As filed with the Securities and Exchange Commission on January 29, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) January 28, 1999
CAPITAL TRUST, INC.*
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-8063 94-6181186
- - --------------------------------------------------------------------------------
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification
incorporation) No.)
605 Third Avenue, 26th Floor
New York, New York 10016
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(212) 655-0220
- - --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Capital Trust
- - --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
* Capital Trust, Inc. is the successor to Capital Trust as discussed in
the Explanatory Note hereto.
800914.2
<PAGE>
EXPLANATORY NOTE
This Current Report on Form 8-K, dated January 28, 1999 (this "Form
8-K"), is being filed by Capital Trust, Inc., a Maryland corporation (the
"Registrant"), as the successor to Capital Trust, a California business trust
(the "Predecessor"), following consummation of the Mergers (as defined and
described herein) which were undertaken to effect the reorganization of the
Predecessor into a Maryland corporation. Prior to the Mergers, the Registrant
had engaged in no activities other than those incident to the foregoing
reorganization. Upon consummation of the Mergers, the entire class of Class A
Common Stock (as defined herein) became registered under Section 12(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in accordance
with Rule 12g-3(a) thereunder. Such registration is implemented by the
Commission's acceptance for filing on the date hereof this Form 8-K and the
continuation of the Predecessor's file number (File No. 1-8063) pursuant to the
telephonic interpretation of the staff of the Commission set forth on page 177
of the Division of Corporation Finance's Manual of Publicly-Available Telephone
Interpretations (July 1997).
800914.2
-2-
<PAGE>
ITEM 5. OTHER EVENTS
On January 28, 1999, pursuant to the terms of the agreement and plan of
merger, dated as of November 12, 1998 (the "Merger Agreement"), between the
Registrant, the Predecessor and Captrust Limited Partnership, a Maryland limited
partnership ("CTLP"), and the transactions contemplated thereby, (i) the
Predecessor merged with and into CTLP, with CTLP continuing as the surviving
entity, and CTLP merged with and into the Registrant, with the Registrant
continuing as the surviving corporation (the "Mergers"), (ii) each outstanding
class A common share of beneficial interest, par value $1.00 per share, and each
outstanding class A 9.5% cumulative convertible preferred share of beneficial
interest, par value $1.00 per share (the "Mergers") in the Company, was
converted into, respectively, one share of class A common stock, par value $.01
per share ("Class A Common Stock"), and one share of class A 9.5% cumulative
convertible preferred stock, par value $.01 per share ("Class A Preferred
Stock"), of the Registrant; and (iii) the Registrant assumed all outstanding
obligations to issue Class A Common Stock under the Plans (as defined and
described below). The consummation of the Mergers effected a reorganization of
the Predecessor from a California business trust into a Maryland corporation
("Reorganization"). A copy of the Merger Agreement is filed herewith as Exhibit
2.1. Copies of the charter and amended and restated bylaws of the Registrant
following consummation of the Mergers are filed herewith as Exhibits 3.1 and
3.2, respectively.
The Merger Agreement was approved by the shareholders of the
Predecessor at its 1998 annual meeting of shareholders held on January 28, 1999
("Annual Meeting") for which proxies were solicited pursuant to proxy material
contained in the Registrant's Registration Statement on Form S-4 (File No.
333-526219), which was declared effective on December 24, 1998; such proxy
material is deemed filed pursuant to Regulation 14A under the Exchange Act in
accordance with Instruction E. to Form S-4.
At the Annual Meeting, the Predecessor's shareholders also approved the
following plans: (i) the Capital Trust amended and restated 1997 long-term
incentive share plan (the "Amended and Restated Incentive Plan"), (ii) the
Capital Trust amended and restated 1997 non-employee trustee share plan (the
"Amended and Restated Trustee Plan"), (iii) the Capital Trust 1998 employee
share purchase plan, (iv) the Capital Trust 1998 non-employee share purchase
plan, and (v) the Capital Trust share purchase loan plan (collectively, the
"Plans"). Upon consummation of the Mergers, the Registrant assumed the Plans and
all outstanding obligations to issue shares of Class A Common Stock thereunder.
Shares of Class A Common Stock will now be used to fund the Plans. The Plans
were amended effective as of January 28, 1999 to change all references to
"Capital Trust" to "Capital Trust, Inc." and to make additional technical
revisions that reflect the different capital and governance structure of the
Registrant. Copies of the Plans as amended are filed herewith as Exhibits 10.1
to 10.5.
In addition, upon consummation of the Mergers, the Registrant also
assumed all of the obligations of the Predecessor under the 8.25% step up
convertible trust preferred securities issued pursuant to the declaration of
trust, dated as of July 28, 1998, of CT Convertible Trust I, a
800914.2
-3-
<PAGE>
Delaware statutory business trust, and the related 8.25% step up convertible
junior subordinated debentures issued pursuant to the indenture, dated as of
July 28, 1998, between the Predecessor and Wilmington Trust Company (the
"Indenture"). A copy of the supplemental indenture with respect to the
assumption by the Registrant of the Indenture, dated as of January 28, 1999, is
filed hereto as Exhibit 4.2.
In addition, at the Annual Meeting, the shareholders of the Predecessor
elected the ten incumbent members of the Predecessor's board of trustees who
upon consummation of the Mergers became the board of directors of the
Registrant.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
- - -------------- -----------
2.1 Agreement and Plan of Merger, dated as of November 12,
1998, by and among Capital Trust, the Registrant and the
Captrust Limited Partnership.
3.1 Charter of the Registrant (comprised of Articles of
Amendment and Restatement of Charter and amendments
thereof by Articles Supplementary with respect to Class A
9.5% Cumulative Convertible Prepared Stock and Articles
Supplentary with respect to Class B 9.5% Cumulative
Convertible Non-Voting Preferred Stock).
3.2 Amended and Restated Bylaws of the Registrant.
4.1 Articles Supplementary with respect to Class A 9.5%
Cumulative Convertible Preferred Stock of the Registrant
and Articles Supplementary with respect to Class B 9.5%
Cumulative Convertible Non-Voting Preferred Stock of the
Registrant (included in Exhibit 3.1).
4.2 Supplemental Indenture, dated as of January 28, 1999,
between the Registrant and Wilmington Trust Company, as
trustee.
10.1 Capital Trust, Inc. Amended and Restated 1997 Long-Term
Incentive Stock Plan.
10.2 Capital Trust, Inc. Amended and Restated 1997 Non-Employee
Trustee Stock Plan.
10.3 Capital Trust, Inc. 1998 Employee Stock Purchase Plan.
10.4 Capital Trust, Inc. 1998 Non-Employee Stock Purchase Plan.
10.5 Capital Trust, Inc. Stock Purchase Loan Plan.
800914.2
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL TRUST, INC.
(Registrant)
Date: January 29, 1999 By: /s/ John R. Klopp
---------------------------------------
Name: John R. Klopp
Title: Vice Chairman, Chief Executive
Officer
800914.2
-5-
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), is made as of
November 12, 1998, by and among Capital Trust, a California business trust (the
"Company"), Captrust Limited Partnership, a Maryland limited partnership (the
"Limited Partnership"), and Capital Trust, Inc., a Maryland corporation (the
"New Company").
PRELIMINARY STATEMENT
The Board of Trustees of the Company has determined that it is
advisable and in the best interest of the Company to reorganize from a business
trust organized under the laws of the State of California into a corporation
incorporated under the laws of the State of Maryland. In connection with the
foregoing reorganization, the Company has formed the Limited Partnership and the
New Company as direct or indirect wholly-owned subsidiaries of the Company. The
parties hereto desire to effect the Mergers (as hereinafter defined) upon the
terms and subject to the conditions set forth herein.
Accordingly, in consideration of these premises, the covenants and
agreements made herein and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties hereto adopt the
plan of merger encompassed by this Agreement and agree as follows:
ARTICLE I
THE MERGERS; CLOSING; EFFECTIVE TIME
1.1. THE LIMITED PARTNERSHIP MERGER. Subject to the terms and
conditions of this Agreement, at the Effective Time (as defined in Section 1.4),
the Company shall be merged with and into the Limited Partnership and the
separate existence of the Company shall thereupon cease (the "Limited
Partnership Merger"). The Limited Partnership shall be the surviving entity in
the Limited Partnership Merger (sometimes hereinafter referred to as the
"Surviving Limited Partnership"), shall continue to be governed by the laws of
the State of Maryland and the separate existence of the Limited Partnership with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Limited Partnership Merger.
The Limited Partnership Merger shall have the effects specified in the
Maryland Revised Uniform Limited Partnership Act (the "MRULPA").
