Exhibit 4.2
BOYKIN LODGING COMPANY
DIVIDEND REINVESTMENT AND OPTIONAL SHARE PURCHASE PLAN
1. PURPOSE AND ADMINISTRATION.
This Dividend Reinvestment and Optional Share Purchase Plan (the
"Plan") provides the shareholders of Boykin Lodging Company (the "Company") an
opportunity to automatically invest their cash dividends on their Common Shares,
without par value, of the Company ("Common Shares") in additional Common Shares,
and to make monthly or other voluntary cash investments in Common Shares. The
Company will pay the cost of the administration of the Plan. Persons who are not
already shareholders of the Company may purchase Common Shares under the Plan
through voluntary cash investments. The Company may issue not more than
2,500,000 Common Shares under the Plan. The Plan will be administered by
National City Bank, transfer agent for the Company. National City Bank or any
successor administrator of the Plan is referred to as the "Agent."
2. ELIGIBILITY.
Except as otherwise provided in this Section 2, only shareholders of
record of the Company ("Record Holders") who complete and return an
Authorization Card to the Agent are eligible to become participants
("Participants") in the Plan. Beneficial owners of Common Shares (i.e., persons
whose Common Shares are held on their behalf by a nominee, such as a bank or a
brokerage firm) are not Record Holders and must have one or more Common Shares
transferred into their names on the share records of the Company in order to
become Participants. Other persons may become Participants by completing and
returning an Authorization Card to the Agent and making an initial purchase of
Common Shares through a voluntary cash investment.
3. PURCHASE OF COMMON SHARES.
The Agent's purchases of Common Shares for the Plan may be made, at the
Company's option, either (i) from the Company out of its authorized but unissued
Common Shares, or (ii) in the open market (on the New York Stock Exchange or any
securities exchange where the Common Shares are then traded, in the
over-the-counter market or in negotiated transactions). The Company may change
its designation as to whether Common Shares will be purchased from the Company
or in the open market only once in any three-month period. The Company will pay
the brokerage fees or commissions related to the Agent's purchases of Common
Shares in the open market.
In making purchases of Common Shares, the Agent may commingle the
Participants' funds. The Agent will purchase Common Shares to be purchased in
the open market on or as promptly as practicable after the applicable Investment
Date (defined below), consistent with any applicable securities laws and market
conditions, and, in any event, dividends and voluntary cash investments will be
invested within 30 days after receipt by the Agent except when applicable laws
or regulations require otherwise. The exact timing of open market purchases,
including
determining the number of Common Shares, if any, to be purchased on any day
or at any time of day, the prices paid for such shares, the markets on which
such purchases are made, and the persons (including brokers and dealers) from
or through whom such purchases are made will be determined by the Agent or
the broker selected by it for that purpose. The Agent may purchase Common
Shares in advance of an Investment Date for settlement on or after such date.
No interest will be paid on funds held by the Agent pending investment. The
Agent may hold Common Shares of all Participants on deposit in its name or in
the name of its nominee. The Agent is not responsible for the value of Common
Shares acquired for the Participant's account.
If the Agent is unable to invest dividend payments or funds received
for voluntary cash investments in accordance with the guidelines of the Plan,
voluntary cash investments will be returned within 35 days after receipt by the
Agent and dividend payments will be returned within 35 days after the applicable
dividend payment date. The Agent has no liability for conditions that prevent
the purchase of Common Shares or interfere with the timing of purchases.
4. DIVIDEND REINVESTMENT.
As the Participant's agent, the Agent will receive, on or before each
dividend payment date, cash from the Company equal to the dividend on the
participating Common Shares, including any fractional Common Share (computed to
three decimal places) held by the Participant. The Agent will apply such funds
(subject to tax withholding requirements, as described in Section 9) toward the
purchase of Common Shares for the Participant's account. A Participant may
direct the Agent to reinvest dividends on some but not all of his or her Common
Shares. The purchase price per share to the Participant for Common Shares
purchased by the Agent for the Plan with reinvested dividends will be 98%
(subject to change) of the Market Price for the applicable Investment Date. The
number of Common Shares credited to a Participant's account on each purchase of
Common Shares with reinvested dividends will be the number (computed to three
decimal places) resulting from dividing the Participant's aggregate dividends
invested by 98% (subject to change) of the Market Price for the applicable
Investment Date.
The "Market Price" will be, (a) with respect to Common Shares purchased
from the Company, the average of the daily high and low sale prices of Common
Shares on the New York Stock Exchange for the ten trading days immediately
preceding the applicable Investment Date, and (b) with respect to Common Shares
purchased in the open market or in negotiated transactions, the weighted average
price of all Common Shares purchased under the Plan on the applicable Investment
Date.
