<PAGE>
As filed with the Securities and Exchange Commission on _______ __, 199_.
Registration Statement No. 333- _____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
PRENTISS PROPERTIES TRUST
(Exact name of Registrant as specified in its Charter)
Maryland 75-2261588
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
3890 West Northwest Highway, Suite 400
Dallas, Texas 75220
(214) 654-0886
(Address of principal executive office, including zip code)
PRENTISS PROPERTIES TRUST
SHARE PURCHASE PLAN
(Full title of the Plan)
Michael V. Prentiss
3890 West Northwest Highway, Suite 400
Dallas, Texas 75220
(214) 654-0886
(Name, address, including zip code, and telephone number
including area code, of agent for service)
With copies to:
Mark A. Murphy, Esquire
Hunton & Williams
951 E. Byrd Street
Richmond, Virginia 23219
(804) 788-8200
____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share offering price registration fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common shares of beneficial interest
$.01 par value 500,000 shares $27.0000(*) $13,500,000 $4,091
=====================================================================================================================
</TABLE>
(*) Estimated solely for the purpose of computing the registration fee.
This amount was calculated pursuant to Rule 457(c) on the basis of $27.0000 per
share, which was the average of the high and low prices of the Common Shares on
the New York Stock Exchange on January 22, 1997.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Securities and Exchange Commission (the
"Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Prentiss Properties Trust (the "Company")
with the Commission (file No. 1-14516) are incorporated herein by reference and
made a part hereof: (i) the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, (ii) the Company's Form 8-A, dated October 17,
1996, containing a description of the Company's Common Shares (the "Common
Shares") and (iii) the Company's Prospectus dated October 17, 1996 filed
pursuant to Rule 424(b) on October 18, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of the Prospectus and prior to the filing of a post-effective
amendment that indicates that all securities offered have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in the Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that is incorporated by reference
herein modifies or supersedes such earlier statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Title 8 of the Corporations and Associations Article of the Annotated Code
of Maryland as amended (the "Maryland REIT Law") permits a Maryland real estate
investment trust to include in its
<PAGE>
Declaration of Trust a provision limiting the liability of its trustees and
officers to the trust and its shareholders for money damages except for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment as being material to the cause of action. The Amended and
Restated Declaration of Trust of the Company (the "Declaration of Trust")
contains such a provision which eliminates such liability to the maximum extent
permitted by the Maryland REIT Law.
The Declaration of Trust of the Company authorizes it, to the maximum
extent permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former Trustee or officer or (b) any individual who, while a
Trustee of the Company and at the request of the Company, serves or has served
another real estate investment trust, corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a trustee, director,
officer or partner of such real estate investment trust, corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
The Bylaws of the Company obligate it, to the maximum extent permitted by
Maryland law, to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to (a) any present or former
Trustee or officer who is made a party to the proceeding by reason of his
service in that capacity or (b) any individual who, while a Trustee of the
Company and at the request of the Company, serves or has served another real
estate investment trust, corporation, partnership, joint venture, trust,
employee benefit plan or any other enterprise as a trustee, director, officer or
partner of such real estate investment trust, corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise and who is made a
party to the proceeding by reason of his service in that capacity. The
Declaration of Trust and Bylaws also permit the Company to indemnify and advance
expenses to any person who served a predecessor of the Company in any of the
capacities described above and to any employee or agent of the Company or a
predecessor of the Company. The Bylaws require the Company to indemnify a
Trustee or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he is made a party by reason of his service
in that capacity.
The Maryland REIT Law permits a Maryland real estate investment trust to
indemnify and advance expenses to its trustees, officers, employees and agents
to the same extent as is permitted by the MGCL for directors and officers of
Maryland corporations. The MGCL permits a corporation to indemnity its present
and former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a) the
act or omission of the director or officer was material to the matter giving
rise to the proceeding and (i) was committed in bad faith or (ii) was the result
of active and deliberate dishonesty, (b) the director or officer actually
received an improper personal benefit in money, property or services or (c) in
the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. However, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation. In accordance with the MGCL, the Bylaws of the Company
require it, as a condition to advancing expenses, to obtain (a) a written
affirmation by the Trustee or officer of his good faith belief that he has met
the standard of conduct necessary for indemnification by the Company as
authorized by the Bylaws and (b) a written statement by or on his behalf to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE>
ITEM 8. EXHIBITS.
Exhibit No.
- -----------
4.1 Amended and Restated Declaration of Trust.
4.2 By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-11 (Registration No. 333-9863).
4.3 Prentiss Prospectus Trust Share Purchase Plan.
5 Opinion of Hunton & Williams as to the legality of the securities being
registered.
24.1 Consent of Hunton & Williams (included in the opinion filed as Exhibit 5
to the Registration Statement).
24.2 Consent of Coopers & Lybrand L.L.P.
25 Power of Attorney (included on the signature page hereto)
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change in such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing Form S-8 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Dallas, State of Texas on the 23rd day of January, 1997.
PRENTISS PROPERTIES TRUST,
a Maryland real estate investment trust
(Registrant)
By: /s/ Thomas F. August
-------------------------------------
Thomas F. August
President, Chief Operating Officer and
Trustee
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1997. Each of the directors and/or officers
of Prentiss Properties Trust whose signature appears below hereby appoints
Thomas F. August and Gregory S. Imhoff, and each of them severally, as his
attorney-in-fact to sign in his name and behalf, in any and all capacities
stated below, and to file with the Commission any and all amendments, including
post-effective amendments, to this registration statement, making such changes
in the registration statement as appropriate, and generally to do all such
things in their behalf in their capacities as officers and directors to enable
Prentiss Properties Trust to comply with the provisions of the Securities Act of
1933, and all requirements of the Securities and Exchange Commission.
SIGNATURE TITLE
--------- -----
/s/ Michael V. Prentiss Chairman of the Board and Chief Executive Officer
------------------------- (Principal Executive Officer)
Michael V. Prentiss
/s/ Thomas F. August Chief Operating Officer, President and Trustee
-------------------------
Thomas F. August
/s/ Mark R. Doran Executive Vice President and Treasurer
------------------------- (Principal Financial Officer
Mark R. Doran and Principal Accounting Officer)
Director
-------------------------
Thomas J. Hynes
/s/ Barry J.C. Parker Director
-------------------------
Barry J.C. Parker
/s/ Leonard M. Riggs, Jr. Director
-------------------------
Leonard M. Riggs, Jr.
/s/ Ronald G. Steinhart Director
-------------------------
Ronald G. Steinhart
/s/ Lawrence A. Wilson Director
-------------------------
Lawrence A. Wilson
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Description Number Page
- ----------- ----------- -----------
4.1 Amended and Restated Declaration of Trust.
4.2 By-Laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-11
(Registration No. 333-9863).
4.3 Prentiss Properties Trust Share
Purchase Plan
5 Opinion of Hunton & Williams as to the
legality of the securities being
registered.
24.1 Consent of Hunton & Williams (included
in the opinion filed as Exhibit 5 to
the Registration Statement).
23.2 Consent of Coopers & Lybrand L.L.P.
25 Power of Attorney (included on
signature page hereto).
<PAGE>
EXHIBIT 4.1
PRENTISS PROPERTIES TRUST
-------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
DATED AS OF OCTOBER 16, 1996
Prentiss Properties Trust, a Maryland real estate investment trust (the
"Trust") under Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland ("Title 8"), desires to amend and restate its
Declaration of Trust as currently in effect and as hereinafter amended.
The following provisions are all the provisions of the Declaration of Trust
currently in effect and as hereinafter amended:
ARTICLE I
FORMATION
The Trust is a real estate investment trust (a "REIT") within the meaning
of Title 8. The Trust shall not be deemed to be a general partnership, limited
partnership, joint venture, joint stock company or a corporation (but nothing
herein shall preclude the Trust from being treated for tax purposes as an
association under the Code).
ARTICLE II
NAME
The name of the Trust is:
Prentiss Properties Trust
Under circumstances in which the Board of Trustees of the Trust (the "Board
of Trustees" or "Board") determines that the use of the name of the Trust is not
practicable, the Trust may use any other designation or name for the Trust.
<PAGE>
ARTICLE III
PURPOSES AND POWERS
Section 1. Purposes. The purposes for which the Trust is formed are to
--------
invest in and to acquire, hold, manage, administer, control and dispose of real
property and interests in real property, including, without limitation or
obligation, engaging in business as a REIT under the Internal Revenue Code of
1986, as amended (the "Code").
Section 2. Powers. The Trust shall have all of the powers granted to
------
REITs by Title 8 and all other powers set forth in the Declaration of Trust
which are not inconsistent with law and are appropriate to promote and attain
the purposes set forth in the Declaration of Trust.
ARTICLE IV
RESIDENT AGENT
The name of the resident agent of the Trust in the State of Maryland is
James J. Hanks, Jr., c/o Ballard Spahr Andrews & Ingersoll, whose post office
address is 300 East Lombard Street, Baltimore, Maryland 21202. The resident
agent is a citizen of and resides in the State of Maryland. The Trust may have
such offices or places of business within or outside the State of Maryland as
the Board of Trustees of the Trust may from time to time determine.
ARTICLE V
BOARD OF TRUSTEES
Section 1. Powers.
------
(A) Subject to any express limitations contained in the Declaration
of Trust or in the Bylaws, (i) the business and affairs of the Trust shall be
managed under the
<PAGE>
direction of the Board of Trustees and (ii) the Board shall have full, exclusive
and absolute power, control and authority over any and all property of the
Trust. The Board may take any action as it, in its sole judgment and discretion,
deems necessary or appropriate to conduct the business and affairs of the Trust.
The Declaration of Trust shall be construed with a presumption in favor of the
grant of power and authority to the Board. Any construction of the Declaration
of Trust or determination made in good faith by the Board concerning its powers
and authority hereunder shall be conclusive. The enumeration and definition of
particular powers of the Trustees included in the Declaration of Trust or in the
Bylaws shall in no way be construed or deemed by inference or otherwise in any
manner to exclude or limit the powers conferred upon the Board of Trustees under
the general laws of the State of Maryland or any other applicable laws.
