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EXHIBIT 3.2
AMENDMENTS TO ARTICLE IV, SECTIONS 1, 8(b) AND 9 AND
ARTICLES X, XI, XII, XIII, XV AND XVI OF THE BYLAWS OF
EQUITY OFFICE PROPERTIES TRUST
I. Amendments to Article IV, Sections 1, 8(b) and 9
Article IV, Section 1 hereby is amended to read in its
entirety as follows:
Section 1. NUMBER, TENURE AND QUALIFICATION. The Trustees may
appoint from among its members an Audit Committee, a
Compensation Committee and other committees, each
composed of one or more Trustees, to serve at the
pleasure of the Trustees. A majority of the Trustees
on the Compensation Committee and all of the Trustees
on the Audit Committee shall be Independent Trustees.
Article IV, Section 8(b) hereby is amended to read in its
entirety as follows:
(b) The Conflicts Committee shall have the power to
consider and, in each case where the transaction
obligates or is expected to obligate the Trust in an
amount not greater than Fifty Million Dollars
($50,000,000), to approve, in the name and on behalf
of the Trust (including, without limitation, in the
name and on behalf of EOP Operating Limited
Partnership, in the Trust's capacity as its general
partner, as applicable), any transaction in which the
Trust is or is proposed to be a party and as to which
any Trustee knows at the time of commitment that any
of the following persons either is or is entitled to
be a party, whether directly or indirectly, to the
transaction or has a sufficiently material beneficial
interest that the interest might reasonably be
expected to exert an influence on the Trustee's
judgment if he were called upon to vote on the
transaction: (a) any Trustee or any Related Person of
any Trustee; (b) any person (other than the Trust) of
which the Trustee is the owner of more than 5% of any
class of equity securities or is a director, trustee,
general partner, agent or employee; (c) any person
that controls one or more of the persons specified in
clause (b) or a person that is controlled by, or is
under common control with, one or more of the persons
specified in clause (b); or (d) an individual who is
a general partner, principal or employer of the
Trustee.
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Article IV, Section 9 hereby is amended to read in its
entirety as follows:
Section 9. AUDIT COMMITTEE
I. PURPOSE
The primary purpose of the Audit Committee is to assist the
Board in fulfilling its oversight responsibilities with
respect to financial reports and other financial information.
In this regard, the Audit Committee is to:
(a) Serve as an independent and objective body
to monitor the Trust's financial reporting
process and internal control systems;
(b) Serve, together with the Board, as the
ultimate authority to which the independent
auditor (the "Independent Auditor") and the
internal auditing department ("Internal
Audit") are accountable, and have, together
with the Board, the ultimate authority and
responsibility to select, evaluate and,
where appropriate, replace the Independent
Auditor (or to nominate the Independent
Auditor to be proposed for shareholder
approval in any proxy statement);
(c) Review and audit efforts of the Independent
Auditor and Internal Audit; and
(d) Provide an open avenue of communication
among the Independent Auditor, financial and
senior management, Internal Audit, and the
Board.
II. COMPOSITION AND EXPERTISE
(a) Members of the Audit Committee shall meeting
the independence and experience requirements
of the New York Stock Exchange (the "NYSE")
and any other market or markets, if any, on
which the securities of the Trust or any of
its subsidiaries are traded. Determinations
as to whether a particular trustee satisfies
the requirements for membership on the Audit
Committee will be made by the Board.
(b) The members of the Audit Committee shall be
elected by the Board at the annual
organizational meeting of the Board
(commencing with the 2001 organizational
meeting) and shall serve until their
successors shall have been duly elected and
qualified or until their resignation or
removal. Unless a Chair is designated by the
full Board, the members of the Audit
Committee may elect a Chair by majority
vote.
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(c) The Audit Committee shall be composed of not
less than three Trustees.
III. DUTIES AND RESPONSIBILITIES
The Audit Committee shall:
Documents/Reports Review
(a) Review the adequacy of this Charter at least
annually and at such other intervals as the
Audit Committee or the Board determines.
(b) Review and discuss with management the
annual audited and quarterly financial
statements.
(c) Review reports to management prepared by the
Independent Auditor or Internal Audit and
any responses to the same by management.
Independent Auditor
(d) Review and recommend to the Board: (i) the
selection of the Independent Auditor to
audit the books, records and accounts of the
Trust, and (ii) the approval of the fees and
other compensation of the Independent
Auditor.
(e) Review and discuss with the Independent
Auditor all significant relationships that
the auditor and its affiliates have with the
Trust and its affiliates in order to
determine the auditor's independence. The
Audit Committee shall: (i) request, receive
and review and a periodic basis, a formal
written statement from the Independent
Auditor delineating all relationships
between the Independent Auditor and the
Trust, (ii) discuss with the Independent
Auditor and disclosed relationships or
services that may impact the objectivity and
independence of the Independent Auditor and
(iii) recommend that the Board take
appropriate action in response to the
Independent Auditor's report to satisfy
itself of the Independent Auditor's
independence.
Financial Reporting Process
(f) Review the financial processes and audit
controls, both internal and external, based
on consultation with the Independent Auditor
and Internal Audit.
(g) Review the Independent Auditor's judgment
about the quality and appropriateness of
accounting principles as applied in
financial reporting.
(h) Consider and, if appropriate, recommend to
the Board significant changes to auditing
and accounting principles and practices as
suggested by the Independent Auditor,
management of Internal Audit.
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Process Improvements
(i) Review reports to the Audit Committee by
each of management, the Independent Auditor
and Internal Audit regarding any significant
judgments made in management's preparation
of financial statements and the view of each
as to the appropriateness of such judgments.
(j) Review with each of management, the
Independent Auditor and Internal Audit any
significant difficulties encountered during
the course of each audit.
(k) Review any significant disagreement among
management, the Independent Auditor and
Internal Audit in connection with the
preparation of the financial statements.
(l) Review with the Independent Auditor,
Internal Audit and management the extent to
which changes or improvements in financial
or accounting practices and internal
controls, as approved by the Audit
Committee, have been implemented.
Other
(m) Annually prepare a report to shareholders as
required by the Securities and Exchange
Commission.
(n) Keep a record of the acts and proceedings of
the Audit Committee and report thereon to
the Board periodically or whenever requested
to do so.
(o) Review, with the Trust's counsel, legal
compliance matters or any legal matter that
could have a significant impact on the
organization's financial statements.
(p) Perform such other activities, consistent
with this Charter, the Trust's Declaration
or Trust, Bylaws and governing law, as the
Audit Committee or the Board deems necessary
or appropriate.
(q) While the Audit Committee has the
responsibilities and powers set forth in
this Charter, it is not the duty of the
Audit Committee to plan or conduct audits,
to implement internal controls or to
determine that the Trust's financial
statements are complete and accurate and are
in accordance with generally accepted
accounting principles. This is the
responsibility of management and the
Independent Auditor. Nor is it the duty of
the Audit Committee to conduct
investigations, to resolve disagreements, if
any, amount management, the Independent
Auditor or Internal Audit or to assure
compliance with laws and regulations. The
review of the financial statements by the
Audit Committee is not of the same quality
as the audit performed by the Independent
Auditor. In carrying out its
responsibilities, the Audit Committee's
policies and procedures should remain
flexible in order to best react to a
changing environment.
II. Amendments to Articles X, XI, XII, XIII, XV and XVI
Effective May 15, 1998, Article X is deleted in its entirety.
Article XI, Article XII, Article XIII, Article XV and Article
XVI hereby are renumbered as Article X, Article XI, Article XII, Article XIII
and Article XV, respectively.
