AMBIGUITY. In the case of any ambiguity in the application of any
provision of this Division C, including any definition contained herein, the
Board of Directors shall have the power to determine the application of that
provision.
V. LEGEND. Each certificate for Equity Shares shall bear the
following legend:
"The [Common Shares or Cumulative Preferred Shares or
Noncumulative Preferred Shares] represented by this certificate
are subject to restrictions on 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"). No Person may (i) Beneficially Own or
Constructively Own
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Common Shares in excess of 9% of the number of outstanding Common
Shares, (ii) Beneficially Own or Constructively Own shares of any
class or series of Preferred Shares in excess of 9% of the number
of outstanding shares of that class or series of Preferred Shares,
(iii) beneficially own Equity Shares that would result in the
Equity Shares being beneficially owned by fewer than 100 Persons
(determined without reference to any rules of attribution), (iv)
Beneficially Own Equity Shares that would result in the Corporation
being "closely held" under Section 856(h) of the Code, or (v)
Constructively Own Equity Shares that would cause the Corporation
to Constructively Own 10% or more of the ownership interests in a
tenant of the Corporation's or of a Subsidiary's real property,
within the meaning of Section 856(d)(2)(B) of the Code. Each
holder of Equity Shares is required to furnish the Corporation such
information as the Corporation may request pursuant to Section 6 of
the Corporation's Amended and Restated Articles of Incorporation.
Any Person who attempts to Beneficially Own or Constructively Own
Equity Shares in excess of the above limitations must immediately
notify the Corporation in writing. If those restrictions are
violated, the Equity Shares represented hereby in excess of those
limitations will be transferred automatically by operation of the
Corporation's Amended and Restated Articles of Incorporation to a
Trust and will be designated Shares-in-Trust. All capitalized
terms in this legend have the meanings defined in the Corporation's
Amended and Restated Articles of Incorporation, as they may be
amended from time to time, a copy of which, including the
restrictions on transfer, will be sent without charge to each
shareholder who so requests."
VI. SEVERABILITY. Each provision of this Article FOURTH shall be
several, and an adverse determination as to any such provision shall in no
way affect the validity of any other provision.
FIFTH: At all times following the consummation of the Initial Public
Offering (as defined in Article FOURTH), at least a majority of the members
of the Board of Directors shall, except as may result from a vacancy or
vacancies therein, be Independent Directors. An "Independent Director" shall
mean a person who is (i) independent of management of the Corporation, (ii)
not employed by or an officer of the Corporation, (iii) not an "affiliate"
(as defined in Rule 405 under the Securities Act of 1933, as amended) of the
Corporation or of any Subsidiary of the Corporation, and (iv) not a person
who acts on a regular basis as an individual or representative of an
organization serving as a professional advisor, legal counsel or consultant
to management if, in the opinion of the Board of Directors, the relationship
is material to the Corporation, that person, or the organization represented.
Any determination to be made by the Board of Directors in connection with
any matter presenting a conflict of interest for any officer of the
Corporation or any director of the Corporation who is not an Independent
Director shall be made by the Independent Directors.
SIXTH: No holder of shares of the Corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares
of any class, now or hereafter authorized, or to subscribe for or purchase
securities convertible into or exchangeable for shares of the Corporation or
to which shall be attached or appertain any warrants or rights entitling the
holder thereof to subscribe for or purchase shares, except such rights of
subscription or purchase, if any, for such considerations and upon such terms
and conditions as its Board of Directors from time to time may determine.
SEVENTH: Notwithstanding any provision of Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code, or any successor statutes now or
hereafter in force, requiring for the authorization or taking of any action
the vote or consent of the holders of shares entitling them to exercise
two-thirds or
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any other proportion of the voting power of the Corporation or of any class
or classes of shares thereof, such action, unless otherwise expressly
required by law or these Amended and Restated Articles of Incorporation, may
be authorized or taken by the vote or consent of the holders of shares
entitling them to exercise a majority of the voting power of the Corporation
or of such class or classes of shares thereof.
EIGHTH: To the extent permitted by law, the Corporation, by action of
its Board of Directors, may purchase or otherwise acquire shares of any class
issued by it at such times, for such consideration and upon such terms and
conditions as its Board of Directors may determine.