(B) Except as otherwise provided in the Bylaws, the Board, without
any action by the shareholders of the Trust, shall have and may exercise, on
behalf of the Trust, without limitation, the power to adopt, amend and repeal
Bylaws; to elect officers in the manner prescribed in the Bylaws; to solicit
proxies from holders of shares of beneficial interest of the Trust; and to do
any other acts and deliver any other documents necessary or appropriate to the
foregoing powers.
(C) It shall be the duty of the Board of Trustees to ensure that
the Trust satisfies the requirements for qualification as a REIT under the Code,
including, but not limited to, the ownership of outstanding shares of its
beneficial interest, the nature of its assets, the sources of its income, and
the amount and timing of its distributions to its shareholders. The Board of
<PAGE>
Trustees shall take no action to disqualify the Trust as a REIT or to otherwise
revoke the Trust's election to be taxed as a REIT without the affirmative vote
of a majority of the number of shares of Common Shares entitled to vote on such
matter at a meeting of the Shareholders.
Section 2. Classification and Number. (A) The Trustees of the Trust
-------------------------
(hereinafter the "Trustees") (other than any Trustee elected solely by holders
of one or more classes or series of Preferred Shares) shall be classified, with
respect to the terms for which they severally hold office, into three classes,
as nearly equal in number as possible, one class ("Class I") to hold office
initially for a term expiring at the first annual meeting of shareholders,
another class ("Class II") to hold office initially for a term expiring at the
second succeeding annual meeting of shareholders and another class ("Class III")
to hold office initially for a term expiring at the third succeeding annual
meeting of shareholders, with the Trustees of each class to hold office until
their successors are duly elected and qualified. At each annual meeting of
shareholders, the successors to the class of Trustees whose term expires at such
meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election. Shareholder votes to elect Trustees shall be conducted in the manner
provided in the Bylaws.
(B) The number of Trustees initially shall be seven, which number
may be increased or decreased pursuant to the Bylaws of the Trust. The name,
address and class of the Trustees who shall serve as the initial Trustees and
until their successors are duly elected and qualified is:
<PAGE>
<TABLE>
<CAPTION>
Name Address Class
- ---- ------- -----
<S> <C> <C>
Michael V. Prentiss 1717 Main Street Class III
Suite 5000
Dallas, TX 75201
Thomas F. August 1717 Main Street Class II
Suite 5000
Dallas, TX 75201
Thomas J. Hynes 160 Federal Street Class III
Boston, MA 02110
Barry J. C. Parker Class III
Dr. Leonard M. Riggs,Jr. 1717 Main Street Class II
Suite 5200
Dallas, TX 75201
Ronald G. Steinhart P. O. Box 655415 Class II
Dallas, TX 75265-5415
Lawrence A. Wilson 1700 Pacific, Suite 3800 Class I
Dallas, TX 75201
</TABLE>
The Trustees may increase the number of Trustees and fill any vacancy, whether
resulting from an increase in the number of Trustees or otherwise, on the Board
of Trustees prior to the first annual meeting of shareholders in the manner
provided in the Bylaws. Independent Trustees shall nominate replacements for
vacancies among the Independent Trustees' positions. In the event that, after
the closing of the Initial Public Offering, a majority of the Board of Trustees
are not Independent Trustees by reason of the resignation or removal of one or
more Independent Trustees or otherwise, the remaining Independent Trustees (or,
if there are no Independent Trustees, the remaining members of the Board of
Trustees) shall promptly elect that number of
<PAGE>
Independent Trustees necessary to cause the Board of Trustees to include a
majority of Independent Trustees. It shall not be necessary to list in the
Declaration of Trust the names and addresses of any Trustees hereinafter
elected.
Section 3. Resignation, Removal or Death. Any Trustee may resign by
-----------------------------
written notice to the Board, effective upon execution and delivery to the Trust
of such written notice or upon any future date specified in the notice. Subject
to the rights of holders of one or more classes or series of Preferred Shares to
elect one or more Trustees, a Trustee may be removed at any time, with or
without cause, at a meeting of the shareholders, by the affirmative vote of the
holders of not less than two-thirds of the Shares then outstanding and entitled
to vote generally in the election of Trustees.
Section 4. Independent Trustees. Notwithstanding anything herein to the
--------------------
contrary, at all times (except during a period not to exceed sixty (60) days
following the death, resignation, incapacity or removal from office of a Trustee
prior to expiration of the Trustee's term of office), a majority of the Board of
Trustees shall be comprised of persons who are not affiliated with any member of
the Prentiss family or officers or employees of the Trust or "Affiliates" of (i)
any subsidiary of the Trust or (ii) any partnership which is an Affiliate of the
Trust (each such person serving on the Board of Trustees being an "Independent
Trustee").
Section 5. Definition of Affiliate. For purposes of Section 4 above,
-----------------------
"Affiliate" of a person shall mean (i) any person that, directly or indirectly,
controls or is controlled by or is under common control with such person, (ii)
any other person that owns, beneficially, directly or indirectly, five percent
(5%) or more of the outstanding capital shares, shares or equity interests
<PAGE>
of such person, or (iii) any officer, director, employee, partner or trustee of
such person or of any person controlling, controlled by or under common control
with such person (excluding trustees and persons serving in similar capacities
who are not otherwise an Affiliate of such person). The term "person" means and
includes individuals, corporation, general and limited partnerships, stock
companies or associations, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts, or other entities and
governments and agencies and political subdivisions thereof. For the purpose of
this definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such person,
through the ownership of voting securities, partnership interests or other
equity interests.
Section 6. Business Activities by Trustees. Unless otherwise agreed
-------------------------------
between the Trust and the Trustees, each individual Trustee, including each
Independent Trustee, may engage in other business activities of the type
conducted by the Trust and is not required to present to the Trust any
investment opportunities presented to them even though the investment
opportunities may be within the scope of the Trust's investment policies.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 1. Authorized Shares. The beneficial interest of the Trust shall
-----------------
be divided into shares of beneficial interest (the "Shares"). The Trust has
authority to issue one hundred million (100,000,000) common shares of beneficial
interest, $.01 par value per share ("Common
<PAGE>
Shares"), and twenty million (20,000,000) preferred shares of beneficial
interest, $.01 par value per share ("Preferred Shares"). The Board of Trustees,
without any action by the shareholders of the Trust, may amend the Declaration
of Trust from time to time to increase or decrease the aggregate number of
Shares or the number of Shares of any class that the Trust has authority to
issue.
Section 2. Common Shares. Subject to the provisions of Article VII, each
-------------
Common Share shall entitle the holder thereof to one vote on each matter upon
which holders of Common Shares are entitled to vote. The Board of Trustees may
reclassify any unissued Common Shares from time to time in one or more classes
or series of Shares.
Section 3. Preferred Shares. The Board of Trustees may classify any
----------------
unissued Preferred Shares and reclassify any previously classified but unissued
Preferred Shares of any series from time to time, in one or more series of
Shares.
Section 4. Classified or Reclassified Shares. Prior to issuance of
---------------------------------
classified or reclassified Shares of any class or series, the Board of Trustees
by resolution shall (a) designate that class or series to distinguish it from
all other classes and series of Shares; (b) specify the number of Shares to be
included in the class or series; (c) set, subject to the provisions of Article
VII and subject to the express terms of any class or series of Shares
outstanding at the time, the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each series; and (d)
cause the Trust to file articles supplementary with the State Department of
Assessments and Taxation of Maryland ("SDAT"). Any of the terms of any class or
series of
<PAGE>
Shares set pursuant to clause (c) of this Section 4 may be made dependent upon
facts or events ascertainable outside the Declaration of Trust (including
determinations by the Board of Trustees or other facts or events within the
control of the Trust) and may vary among holders thereof, provided that the
manner in which such facts, events or variations shall operate upon the terms of
such class or series of Shares is clearly and expressly set forth in articles
supplementary filed with the SDAT.
Section 5. Authorization by Board of Share Issuance. The Board of
----------------------------------------
Trustees may authorize the issuance from time to time of Shares of any class or
series, whether now or hereafter authorized, or securities or rights convertible
into Shares of any class or series, whether now or hereafter authorized, for
such consideration (whether in cash, property, past or future services,
obligation for future payment or otherwise) as the Board of Trustees may deem
advisable (or without consideration in the case of a Share split or Share
dividend), subject to such restrictions or limitations, if any, as may be set
forth in the Declaration of Trust or the Bylaws of the Trust. Notwithstanding
any other provision in the Declaration of Trust, no determination shall be made
by the Board of Trustees nor shall any transaction be entered into by the Trust
which would cause any Shares or other beneficial interest in the Trust not to
constitute "transferable shares" or "transferable certificates of beneficial
interest" under Section 856(a)(2) of the Code or which would cause any
distribution to constitute a preferential dividend as described in Section
562(c) of the Code.
Section 6. Dividends and Distributions. The holders of all Common Shares
---------------------------
will participate equally in dividends payable to holders of Common Shares when
and as authorized
<PAGE>
and declared by the Board of Trustees and in net assets available for
distribution to holders of Common Shares upon liquidation or dissolution. The
Board of Trustees may from time to time authorize and declare to shareholders
such dividends or distributions, in cash or other assets of the Trust or in
securities of the Trust or from any other source as the Board of Trustees in its
discretion shall determine. The Board of Trustees shall endeavor to declare and
pay such dividends and distributions as shall be necessary for the Trust to
qualify as a REIT under the Code; however, shareholders shall have no right to
any dividend or distribution unless and until authorized and declared by the
Board. The exercise of the powers and rights of the Board of Trustees pursuant
to this Section shall be subject to the provisions of any class or series of
Shares at the time outstanding.
Section 7. General Nature of Shares. All Shares shall be personal
------------------------
property entitling the shareholders only to those rights provided in the
Declaration of Trust. The shareholders shall have no interest in the property
of the Trust and shall have no right to compel any partition, division, dividend
or distribution of the Trust or of the property of the Trust. The death of a
shareholder shall not terminate the Trust. The Trust is entitled to treat as
shareholders only those persons in whose names Shares are registered as holders
of Shares on the beneficial interest ledger of the Trust.
Section 8. Fractional Shares. The Trust may, without the consent or
-----------------
approval of any shareholder, issue fractional Shares, eliminate a fraction of a
Share by rounding up or down to a full Share, arrange for the disposition of a
fraction of a Share by the person entitled to it, or pay cash for the fair value
of a fraction of a Share.