1.2. THE COMPANY MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.4 hereof), the
Surviving Limited
<PAGE>
Partnership shall be merged with and into the New Company and the separate
existence of the Surviving Limited Partnership shall thereupon cease (the
"Company Merger" and, together with the Limited Partnership Merger, the
"Mergers"). The New Company shall be the surviving entity in the Company Merger
(sometimes hereinafter referred to as the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Maryland and the separate
existence of the New Company with all its rights, privileges, immunities, powers
and franchises shall continue unaffected by the Mergers.
The Company Merger shall have the effects specified in the Maryland
General Corporation Law (the "MGCL").
The parties intend that the Mergers qualify as a reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended.
1.3. CLOSING. The closing of the Mergers (the "Closing") shall take
place (i) at the offices of the New Company, 605 Third Avenue, 26th Floor, New
York, New York 10016 at 10:00 a.m. local time on the first business day on which
the last to be fulfilled or waived of the conditions set forth in Section 5.1
hereof shall be fulfilled or (ii) at such other place and time and/or on such
other date as the Company, the Limited Partnership and the New Company may
agree.
1.4. EFFECTIVE TIME. Following the fulfillment or waiver of the
conditions set forth in Section 5.1 hereof, and provided that this Agreement has
not been terminated or abandoned pursuant to Article VII hereof, the Company and
the Limited Partnership will, at such time as they deem advisable, cause
Articles of Merger (the "Partnership Articles of Merger") to be filed with the
State Department of Assessments and Taxation of Maryland (the "SDAT") as
provided in Section 10-208(d) of the MRULPA. Following the fulfillment or waiver
of the conditions set forth in Section 5.1 hereof, provided that this Agreement
shall not have been terminated or abandoned pursuant to Article VI hereof, the
Surviving Limited Partnership and the New Company will, at such time as they
deem advisable, cause Articles of Merger (the "Company Articles of Merger") to
be filed with the SDAT as provided in Section 3-107 of the MGCL. The Mergers
shall become effective upon the acceptance for record of the Partnership
Articles of Merger and the Company Articles of Merger by the SDAT (the
"Effective Time"). The parties hereto intend the Mergers to become effective
simultaneously.
ARTICLE II
CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF THE SURVIVING LIMITED PARTNERSHIP AND THE
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1. SURVIVING LIMITED PARTNERSHIP. The certificate of limited
partnership and agreement of limited partnership of the Limited Partnership in
effect at the Effective Time
-2-
<PAGE>
shall be the certificate of limited partnership and agreement of limited
partnership of the Surviving Limited Partnership, until duly amended in
accordance with the terms thereof and the MRULPA.
2.2. SURVIVING CORPORATION. The charter of the New Company, as in
effect at the Effective Time, shall be amended by the Articles of Amendment and
Restatement in the form attached hereto as Exhibit A, the Articles Supplementary
with respect to New Class A Preferred Stock (as defined below), in the form
attached hereto as Exhibit B, and the Articles Supplementary with respect to
Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01
per share, of New Company, in the form attached hereto as Exhibit C
(collectively, the "Articles"), and the Articles shall be the charter of the
Surviving Corporation, until duly amended in accordance with the MGCL. The
Bylaws of the New Company, as in effect at the Effective Time, shall be amended
and restated in full, as set forth in the amended and restated Bylaws of the New
Company attached hereto as Exhibit D (the "Amended and Restated Bylaws"), and
said Amended and Restated Bylaws, as so amended and restated, shall be the
Bylaws of the Surviving Corporation, until duly amended in accordance with the
MGCL.
ARTICLE III
DIRECTORS AND EXECUTIVE OFFICERS AND
COMMITTEES OF THE BOARD OF DIRECTORS
OF THE SURVIVING CORPORATION
3.1. DIRECTORS AND OFFICERS. At or before the Effective Time, the
following persons shall be elected or appointed as the executive officers and
directors of the Surviving Corporation and such officers and directors shall
thereafter serve until their successors have been duly elected and qualified or
until their earlier death, resignation or removal in accordance with the charter
of the Surviving Corporation:
Name Office
- - ---- ------
Samuel Zell Chairman of the Board and Director
Jeffrey A. Altman Director
Martin L. Edelman Director
Gary R. Garrabrant Director
Thomas E. Dobrowski Director
Steven Roth Director
Craig M. Hatkoff Vice Chairman and Director
John R. Klopp Vice Chairman, Chief Executive
Officer and Director
Stephen D. Plavin Chief Operating Officer
Sheli Z. Rosenberg Director
Lynne B. Sagalyn Director
-3-
<PAGE>
Name Office
- - ---- ------
Donald J. Meyer Managing Director and Chief
Investment Officer
Edward L. Shugrue III Managing Director, Chief
Financial Officer and Assistant
Secretary
3.2. COMMITTEES OF THE BOARD OF DIRECTORS. At or before the Effective
Time, the board of directors of the Surviving Corporation shall create and
constitute committees with the same names, memberships and functions and powers
delegated to them as the committees of the Board of Trustees of the Company in
existence at the Effective time as set forth in the minutes of the Board of
Trustees of the Company. Each member of such committee shall thereafter serve
until his successor shall have been duly appointed in accordance with the Bylaws
of the Surviving Corporation.
ARTICLE IV
EFFECT OF THE MERGER
ON SHARES OF BENEFICIAL INTEREST;
EXCHANGE OF CERTIFICATES
4.1. EFFECT ON STOCK. At the Effective Time, by virtue of the Mergers
and without any action on the part of the holders thereof:
(a) Each class A common share of beneficial interest, $1.00 par value,
in the Company (the "Class A Common Shares"), issued and outstanding immediately
prior to the Effective Time shall be converted into, and shall become, one
validly issued, fully paid and nonassessable share of class A common stock, par
value $.01 per share, of the New Company ("New Class A Common Stock"). At the
Effective Time, all Class A Common Shares shall no longer be outstanding and
shall be canceled and retired and shall cease to exist.
(b) Each class A 9.5% cumulative convertible share of beneficial
interest, $1.00 par value, in the Company (the "Class A Preferred Shares"),
issued and outstanding immediately prior to the Effective Time shall be
converted into, and shall become, one share of class A 9.5% cumulative
convertible preferred stock, par value $.01 per share, of the New Company (the
"New Class A Preferred Stock"). At the Effective Time, all Class A Preferred
Shares shall no longer be outstanding and shall be canceled and retired and
shall cease to exist.
(c) Each Class A Common Share and Class A Preferred Share issued and
held in the Company's treasury at the Effective Time shall, by virtue of the
Mergers and without any action on the part of the holder thereof, cease to be
outstanding, shall be canceled and retired without payment of any consideration
therefor and shall cease to exist.
-4-
<PAGE>
(d) At the Effective Time, each partnership interest in the Limited
Partnership existing immediately prior to the Effective Time shall, by virtue of
the Mergers and without any action on the part of the Limited Partnership or the
holder of such interests, be canceled and retired without payment of any
consideration therefor.
(e) At the Effective Time, each share of common stock, par value $.01
per share, of the New Company, issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Mergers and without any action on the
part of the New Company or the holder thereof, be canceled and retired without
payment of any consideration therefor, and such shares shall have the status of
unauthorized and unissued shares of New Class A Common Stock.
4.2. STOCK CERTIFICATES. From and after the Effective Time, (i) each
certificate which immediately prior to the Effective Time represented Class A
Common Shares (each, a "Common Certificate") shall be deemed for all purposes to
represent ownership of an equal number of, shares of New Class A Common Stock,
and (ii) each certificate which immediately prior to the Effective Time
represented Class A Preferred Shares (each a "Preferred Certificate," and
together with the Common Certificate, the "Certificates") shall be deemed for
all purposes to represent ownership of an equal number of, shares of New Class A
Preferred Stock. The registered owner on the books and records of the Company or
its transfer agent of any Certificate shall, until such Certificate shall have
been surrendered for transfer or otherwise accounted for to the Surviving
Corporation or its transfer agent, have and be entitled to exercise any voting
or other rights with respect to and to receive any dividends and other
distributions upon the shares of New Class A Common Stock or the New Class A
Preferred Stock, as the case may be, represented by any such outstanding
Certificate as provided above. Nothing contained herein shall be deemed to
require the holder of any Class A Common Shares or Class A Preferred Shares, as
the case may be, to surrender any Certificate(s) representing such shares in
exchange for a certificate or certificates representing shares of New Class A
Common Stock or the New Class A Preferred Stock.