NINTH: No person who is serving or has served as a director of the
Corporation shall be personally liable to the Corporation or any of its
shareholders for monetary damages for breach of any fiduciary duty of such
person as a director by reason of any act or omission of such person as a
director; but the foregoing provision shall not eliminate or limit the
liability of any person (a) for any breach of such person's duty of loyalty
as a director to the Corporation or its shareholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 1701.95 of the Ohio Revised Code,
(d) for any transaction from which such person derived any improper personal
benefit, or (e) to the extent that such liability may not be limited or
eliminated by virtue of Section 1701.13 of the Ohio Revised Code or any
successor section or statute. Any repeal or modification of this Article
NINTH by the shareholders of the Corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or
modification.
TENTH: Section 1701.831 of the Ohio Revised Code shall not apply to the
Corporation.
ELEVENTH: Chapter 1704 of the Ohio Revised Code shall not apply to the
Corporation.
TWELFTH: If any provision (or portion thereof) of these Amended and
Restated Articles of Incorporation shall be found to be invalid, prohibited,
or unenforceable for any reason, the remaining provisions (or portions
thereof) of these Amended and Restated Articles of Incorporation shall remain
in full force and effect, and shall be construed as if such invalid,
prohibited, or unenforceable provision had been stricken herefrom or
otherwise rendered inapplicable, it being the intent of the Corporation and
its shareholders that each such remaining provision (or portion thereof) of
these Amended and Restated Articles of Incorporation remain, to the fullest
extent permitted by law, applicable and enforceable as to all shareholders,
notwithstanding any such finding.
THIRTEENTH: No shareholder of the Corporation may cumulate his voting
power in the election of directors.
FOURTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Amended and Restated Articles of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon shareholders herein are granted subject to this
reservation.
FIFTEENTH: These Amended and Restated Articles of Incorporation shall
take the place of and supersede the Corporation's existing Articles of
Incorporation.
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CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
BOYKIN LODGING COMPANY
Robert A. Weible, Secretary, of Boykin Lodging Company, an Ohio
corporation (the "Corporation"), does hereby certify that the Executive
Committee of the Board of Directors of the Corporation adopted the following
resolution to amend the Amended and Restated Articles of Incorporation (the
"Articles") of the Corporation by written action pursuant Section 1701.63(D)
of the Ohio Revised Code and pursuant to the authority granted by Section
1701.70(B)(1) of the Ohio Revised Code and Section I.1. of Division A of the
Articles:
RESOLVED, that the Amended and Restated Articles of Incorporation
of the Corporation be, and they hereby are, amended by adding at the end of
Division A.I. of Article FOURTH a new Section 6 that reads as follows:
SECTION 6. CLASS A CUMULATIVE PREFERRED SHARES, SERIES 1999-A.
A. DESIGNATION AND AMOUNT. Of the 5,000,000 authorized Class A
Cumulative Preferred Shares, 75,000 are designated as "Class A Cumulative
Preferred Shares, Series 1999-A" (the "Series 1999-A Preferred Shares"). The
Series 1999-A Preferred Shares have the express terms set forth in this
Division as being applicable to all Class A Cumulative Preferred Shares as a
class and, in addition, the following express terms. The number of Series
1999-A Preferred Shares may be increased or decreased by resolution of the
Board of Directors and by the filing of a certificate of amendment pursuant
to the General Corporation Law of the State of Ohio stating that the increase
or reduction has been so authorized, but no decrease may reduce the number of
Series 1999-A Preferred Shares to a number less than that of the Series
1999-A Preferred Shares then outstanding plus the number of Series 1999-A
Preferred Shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation.