<PAGE>
Section 9. Declaration of Trust and Bylaws. All shareholders are subject
-------------------------------
to the provisions of the Declaration of Trust and the Bylaws of the Trust.
ARTICLE VII
RESTRICTIONS ON TRANSFER AND SHARES-IN-TRUST
Section 1. Restrictions on Transfer.
------------------------
(A) Definitions. The following terms shall have the following
-----------
meanings:
(1) "Beneficial Ownership" shall mean ownership of Equity
Shares (or options to acquire 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 Code, as modified by Section 856(h)(1)(B) of
the Code. The terms "Beneficial Owner," "Beneficially Owns," and "Beneficially
Owned" shall have correlative meanings.
(2) "Beneficiary" shall mean, with respect to any Share Trust,
one or more organizations described in each of Section 170(b)(1)(A) (other than
clauses (vii) or (viii) thereof) and Section 170(c)(2) of the Code that are
named by the Share Trust as the beneficiary or beneficiaries of such Share
Trust, in accordance with the provisions of Section 2(A) hereof.
(3) "Board of Trustees" shall mean the Board of Trustees of
the Trust.
(4) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(5) "Constructive Ownership" shall mean ownership of Equity
Shares (or options to acquire 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 Code, as
<PAGE>
modified by Section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns," and "Constructively Owned" shall have correlative
meanings.
(6) "Equity Shares" shall mean shares that are either
Preferred Shares or Common Shares. The term "Equity Shares" shall include all
Preferred Shares or Common Shares that are held as Shares-in-Trust in accordance
with the provisions of Section 2 hereof.
(7) "Exchange Rights" shall mean the rights granted under the
Prentiss Properties Partnership Agreement to the limited partners to exchange,
under certain circumstances, their limited partnership interests for cash (or,
at the option of the Trust, Common Shares).
(8) "Excluded Holder" shall mean Michael V. Prentiss.
(9) "Excluded Holder Limit" shall mean, (i) the lesser of (A)
15% of the number of outstanding Common Shares or (B) the Adjusted Excluded
Holder Percentage (as defined in Section 1(I) of this Article VII). The Excluded
Holder Limit shall be adjusted on any day that the Adjusted Excluded Holder
Percentage changes as provided in Section 1(I) of this Article VII. The Excluded
Holder shall be subject to the Ownership Limit with respect to any Preferred
Shares acquired by the Excluded Holder.
(10) "Initial Public Offering" means the sale of Common Shares
pursuant to the Trust's first effective registration statement for such Common
Shares filed under the Securities Act of 1933, as amended.
(11) "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
<PAGE>
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 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 the Equity Shares are listed or admitted
to trading or, if the 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 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 the Equity
Shares selected by the Board of Trustees. "Trading Day" shall mean a day on
which the principal national securities exchange on which the Equity Shares are
listed or admitted to trading is open for the transaction of business or, if the
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.
(12) "Non-Transfer Event" shall mean an event (other than a
purported Transfer) that would cause (i) any Person (other than the Excluded
Holder with respect to
<PAGE>
Common Shares) to Beneficially Own or Constructively Own Equity Shares in excess
of the Ownership Limit or (ii) the Excluded Holder to Beneficially Own or
Constructively Own Common Shares in excess of the Excluded Holder Limit,
including, but not limited to, the granting of any option or entering into 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.
(13) "Ownership Limit" initially shall mean 8.5% of the number
of outstanding Common Shares and 9.8% of the outstanding number of any series of
Preferred Shares. After any adjustment provided for in Section 1(J) of this
Article VII, the Ownership Limit with respect to Common Shares shall be
increased (but not above 9.8%) as set forth in such Section.
(14) "Partnership Unit" shall mean a fractional, undivided
share of the partnership interests of Prentiss Properties Acquisition Partners,
L.P., a Delaware limited partnership.
(15) "Permitted Transferee" shall mean any Person designated
as a Permitted Transferee in accordance with the provisions of Section 2(E)
hereof.
(16) "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 Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a "group" as
<PAGE>
that term is used for purposes of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended.
(17) "Prentiss Properties Partnership Agreement" shall mean
the agreement of limited partnership of Prentiss Properties Acquisition
Partners, L.P., a Delaware limited partnership, as amended and restated.
(18) "Prohibited Owner" shall mean, with respect to any
purported Transfer or Non-Transfer Event, any Person who, but for the provisions
of Section 1(C) hereof, would own record title to Equity Shares.
(19) "REIT" shall mean a real estate investment trust under
Section 856 of the Code.
(20) "Restriction Termination Date" shall mean the first day
after the date of the Initial Public Offering on which the Board of Trustees and
the shareholders of the Trust determine, pursuant to Article V, Section 1(C),
that it is no longer in the best interests of the Trust to attempt to, or
continue to, qualify as a REIT.
(21) "Shares-in-Trust" shall mean any Equity Shares designated
Shares-in-Trust pursuant to Section 1(C) hereof.
(22) "Share Trust" shall mean any separate trust created
pursuant to Section 1(C) hereof and administered in accordance with the terms of
Section 2 hereof, for the exclusive benefit of any Beneficiary.
<PAGE>
(23) "Share Trustee" shall mean any person or entity
unaffiliated with both the Trust and any Prohibited Owner, such Share Trustee to
be designated by the Trust to act as trustee of any Share Trust, or any
successor trustee thereof.
(24) "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.
(B) Restriction on Transfers.
------------------------
(1) Except as provided in Section 1(G) hereof, from the date
of the Initial Public Offering and prior to the Restriction Termination Date,
(i) no Person (other than the Excluded Holder with respect to Common Shares)
shall Beneficially Own or Constructively Own outstanding Equity Shares in excess
of the Ownership Limit and (ii) the Excluded Holder shall not Beneficially Own
or Constructively Own outstanding Common Shares in excess of the Excluded Holder
Limit.
(2) Except as provided in Section 1(G) hereof and subject to
Section 1(H) hereof, from the date of the Initial Public Offering and prior to
the Restriction Termination Date, any Transfer that, if effective, would result
in (i) any Person (other than the Excluded Holder with respect to Common Shares)
Beneficially Owning or Constructively Owning Equity Shares in excess of the
Ownership Limit or (ii) the Excluded Holder Beneficially Owning or
Constructively Owning Common Shares in excess of the Excluded Holder Limit,
shall be void ab initio as to the Transfer of that number of Equity Shares
-- ------
which would be otherwise Beneficially
<PAGE>
Owned or Constructively Owned by such Person in excess of the Ownership Limit or
the Excluded Holder Limit, as applicable, and the intended transferee shall
acquire no rights in such excess Equity Shares.
(3) From the date of the Initial Public Offering and prior to
the Restriction Termination Date, any Transfer that, if effective, would result
in the 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 of 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
excess Equity Shares; provided, however, that this Section 1(B)(3) shall not
apply to the Transfer of Equity Shares from the Trust to the underwriters of the
Initial Public Offering.
(4) From the date of the Initial Public Offering and prior to
the Restriction Termination Date, any Transfer of Equity Shares that, if
effective, would result in the Trust being "closely held" within the meaning of
Section 856(h) of the Code shall be void ab initio as to the Transfer of that
-- ------
number of Equity Shares which would cause the Trust to be "closely held" within
the meaning of Section 856(h) of the Code, and the intended transferee shall
acquire no rights in such excess Equity Shares.
(5) Except as provided in Section 1(G) hereof and subject to
Section 1(H) hereof, from the date of the Initial Public Offering and prior to
the Restriction Termination Date, any Transfer of Equity Shares that, if
effective, would cause the Trust to Constructively Own 10% or more of the
ownership interests in a tenant of the Trust's real property, within the meaning
of Section 856(d)(2)(B) of the Code, shall be void ab initio as to the Transfer
-- ------
of that number of Equity Shares which would cause the Trust to Constructively
Own 10% or more of the ownership interests in a tenant of the Trust's real
property, within the
<PAGE>
meaning of Section 856(d)(2)(B) of the Code, and the intended transferee shall
acquire no rights in such excess Equity Shares.
(C) Transfer to Share Trust.
-----------------------
(1) If, notwithstanding the other provisions contained in this
Section 1, at any time after the date of the Initial Public Offering and prior
to the Restriction Termination Date, there is a purported Transfer or Non-
Transfer Event such that (i) any Person (other than the Excluded Holder with
respect to Common Shares) would either Beneficially Own or Constructively Own
Equity Shares in excess of the Ownership Limit or (ii) the Excluded Holder would
either Beneficially Own or Constructively Own Common Shares in excess of the
Excluded Holder Limit, then, (x) except as otherwise provided in Section 1(G)
hereof, 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 or the Excluded Holder Limit, as applicable, (y) such number of Equity
Shares in excess of the Ownership Limit or the Excluded Holder Limit, as
applicable (rounded up to the nearest whole share), shall be designated Shares-
in-Trust and, in accordance with the provisions of Section 2
<PAGE>
hereof, transferred automatically and by operation of law to the Share Trust to
be held in accordance with that Section 2 and (z) the Prohibited Owner shall
submit such number of Equity Shares to the Trust for registration into the name
of the Share Trust. Such transfer to a Share 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.
(2) If, notwithstanding the other provisions contained in this
Section 1, at any time after the date of 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 the Equity Shares being
beneficially owned by fewer than 100 Persons (determined without reference to
any rules of attribution), (ii) result in the Trust being "closely held" within
the meaning of Section 856(h) of the Code, or (iii) cause the Trust to
Constructively Own 10% or more of the ownership interests in a tenant of the
Trust's real property, within the meaning of Section 856(d)(2)(B) of the 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 of 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 the Equity Shares being beneficially owned by fewer than 100 Persons
(determined without reference to any rules of attribution), (B) result in the
Trust being "closely held" within the meaning of Section 856(h) of the Code, or
(C) cause the Trust to Constructively Own 10% or more of the ownership interests
in a tenant of the Trust's real
<PAGE>
property, within the meaning of Section 856(d)(2)(B) of the Code, (y) such
number of Equity Shares (rounded up to the nearest whole share) shall be
designated Shares-in-Trust and, in accordance with the provisions of Section 2
hereof, transferred automatically and by operation of law to the Share Trust to
be held in accordance with that Section 2, and (z) the Prohibited Owner shall
submit such number of Equity Shares to the Trust for registration into the name
of the Share Trust. Such transfer to a Share 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.