4.3. OPTIONS. Each unit providing the right to acquire or an option to
purchase or otherwise acquire Class A Common Shares granted under the Company's
1997 Long-Term Incentive Share Plan and 1997 Non-Employee Trustee Share Plan
(collectively, the "Plans"), which is outstanding immediately prior to the
Effective Time shall, by virtue of the Mergers and without any action on the
part of the holder of such option or unit, be converted into and become a unit
providing the right to acquire or an option to purchase or otherwise acquire the
same number of shares of New Class A Common Stock, upon the same terms and
subject to the same conditions as set forth in the Plans as in effect at the
Effective Time. The same number of shares of New Class A Common Stock shall be
reserved for purposes of the outstanding options as is equal to the number of
Class A Common Shares so reserved as of the Effective Time. As of the Effective
Time, the Surviving Corporation assumes the Plans and all obligations of the
Company under the Plans, including the outstanding units or options or portions
thereof granted pursuant to the Plans.
-5-
<PAGE>
ARTICLE V
CONDITIONS
5.1. CONDITION TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of the Company, the Limited Partnership and the New
Company to consummate the Mergers are subject to the fulfillment of each of the
following conditions:
(a) The registration statement on Form S-4 to be filed by the New
Company, which will include the proxy statement of the Company soliciting
proxies to approve the Mergers, shall have been declared effective in accordance
with the Securities Act of 1933, as amended, by the Securities and Exchange
Commission and no stop order shall have been issued or threatened.
(b) This Agreement shall have been duly approved by (i) the requisite
vote of holders of the Class A Common Shares and Class A Preferred Shares, in
accordance with applicable law and the amended and restated declaration of trust
and by-laws of the Company, (ii) the New Company as the general partner of the
Limited Partnership, and (iii) the Company, as the sole shareholder of the New
Company.
(c) The shares of New Class A Common Stock to be issued in the Mergers
and the shares of New Class A Common Stock underlying the New Class A Preferred
Stock to be issued in the Mergers shall have been listed on the New York Stock
Exchange, subject to official notice of issuance.
(d) No order to restrain, enjoin or otherwise prevent the consummation
of this Agreement or either of the Mergers shall have been entered by any court
or administrative body and shall remain in full force and effect.
(e) The obligations to consummate the Mergers contemplated hereby shall
not have been terminated pursuant to Article VI hereof.
(f) All consents and approvals, if any, necessary for the transactions
contemplated hereby shall have been obtained and be in full force and effect.
ARTICLE VI
TERMINATION
6.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Mergers may be abandoned at any time prior to the Effective Time, before
or after the approval by holders of the Class A Common Shares and the Class A
Preferred Shares, by the
-6-
<PAGE>
mutual consent of the Board of the Trustees of the Company and the general
partner of the Limited Partnership and the Board of Directors of the New
Company.
6.2. EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and abandonment of the Mergers pursuant to this Article VI, no
party hereto (or any of its directors, trustees or officers) shall have any
liability or further obligation to any other party to this Agreement.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.1. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. From and
after the Effective Time, the Surviving Corporation will indemnify, and pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to, (i) any individual who is a present or former trustee or officer of the
Company or the Limited Partnership or its general partner or (ii) any individual
who, while a trustee of the Company and at the request of the Company, serves or
has served another corporation, partnership, joint venture, trust, employee
benefit plan or any other enterprise as a director, officer, partner or trustee
of such corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, arising out of or pertaining to matters existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent required or permitted by
Maryland law.
7.2. MODIFICATION OR AMENDMENT. Subject to the applicable provisions of
the MRULPA and the MGCL, at any time prior to the Effective Time, the parties
hereto may amend or modify this Agreement by written agreement, executed and
delivered by duly authorized officers of the respective parties; provided,
however, that after the Mergers have been approved by the Company's
shareholders, no amendment or modification may change the amount or form of the
consideration to be received by such shareholders in the Mergers.
7.3. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the relevant Merger are for the sole benefit of such
party and may be waived by such party in whole or in part to the extent
permitted by applicable law.
7.4. COUNTERPARTS. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same
agreement.
7.5. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the States of California and Maryland in the case
of the Limited Partnership Merger, and in accordance with the laws of the State
of Maryland in the case of the Company Merger.
-7-
<PAGE>
7.6. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.1,
no provision of this Agreement is intended, nor shall it be interpreted, to
provide or create any third party beneficiary rights or any other rights of any
kind in any client, customer, affiliate, stockholder, partner or employee or any
other person or entity.
7.7. HEADINGS. The Article, Section and Paragraph headings herein are
for convenience of reference only and shall have no effect on the construction
or meaning of this Agreement.
7.8. SERVICE OF PROCESS.
(a) The New Company may be served with process in the State of Maryland
in any proceeding for the enforcement of any obligation of the Company or the
Limited Partnership, as well as for enforcement of any obligations of the New
Company arising from the Mergers. The resident agent in the State of Maryland is
Ballard Spahr Andrews & Ingersoll LLP, 300 Lombard Street, Baltimore, Maryland
21202, Attn: James J. Hanks, Jr.
-8-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first
hereinabove written.
CAPITAL TRUST, INC.
By:/s/ John R. Klopp
------------------------
Name: John R. Klopp
Title: President
CAPTRUST LIMITED PARTNERSHIP
By: CAPITAL TRUST, INC.,
its general partner
By:/s/ John R. Klopp
-----------------------
Name: John R. Klopp
Title: President
CAPITAL TRUST
By:/s/ Edward L. Shugrue III
--------------------------------
Name: Edward L. Shugrue III
Title: Managing Director and
Chief Financial Officer
-9-
Exhibit 3.1
CAPITAL TRUST, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: Capital Trust, Inc., a Maryland corporation (the "Corporation"),
desires to amend and restate its charter as currently in effect and as
hereinafter amended.
SECOND: The following provisions are all the provisions of the charter
currently in effect and as hereinafter amended:
ARTICLE I
INCORPORATOR
The undersigned, Tonya Mitchem Grindon whose address is c/o Ballard
Spahr Andrews & Ingersoll, 300 East Lombard Street, Baltimore, Maryland 21202,
being at least 18 years of age, does hereby form a corporation under the general
laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is: Capital Trust, Inc.
ARTICLE III
PURPOSE
The purposes for which the Corporation is formed are to engage in any
lawful act or activity for which corporations may be organized under the general
laws of the State of Maryland as now or hereafter in force.
697816.6
<PAGE>
ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The address of the principal office of the Corporation in the State of
Maryland is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street,
Baltimore, Maryland 21202, Attention: James J. Hanks, Jr. The name of the
resident agent of the Corporation in the State of Maryland is James J. Hanks,
Jr., whose post address is c/o Ballard Spahr Andrews & Ingersoll, 300 East
Lombard Street, Baltimore, Maryland 21202. The resident agent is a citizen of
and resides in the State of Maryland.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1 Number of Directors. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. The
number of directors of the Corporation initially shall be ten (10), which number
may be increased or decreased pursuant to the Bylaws, but shall never be less
than the minimum number required by the Maryland General Corporation Law. The
names of the directors who shall serve until the first annual meeting of
stockholders and until their successors are duly elected and qualified are:
Samuel Zell
Jeffrey A. Altman
Sheli Z. Rosenberg
Gary R. Garrabrant
Martin L. Edelman
John R. Klopp
697816.6
-2-
<PAGE>
Lynne B. Sagalyn
Craig M. Hatkoff
Thomas E. Dobrowski
Steven Roth
These directors may increase the number of directors and may fill any vacancy,
whether resulting from an increase in the number of directors or otherwise, on
the Board of Directors occurring before the first annual meeting of stockholders
in the manner provided in the Bylaws.
Section 5.2 Extraordinary Actions. Notwithstanding any provision of law
permitting or requiring any action to be taken or approved by the affirmative
vote of the holders of shares entitled to cast a greater number of votes, any
such action shall be effective and valid if taken or approved by the affirmative
vote of holders of shares entitled to cast a majority of all the votes entitled
to be cast on the matter.
Section 5.3 Authorization by Board of Stock Issuance. The Board of
Directors may authorize the issuance from time to time of shares of stock of the
Corporation of any class or series, whether now or hereafter authorized, or
securities or rights convertible into shares of its stock of any class or
series, whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable (or without consideration in the case of a stock
split or stock dividend), subject to such restrictions or limitations, if any,
as may be set forth in the charter or the Bylaws.