The "Investment Date," with respect to all funds received as cash
dividends from the Company, will be the dividend payment date declared by the
Company for those payments from time to time. The Investment Date, with respect
to voluntary cash investments, will be once per month on (i) the dividend
payment date for any month in which the Company pays a cash dividend and (ii)
for any month in which no cash dividend is paid, the tenth day of that month or
the next business day if the tenth day is not a business day. A business day is
any day on which both the Agent and the New York Stock Exchange are open.
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The Agent must receive authorization for any reinvestment of dividends
at least one day prior to the record date for payment of those dividends;
otherwise, such authorization will not be effective until the Investment Date
following the next dividend record date.
5. VOLUNTARY CASH INVESTMENT.
As the Participant's agent, the Agent may receive monthly or other (as
determined by the Participant) voluntary cash investments. The Agent will apply
such funds toward the purchase of Common Shares for the Participant's account.
Voluntary cash investments received by the Agent at least eleven business days
prior to an applicable Investment Date will be invested on or as promptly as
practicable after the applicable Investment Date. The purchase price per share
to the Participant for Common Shares purchased by the Agent for the Plan with
voluntary cash investments will be 98% (subject to change) of the Market Price
for the applicable Investment Date, and the purchase price per share to a person
making an initial purchase of Common Shares pursuant to the Plan for Common
Shares purchased by the Agent for the Plan will be 100% of the Market Price for
the applicable Investment Date. The number of Common Shares credited to a
Participant's account on each purchase of Common Shares with voluntary cash
investments will be the number (computed to three decimal places) resulting from
dividing the Participant's voluntary cash investment by 98% (subject to change)
of the Market Price for the applicable Investment Date. The number of Common
Shares credited to the account of a person making an initial purchase of Common
Shares pursuant to the Plan will be the number (computed to three decimal
places) resulting from dividing that person's voluntary cash investment by 100%
of the Market Price for the applicable Investment Date.
Subject to Section 7 below, any voluntary cash investment by a
Participant may not be less than $50 nor more than $5,000 in the aggregate in
any month, and any voluntary cash investment by a person making an initial
purchase of Common Shares pursuant to the Plan may not be less than $2,000 nor
more than $5,000 in the aggregate. No interest will be paid on funds held by the
Agent prior to investment. Voluntary cash investments received by the Agent will
be returned to the Participant (or first-time purchasers) upon written request
received by the Agent at least four business days prior to the applicable
Investment Date.
6. DISCOUNTS AND COMMISSIONS.
The discount per share from the Market Price for either a dividend
reinvestment or a voluntary cash investment is subject to change (but will not
vary from the range of 0% to 5%) from time to time at the Company's sole
discretion after a review of current market conditions, the level of
participation in the Plan and the Company's current and projected capital needs.
The Agent will provide Participants with prompt written notice of any change in
the discount.
In no event may the combined discount from the Market Price and
brokerage fees or commissions per share for Common Shares credited to a
Participant's account exceed 5% of the Market Price on the applicable Investment
Date, and the Agent is authorized to adjust the discount from the Market Price
to ensure that that limit is not exceeded.
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For each Investment Date for which the Agent is directed to purchase
Common Shares in the open market, the Company will pay the Agent an amount equal
to the amount of the aggregate discounts per share (if any) from the Market
Price.
7. PERMITTED PAYMENTS IN EXCESS OF LIMITS.
Voluntary cash investments in excess of $5,000 may be made by a
Participant only upon the prior approval by the Company of a waiver purchase
form (a "Waiver Purchase Form") from such Participant. At the Company's sole
discretion, voluntary cash investments pursuant to a Waiver Purchase Form
request may be made at a discount of from 0% to 5% of the Market Price. The
Company reserves the right to review and adjust the discount relating to Waiver
Purchase Form requests at any time. The Waiver Purchase Form may require the
requesting Participant to represent, among other things, that the Participant is
not purchasing the Common Shares to engage in arbitrage activities and will not
sell Common Shares during any applicable ten-day pricing period. No maximum
limit applies to voluntary cash investments that may be made pursuant to a
Waiver Purchase Form request. Notwithstanding the above, no Participant may
acquire more than 9% of the outstanding Common Shares.