(D) Remedies For Breach. If the Trust, or its designees, shall at
-------------------
any time determine in good faith that a Transfer has taken place in violation of
Section 1(B) hereof or that a Person intends to acquire or has attempted to
acquire Beneficial Ownership or Constructive Ownership of any Equity Shares in
violation of Section 1(B) hereof, the Trust shall take such action as it deems
advisable to refuse to give effect to or to prevent such Transfer or
acquisition, including, but not limited to, refusing to give effect to such
Transfer on the books of the Trust or instituting proceedings to enjoin such
Transfer or acquisition.
(E) Notice of Restricted Transfer. Any Person who acquires or
-----------------------------
attempts to acquire Equity Shares in violation of Section 1(B) hereof, or any
Person who owned Equity Shares that were transferred to the Share Trust pursuant
to the provisions of Section 1(C) hereof, shall immediately give written notice
to the Trust of such event and shall provide to the Trust such other information
as the Trust may request in order to determine the effect, if any, of such
Transfer or Non-Transfer Event, as the case may be, on the Trust's status as a
REIT.
<PAGE>
(F) Owners Required To Provide Information. From the date of the
--------------------------------------
Initial Public Offering and prior to the Restriction Termination Date:
(1) Every Beneficial Owner or Constructive Owner of more than
5%, or such lower percentages as required pursuant to regulations under the
Code, of the outstanding Equity Shares of the Trust shall, within 30 days after
January 1 of each year, provide to the Trust 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. Each such Beneficial Owner or
Constructive Owner shall provide to the Trust such additional information as the
Trust may request in order to determine the effect, if any, of such Beneficial
Ownership or Constructive Ownership on the Trust's status as a REIT and to
ensure compliance with the Ownership Limit and the Excluded Holder Limit.
(2) 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 Trust a written statement or affidavit stating such information
as the Trust may request in order to determine the Trust's status as a REIT and
to ensure compliance with the Ownership Limit and the Excluded Holder Limit.
(G) Exception to Ownership Limit. 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
<PAGE>
provided that the restrictions contained in Section 1(B) hereof will not be
violated following the distribution by such underwriter of such shares. In
addition, the Board of Trustees, upon receipt of a ruling from the Internal
Revenue Service or an opinion of counsel in each case to the effect that the
restrictions contained in Section 1(B)(3) and/or Section 1(B)(4) hereof will not
be violated and that REIT status will not otherwise be lost, may exempt a Person
from the Ownership Limit if such Person is not an individual for purposes of
Section 542(a)(2) of the Code, provided that (i) the Board of Trustees obtains
such representations and undertakings from such Person as are reasonably
necessary to ascertain that no individual's Beneficial Ownership or Constructive
Ownership of Equity Shares will violate the Ownership Limit and (ii) such Person
agrees that any violation or attempted violation will result in a transfer to
the Share Trust of Equity Shares pursuant to Section 1(C) hereof.
(H) New York Stock Exchange Transactions. Notwithstanding any
------------------------------------
provision contained herein to the contrary, nothing in this Amended and Restated
Declaration of Trust shall preclude the settlement of any transaction entered
into through the facilities of the New York Stock Exchange.
(I) Redetermination of Excluded Holder Limit. The Excluded Holder
----------------------------------------
Limit shall be redetermined whenever the Adjusted Excluded Holder Percentage (as
defined below) is changed by the Board of Trustees. The "Adjusted Excluded
Holder Percentage" shall equal the percentage of the number of outstanding
Common Shares Beneficially or Constructively Owned by the Excluded Holder
assuming the following: (i) all of the Partnership Units Beneficially or
Constructively Owned by the Excluded Holder are exchanged for Common Shares;
(ii) no other
<PAGE>
Partnership Units are exchanged for Common Shares; (iii) all of the options to
acquire Common Shares that are Beneficially or Constructively Owned by the
Excluded Holder are exercised; and (iv) no other options to acquire Common
Shares are exercised. The Adjusted Excluded Holder Percentage may (but is not
required to) be redetermined by the Board of Trustees whenever there is a change
in either the number of Common Shares outstanding or the number of Common Shares
Beneficially or Constructively Owned by the Excluded Holder, in each case based
on the assumptions set out in the immediately preceding sentence. In
redetermining the Adjusted Excluded Holder Percentage, the Board of Trustees may
take into account any options with respect to Common Shares that are expected to
be issued to the Excluded Holder (or to any other Person if the Excluded Holder
will be considered to Beneficially or Constructively Own the Common Shares that
are the subject of the options) in the future.
(J) Redetermination of Ownership Limit. Whenever the Excluded
----------------------------------
Holder Limit is redetermined pursuant to Section 1(I) of this Article VII, the
Ownership Limit shall be redetermined to equal the percentage obtained by
dividing (i) 49% minus the new Excluded Holder Limit by (ii) four.
(K) Limitations on Redetermination of Excluded Holder Limit and
-----------------------------------------------------------
Ownership Limit.
- ---------------
(1) Neither the Ownership Limit nor the Excluded Holder Limit
may be increased (nor may any additional ownership limitation be created with
respect to any shareholder of the Trust) if, after giving effect to such
increase (or creation), the Trust would be (or potentially could be if five or
more individuals Beneficially Owned a percentage of
<PAGE>
outstanding Common Shares equal to the applicable limits) "closely held" within
the meaning of Section 856(h) of the Code.
(2) In no event shall the Adjusted Excluded Holder Percentage
be less than 9.8%.
(3) In no event shall the Ownership Limit be less than 8.5% or
greater than 9.8%.
(4) Prior to any redetermination of the Adjusted Excluded
Holder Limit, the Board may require such opinions of counsel, affidavits,
undertakings, or agreements as it may deem necessary or advisable in order to
determine or assure the Trust's status as a REIT.
Section 2. Shares-in-Trust.
---------------
(A) Share Trust. Any Equity Shares transferred to a Share Trust and
----- -----
designated Shares-in-Trust pursuant to Section 1(C) hereof shall be held for the
exclusive benefit of the Beneficiary. The Trust shall name a beneficiary of each
Share Trust within five days after discovery of the existence thereof. Any
transfer to a Share Trust, and subsequent designation of Equity Shares as
Shares-in-Trust, pursuant to Section 1(C) hereof shall be effective 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 Share Trust. Shares-in-Trust
shall remain issued and outstanding Equity Shares of the Trust and shall be
entitled to the same rights and privileges on identical terms and conditions as
are all other issued and outstanding Equity Shares of the same class and
<PAGE>
series. When transferred to a Permitted Transferee in accordance with the
provisions of Section 2(E) hereof, such Shares-in-Trust shall cease to be
designated as Shares-in-Trust.
(B) Dividend Rights. The Share Trust, as record holder of Shares-
in-Trust, shall be entitled to receive all dividends and distributions as may be
declared by t he Board of Trustees on such Equity Shares and shall hold such
dividends or distributions in trust for the benefit of the Beneficiary. The
Prohibited Owner with respect to Shares-in-Trust shall repay to the Share Trust
the amount of any dividends or distributions received by it that (i) are
attributable to any Equity Shares designated Shares-in-Trust and (ii) the record
date for which was on or after the date that such shares became Shares-in-Trust.
The Trust 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 Section 1(C) hereof, would
Constructively Own or Beneficially Own the Shares-in-Trust; and, as soon as
reasonably practicable following the Trust's receipt or withholding thereof,
shall pay over to the Share Trust for the benefit of the Beneficiary the
dividends so received or withheld, as the case may be.
(C) 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 Trust, 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 Trust which is available for
distribution to the holders of such class and series of Equity Shares. The Share
Trust shall
<PAGE>
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
Section 2(C) in excess of, (i) 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 Share Trust, the price per share, if any, such
Prohibited Owner paid for the Equity Shares and, (ii) 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 Share 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 Share Trust shall be distributed to the Beneficiary.
(D) Voting Rights. The Share 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 Trust that the Equity Shares are Shares-in-Trust
shall, subject to 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
purported Transfer or Non-Transfer Event that results in the transfer to the
Share Trust of Equity Shares under Section 1(C) hereof, an irrevocable proxy to
the Share Trustee to vote the Shares-in-Trust in the manner in which the Share
Trustee, in its sole and absolute discretion, desires.
(E) Designation of Permitted Transferee. The Share Trustee shall
-----------------------------------
have the exclusive and absolute right to designate a Permitted Transferee of
any and all Shares-in-Trust.
<PAGE>
In an orderly fashion so as not to materially adversely affect the Market Price
of the Shares-in-Trust, the Share Trustee shall designate any Person as
Permitted Transferee, provided, however, that (i) the Permitted Transferee so
-------- -------
designated purchases for valuable consideration (whether in a public or private
sale), at a price as set forth in Section 2(G) hereof, the Shares-in-Trust and
(ii) the Permitted Transferee so designated may acquire such Shares-in-Trust
without such acquisition resulting in a transfer to a Share Trust and the
redesignation of such Equity Shares so acquired as Shares-in-Trust under Section
1(C) hereof. Upon the designation by the Share Trustee of a Permitted Transferee
in accordance with the provisions of this Section 2(E), the Share Trustee shall
(i) cause to be transferred to the Permitted Transferee that number of
Shares-in-Trust acquired by the Permitted Transferee, (ii) cause to be recorded
on the books of the Trust 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 with respect to
the Shares-in-Trust after making the payment to the Prohibited Owner pursuant to
Section 2(F) hereof.
(F) Compensation to Record Holder of Equity Shares that Become
----------------------------------------------------------
Shares-in-Trust. Any Prohibited Owner shall be entitled (following discovery of
- ---------------
the Shares-in-Trust and subsequent designation of the Permitted Transferee in
accordance with Section 2(E) hereof or following the acceptance of the offer to
purchase such shares in accordance with Section 2(G) hereof) to receive from the
Share 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
<PAGE>
Share 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 Share 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 Share Trustee from the
sale or other disposition of such Shares-in-Trust in accordance with Section
2(E) hereof. Any amounts received by the Share Trustee in respect of such
Shares-in-Trust and in excess of such amounts to be paid the Prohibited Owner
pursuant to this Section 2(F) shall be distributed to the Beneficiary in
accordance with the provisions of Section 2(E) hereof. Each Beneficiary and
Prohibited Owner waive any and all claims that they may have against the Share
Trustee and the Share 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 Section 2 by such Share
Trustee or the Trust.