Section 5.4 Preemptive Rights. Except as may be provided by the Board
of Directors in setting the terms of classified or reclassified shares of stock
pursuant to Section 6.4 or as may otherwise be provided by contract, no holder
of shares of stock of the Corporation shall, as such holder, have any preemptive
right to purchase or subscribe for any additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
Section 5.5 Indemnification. The Corporation shall have the power, to
the maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to, (a) any individual who is a
present or former director or officer of the Corporation or (b) any individual
who, while a director of the Corporation and at the request of the Corporation,
serves or has
697816.6
-3-
<PAGE>
served as a director, officer, partner or trustee of another corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or any other enterprise from and against any claim or liability to which
such person may become subject or which such person may incur by reason of his
status as a present or former director or officer of the Corporation. The
Corporation shall have the power, with the approval of the Board of Directors,
to provide such indemnification and advancement of expenses to a person who
served a predecessor of the Corporation in any of the capacities described in
(a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation.
Section 5.6 Determinations by Board. The determination as to any of the
following matters, made in good faith by or pursuant to the direction of the
Board of Directors consistent with the charter and in the absence of actual
receipt of an improper benefit in money, property or services or active and
deliberate dishonesty established by a court, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of its capital
stock: the amount of the net income of the Corporation for any period and the
amount of assets at any time legally available for the payment of dividends,
redemption of its capital stock or the payment of other distributions on its
capital stock; the amount of paid-in surplus, net assets, other surplus, annual
or other net profit, net assets in excess of capital, undivided profits or
excess of profits over losses on sales of assets; the amount, purpose, time of
creation, increase or decrease, alteration or cancellation of any reserves or
charges and the propriety thereof (whether or not any obligation or liability
for which such reserves or charges shall have been created shall have been paid
or discharged); the fair value, or any sale, bid or asked price to be applied in
determining the fair value, of any asset owned or held by the Corporation; any
matter relating to the acquisition, holding and disposition of any assets by the
Corporation; or any other matter relating to the business and affairs of the
Corporation.
697816.6
-4-
<PAGE>
ARTICLE VI
STOCK
Section 6.1 Authorized Shares. The total number of shares of stock
which the Corporation shall have the authority to issue is 300,000,000 shares,
consisting of three classes of stock as follows:
(a) 100,000,000 shares of class A common stock, par value $.01
per share (the "Class A Stock");
(b) 100,000,000 shares of class B common stock, par value $.01
per share (the "Class B Stock," and together with the Class A Stock, the "Common
Stock"); and
(c) 100,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). The aggregate par value of all authorized shares
of stock having par value is $3,000,000. If shares of one class of stock are
classified or reclassified into shares of another class of stock pursuant to
this Article VI, the number of authorized shares of the former class shall be
automatically decreased and the number of shares of the latter class shall be
automatically increased, in each case by the number of shares so classified or
reclassified, so that the aggregate number of shares of stock of all classes
that the Corporation has authority to issue shall not be more than the total
number of shares of stock set forth in the first sentence of this paragraph. To
the extent permitted by Maryland law, the Board of Directors, without any action
by the stockholders of the Corporation, may amend the charter from time to time
to increase or decrease the aggregate number of shares of stock of any class or
series that the Corporation has the authority to issue.
Section 6.2 Common Stock. Except as may otherwise be provided in this
Article VI, all shares of Common Stock shall be identical and shall entitle the
holders thereof to the same rights and privileges with respect thereto. Subject
to the provisions of Section 6.3, the Common Stock shall have the following
preferences, rights, powers, restrictions, limitations and qualifications, and
such others as may be afforded by law:
(a) Voting Rights. Except as may otherwise be provided by law,
each holder of Class A Stock shall have one vote in respect to each share of
Class A Stock held of record on all matters to be voted upon by stockholders and
the shares of Class B Stock shall not have voting
697816.6
-5-
<PAGE>
rights and shall not be counted in determining the presence of a quorum at any
meeting of stockholders.
(b) Dividend Rights. The holders of Common Stock shall be
entitled to receive, ratably in proportion to the number of shares of Common
Stock held by them, such dividends as may be authorized from time to time by the
Board of Directors out of assets legally available therefor.
(c) Liquidation Rights. In the event of the voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, after
payment in full or reasonable provision for payment in full of all claims and
obligations of the Corporation shall have been made, all of the assets of the
Corporation, if any, remaining, of whatever kind available for distribution to
stockholders, shall be distributed to the holders of Common Stock, ratably, in
proportion to the number of shares of Common Stock held by them.
(d) Conversion. The Common Stock shall have the following
conversion rights:
(i) Each share of Class A Stock shall be convertible at the
option of the holder thereof at any time and from time to time into one
validly issued, fully paid and nonassessable share of Class B Stock.
Subject to delivery of the certification described in Section
6.2(d)(ii) below, each share of Class B Stock shall be convertible at
the option of the holder thereof at any time and from time to time into
one validly issued, fully paid and nonassessable share of Class A
Stock.
(ii) In order to exercise the conversion right, the holder of
any shares of Common Stock to be converted in whole or in part shall
surrender the certificate or certificates representing such shares of
Common Stock to the Corporation and shall give written notice to the
Corporation ("Conversion Notice") that the stockholder elects to
convert such shares of Common Stock or the portion thereof specified in
said notice into shares of Class A Stock or shares of Class B Stock, as
specified by the stockholder in the Conversion Notice. The Conversion
Notice shall also (x) state the name or names (with address) in which
the certificates for
697816.6
-6-
<PAGE>
the shares of Common Stock shall be issued and (y) if the shares of
Class B Stock are to be converted into shares of Class A Stock, contain
a certification by the stockholder that the stockholder either (a) will
not, together with such stockholder's Aggregated Transferors (as
defined below), upon the issuance of such shares of Class A Stock, own
more than 4.9% of any class of Voting Stock (as defined below) of the
Corporation or (b) is not limited by the Bank Holding Company Act of
1956, as amended, to holding no more than 4.9% of any class or series
of Voting Stock. Each certificate representing shares of Common Stock
surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of
such shares of Common Stock, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Corporation duly
executed by, the stockholder or its duly authorized attorney. As
promptly as practicable after receipt of a Conversion Notice and
surrender of the certificate or certificates representing the shares of
Common Stock relating thereto, the Corporation shall issue and deliver
to such stockholder (or upon the written order of such stockholder) a
certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such Common Stock or portion
thereof in accordance with the provisions of this Section 6.2(d)(ii).
In the event that less than all the shares of Common Stock represented
by a certificate are to be converted, the Corporation shall issue and
deliver or cause to be issued and delivered to (or upon the written
order of) the holder of the shares of Common Stock so surrendered,
without charge to such stockholder, a new certificate or certificates
representing a number of shares of Common Stock equal to the
unconverted portion of the surrendered certificate. Each conversion
shall be deemed to have been effected on the date (the "Conversion
Date") on which the certificate or certificates representing such
shares of Common Stock shall have been surrendered to the Corporation
or its transfer agent and a Conversion Notice with respect to such
shares of Common Stock shall have been received by the Corporation, as
described above. Any Person (as defined below) in whose name
697816.6
-7-
<PAGE>
any certificate or certificates for shares of Common Stock shall be
issuable upon conversion shall be deemed to have become the holder of
record of the shares of Common Stock represented thereby on the
Conversion Date; provided, however, if the certificate or certificates
representing shares of Common Stock are surrendered on any date when
the stock transfer books of the Corporation shall be closed, the
stockholder shall constitute the Person in whose name the certificates
are to be issued as the record holder thereof for all purposes until
the next succeeding day on which such stock transfer books are open,
but such conversion shall be at the Conversion Price in effect on the
date on which such certificate or certificates shall have been
surrendered. No payment or adjustment will be made for dividends or
other distributions with respect to any shares of Common Stock issuable
upon conversion of shares of Common Stock as provided herein.
(iii) The issuance of stock certificates upon conversion of
shares of Common Stock shall be made without charge to the converting
stockholder for any tax in respect of the issuance thereof.
(iv) The Corporation covenants that all shares of Common Stock
which may be issued upon conversion of shares of Common Stock will upon
issuance be validly issued, fully paid and nonassessable by the
Corporation and free from all taxes, liens and charges with respect to
the issuance thereof.
(v) For purposes of this Section 6.2(d), (x) the term "Aggregated
Transferor" of a Person shall mean any other Person other than the
Corporation who previously held Voting Stock of the Corporation now
held by such Person, (y) the term "Person" shall mean an individual, a
corporation, a partnership, a limited liability company, a joint
venture, an association, a joint-stock company, a trust, a business
trust, a government or any agency or any political subdivision thereof,
any unincorporated organization or any other entity, and (z) the term
"Voting
697816.6
-8-
<PAGE>
Shares" shall mean, collectively, the shares of Class A Stock and the
shares of Preferred Stock created pursuant to Section 6.3 and
designated at such time as entitled to vote generally in the election
of directors.