B. DIVIDENDS AND DISTRIBUTIONS.
(1) Subject to the rights of the holders of any series of
preferred shares (or any similar shares) ranking prior to the Series 1999-A
Preferred Shares with respect to dividends, the holders of Series 1999-A
Preferred Shares, in preference to the holders of Common Shares and of any
other shares ranking junior to the Series 1999-A Preferred Shares, will be
entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, (1) quarterly dividends payable
in cash on the same day as the quarterly dividend payment date for any
regular quarterly dividend payable on the Common Shares with respect to
the same period or, if no such regular quarterly dividend is payable on the
Common Shares, on the fifth day of May, August, November and February in each
year (each such date, a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a Series
1999-A Preferred Share or fraction thereof, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $47.00 or (b) subject to
adjustment as hereinafter set forth, 100 times the per share amount of all
regular quarterly cash dividends, and 100 times the per share value of all
regular quarterly noncash dividends or other distributions (as determined by
the Board of Directors in good faith), other than any dividend payable in
Common Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares with respect to
the same period, and (2) if a dividend or distribution other than a regular
quarterly dividend and other than a dividend payable in Common Shares or a
subdivision of the outstanding Common Shares (by reclassification or
otherwise) is authorized, declared or paid to the holders of Common Shares
(including without limitation a dividend or distribution of cash, rights,
options or other securities or any noncash property), a per share cash
dividend in an amount equal to the value of the per share amount payable on
each Common Share (as determined by the Board of Directors in good faith)
multiplied by the Dividend Multiple (as defined below), payable on the same
day as the payment date for that dividend on the Common Shares. The multiple
of dividends declared on the Common Shares to which holders of the Series
1999-A Preferred Shares are entitled, which is 100 initially but which will
be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple." If the Company at any time after
February 1, 1999: (i) declares or pays any dividend on the Common Shares
payable in Common Shares, or (ii) effects a subdivision or combination or
consolidation of the outstanding Common Shares (by reclassification or
otherwise than by payment of a dividend in Common Shares) into a greater or
lesser number of Common Shares, then in each such case the Dividend Multiple
will thereafter be the Dividend Multiple applicable immediately prior to that
event multiplied by a fraction, the numerator of which is the number of
Common Shares outstanding immediately after that event and the denominator of
which is the number of Common Shares that were outstanding immediately prior
to that event.
(2) The Board of Directors may fix in accordance with applicable
law a record date for the determination of holders of Series 1999-A Preferred
Shares entitled to receive payment of a dividend or other distribution
declared thereon, which will be the same day as the record date for any
dividend or distribution payable on the Common Shares with respect to the
same period if any such dividend or distribution is so payable. Dividends on
the Series 1999-A Preferred Shares will accrue and be cumulative (i) with
respect to shares included in the initial issuance of Series 1999-A Preferred
Shares and shares issued any time thereafter to and including the record date
for the payment of the first dividend on the shares included in that initial
issuance (the "First Record Date"), from the date of that initial issuance,
(ii) with respect to shares issued any time after the First Record Date and
not between a record date and the dividend payment date to which that record
date applies (that period, the "Ex-dividend Period"), from the dividend
payment date immediately preceding the date of issue of those shares, and
(iii) with respect to shares issued after the First Record Date and during an
Ex-dividend Period, from the dividend payment date on which that Ex-dividend
Period ends. Accrued but unpaid dividends will not bear interest. Dividends
paid on the Series 1999-A Preferred Shares in an amount less than the total
amount of dividends at the time accrued and payable on those shares
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will be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The amount of accrued and unpaid dividends on any
Series 1999-A Preferred Share at any date is the amount of any dividends
payable thereon in accordance with this Section 6.B. (whether or not
declared) that have not been paid.
C. REDEMPTION. The Series 1999-A Preferred Shares are
redeemable, in whole but not in part, in accordance with Section 3 of
Division A.1.of Article FOURTH, at any time on or after (but not before) the
fifth anniversary of the initial issuance of a Series 1999-A Preferred Share,
at the option of the Board of Directors, upon payment of an amount in cash
for each share redeemed equal to the Conversion Multiple (as defined in
Section E.1., below) times the Adjusted Share Price, together with all
accrued and unpaid dividends thereon to the redemption date (the "Redemption
Price"). The Board of Directors may, at its option, pay all or any portion
of the Redemption Price for any Series 1999-A Preferred Shares redeemed in
accordance with this Section 6.C. by delivering to the holder thereof the
number of Common Shares derived by dividing the portion of the redemption
price to be so paid by the Adjusted Share Price, so long as that form of
payment will not result in the holder beneficially owning more than nine
percent (9.0%) of the total number of the outstanding Common Shares
(determined pursuant to Section 13(d) of the Securities Exchange Act of 1934,
as amended), or violating Division C of this Article FOURTH, whichever is
more restrictive. For purposes of this Section 6.C., "Adjusted Share Price"
means a dollar amount equal to the average last sale price (or bid price if
there were no sales) per Common Share on the NYSE over the twenty-one (21)
days on which the NYSE is open and for which trades in Common Shares are
reported immediately preceding the date on which the Corporation delivers the
applicable redemption notice (adjusted to take into account any splits,
combinations, reclassifications, or other changes in the Corporation's
capitalization that occur between the date of that notice and the redemption
date). If the Common Shares are no longer trading on the NYSE, then the
Adjusted Share Price will be determined using the prices reported on the
exchange or automated quotation system on which the Common Shares then trade.
Each holder of Series 1999-A Preferred Shares may exercise the conversion
rights described in Section 6.E. for those shares at any time prior to the
date set for redemption of those shares.
D. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution may be made (x) to the holders of shares ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series
1999-A Preferred Shares unless, prior thereto, the holders of Series 1999-A
Preferred Shares shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $1,648.00 per share
or (2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Shares, or (y) to the holders of
shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series 1999-A Preferred Shares, except
distributions made ratably on the Series 1999-A Preferred Shares and all
other such parity shares in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up (the holders of Series 1999-A Preferred Shares being entitled to
receive, for this purpose, the amount determined pursuant to clause (x) of
this sentence). If the Corporation at any time after February 1, 1999 (i)
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declares or pays any dividend on Common Shares payable in Common Shares, or
(ii) effects a subdivision or combination or consolidation of the outstanding
Common Shares (by reclassification or otherwise than by payment of a dividend
in Common Shares) into a greater or lesser number of Common Shares, then in
each such case the aggregate amount per share to which holders of Series
1999-A Preferred Shares were entitled immediately prior to such event under
clause (x)(2) of the immediately preceding sentence will be adjusted by
multiplying that amount by a fraction, the numerator of which is the number
of Common Shares outstanding immediately after that event and the denominator
of which is the number of Common Shares that were outstanding immediately
prior to that event.
Neither the consolidation of nor merger of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Corporation, will be considered
a liquidation, dissolution or winding up of the Corporation within the
meaning of this paragraph D.
E. CONVERSION RIGHTS.
(1) The holders of Series 1999-A Preferred Shares have the right,
at their option, to convert all or any portion of their Series 1999-A
Preferred Shares into Common Shares at any time and from time to time, on the
basis set forth below, but (a) no such holder may so convert Series 1999-A
Preferred Shares if, immediately after that conversion, that holder would be
the record or beneficial owner of more than nine percent (9.0%) of the total
number of the outstanding Common Shares (determined pursuant to Section 13(d)
of the Securities Exchange Act of 1934, as amended), or violate Division C of
this Article FOURTH, whichever is more restrictive, and (b) the right to
convert Series 1999-A Preferred Shares that have been called for redemption
pursuant to Section 6.C. terminates at the close of business on the
redemption date for those Series 1999-A Preferred Shares pursuant to Section
6.C., unless the Corporation defaults in making payment of any cash payable
on that redemption. Each Series 1999-A Preferred Share is initially
convertible into 100 Common Shares (the number of Common Shares into which
each Series 1999-A Preferred Share is convertible, the "Conversion
Multiple"). If the Corporation, at any time after February 1, 1999: (i)
declares or pays any dividend on the Common Shares payable in Common Shares,
or (ii) effects a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the Conversion Multiple will thereafter be the
Conversion Multiple applicable immediately prior to that event multiplied by
a fraction, the numerator of which is the number of Common Shares outstanding
immediately after that event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to that event.
(2) In order for a holder of Series 1999-A Preferred Shares to
convert Series 1999-A Preferred Shares into Common Shares, that holder shall
surrender the certificate or certificates for those Series 1999-A Preferred
Shares at the office of the transfer agent for the Series 1999-A Preferred
Shares (or at the principal office of the Corporation if the Corporation
serves as its own transfer agent), together with written notice that the
holder elects to convert all or any number of the Series 1999-A Preferred
Shares represented by that certificate or certificates. That notice must
state the holder's name or the names of the nominees in which the
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holder wishes the certificate or certificates for Common Shares to be issued
and the number of Series 1999-A Preferred Shares to be converted. If
required by the Corporation, certificates surrendered for conversion must be
endorsed or accompanied by a written instrument or instruments of transfer,
in form satisfactory to the Corporation, duly executed by the registered
holder or his or its attorney duly authorized in writing. The date of
receipt of those certificates and notice by the transfer agent or by the
Corporation (if the Corporation serves as its own transfer agent) will be the
conversion date (the "Conversion Date") and the conversion will be effective
as of the close of business on the Conversion Date. The Corporation shall, as
soon as practicable after the Conversion Date, issue and deliver at that
office, or send, on the converting holder's written instruction, to that
holder or to his or its nominees, a certificate or certificates for the
number of Common Shares to which that holder is entitled, together with cash
in lieu of any fraction of a share.
(3) The Corporation shall at all times when any Series 1999-A
Preferred Shares are outstanding, reserve and keep available out of its
authorized but unissued shares, for the purpose of effecting the conversion
of the Series 1999-A Preferred Shares, such number of its duly authorized
Common Shares as are from time to time sufficient to effect the conversion of
all outstanding Series 1999-A Preferred Shares.