(G) Purchase Right in Shares-in-Trust. Shares-in-Trust shall be
---------------------------------
deemed to have been offered for sale to the Trust, or its designee, at a price
per share equal to the lesser of (i) the price per share in the transaction that
created such Shares-in-Trust (or, in the case of 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 Trust, or its designee, accepts such
offer. The Trust shall have the right to accept such offer for a period of
ninety days after the later of (i) the date of the Non-Transfer Event or
purported Transfer which resulted in such
<PAGE>
Shares-in-Trust and (ii) the date the Trust determines in good faith that a
Transfer or Non-Transfer Event resulting in Shares-in-Trust has occurred, if the
Trust does not receive a notice of such Transfer or Non-Transfer Event pursuant
to Section 1(E) hereof.
Section 3. Remedies Not Limited. Subject to Section 1(H) hereof, nothing
--------------------
contained in this Article VII shall limit the authority of the Trust to take
such other action as it deems necessary or advisable to protect the Trust and
the interests of its shareholders by preservation of the Trust's status as a
REIT and to ensure compliance with the Ownership Limit and the Excluded Holder
Limit.
Section 4. Ambiguity. In the case of an ambiguity in the application of
---------
any of the provisions of Article VII, including any definition contained in
Section 1(A) hereof, the Board of Trustees shall have the power to determine the
application of the provisions of this Article VII with respect to any situation
based on the facts known to it.
Section 5. Legend. Each certificate for Equity Shares shall bear the
------
following legend:
"The [Common or Preferred] Shares represented by this certificate are
subject to restrictions on transfer for the purpose of the Trust's maintenance
of its status as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the "Code"). Subject to certain further restrictions and
except as provided in the Declaration of Trust of the Trust, no Person may (i)
Beneficially or Constructively Own Common Shares in excess of 8.5% (or such
other percentage as may be determined by the Board of Trustees) of the number of
outstanding Common Shares, unless such Person is the Excluded Holder (in which
case the Excluded Holder Limit shall be applicable); (ii) Beneficially or
Constructively Own Preferred Shares of any series
<PAGE>
of Preferred Shares in excess of 9.8% of the number of outstanding Preferred
Shares of such series, (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 Trust being "closely held" under Section 856(h)
of the Code, or (v) Constructively Own Equity Shares that would cause the Trust
to Constructively Own 10% or more of the ownership interests in a tenant of the
Trust's real property, within the meaning of Section 856(d)(2)(B) of the Code.
Any Person who attempts to Beneficially or Constructively Own shares of Equity
Shares in excess of the above limitations must immediately notify the Trust in
writing. If any restrictions above are violated, the Equity Shares represented
hereby will be transferred automatically to a Share Trust and shall be
designated Shares-in-Trust to a trustee of a trust for the benefit of one or
more charitable beneficiaries. In addition, upon the occurrence of certain
events, attempted transfers in violation of the restrictions described above may
be void ab initio. All capitalized terms in this legend have the meanings
-- ------
defined in the Trust's Amended and Restated Declaration of Trust, as the same
may be further 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. Such requests must be made to the secretary of the trust at its
principal office or to the transfer agent."
Section 6. Severability. If any provision of this Article VII or any
------------
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of
<PAGE>
such provision shall be affected only to the extent necessary to comply with the
determination of such court.
ARTICLE VIII
SHAREHOLDERS
Section 1. Meetings. There shall be an annual meeting of the
--------
shareholders, to be held on proper notice at such time (after the delivery of
the annual report) and convenient location as shall be determined by or in the
manner prescribed in the Bylaws, for the election of the Trustees, if required,
and for the transaction of any other business within the powers of the Trust.
Except as otherwise provided in this Declaration of Trust, special meetings of
shareholders may be called in the manner provided in the Bylaws. If there are
no Trustees, the officers of the Trust shall promptly call a special meeting of
the shareholders entitled to vote for the election of successor Trustees. Any
meeting may be adjourned and reconvened as the Trustees determine or as provided
in the Bylaws.
Section 2. Voting Rights. Subject to the provisions of any class or
-------------
series of Shares then outstanding, the shareholders shall be entitled to vote
only on the following matters: (a) termination of REIT status as provided in
Article V, Section (1)(C), (b) election of Trustees as provided in Article V,
Section 2(A) and the removal of Trustees as provided in Article V, Section 3;
(c) amendment of the Declaration of Trust as provided in Article X; (d)
termination of the Trust as provided in Article XII, Section 2; (e) merger or
consolidation of the Trust, or the sale or disposition of substantially all of
the Trust Property, as provided in Article XI; and (f) such other matters with
respect to which a vote of the shareholders is required by applicable law
<PAGE>
or the Board of Trustees has adopted a resolution declaring that a proposed
action is advisable and directing that the matter be submitted to the
shareholders for approval or ratification. Except with respect to the foregoing
matters, no action taken by the shareholders at any meeting shall in any way
bind the Board of Trustees.
Section 3. Preemptive and Appraisal Rights. Except as may be provided by
-------------------------------
the Board of Trustees in setting the terms of classified or reclassified Shares
pursuant to Article VI, Section 4, no holder of Shares shall, as such holder,
(a) have any preemptive or preferential right to purchase or subscribe for any
additional Shares of the Trust or any other security of the Trust which it may
issue or sell or (b), except as expressly required by Title 8, have any right to
require the Trust to pay him the fair value of his Shares in an appraisal or
similar proceeding.
Section 4. Extraordinary Actions. Except as specifically provided in
---------------------
Article V, Sections 1(C), 2(A) and 3 and Article X, Sections 2 and 3, and
Article XII, Section 2 of this Declaration of Trust, notwithstanding any
provision of law permitting or requiring any action to be taken or authorized by
the affirmative vote of the holders of a greater number of votes, any such
action shall be effective and valid if taken or authorized by the affirmative
vote of holders of Shares entitled to cast a majority of all the votes entitled
to be cast on the matter.
Section 5. Board Approval. The submission of any action to the
--------------
shareholders for their consideration shall first be approved by the Board of
Trustees.
Section 6. Action By Shareholders Without a Meeting. The Bylaws of the
----------------------------------------
Trust may provide that any action required or permitted to be taken by the
shareholders may be taken without a meeting by the written consent of the
shareholders entitled to cast a sufficient number
<PAGE>
of votes to approve the matter as required by statute, the Declaration of Trust
or the Bylaws of the Trust, as the case may be.
ARTICLE IX
LIABILITY LIMITATION, INDEMNIFICATION
AND TRANSACTIONS WITH THE TRUST
Section 1. Limitation of Shareholder Liability. No shareholder shall be
-----------------------------------
liable for any debt, claim, demand, judgment or obligation of any kind of,
against or with respect to the Trust by reason of his being a shareholder, nor
shall any shareholder be subject to any personal liability whatsoever, in tort,
contract or otherwise, to any person in connection with the property or the
affairs of the Trust by reason of his being a shareholder.
Section 2. Limitation of Trustee and Officer Liability. To the maximum
-------------------------------------------
extent that Maryland law in effect from time to time permits limitation of the
liability of trustees and officers of a REIT, no Trustee or officer of the Trust
shall be liable to the Trust or to any shareholder for money damages. Neither
the amendment nor repeal of this Section, nor the adoption or amendment of any
other provision of the Declaration of Trust or Bylaws of the Trust inconsistent
with this section, shall apply to or affect in any respect the applicability of
the preceding sentence with respect to any act or failure to act which occurred
prior to such amendment, repeal or adoption. In the absence of any Maryland
statute limiting the liability of trustees and officers of a Maryland REIT for
money damages in a suit by or on behalf of the Trust or by any shareholder, no
Trustee or officer of the Trust shall be liable to the Trust or to any
shareholder for money damages except to the extent that (a) the Trustee or
officer actually
<PAGE>
received an improper benefit or profit in money, property, or services, for the
amount of the benefit or profit in money, property, or services actually
received; or (b) a judgment or other final adjudication adverse to the Trustee
or officer is entered in a proceeding based on a finding in the proceeding that
the Trustee's or officer's action or failure to act was the result of active and
deliberate dishonesty and was material to the cause of action adjudicated in the
proceeding.
Section 3. Express Exculpatory Clauses in Instruments. Neither the
------------------------------------------
Shareholders nor the Trustees, officers, employees or agents of the Trust shall
be liable under any written instrument creating an obligation of the Trust, and
all Persons shall look solely to the Trust Property for the payment of any claim
under or for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity or
enforceability of such instrument and shall not render any Shareholder, Trustee,
officer, employee or agent liable thereunder to any third party, nor shall the
Trustees or any officer, employee or agent of the Trust be liable to anyone for
such omission.
Section 4. Indemnification. The Trust shall have the power, to the
---------------
maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to, (a) any individual who is a
present or former shareholder, Trustee or officer of the Trust or (b) any
individual who, while a Trustee of the Trust and at the request of the Trust,
serves or has served as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise from and against any claim or liability to which such person
may become subject or which such person may incur by reason of
<PAGE>
his status as a present or former shareholder, Trustee or officer of the Trust.
The Trust shall have the power, with the approval of its Board of Trustees, to
provide such indemnification and advancement of expenses to a person who served
as a predecessor of the Trust in any of the capacities described in (a) or (b)
above, and to any employee or agent of the Trust or a predecessor of the Trust.
Section 5. Transactions Between the Trust and its Trustees, Officers,
----------------------------------------------------------
Employees and Agents. Subject to any express restrictions in the Declaration of
- --------------------
Trust or adopted by the Trustees in the Bylaws or by resolution, the Trust may
enter into any contract or transaction of any kind with any person, including
any Trustee, officer, employee or agent of the Trust or any person affiliated
with a Trustee, officer, employee or agent of the Trust, whether or not any of
them has a financial interest in such transaction.