The Board of Directors may reclassify any unissued shares of Common Stock from
time to time in one or more classes or series of stock.
Section 6.3 Preferred Stock. The Board of Directors may classify any
unissued shares of Preferred Stock and reclassify any previously classified but
unissued shares of Preferred Stock of any series from time to time, in one or
more classes or series of stock.
Section 6.4 Classified or Reclassified Shares. Prior to issuance of
classified or reclassified shares of any class or series, the Board of Directors
by resolution shall: (a) designate that class or series to distinguish it from
all other classes and series of stock of the Corporation; (b) specify the number
of shares to be included in the class or series; (c) set or change, subject to
the provisions of Section 6.3 and subject to the express terms of any class or
series of stock of the Corporation outstanding at the time, the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms and conditions of
redemption for each class or series; and (d) cause the Corporation to file
articles supplementary with the State Department of Assessments and Taxation of
Maryland ("SDAT"). Any of the terms of any class or series of stock set or
changed pursuant to clause (c) of this Section 6.4 may be made dependent upon
facts or events ascertainable outside the charter (including determinations by
the Board of Directors or other facts or events within the control of the
Corporation) and may vary among holders thereof, provided that the manner in
which such facts, events or variations shall operate upon the terms of such
class or series of stock is clearly and expressly set forth in the articles
supplementary filed with the SDAT.
Section 6.5 Charter and Bylaws. All persons who shall acquire capital
stock in the Corporation shall acquire the same subject to the provisions of the
charter and the Bylaws.
697816.6
-9-
<PAGE>
ARTICLE VII
AMENDMENTS
The Corporation reserves the right from time to time to make any
amendment to its charter, now or hereafter authorized by law, including any
amendment altering the terms or contract rights, as expressly set forth in the
charter, of any shares of outstanding stock. All rights and powers conferred by
the charter on stockholders, directors and officers are granted subject to this
reservation.
ARTICLE VIII
LIMITATION OF LIABILITY
To the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of directors and officers of a corporation,
no director or officer of the Corporation shall be liable to the Corporation or
its stockholders for money damages. Neither the amendment nor repeal of this
Article VIII, nor the adoption or amendment of any other provision of the
charter or Bylaws inconsistent with this Article VIII, shall apply to or affect
in any respect the applicability of the preceding sentence with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption.
THIRD: The amendment to and restatement of the charter as hereinabove
set forth have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
FOURTH: The current address of the principal office of the Corporation
is as set forth in Article IV of the foregoing amendment and restatement of the
charter.
FIFTH: The name and address of the Corporation's current resident agent
is as set forth in Article IV of the foregoing amendment and restatement of the
charter.
SIXTH: The number of directors of the Corporation and the names of
those currently in office are as set forth in Article V of the foregoing
amendment and restatement of the charter.
SEVENTH: The total number of shares of capital stock which the
Corporation had authority to issue immediately prior to this amendment and
restatement was 100 shares, consisting of 1,000 shares of Common Stock, par
value $.01 per share. The aggregate par value of all shares of capital stock
having par value was $10.
697816.6
-10-
<PAGE>
EIGHTH: The total number of shares of stock which the Corporation has
authority to issue pursuant to the foregoing amendment and restatement of the
charter is 300,000,000, consisting of 200,000,000 shares of Common Stock, par
value $.01 per share, and 200,000,000 shares of Preferred Stock, par value $.01
per share. The aggregate par value of all shares of stock having par value is
$3,000,000.
NINTH: The undersigned chief executive officer acknowledges these
Articles of Amendment and Restatement to be the corporate act of the Corporation
and as to all matters or facts required to be verified under oath, the
undersigned chief executive officer acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties for
perjury.
697816.6
-11-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment and Restatement to be signed in its name and on its behalf by its
chief executive officer and attested to by its secretary on this 28th day of
January, 1999.
ATTEST: CAPITAL TRUST, INC.
/s/ Edward L. Shugrue III By: /s/ John R. Klopp (SEAL)
- - ------------------------ ------------------------------
Secretary Chief Executive Officer
697816.6
-12-
<PAGE>
CAPITAL TRUST, INC.
-------------------
ARTICLES SUPPLEMENTARY
CLASS A 9.5% CUMULATIVE CONVERTIBLE
PREFERRED STOCK
(par value $.01 per share)
FIRST: Capital Trust, Inc., a Maryland corporation (hereinafter called
the "Corporation"), does hereby certify to the State Department of Assessments
and Taxation of Maryland pursuant to Section 2-208 of the Maryland General
Corporation Law that, under a power contained in Section 6.3 of the charter of
the Corporation (the "Charter"), the Board of Directors of the Corporation (the
"Board of Directors"), by unanimous written consent dated November 11, 1998,
classified and designated 12,639,405 unissued and unclassified shares (the
"Shares") of Preferred Stock (as defined in the Charter) as shares of Class A
9.5% Cumulative Convertible Preferred Stock, par value $.01 per share, with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption of shares as set forth herein, which upon any
restatement of the Charter may be made part of Article VI of the Charter, with
any necessary or appropriate changes to the enumeration or lettering of sections
or subsections thereof:
CLASS A 9.5% CUMULATIVE CONVERTIBLE
PREFERRED STOCK
1 Designation and Amount. The class of Preferred Stock of the Corporation
created hereby shall be designated as Class A 9.5% Cumulative Convertible
Preferred Stock, and the number of shares constituting such class shall be
12,639,405, par value $.01 per share.
2 Definitions. As used in these Articles Supplementary, the following terms
shall have the following meanings:
(a) "Aggregate Consideration Receivable" by the Corporation in connection
with the issuance of any shares of Common Stock or any Common Stock
Equivalents means the sum of:
(i) the aggregate consideration paid to the Corporation for such
shares of Common Stock or Common Stock Equivalents and
(ii) the aggregate consideration or premiums, if any, stated in such
Common Stock Equivalents to be payable for the Common Stock upon
the exercise or conversion of such Common Stock Equivalents,
747131.5
<PAGE>
calculated in each case in accordance with section 7(d)(vii) hereof.
In case all or any portion of the consideration to be received by the
Corporation may be paid in a form other than cash, the value of such
consideration shall be determined in good faith by the Board or a duly
authorized committee thereof (irrespective of the accounting treatment
thereof), and described in a resolution of the Board or such
committee.
(b) "Aggregated Transferor" of a Person shall mean any other Person other
than the Corporation who previously held Voting Stock of the
Corporation now held by such Person.
(c) "Annual Dividend Rate" has the meaning set forth in section 3(a)
hereof.
(d) "Bank Holding Company" means a bank holding company (as defined in
Section 1841 (a) of the Bank Holding Company Act of 1956, as amended)
or any affiliate (as defined in Section 1841 (k) of the Bank Holding
Company Act of 1956, as amended) of any bank holding company (as
defined in Section 1841 (a) of the Bank Holding Company Act of 1956,
as amended).
(e) "Board" means the Board of Directors of the Corporation.
(f) "Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of New York, New York are
authorized or obligated by law or executive order to close.
(g) "Charter" means the charter, as defined in Section 1- 101(e) of the
Maryland General Corporation Law, of the Corporation.
(h) "Class A Articles Supplementary" means these Articles Supplementary
filed with and accepted for record by the State Department of
Assessment and Taxation of Maryland on or about January 28, 1999,
establishing the Class A Preferred Stock pursuant to Article VI of the
Charter, as the same may be amended, supplemented or modified from
time to time in accordance with the terms hereof and pursuant to
applicable law and upon any restatement of the Charter shall mean the
terms of the Class A Preferred Stock as set forth in Article VI of the
Charter.
(i) "Class A Common Stock" means the class A common stock, par value $.01
per share, of the Corporation, having the designations and rights,
qualifications, limitations and restrictions set forth in the Charter.
(j) "Class A Preferred Stock" means the Class A 9.5% Cumulative
Convertible Preferred Stock, par value $.01
747131.5
- 2 -
<PAGE>
per share, of the Corporation established pursuant to these Articles
Supplementary.
(k) "Class B Articles Supplementary" means Articles Supplementary filed
with and accepted for record by the State Department of Assessment and
Taxation of Maryland on or about January 28, 1999, establishing the
Class B Preferred Stock pursuant to Article VI of the Charter, as the
same may be amended, supplemented or modified from time to time in
accordance with the terms hereof and pursuant to applicable law and
upon any restatement of the Charter shall mean the terms of the Class
B Preferred Stock as set forth in Article VI of the Charter.