A Waiver Purchase Form request will be considered on the basis of a
variety of factors, including: the Company's current and projected capital
requirements, the alternatives available to the Company to meet those
requirements, prevailing market prices for Common Shares, general economic and
market conditions, expected aberrations in the price or trading volume of Common
Shares, the number of Common Shares held by the Participant submitting the
Waiver Purchase Form, the aggregate amount of voluntary cash investments for
which such Waiver Purchase Forms have been submitted, and the administrative
constraints associated with granting such Waiver Purchase Form request. Any
grant of permission to purchase Common Shares in excess of $5,000 per month will
be made in the sole discretion of the Company.
The Company may establish for each Investment Date a threshold Common
Share purchase price (the "Threshold Price") which applies only to voluntary
cash investments made pursuant to a Waiver Purchase Form request. The Threshold
Price will be a stated dollar amount that the Market Price of the Common Shares
for the respective Investment Date must equal or exceed in order for the Agent
to make any purchases pursuant to a Waiver Purchase Form request. The Threshold
Price will initially be established by the Company at least ten business days
prior to the applicable Investment Date; however, the Company reserves the right
to change the Threshold Price at any time. The Threshold Price will be
determined in the Company's sole discretion after a review of current market
conditions and other relevant factors. If the Threshold Price is not met for the
applicable Investment Date, each Participant's voluntary cash investments made
pursuant to a Waiver Purchase Form for that Investment Date will be returned,
without interest, to the Participant. Setting a Threshold Price for an
Investment Date will not affect the setting of a Threshold Price for any
subsequent Investment Date.
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8. ACCOUNTS.
As soon as practicable after the purchase of Common Shares on any
Investment Date, the Agent will send to each Participant a statement of account
confirming that Participant's transactions and itemizing that Participant's
investment and reinvestment activity for the calendar year. Common Shares
credited to a Participant's account may not be pledged or assigned, and any
attempted pledge or assignment is void. A Participant who wishes to pledge or
assign Common Shares credited to the Participant's account must first withdraw
the Common Shares from the account.
9. INCOME TAX.
The reinvestment of dividends does not relieve a Participant of any
income tax which may be payable on the dividends. In the case of both foreign
Participants who elect to have their dividends reinvested (and whose dividends
are subject to United States income tax withholding) and other Participants who
elect to have their dividends reinvested (and who are subject to "backup"
withholding under Section 3406(a)(1) of the Internal Revenue Code of 1986, as
amended, (the "Code")), the Agent will invest in Common Shares in an amount
equal to the dividends of the Participants, less the amount of tax required to
be withheld. To the extent required under federal tax law, Participants will be
treated as having received a distribution to which Section 301 of the Code
applies with respect to (i) brokerage fees or commissions paid by the Company to
acquire Common Shares for the Participant and (ii) the dollar value of the
discount applicable to such acquisitions.
10. VOTING.
The Participant may vote all Common Shares credited to a Participant's
account under the Plan. If on the record date for a meeting of shareholders
there are Common Shares credited to the account of a Participant, the Agent will
send to that Participant the proxy material for the meeting and a proxy covering
the Participant's shares credited to the Participant's account.
11. CERTIFICATES.
Common Shares purchased under the Plan are registered in the name of
a nominee and shown on each Participant's account. However, a Participant may
request in writing a certificate for any of the whole Common Shares that have
accumulated in the Participant's account. Each certificate issued is
registered in the name or names in which the account is maintained, unless
the Participant otherwise instructs the Agent in writing. If the certificate
is to be issued in a name other than the name of the Plan account, the
Participant or Participants must have his, her or their signatures guaranteed
by an eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Act
of 1933, as amended. Certificates for fractional shares will not be issued.
Dividends will be paid on the cumulative holdings of both full and fractional
Common Shares remaining in the Participant's account and will be reinvested
in accordance with the elections made by the Participant in accordance with
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the Plan. Participants may deposit certificates for Common Shares registered
in their names with the Agent for credit under the Plan. There is no charge
for such deposits. Dividends on Common Shares deposited with the Agent will
be reinvested.