<PAGE>
ARTICLE X
AMENDMENTS
Section 1. General. The Trust reserves the right from time to time to
-------
make any amendment to the Declaration of Trust, now or hereafter authorized by
law, including any amendment altering the terms or contract rights, as expressly
set forth in the Declaration of Trust, of any Shares. All rights and powers
conferred by this Declaration of Trust on shareholders, Trustees and officers
are granted subject to this reservation. An amendment to the Declaration of
Trust (a) shall be signed and acknowledged by at least two-thirds of the
Trustees, (b) shall be filed for record with SDAT as provided in Article XIII,
Section 5 and (c) shall become effective as of the later of the time the SDAT
accepts the amendment for record or the time established in the amendment, not
to exceed 30 days after the amendment is accepted for record. All references to
the Declaration of Trust shall include all amendments thereto.
Section 2. By Trustees. The Trustees by a two-thirds vote may amend the
-----------
Declaration of Trust from time to time, in the manner provided by Title 8,
without any action by the shareholders, to qualify as a REIT under the Code or
under Title 8.
Section 3. By Shareholders. Other than amendments pursuant to Section 2
---------------
of this Article X, any amendment to the Declaration of Trust shall be valid only
if approved by the affirmative vote of at least a majority of all the votes
entitled to be cast on the matter, except that any amendment to Article V,
Article VII, Article X, Sections 2 and 3, and Article XII, Section 2 of this
Declaration of Trust shall be valid only if approved by the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter.
<PAGE>
ARTICLE XI
MERGER, CONSOLIDATION OR SALE OF TRUST PROPERTY
Subject to the provisions of any class or series of Shares at the time
outstanding, the Trust may (a) merge the Trust into another entity, (b)
consolidate the Trust with one or more other entities into a new entity or (c)
sell, lease, exchange or otherwise transfer all or substantially all of the
Trust Property. Any such action must be approved by the Board of Trustees and,
after notice to all shareholders entitled to vote on the matter, by the
affirmative vote of a majority of all the votes entitled to be cast on the
matter.
ARTICLE XII
DURATION AND TERMINATION OF TRUST
Section 1. Duration. The Trust shall continue perpetually unless
--------
terminated pursuant to Section 2 of this Article XII or pursuant to any
applicable provision of Title 8.
Section 2. Termination.
-----------
(a) Subject to the provision of any class or series of Shares at
the time outstanding, the Trust may be terminated at any meeting of
shareholders, by the affirmative vote of two thirds of all the votes entitled to
be cast on the matter. Upon the termination of the Trust:
i) The Trust shall carry on no business except for the
purpose of winding up its affairs.
ii) The Trustees shall proceed to wind up the affairs of the
Trust and all of the powers of the Trustees under the Declaration of Trust shall
continue, including the powers to fulfill or discharge the Trust's contracts,
collect its assets, sell, convey, assign,
<PAGE>
exchange, transfer or otherwise dispose of all or any part of the remaining
property of the Trust to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities and do all other acts
appropriate to liquidate its business.
iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and agreements
as they deem necessary for their protection, the Trust may distribute the
remaining property of the Trust among the shareholders so that after payment in
full or the setting apart for payment of such preferential amounts, if any, to
which the holders of any Shares at the time outstanding shall be entitled, the
remaining property of the Trust shall, subject to any participating or similar
rights of Shares at the time outstanding, be distributed ratably among the
holders of Common Shares at the time outstanding.
(b) After termination of the Trust, the liquidation of its business
and the distribution to the shareholders as herein provided, a majority of the
Trustees shall execute and file with the Trust's records a document certifying
that the Trust has been duly terminated, and the Trustees shall be discharged
from all liabilities and duties hereunder, and the rights and interests of all
shareholders shall cease.
<PAGE>
ARTICLE XIII
MISCELLANEOUS
Section 1. Governing Law. The Declaration of Trust is executed by the
-------------
undersigned Trustee[S] and delivered in the State of Maryland with reference to
the laws thereof, and the rights of all parties and the validity, construction
and effect of every provision hereof shall be subject to and construed according
to the laws of the State of Maryland without regard to conflicts of laws
provisions thereof.
Section 2. Reliance by Third Parties. Any certificate shall be final and
-------------------------
conclusive as to any person dealing with the Trust if executed by the Secretary
or an Assistant Secretary of the Trust or a Trustee, and if certifying to: (a)
the number or identity of Trustees, officers of the Trust or shareholders; (b)
the due authorization of the execution of any document; (c) the action or vote
taken, and the existence of a quorum, at a meeting of the Board of Trustees or
shareholders; (d) a copy of the Declaration of Trust or of the Bylaws as a true
and complete copy as then in force; (e) an amendment to the Declaration of
Trust; (f) the termination of the Trust; or (g) the existence of any fact
relating to the affairs of the Trust. No purchaser, lender, transfer agent or
other person shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trust on its behalf or by any officer,
employee or agent of the Trust.
Section 3. Severability.
------------
(A) The provisions of the Declaration of Trust are severable, and
if the Board of Trustees shall determine, with the advice of counsel, that any
one or more of such provisions (the "Conflicting Provisions") are in conflict
with the Code, Title 8 or other applicable federal or state laws, the
Conflicting Provisions, to the extent of the conflict, shall be deemed never to
have
<PAGE>
constituted a part of the Declaration of Trust, even without any amendment of
the Declaration of Trust pursuant to Article X and without affecting or
impairing any of the remaining provisions of the Declaration of Trust or
rendering invalid or improper any action taken or omitted prior to such
determination. No Trustee shall be liable for making or failing to make such a
determination. In the event of any such determination by the Board of Trustees,
the Board shall amend the Declaration of Trust in the manner provided in Article
X, Section 2.
(B) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such holding shall apply only to
the extent of any such invalidity or unenforceability and shall not in any
manner affect, impair or render invalid or unenforceable such provision in any
other jurisdiction or any other provision of the Declaration of Trust in any
jurisdiction.
Section 4. Construction. In the Declaration of Trust, unless the context
------------
otherwise requires, words used in the singular or in the plural include both the
plural and singular and words denoting any gender include all genders. The
title and headings of different parts are inserted for convenience and shall not
affect the meaning, construction or effect of the Declaration of Trust. In
defining or interpreting the powers and duties of the Trust and its Trustees and
officers, reference may be made by the Trustees or officers, to the extent
appropriate and not inconsistent with the Code or Title 8, to Titles 1 through 3
of the Corporations and Associations Article of the Annotated Code of Maryland.
In furtherance and not in limitation of the foregoing, in accordance with the
provisions of Title 3, Subtitles 6 and 7,
<PAGE>
of the Corporations and Associations Article of the Annotated Code of Maryland,
the Trust shall be included within the definition of "corporation" for purposes
of such provisions.
Section 5. Recordation. The Declaration of Trust and any amendment hereto
-----------
shall be filed for record with the SDAT and may also be filed or recorded in
such other places as the Trustees deem appropriate, but failure to file for
record the Declaration of Trust or any amendment hereto in any office other than
in the State of Maryland shall not affect or impair the validity or
effectiveness of the Declaration of Trust or any amendment hereto. A restated
Declaration of Trust shall, upon filing, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration of Trust and the various amendments thereto.
<PAGE>
IN WITNESS WHEREOF, this Amended and Restated Declaration of Trust has been
signed on this th day of October, 1996, by the undersigned President of the
Trust and witnessed by the undersigned Secretary of the Trust, each of whom
acknowledges that this document is his free act and deed, and that to the best
of his knowledge, information, and belief, the matters and facts set forth
herein are true in all material respects and that the statement is made under
the penalties for perjury.
PRENTISS PROPERTIES TRUST
ATTEST:
/s/ Michael V. Prentiss
--------------------------------
Michael V. Prentiss, President
IN WITNESS WHEREOF, this Amended and Restated Declaration of Trust has been
signed on this th day of October 1996, by the sole Trustee of the Trust who
acknowledges that this document is his free act and deed, and that to the best
of his knowledge, information, and belief, the matters and facts set forth
herein are true in all material respects and that the statement is made under
the penalties for perjury.
/s/ Michael V. Prentiss
-------------------------------- (SEAL)
Michael V. Prentiss, Trustee
<PAGE>
EXHIBIT 4.3
PRENTISS PROPERTIES TRUST
SHARE PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS.......................... 1
1.01. Administrator........................ 1
1.02. Affiliate............................ 1
1.03. Beneficiary.......................... 1
1.04. Board................................ 1
1.05. Business Day......................... 2
1.06. Code................................. 2
1.07. Committee............................ 2
1.08. Common Shares........................ 2
1.09. Company.............................. 2
1.10. Compensation......................... 2
1.11. Date of Exercise..................... 2
1.12. Date of Grant........................ 2
1.13. Election Date........................ 2
1.14. Election Form........................ 2
1.15. Employee............................. 3
1.16. Employer............................. 3
1.17. Exchange Act......................... 3
1.18. Fair Market Value.................... 3
1.19. Non-Employee Trustee................. 3
1.20. Non-Public Company................... 4
1.21. Option............................... 4
1.22. Participant.......................... 4
1.23. Plan................................. 4
1.24. Public Company....................... 4
1.25. Trustee.............................. 4
ARTICLE II. PURPOSES............................. 4
ARTICLE III. ADMINISTRATION....................... 5
ARTICLE IV. ELIGIBILITY.......................... 6
ARTICLE V. COMPENSATION DEDUCTIONS.............. 6
5.01. Amount of Deduction.................. 6
5.02. Participant's Account................ 7
5.03. Changes in Payroll Deductions........ 7
ARTICLE VI. OPTION GRANTS........................ 8
6.01. Number of Shares..................... 8
<PAGE>
TABLE OF CONTENTS
Page
----
6.02. Option Price......................... 8
6.03. Spending Limit....................... 8
ARTICLE VII. EXERCISE OF OPTION................... 8
7.01. Automatic Exercise................... 8
7.02. Fractional Shares.................... 9
7.03. Nontransferability................... 9
7.04. Employee Status...................... 9
7.05. Vesting.............................. 9
ARTICLE VIII. WITHDRAWAL AND TERMINATION OF
EMPLOYMENT........................... 10
8.01. Generally............................ 10
8.02. Subsequent Participation............. 10
8.03. Termination of Employment............ 10
8.04. Death of Participant................. 11
ARTICLE IX. SHARES SUBJECT TO PLAN............... 11
9.01. Shares Issued........................ 11
9.02. Aggregate Limit...................... 12
9.03. Reallocation of Shares............... 12
9.04. Employer Options..................... 12
ARTICLE X. ADJUSTMENT UPON CHANGE IN COMMON
SHARES............................... 13
ARTICLE XI. COMPLIANCE WITH LAW AND APPROVAL OF
REGULATORY BODIES.................... 14
ARTICLE XII. GENERAL PROVISIONS................... 14
12.01. Effect on Employment and Service..... 14
12.02. Unfunded Plan........................ 15
12.03. Rules of Construction................ 15
12.04. Notice............................... 15
ARTICLE XIII. AMENDMENT............................ 16
ARTICLE XIV. DURATION OF PLAN..................... 16
ARTICLE XV. EFFECTIVE DATE OF PLAN............... 16
<PAGE>
PRENTISS PROPERTIES TRUST
SHARE PURCHASE PLAN
-------------------
ARTICLE I.