(l) "Class B Common Stock" means the class B common stock, par value $.01
per share, of the Corporation, having the designations and rights,
qualifications, limitations and restrictions set forth in the Charter.
(m) "Class B Preferred Stock" means the Class B 9.5% Cumulative
Convertible Non-Voting Preferred Stock, par value $.01 per share, of
the Corporation established pursuant to the Class B Articles
Supplementary.
(n) "Common Stock" means, collectively, the Class A Common Stock and the
Class B Common Stock.
(o) "Common Stock Equivalents" means, without double counting:
(i) Common Stock, where one share of Common Stock shall constitute
one Common Stock Equivalent,
(ii) Stock of the Corporation (including without limitation the
Preferred Stock) convertible into Common Stock, where any one
share of Stock of the Corporation shall constitute a number of
Common Stock Equivalents equal to the number of shares of Common
Stock issuable in respect of such Stock,
(iii) any rights, warrants, options and convertible, exchangeable or
exercisable securities entitling the holder thereof to subscribe
for or purchase any Common Stock, where any such rights,
warrants, options and convertible, exchangeable or exercisable
securities shall constitute a number of Common Share Equivalents
equal to the number of shares of Common Stock issuable in respect
of such rights, warrants, options or convertible, exchangeable or
exercisable securities, and
747131.5
- 3 -
<PAGE>
(iv) any stock appreciation rights entitling the holders thereof to
any interest in an increase in value, however measured, of Common
Stock, where any such stock appreciation rights shall constitute
a number of Common Share Equivalents equal to the shares of
Common Stock, as nearly as it may be calculated, to such share
appreciation rights.
(p) "Conversion Date" has the meaning set forth in section 7(b) hereof.
(q) "Conversion Notice" has the meaning set forth in section 7(b) hereof.
(r) "Conversion Price" has the meaning set forth in section 7(a) hereof.
(s) "Corporation" means Capital Trust, Inc., a Maryland corporation.
(t) "D/E Ratio" means, as of the date of determination, the ratio of (i)
the sum of (x) the total Indebtedness of the Corporation and its
consolidated Subsidiaries as reflected on the Corporation's most
recent regularly prepared consolidated balance sheet, plus (y) all
Indebtedness issued by the Corporation and its consolidated
subsidiaries since the date of such consolidated balance sheet less
all Indebtedness retired or repurchased by the Corporation and its
subsidiaries since that date, plus (z) the Corporation's pro rata
share, based upon its percentage equity ownership interest therein, of
aggregate total Indebtedness of Equity Affiliates, to (ii) the excess
of total assets (including the Corporation's equity in its Equity
Affiliates) over total liabilities of the Corporation and its
consolidated subsidiaries, as reflected on the Corporation's most
recent regularly prepared consolidated balance sheet, in each case
determined in accordance with GAAP and after giving effect to the
incurrence of any proposed Indebtedness and the application of
proceeds of such Indebtedness.
(u) "Dividend Payment Date" has the meaning set forth in section 3(a)
hereof.
(v) "Dividend Period" has the meaning set forth in section 3(a) hereof.
(w) "Effective Purchase Price per Share" at which the Corporation issues
any shares of Common Stock or any Common Stock Equivalents means an
amount equal to:
747131.5
- 4 -
<PAGE>
(i) the Aggregate Consideration Receivable by the Corporation in
connection with the issuance of such shares of Common Stock or
Common Stock Equivalents divided by
(ii) the number of shares of Common Stock and Common Stock Equivalents
so issued.
(x) "Equity Affiliate" means any Person in which the Corporation or any of
its consolidated Subsidiaries has an equity interest which is or, in
accordance with GAAP, should be accounted for on the equity method in
the Corporation's consolidated financial statements.
(y) "Exempted Transaction" means each and any of the following:
(i) the issuance, from the Issuance Date through the date of the
Exempted Transaction, of Common Stock Equivalents to employees or
officers of the Corporation or any of its Subsidiaries, or to
consultants or service providers to the Corporation or any of its
Subsidiaries, or to directors of the Corporation or any of its
Subsidiaries, under an employee benefit plan or similar
arrangement adopted by the Corporation in an amount not to exceed
10% of the aggregate number of Common Stock Equivalents
outstanding on the date of such Exempted Transaction,
(ii) the issuance of any shares of Common Stock or Preferred Stock of
the Corporation upon the conversion of any shares of Common Stock
or Preferred Stock, and
(iii) the issuance of any Stock of the Corporation in exchange, in
whole or in part, for any acquisition by the Corporation of
shares of stock or other assets of any kind.
(z) "Fair Market Value" of a share of Common Stock means, as of any date,
the average of the closing prices of Class A Common Stock for the 20
consecutive Trading Days next preceding the date five days prior to
the date in question. The closing price for each day shall be:
(i) if the Class A Common Stock is listed or admitted for trading on
the New York Stock Exchange or any other national securities
exchange, the last sale price, or the closing bid price if no
sale occurred, of one share of Class A Common Stock on the New
York Stock Exchange or, if not then listed on the New York Stock
Exchange, the principal securities exchange on which the Class
747131.5
- 5 -
<PAGE>
A Common Stock is listed or admitted for trading; or
(ii) if not listed or admitted for trading as described in clause (i)
of this section 2(z), the average of the closing sale price or,
in the absence of a closing sale price, the average of the
highest bid and lowest asked prices of one share of Class A
Common Stock quoted in the NASDAQ National Market System or any
similar system of automated dissemination of quotations of
securities prices then in common use, if so quoted; or
(iii) if not quoted as described in clause (ii) of this section 2(z),
the average of the highest bid and lowest offered quotations for
one share of Class A Common Stock as reported by the National
Quotation Bureau Incorporated if at least two securities dealers
have inserted both bid and offered quotations for shares of Class
A Common Stock on at least five of the 20 consecutive Trading
Days next preceding the date five days prior to the date in
question.
If none of the conditions set forth above is met, the closing price of
one share of Class A Common Stock on any day or the average of such
closing prices for any period shall be the fair market value of one
share of Common Stock for such day or period as determined in good
faith by the Board.
"Fair Market Value" of a share of Preferred Stock means the Fair
Market Value of a number of fully paid and nonassessable shares of
Class A Common Stock equal to the ratio of (a) the Liquidation
Preference for such Preferred Stock plus an amount equal to the
dividends per share accrued and unpaid thereon as of the date of such
determination to (b) the Conversion Price in effect as of the date of
such determination.
(aa) "GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the American Institute of
Certified Public Accountants acting through its Accounting Principles
Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently
applied for all periods after the date hereof so as to properly
reflect the financial condition, results of operations and changes in
financial position of any Person, except that any accounting principle
or practice required to be changed by such Accounting Principles Board
or Financial Accounting Standards Board (or other appropriate board or
committee of such Boards)
747131.5
- 6 -
<PAGE>
in order to continue as a generally accepted accounting principle or
practice may be so changed.
(bb) "Holder" of a share of Class A Preferred Stock or a share of Class B
Preferred Stock means the Person in whose name such share of Class A
Preferred Stock or Class B Preferred Stock is registered on the books
of the Corporation.
"Holder" of a share of Class A Common Stock or a share of Class B
Common Stock means the Person in whose name such share of Class A
Common Stock or Class B Common Stock is registered on the books of the
Corporation.
(cc) "Incur" means to issue, assume, guarantee, incur or otherwise become
liable for.
(dd) "Indebtedness" means, with respect to any Person, without duplication,
any liability of such Person (i) for borrowed money, (ii) evidenced by
bonds, debentures, notes or other similar instruments, (iii)
constituting capitalized lease obligations, (iv) incurred or assumed
as the deferred purchase price of property, or pursuant to conditional
sale obligations and title retention agreements (but excluding trade
accounts payable arising in the ordinary course of business) and (v)
which are secured by any Lien on any property or asset of such first
referred to Person.
(ee) "Issuance Date" means, with respect to any Preferred Stock, the date
on which such Preferred Stock is issued by the Corporation.
(ff) "Junior Stock" means Common Stock and any other class or series of
Stock of the Corporation now or hereafter authorized, issued or
outstanding which is subject, under the terms of the Charter, to the
following restrictions and limitations:
(i) no dividend or distribution can be declared or paid on the shares
of such class or series unless all accrued dividends and other
amounts then due with respect to the Preferred Stock shall have
been paid in full,
(ii) in the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the Holders of the
Preferred Stock shall be entitled to receive out of assets of the
Corporation available for distribution to shareholders, the
amount specified in section 4 hereof, before any payment shall be
made or any
747131.5
- 7 -
<PAGE>
assets distributed to the holders of such
other class or series of Stock of the Corporation, and
(iii) shares of such class or series may not be redeemed under any
circumstances, either at the option of the Corporation or of any
holder thereof, unless all of the outstanding Preferred Stock
have theretofore been redeemed or converted.