12. TERMINATION OF PARTICIPATION.
A Participant may terminate his or her account at any time by notifying
the Agent in writing. Unless the Agent receives the termination notice at least
five days prior to any dividend record date, it will not be processed until
after purchases made from the dividends paid with respect to that record date
have been completed and credited to the Participant's account. All dividends
with a record date after timely receipt of notice for termination will be sent
directly to the Participant. In addition, upon instructions from the Company,
the Agent may terminate the account of any Participant by written notice mailed
to the Participant. Within 14 days after mailing the termination notice, the
Agent will issue to the Participant, without charge, a certificate for the full
Common Shares held in the Participant's account or, if the Participant so
requests the Agent in writing or by telephone before the Agent's issuance of a
certificate, the Agent will sell the full Common Shares held in the
Participant's account, deduct brokerage commissions, transfer taxes (if any) and
a service charge, and deliver the proceeds to the Participant. In every case of
termination, the Participant's interest in any fractional Common Share will be
paid in cash at the market value of the Company's Common Shares existing on the
date the termination becomes effective as determined by the Agent. A Participant
will also be entitled to the uninvested portion of any voluntary investment if
notice of termination is received at least two business days prior to the date
when the Agent becomes obligated to pay for Common Shares purchased with respect
to that investment.
If a Participant disposes of all of the Common Shares registered in his
or her name on the books and records of the Company, the Participant will remain
in the Plan with respect to any Common Shares held in the Participant's account
under the Plan unless the Participant provides written notice of termination to
the Agent.
13. SHARE DIVIDENDS.
Any share dividends or share splits distributed by the Company on the
Common Shares held by the Agent for the Participant will be credited to the
Participant's account. If the Company makes available to its shareholders rights
to purchase additional Common Shares or other securities, the Agent will send to
the Participant appropriate instructions in connection with all such rights in
order to permit the Participant to determine what action he or she desires to
take.
14. RESPONSIBILITY OF AGENT.
The Agent is not liable hereunder for any act done in good faith, or
for any good faith omission to act, including, without limitation, for: (i) any
failure to terminate any Participant's account upon the Participant's death
prior to receipt of notice in writing of his or her death, and (ii) the prices
and times at which it purchases or sells Common Shares for any Participant's
account.
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15. AMENDMENT OF PLAN.
The Company may amend or supplement the Plan at any time, but, except
when necessary or appropriate to comply with law or the rules or regulations of
the Securities and Exchange Commission (the "Commission"), the Internal Revenue
Service or other regulatory authority or with respect to any modification or
amendment that does not materially affect the rights of Participants, any
amendment or supplement will be effective only upon the mailing of written
notice thereof at least 30 days prior to the effective date thereof to each
Participant. The amendment or supplement will be considered to be accepted by
the Participant unless, prior to the effective date thereof, the Agent receives
written notice of the termination of the Participant's account. Any such
amendment may include an appointment by the Company of a successor Agent, in
which event the Company is authorized to pay the successor Agent for the account
of the Participant all dividends and distributions payable on Common Shares held
by the Participant for application by the successor Agent as provided in the
Plan.
16. SUSPENSION, TERMINATION AND COMPANY DISCRETION.
The Company reserves the right to suspend or terminate the Plan at any
time, and reserves the right to refuse voluntary cash investments from any
person who, in the sole judgment of the Company, is attempting to circumvent the
interests of the Plan by making excessive voluntary cash investments through
multiple accounts or by engaging in arbitrage activities. The Company may also
suspend, terminate or refuse participation in the Plan to any person if
participation or any increase in the number of Common Shares held by such person
would, in the sole judgment of the Company, jeopardize the status of the Company
as a real estate investment trust.
17. COMPLIANCE WITH APPLICABLE LAW AND REGULATIONS.
(a) The Company's obligation to offer or sell Common Shares hereunder
is subject to the Company's obtaining any necessary approval, authorization or
consent from any regulatory authority having jurisdiction over that offer and
sale. The Company may elect not to offer or sell Common Shares hereunder to
persons residing in any jurisdiction where, in the sole judgment of the Company,
the burden or expense of compliance with applicable blue sky or securities laws
makes that offer or sale impracticable or inadvisable.
(b) To the extent required to comply with law or the rules and
regulations of the Commission, neither the Company nor any "affiliated"
purchaser (as defined under the Securities Exchange Act of 1934, as amended)
shall purchase any Common Shares on any day on which the market price of the
Common Shares will be a factor in determining the Market Price as provided in
Section 4 of the Plan.
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18. INTERPRETATION.
The Company will determine any questions of interpretation arising
under the Plan, and that determination will be final. The Company may adopt
rules and regulations to facilitate the administration of the Plan. The terms
and conditions of the Plan will be governed by the laws of the State of Ohio.
19. EFFECTIVE DATE.
The effective date of the Plan is March 2, 1999. All correspondence and
questions regarding the Plan and any Participant's account should be directed
to: National City Bank, Reinvestment Services, P.O. Box 94946, Cleveland, Ohio
44101-4946, telephone number: 800-622-6757, or such other address or telephone
number of which notice is given to Participants in writing.
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