DEFINITIONS
-----------
I.01. Administrator means, while the Company is a Non-Public Company, the
-------------
Board. While the Company is a Public Company, the term "Administrator" means
the Committee and any delegate of the Committee that is appointed in accordance
with Article III.
I.02. Affiliate means any entity under the common control of the Company
---------
within the meaning of Section 414(b) or (c) and any "subsidiary" or "parent"
corporation (within the meaning of Section 424 of the Code) of the Company,
including an entity that becomes an Affiliate after the adoption of this Plan.
I.03. Beneficiary means the person or entity designated by a Participant on a
-----------
form prescribed by the Administrator, to receive any amount payable under the
Plan following a Participant's death. A Participant may change his Beneficiary
from time to time by filing a subsequent designation form and the change will be
effective when received by the Administrator. If a designated Beneficiary fails
to survive the Participant or be in existence on the date of his death or if the
Participant fails to designate a Beneficiary, the Participant's Beneficiary
shall be determined as follows: the Participant's surviving spouse (i.e., the
----
person to whom the Participant is legally married on the date of his death) or,
if none, the Participant's surviving children or, if none, the Participant's
estate.
<PAGE>
I.04. Board means the Board of Trustees of the Company.
-----
I.05. Business Day means any day other than Saturday, Sunday and a Company
------------
holiday.
I.06. Code means the Internal Revenue Code of 1986, and any amendments
----
thereto.
I.07. Committee means the Compensation Committee of the Board which shall be
---------
comprised solely of two or more Non-Employee Trustees. The Compensation
Committee shall be appointed by the Board.
I.08. Common Shares means the common shares of the Company.
-------------
I.09. Company means Prentiss Properties Trust.
-------
I.10. Compensation means an Employee's regular straight-time earnings and
------------
payments for overtime, shift premium, bonuses and other special payments,
commissions and incentive payments.
I.11. Date of Exercise means the last Business Day of June next following the
----------------
January Date of Grant and the last Business Day of December next following the
July Date of Grant.
I.12. Date of Grant means the first Business Day of January and the first
-------------
Business Day of July during the term of the Plan.
I.13. Election Date means each December 15 immediately preceding the January
-------------
Date of Grant and each June 15 immediately preceding the July Date of Grant.
-2-
<PAGE>
I.14. Election Form means the form, prescribed by the Administrator, that a
-------------
Participant uses to authorize a reduction in his Compensation in accordance with
Article V.
I.15. Employee means any employee of an Employer who is regularly scheduled to
--------
work at least twenty hours per week.
I.16. Employer means the Company and any Affiliate.
--------
I.17. Exchange Act means the Securities Exchange Act of 1934, as amended and
------------
as in effect on the date of this Agreement.
I.18. Fair Market Value means, on any given date, the current fair market
-----------------
value of Common Shares as determined pursuant to subsection (a) or (b) below.
(a) While the Company is a Non-Public Company, Fair Market Value shall
be determined by the Board using any reasonable method in good faith.
(b) While the Company is a Public Company, Fair Market Value shall be
determined as follows: if Common Shares are not listed on an established stock
exchange, the Fair Market Value shall be the average reported "closing"price of
Common Shares in the New York over-the-counter market as reported by the
National Association of Securities Dealers, Inc. If Common Shares are listed on
an established stock exchange or exchanges, Fair Market Value shall be the
average closing price of Common Shares reported on that stock exchange or
exchanges. If Common Shares were not traded on the date of reference, Fair
Market Value shall be determined as of the next preceding day that Shares were
traded.
-3-
<PAGE>
I.19. Non-Employee Trustee means a Trustee who satisfies the requirements for
--------------------
a "Non-Employee Director" within the meaning of Securities and Exchange
Commission Rule 16b-3(b)(3).
I.20. Non-Public Company means a corporation that has never sold securities
------------------
pursuant to an effective registration statement on Form S-11 filed pursuant to
the Securities Act of 1933, as amended.
I.21. Option means a share option granted under the Plan that entitles the
------
holder to purchase from the Company a stated number of Common Shares on the
terms and conditions prescribed by the Plan.
I.22. Participant means an Employee, including an Employee who is a member of
-----------
the Board, who satisfies the requirements of Article IV and who elects to
receive an Option.
I.23. Plan means the Prentiss Properties Trust Share Purchase Plan.
----
I.24. Public Company means a corporation that has sold securities pursuant to
--------------
an effective registration statement on Form S-11 filed pursuant to the
Securities Act of 1933, as amended.
I.25. Trustee means a member of the Board.
-------
-4-
<PAGE>
ARTICLE II.
PURPOSES
--------
The Plan is intended to assist Employers in recruiting and retaining
individuals with ability and initiative by enabling such persons to participate
in the future success of the Company and its related entities and to associate
their interests with those of the Company and its shareholders. The proceeds
received by the Company from the sale of Common Shares pursuant to this Plan
shall be used for general corporate purposes.
-5-
<PAGE>
ARTICLE III.
ADMINISTRATION
--------------
The Plan shall be administered by the Administrator. The Administrator
shall have complete authority to interpret all provisions of this Plan; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Administrator shall not be construed as limiting any power or authority
of the Administrator. Any decision made, or action taken, by the Administrator
or in connection with the administration of this Plan shall be final and
conclusive. Neither the Administrator nor any member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any Option.
All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers
of the Company all or part of the Committee's authority and duties with respect
to grants and awards to individuals who are not subject to the reporting and
other provisions of Section 16 of the Exchange Act. The Committee may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Committee's delegate or delegates that were consistent
with the terms of the Plan.
-6-
<PAGE>
ARTICLE IV.
ELIGIBILITY
-----------
Each Employee of an Employer other than the Company is eligible to
participate in this Plan immediately after completing twelve months' continuous
employment with one or more Employer(s) and/or a predecessor entity of an
Employer. Trustees who are Employees may participate in this Plan. An Employee
who has satisfied the requirements set forth in the preceding sentences of this
Article IV becomes a Participant by completing an Election Form in accordance
with Section 5.01 and returning it to the Administrator (or to the person the
Administrator designates to receive the Employee's Election Form) on or before
the Election Date.
-7-
<PAGE>
ARTICLE V.
COMPENSATION DEDUCTIONS
-----------------------
V.01. Amount of Deduction. A payroll deduction shall be made from the
-------------------
Compensation of each Participant for each payroll period. The amount of such
deduction shall be the percentage specified by the Participant on his Election
Form; provided that such percentage shall be in multiples of one percent and
shall not exceed twenty percent. A Participant may contribute to the Plan only
by payroll deduction. A Participant's Election Form will continue to be
effective, and amounts will be deducted from the Participant's Compensation,
until the Election Form is changed in accordance with Section 5.03 or the
Participant withdraws from the Plan or his participation otherwise ends in
accordance with Article VIII.
V.02. Participant's Account. A record-keeping account shall be established
---------------------
for each Participant. All amounts deducted from a Participant's Compensation
shall be credited to his account. No interest will be paid or credited to the
account of any Participant.
V.03. Changes in Payroll Deductions. A Participant may discontinue his
-----------------------------
participation in the Plan as provided in Section 8.01. A Participant may change
the amount of his or her payroll deduction by submitting a new Election Form to
the Administrator (or to the person the Administrator designates to receive the
Participant's Election Form) prior to or on Election Date. Except as provided in
Section 8.01, a Participant's direction to change the percentage deduction
specified on his Election Form shall be effective as of the first Date of Grant
following the Election Date on which or immediately following the date that
written notice of such
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<PAGE>
change (either by revocation of participation or a new Election Form) is
delivered to the Administrator (or to the person the Administrator designates to
receive the Participant's Election Form).
ARTICLE VI.
OPTION GRANTS
-------------
VI.01. Number of Shares. Each Employee who is a Participant on a Date of Grant
----------------
shall be granted an Option as of that Date of Grant. The number of Common Shares
subject to such Option shall be determined by dividing the option price into the
balance credited to the Participant's account as of the Date of Exercise next
following the Date of Grant.
VI.02. Option Price. The price per share for Common Shares purchased on the
------------
exercise of an Option shall be the lesser of (i) eighty-five percent of the Fair
Market Value on the applicable Date of Grant or (ii) eighty-five percent of the
Fair Market Value on the applicable Date of Exercise.
VI.03. Spending Limit. Notwithstanding Section 6.01, a Participant's purchases
--------------
under the Plan may not, in any calendar year, exceed the lesser of $25,000 or
fifteen percent of the Participant's compensation for such calendar year.
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<PAGE>
ARTICLE VII.
EXERCISE OF OPTION
------------------
VII.01. Automatic Exercise. Subject to the provisions of Articles VI, VIII, IX
------------------
and XI, each Option shall be exercised automatically as of the Date of Exercise
next following the Option's Date of Grant for the number of whole Common Shares
that may be purchased at the option price for that Option with the balance
credited to the Participant's account.
VII.02. Fractional Shares. Fractional shares will not be issued under the Plan.
-----------------
Any amount remaining to the credit of the Participant's account after the
exercise of an Option shall remain in the account and applied to the option
price of the Option next granted if the Participant continues to participate in
the Plan or, if he does not, shall be returned to the Participant.