(gg) "Lien" means any lien, mortgage, deed of trust, pledge, charge or
other encumbrance of any kind, including, without limitation, any
conditional sale or other title retention agreement and any lease in
the nature thereof.
(hh) "Liquidation Preference" means, with respect to each share of
Preferred Stock, an amount equal to $2.69.
(ii) "Merger" means the simultaneous mergers of Capital Trust, a California
business trust, with and into Captrust Limited Partnership, a Maryland
limited partnership ("Captrust"), and of Captrust with and into the
Corporation.
(jj) "Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint-stock
company, a trust, a business trust, a government or any agency or any
political subdivision, any unincorporated organization or any other
entity.
(kk) "Preferred Stock" means, collectively, the Class A Preferred Stock and
the Class B Preferred Stock.
(ll) "Predecessor" means Capital Trust, a California business trust, as the
predecessor of the Corporation in the Merger.
(mm) "Restricted Payment" has the meaning set forth in section 3(c) hereof.
(nn) "Stock" means any shares of stock, rights, warrants or options to
purchase shares of stock, securities convertible into or exchangeable
or exercisable for shares of stock and participations in or other
equivalents of or interests (other than security interests) in shares
of stock, however designated and whether voting or nonvoting, of any
Person.
(oo) "Subsidiary" means:
747131.5
- 8 -
<PAGE>
(i) any corporation 50% or more of the Voting Stock of which is
owned, directly or indirectly, by the Corporation, or
(ii) any other Person whose accounts are required under GAAP to be
included in the Corporation's consolidated financial statements.
(pp) "Trading Day" means, with respect to the Class A Common Stock: (i) if
the Class A Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business; (ii) if the Class A Common Stock is not
listed or admitted for trading on any national securities exchange,
but is quoted on the NASDAQ National Market System, any similar system
of automated dissemination of quotations of securities prices or the
National Quotation Bureau Incorporated, each day on which quotations
may be made on such system; or (iii) if the Class A Common Stock is
not quoted on any system or listed or admitted for trading on any
securities exchange, a Business Day.
(qq) "Voting Stock" means, with respect to the Corporation, all classes of
Stock of the Corporation then outstanding and normally entitled to
vote for the election of directors of the Corporation. Any reference
to a percentage of Voting Stock shall refer to the percentage of votes
eligible to be cast for the election of directors which are
attributable to the applicable Voting Stock.
3 Dividends.
(a) Payment of Dividends. The Holders of the Class A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board, out of
funds legally available therefor, cash dividends per share at the rate
of 9.5% per annum on the Liquidation Preference (the "Annual Dividend
Rate"). Such dividends shall accrue (whether or not declared) from and
including the Issuance Date to and including the date on which the
Liquidation Preference is paid on such shares or on which such shares
are converted or redeemed and, to the extent not paid for any Dividend
Period, will be cumulative. Dividends on the Class A Preferred Stock
shall accrue on a daily basis whether or not the Corporation shall
have earnings or surplus at the time.
Semi-annual dividend periods (each a "Dividend Period") shall commence
on and include the sixteenth day of December and June of each year and
shall end on and include the fifteenth day of June and December,
respectively, of such or the following year; provided
747131.5
- 9 -
<PAGE>
however, that, the first Dividend Period shall be deemed to commence
on December 16, 1998 and shall end on and include June 15, 1999 and
shall end on and include June 15, 1999. Dividends on the Class A
Preferred Stock shall be payable, when, as and if declared,
semi-annually, in arrears, no later than December 26 and June 25 of
each year commencing June 25, 1999 (each such date, a "Dividend
Payment Date"), except that if any such date is not a Business Day,
then such dividend shall be paid on the next succeeding Business Day.
Each such dividend shall be payable to Holders of Class A Preferred
Stock at the close of business on the record date established by the
Board, which record date shall be not more than 60 days prior to the
date fixed for payment thereof.
The amount of dividends payable per share of Class A Preferred Stock
for each full Dividend Period shall be computed by applying the Annual
Dividend Rate to the Liquidation Preference and dividing such amount
by two. The amount of dividends payable for any period shorter than a
full Dividend Period shall be computed on the basis of actual days
elapsed and a 360-day year consisting of twelve 30 day months.
The Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on either class of Preferred
Stock unless the Corporation simultaneously declares or pays or sets
apart for payment dividends or makes distributions, at the same rate,
each share being treated equally, on the other class of Preferred
Stock.
(b) Distribution of Partial Dividend Payments. Except as otherwise
provided in these Articles Supplementary, if on any Dividend Payment
Date the Corporation pays less than the total amount of dividends then
accrued with respect to Preferred Stock, the amount so paid shall be
distributed ratably, each share being treated equally, among the
Holders of the Preferred Stock based upon the number shares of
Preferred Stock then held by each such Holder.
(c) Limitations on Certain Payments. Unless all accrued dividends and
other amounts then accrued through the end of the last Dividend Period
and unpaid with respect to the Preferred Stock shall have been paid in
full, the Corporation shall not declare or pay or set apart for
payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption, exchange or other
retirement of, any Stock of the Corporation other than the Preferred
Stock (each, a "Restricted Payment"); provided, however, that a
"Restricted Payment" shall not include:
747131.5
- 10 -
<PAGE>
(i) any dividend or distribution payable solely in Junior Stock, or
(ii) the acquisition of any Stock of the Corporation in exchange
solely for Junior Stock.
4 Liquidation Preference.
In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the Holders of Preferred
Stock shall be entitled to receive out of assets of the Corporation
available for distribution to stockholders, an amount per share equal to
the Liquidation Preference plus the amount of all dividends per share
accrued and unpaid thereon through the date of final distribution to
stockholders, whether or not declared, before any payment shall be made or
any assets distributed to the holders of any other class or series of Stock
of the Corporation.
If the assets and funds thus distributed among the Holders of Preferred
Stock shall be insufficient to permit the payment to such Holders of the
full preferential amount described above, then the entire assets and funds
of the Corporation legally available for distribution shall be distributed
ratably, each share being treated equally, among the Holders of Preferred
Stock based on the number of shares of Preferred Stock then held by each
such Holder.
In determining whether a distribution of any dividend or the redemption or
other acquisition of any Stock of the Corporation is permitted under
Maryland law, no effect shall be given to amounts, to the extent such
amounts would be needed, if the Corporation were to be liquidated,
dissolved or wound up at the time of such distribution, to satisfy the
preferential rights upon liquidation, dissolution or winding up of the
Corporation of Holders of the Class A Preferred Stock.
5 Consolidation, Merger and Sale of Assets, etc. Unless all of the
outstanding shares of Preferred Stock shall have been redeemed or converted
on or prior to the effective date of any consolidation, merger or transfer
referred to below involving the Corporation, without the approval of the
Holders of a majority of the outstanding shares of Preferred Stock, voting
together as a single class, but voting together as a separate class from
the Common Stock, the Corporation shall not consolidate with or merge into,
or transfer all or substantially all of its assets to, another Person
unless:
(a) in the case of a merger or consolidation, the Corporation is the
surviving entity, the rights and preferences of the Preferred Stock
are not modified, the Corporation, as the surviving entity, does not
have outstanding any shares of Stock that are not shares of Junior
Stock, and,
747131.5
- 11 -
<PAGE>
immediately after the consummation of such merger or consolidation and
after giving effect thereto, the D/E Ratio of the Corporation shall
not exceed 5:1 or
(b) the surviving, resulting or acquiring Person is a Person organized
under the laws of the United States, any state thereof or the District
of Columbia, or a Person organized under the laws of a foreign
jurisdiction whose equity securities are listed on a national
securities exchange in the United States or authorized for quotation
on the NASDAQ National Market System, the Corporation shall make
effective provision such that, upon consummation of such transaction,
the Holders of Preferred Stock shall receive preferred shares of the
surviving entity having substantially identical terms as the Preferred
Stock surrendered by them, the surviving, resulting or acquiring
Person does not have outstanding any shares of Stock that are not
shares of Junior Stock and, immediately after the consummation of such
consolidation, merger or transfer, the D/E Ratio of such Person shall
not exceed 5:1.