(4) Upon any conversion effected in accordance with this Section
6.E., the Corporation shall pay all accrued and unpaid dividends on the
Series 1999-A Preferred Shares surrendered for conversion.
(5) All Series 1999-A Preferred Shares that have been surrendered
for conversion as herein provided will no longer be considered outstanding,
and all rights with respect to those shares, including the rights, if any, to
receive notices and to vote, will cease and terminate at the close of
business on the Conversion Date, except only the right of the holders thereof
to receive Common Shares in exchange therefor and the dividend payment
provided for in paragraph (4), above. If certificates representing more than
one Series 1999-A Preferred Share are surrendered for conversion at one time
by the same holder, the number of Common Shares issuable on conversion
thereof will be computed on the basis of the aggregate number of Series
1999-A Preferred Shares so surrendered.
F. FRACTIONAL SHARES. Series 1999-A Preferred Shares may be issued
in whole shares or in any fraction of a share, which will entitle the holder,
in proportion to that holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
other rights of holders of Series 1999-A Preferred Shares. In lieu of
issuing fractional shares of less than one one-hundredth (1/100) of a
Preferred Share, the Corporation may elect to make a cash payment in an
amount equal to the same fraction of the last sale price (or bid price if
there were no sales) per Common Share on the New York Stock Exchange on the
business day that immediately precedes the Conversion Date or, if the Common
Shares are not the listed on the New York Stock Exchange, of the market price
per share determined using the prices reported on the exchange or automated
quotation system on which the Common Shares then trade, as equitably adjusted
to reflect any change or adjustment to the Conversion Multiple after February
1, 1999.
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G. CERTAIN TRANSACTIONS. If the Corporation is a party to any
transaction (including without limitation a merger, consolidation, statutory
share exchange, self tender offer for all or substantially all Common Shares
outstanding, sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Shares but excluding the payment of any
dividend payable in Common Shares or a subdivision, combination or
consolidation of the outstanding Common Shares (by reclassification or
otherwise)) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which Common Shares are converted
into the right to receive shares, securities or other property (including
cash or any combination thereof), each Series 1999-A Preferred Share that is
not redeemed or converted into the right to receive shares, securities or
other property in connection with that Transaction will thereafter be
convertible into the kind and amount of shares, securities and other property
(including cash or any combination thereof) receivable upon the consummation
of that Transaction by a holder of that number of Common Shares into which
one Series 1999-A Preferred Share was convertible immediately prior to that
Transaction, assuming that holder of Common Shares (i) is not a Person with
which the Corporation consolidated or into which the Corporation merged or
that merged into the Corporation or to which that sale or transfer was made,
as the case may be (a "Constituent Person"), or an affiliate of a Constituent
Person and (ii) failed to exercise his or her rights of election, if any, as
to the kind or amount of shares, securities and other property (including
cash) receivable upon that Transaction (but if the kind or amount of shares,
securities and other property (including cash) receivable upon that
Transaction is not the same for each Common Share held immediately prior to
that Transaction by other than a Constituent Person or an affiliate thereof
and in respect of which those rights of election have not been exercised
("Non-Electing Share"), then for the purpose of this Section 6.G., the kind
and amount of shares, securities and other property (including cash)
receivable upon that Transaction by each Non-Electing Share will be
considered to be the kind and amount so receivable per share by a plurality
of the Non-Electing Shares). The Corporation shall not be a party to any
Transaction unless the terms of that Transaction are consistent with the
provisions of this Section 6.G. and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for
the benefit of the holders of the Series 1999-A Preferred Shares that will
contain provisions enabling the holders of the Series 1999-A Preferred Shares
that remain outstanding after that Transaction to convert their Series 1999-A
Preferred Shares into the consideration received by holders of Common Shares
at the Conversion Multiple in effect immediately prior to that Transaction.
The provisions of this Section 6.G. similarly apply to successive
Transactions.
H. NOTICE. Whenever the Dividend Multiple or the Conversion
Multiple is adjusted as herein provided, the Corporation shall promptly
deliver to each holder of the Series 1999-A Preferred Shares, at that
holder's last address shown on the share records of the Corporation, a notice
of that adjustment, setting forth the adjusted Dividend Multiple or
Conversion Multiple, as applicable, and the effective date of that adjustment
and a brief statement of the facts requiring that adjustment.
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IN WITNESS WHEREOF, the undersigned has executed this instrument as
of February 1, 1999.
/s/ Robert A. Weible
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Robert A. Weible, Secretary
Boykin Lodging Company
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