VII.03. Nontransferability. Each Option granted under this Plan shall be
------------------
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the Option is granted, the Option
may be exercised only by the Participant. No right or interest of a Participant
in any Option shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.
VII.04. Employee Status. For purposes of determining whether an individual is
---------------
employed by an Employer, the Administrator may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability, or
other reasons shall not be deemed interruptions of continuous employment.
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<PAGE>
VII.05. Vesting. Participant's interest in the Common Shares purchased upon
-------
the exercise of his Option shall be immediately nonforfeitable. Subject to the
provisions of Article XI, Common Shares purchased upon the exercise of an Option
shall be transferable.
ARTICLE VIII.
WITHDRAWAL AND
TERMINATION OF EMPLOYMENT
-------------------------
VIII.01. Generally. A Participant may withdraw the payroll deductions credited
---------
to his account under the Plan by giving written notice to that effect to the
Administrator (or to the person the Administrator designates to receive such
notice), at least thirty days prior to the next Date of Exercise. In that event,
all of the payroll deductions credited to his account will be paid to him
promptly after receipt of his notice of withdrawal and no further payroll
deductions will be made from his Compensation until he submits a new Election
Form to the Administrator (or to the person the Administrator designates to
receive the Participant's Election Form). A Participant shall be deemed to have
elected to withdraw from the Plan in accordance with this Section 8.01 if he
ceases to be an Employee.
VIII.02. Subsequent Participation. A Participant who has withdrawn his account
------------------------
under Section 8.01 may submit a new Election Form to the Administrator (or to
the person the Administrator designates to receive the Participant's Election
Form), and
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<PAGE>
resume participation in the Plan as of any subsequent Date of Grant, provided
that the Administrator receives his Election Form before the applicable Election
Date.
VIII.03. Termination of Employment. If a Participant's employment with an
-------------------------
Employer terminates for any reason other than death, his participation in the
Plan shall cease as of the date of termination. The balance credited to the
Participant's account as of the first day of the month following such
termination of employment shall be paid to the Participant or, in the case of
the Participant's death following his termination of employment, to his
Beneficiary, as promptly as possible thereafter.
VIII.04. Death of Participant. If a Participant's employment with an Employer
--------------------
terminates on account of the Participant's death, his Beneficiary may elect, by
written notice received by the Administrator (or the person the Administrator
designates to receive such notice), within thirty days of the Participant's
death (but in all events before the Date of Exercise), to either (i) withdraw
all of the payroll deductions credited to the Participant's account or (ii) to
exercise the Option as of the Date of Exercise and receive whole Common Shares
and cash representing the value of a fractional share in accordance with Section
7.02. If the Option is exercised, the number of Common Shares issuable to the
Beneficiary shall be determined by dividing the option price into the payroll
deductions credited to the Participant's account. If timely written notice of
the Beneficiary's election is not received by the Administrator, the Beneficiary
shall be deemed to have elected to exercise the Option.
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<PAGE>
ARTICLE IX.
SHARES SUBJECT TO PLAN
----------------------
IX.01. Shares Issued. Upon the exercise of any Option the Company may deliver
-------------
to the Participant (or the Participant's broker if the Participant so directs),
Common Shares from its authorized but unissued Common Shares. The Company also
may issue shares from its authorized but unissued Common Shares in accordance
with Section 9.04.
IX.02. Aggregate Limit. The maximum aggregate number of Common Shares that may
---------------
be issued under this Plan pursuant to the exercise of Options is 500,000 shares.
The maximum aggregate number of shares that may be issued under this Plan shall
be subject to adjustment as provided in Article X.
IX.03. Reallocation of Shares. If an Option is terminated, in whole or in
----------------------
part, for any reason other than its exercise, the number of Common Shares
allocated to the Option or portion thereof may be reallocated to other Options
to be granted under this Plan.
IX.04. Employer Options. Shares may be issued to employees of Prentiss
----------------
Properties Limited, Inc., Prentiss Properties Limited II, Inc., and Prentiss
Properties Management, L.P. (each an "Employer") upon the exercise of an option
granted by an Employer and upon payment of the purchase price to the Company.
The purchase price per Common Share for Common Shares issued under this Section
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<PAGE>
9.04 shall be the Fair Market Value on the day preceding the date the Shares are
issued. The holder of an option granted by an Employer shall have none of the
rights of a shareholder of the Company with respect to such option until the
purchase price is received by the Company and the shares are issued.
ARTICLE X.
ADJUSTMENT UPON CHANGE IN COMMON SHARES
---------------------------------------
The maximum number of shares which may be issued under this Plan
pursuant to Options and in accordance with Section 9.04 and the terms of
outstanding Options shall be adjusted as the Committee shall determine to be
equitably required in the event that (a) the Company (i) effects one or more
share dividends, share split-ups, subdivisions or consolidations of shares or
(ii) engages in a transaction to which Section 424 of the Code applies or (b)
there occurs any other event which, in the judgment of the Committee
necessitates such action. Any determination made under this Article 0 by the
Committee shall be final and conclusive.
The issuance by the Company of shares of any class, or securities
convertible into shares of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number
of shares which may be issued in accordance with Section 9.04 or as to which
Options may be granted or the terms of outstanding Options.
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<PAGE>
ARTICLE XI.
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
-----------------------------
No Option shall be exercisable, no Common Shares shall be issued, no
certificates for Common Shares shall be delivered, and no payment shall be made
under this Plan except in compliance with all applicable federal and state laws
and regulations (including, without limitation, withholding tax requirements),
any listing agreement to which the Company is a party, and the rules of all
domestic stock exchanges on which the Company's shares may be listed. The
Company shall have the right to rely on an opinion of its counsel as to such
compliance. Any share certificate issued to evidence Common Shares for which an
Option is exercised may bear such legends and statements as the Administrator
may deem advisable to assure compliance with federal and state laws and
regulations. No Option shall be exercisable, no Common Shares shall be issued,
no certificate for shares shall be delivered, and no payment shall be made under
this Plan until the Company has obtained such consent or approval as the
Administrator may deem advisable from regulatory bodies having jurisdiction over
such matters.
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<PAGE>
ARTICLE XII.
GENERAL PROVISIONS
------------------
XII.01. Effect on Employment and Service. Neither the adoption of this Plan,
--------------------------------
its operation, nor any documents describing or referring to this Plan (or any
part thereof) shall confer upon any individual any right to continue in the
employ of an Employer or in any way affect any right and power of an Employer to
terminate the employment of any individual at any time with or without assigning
a reason therefor.
XII.02. Unfunded Plan. The Plan, insofar as it provides for grants, shall be
-------------
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this
Plan. No such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.
XII.03. Rules of Construction. Headings are given to the articles and sections
---------------------
of this Plan solely as a convenience to facilitate reference. The reference to
any statute, regulation, or other provision of law shall be construed to refer
to any amendment to or successor of such provision of law.
XII.04. Notice. Unless specifically required by the terms of this Plan, notice
------
to the Company's shareholders, the Participant, or any other person or entity of
an action by the Board, the Committee, or the Administrator with respect to the
Plan is not required before or after such action occurs.
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<PAGE>
ARTICLE XIII.
AMENDMENT
---------
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of Common Shares
that may be issued under the Plan; (ii) the amendment changes the class of
individuals eligible to become Participants; or (iii) increases the benefits
that may be provided under the Plan. No amendment shall, without a
Participant's consent, adversely affect any rights of such Participant under any
Option outstanding at the time such amendment is made.
ARTICLE XIV.
DURATION OF PLAN
----------------
No Option may be granted under this Plan more than ten years after the
earlier of the date this Plan is adopted by the Board or the date this Plan is
approved by shareholders in accordance with Article . Options granted before
that date shall remain valid in accordance with their terms.
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<PAGE>
ARTICLE XV.
EFFECTIVE DATE OF PLAN
----------------------
Options may be granted under this Plan upon its adoption by the Board,
provided that no Option shall be effective or exercisable unless this Plan is
approved (i) by a majority of the votes cast by the Company's shareholders,
voting either in person or by proxy, at a duly held shareholders' meeting at
which a quorum representing a majority of all outstanding Shares is present,
either in person or by proxy, or (ii) by unanimous consent of the Company's
shareholders. Shares may be issued in accordance with Section 9.04 of this Plan
after it is approved in accordance with the preceding sentence.
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<PAGE>
EXHIBIT 5
[LETTERHEAD OF HUNTON & WILLIAMS APPEARS HERE]
January 23, 1997
Board of Trustees
Prentiss Properties Trust
3890 W. Northwest Highway
Suite 400
Dallas, Texas 75220
PRENTISS PROPERTIES TRUST
STOCK PURCHASE PLAN
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
Gentlemen:
We have acted as counsel to Prentiss Properties Trust, a Maryland real
estate investment trust (the "Company"), in connection with its Registration
Statement on Form S-8, that is being filed on the date hereof with the
Securities and Exchange Commission (the "Registration Statement"), with respect
to the Company's common shares of beneficial interest, $.01 par value (the
"Common Shares"), which are proposed to be offered and sold as described in the
Registration Statement.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
Based upon the foregoing and the further qualifications stated below, we
are of the opinion that:
1. The Company is a real estate investment trust duly formed, validly
existing and in good standing under the laws of the State of Maryland; and
<PAGE>
Board of Trustees
Prentiss Properties Trust
January 23, 1997
Page 2
2. The Common Shares covered by the Registration Statement have been duly
authorized and, when issued and sold as described in the Registration Statement,
will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
statement made in reference to this firm under the caption "Legal Matters" in
the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-8
(File No. 333- ) of our reports dated July 15, 1996, on our audits of the
balance sheet of Prentiss Property Trust, the financial statements and financial
statement schedule of the Predecessor Company, the combined statements of
revenues and certain operating expenses of the Prentiss Group Acquisition
Properties, the combined statements of revenues and certain operating expenses
of the Other Acquisition Properties, and our report dated August 30, 1996 on our
audit of the statement of revenues and certain operating expenses of Bachman
Creek and Park West E1 and E2 Properties which are included in the Company's
Prospectus dated October 17, 1996.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Dallas, Texas
January 23, 1997