6 Voting Rights of Preferred Stock.
(a) Voting Rights of the Class A Preferred Stock. In addition to the
voting rights described in sections 5 and 6(b) hereof, the holders of
the Class A Preferred Stock shall be entitled to vote together with
the holders of Class A Common Stock as a single class on all matters
submitted for a vote of stockholders, and shall be entitled to notice
of all stockholders' meetings and to act by written consent in the
same manner as the holders of Class A Common Stock. Each share of
Class A Preferred Stock shall entitle the Holder thereof to such
number of votes per share as shall equal the number of shares of Class
A Common Stock into which such share of Class A Preferred Stock is
then convertible.
(b) Preferred Stock Class Vote. The affirmative vote of the Board and the
Holders of a majority of the outstanding shares of Preferred Stock
voting together as a single class, but voting together as a separate
class from the Common Stock, shall be required in order:
(i) to amend, alter or repeal any of the provisions of these Articles
Supplementary or of the Class B Article Supplementary;
(ii) to authorize, create or issue any class or series of Stock of the
Corporation that are not Junior Stock; and
747131.5
- 12 -
<PAGE>
(iii) for the Corporation to Incur any Indebtedness if the
Corporation's D/E Ratio would then exceed 5:1.
Any Preferred Stock owned, directly or indirectly, by the Corporation
or any of its Subsidiaries shall not have voting rights hereunder and
shall not be counted in determining the presence of a quorum.
7 Conversion Right.
(a) Right of Conversion. Each share of Class A Preferred Stock shall be
convertible at the option of the Holder thereof at any time and from
time to time in whole or in part into:
(i) a number of fully paid and nonassessable shares of Class A Common
Stock equal to the ratio of:
(x) the Liquidation Preference of such shares of Class A
Preferred Stock plus an amount equal to all dividends per
share accrued and unpaid thereon as of the Conversion Date
to
(y) the Conversion Price in effect on the Conversion Date, or
(ii) an equal number of fully paid and nonassessable shares of Class B
Preferred Stock,
or into such additional or other securities, cash or property and
at such other rates as required in accordance with the provisions
of this section 7.
For purposes of these Articles Supplementary, the "Conversion
Price" shall initially be $2.69 per share and shall be adjusted
from time to time in accordance with the provisions of this
section 7.
(b) Conversion Procedures. In order to exercise the conversion right, the
Holder of any shares of Class A Preferred Stock to be converted in
whole or in part shall surrender the certificate or certificates
representing such shares to the Corporation and shall give written
notice to the Corporation ("Conversion Notice") that the Holder elects
to convert such shares or the portion thereof specified in said notice
into shares of Class A Common Stock or Class B Preferred Stock, as
provided herein and as specified by the Holder in the Conversion
Notice. The Conversion Notice shall also state the name or names (with
address) in which the certificates for Class A Common Stock or Class B
Preferred Stock, as the case may be, shall be issued. Each certificate
representing Class A Preferred Stock surrendered for
747131.5
- 13 -
<PAGE>
conversion shall, unless the shares issuable on conversion are to be
issued in the same name as the registration of such Class A Preferred
Stock, be duly endorsed by, or be accompanied by instruments of
transfer in form satisfactory to the Corporation duly executed by, the
Holder or its duly authorized attorney.
As promptly as practicable after receipt of a Conversion Notice and
surrender of the certificate or certificates representing the shares
of Class A Preferred Stock relating thereto, the Corporation shall
issue and deliver to such Holder (or upon the written order of such
Holder) a certificate or certificates for the number of full shares of
Class A Common Stock, or Class B Preferred Stock, as specified in the
Conversion Notice, issuable upon the conversion of such Class A
Preferred Stock or portion thereof in accordance with the provisions
of this section 7, and a check or cash in respect of any fractional
shares issuable upon such conversion, as provided in section 7(c)
hereof. In the event that less than all the shares of Class A
Preferred Stock represented by a certificate are to be converted, the
Corporation shall issue and deliver or cause to be issued and
delivered to (or upon the written order of) the Holder of the Class A
Preferred Stock so surrendered, without charge to such Holder, a new
certificate or certificates representing a number of shares of Class A
Preferred Stock equal to the unconverted portion of the surrendered
certificate.
Each conversion shall be deemed to have been effected on the date (the
"Conversion Date") on which the certificate or certificates
representing such shares of Class A Preferred Stock shall have been
surrendered to the Corporation or its transfer agent and a Conversion
Notice with respect to such shares shall have been received by the
Corporation, as described above. Any Person in whose name any
certificate or certificates for Class A Common Stock or Class B
Preferred Stock shall be issuable upon conversion shall be deemed to
have become the holder of record of the shares represented thereby on
the Conversion Date, provided, however, if the certificate or
certificates evidencing such Class A Preferred Stock are surrendered
on any date when the share transfer books of the Corporation shall be
closed, the Holder shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all
purposes until the next succeeding day on which such share transfer
books are open, but such conversion shall be at the Conversion Price
in effect on the date on which such certificate or certificates shall
have been surrendered.
747131.5
- 14 -
<PAGE>
Except as otherwise provided in this section 7, no payment or
adjustment will be made for dividends or other distributions with
respect to any Class A Common Stock or Class B Preferred Stock
issuable upon conversion of Class A Preferred Stock as provided
herein.
(c) Cash Payments in Lieu of Fractional Shares. No fractional shares or
scrip representing fractional shares shall be issued upon conversion
of Preferred Stock. If any fractional share, would, but for this
section 7(c), be issuable upon the conversion of any Class A Preferred
Stock, the Corporation shall make a payment therefor in cash on the
first Business Day immediately preceding the Conversion Date equal to
the Fair Market Value of such fractional share.
(d) Adjustment of Conversion Price for Conversion into Common Stock. The
Conversion Price with respect to the conversion of the Class A
Preferred Stock into Class A Common Stock shall be adjusted from time
to time by the Corporation as follows:
(i) in the event that the Corporation shall at any time after the
Issuance Date:
(A) declare a dividend or make a distribution on the shares of
Class A Common Stock in shares of Class A Common Stock,
(B) subdivide or reclassify the shares of Class A Common Stock
into a greater number of shares,
(C) combine the shares of Class A Common Stock into a smaller
number of shares,
(D) pay a dividend or make a distribution on the shares of Class
A Common Stock in any class of its Stock other than shares
of Class A Common Stock, or
(E) reclassify the shares of Class A Common Stock other than as
set forth in Section 7(d)(i)(B),
then the conversion right and the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of
any shares of Class A Preferred Stock thereafter surrendered for
conversion into shares of Class A Common Stock shall be entitled
to receive the number of shares of Class A Common Stock or other
Stock of the Corporation which such Holder would have owned or
have been entitled to receive after the
747131.5
- 15 -
<PAGE>
happening of any of the events described above had such shares of
Class A Preferred Stock been converted into shares of Class A Common
Stock immediately prior to the happening of such event. An adjustment
made pursuant to this section 7(d)(i) shall become effective
immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the
effective date in the case of subdivision, combination or
reclassification. Such adjustment shall be made successively whenever
any event referred to above shall occur.
(ii) In the event that the Corporation shall at any time after the
Issuance Date issue any Common Stock or any Common Stock
Equivalents other than in an Exempted Transaction, at an
Effective Purchase Price per Share less than the Conversion Price
in effect immediately prior to the date of such issuance, then
such Conversion Price shall be adjusted to equal:
(A) the sum of:
(1) the product of:
(a) the number of shares of Common Stock and Common
Stock Equivalents outstanding immediately prior to
such issuance and
(b) the Conversion Price in effect immediately prior
to such issuance and
(2) the Aggregate Consideration Receivable by the
Corporation in connection with such issuance
divided by:
(B) the sum of:
(1) the number of shares of Common Stock and Common
Stock Equivalents outstanding immediately prior to
such issuance and
(2) the number of additional shares of Common Stock
and Common Stock Equivalents so issued.
For example, if on any given date the Corporation has 20,000,000
shares of Common Stock and Common
747131.5
- 16 -
<PAGE>
Stock Equivalents outstanding, the Corporation issues warrants
exercisable at $1 per share to purchase an additional 1,000,000 shares
of Common Stock for a purchase price of $1 per warrant, and the
Conversion Price in effect on such date is $2.69, then the Conversion
Price shall be adjusted to equal $2.66, which is calculated as
follows:
$2.66 per share =
[(20,000,000shares x $2.69/share) + $2,000,000]/ (20,000,000
shares + 1,000,000 shares).
Such adjustment shall be made successively whenever any shares,
rights, warrants, options, convertible, exchangeable or
exercisable securities or share appreciation rights are issued at
an Effective Purchase Price per Share that is less than the
Conversion Price in effect on the date of such issuance. To the
extent that any right, option, warrant, convertible or
exercisable security or share appreciation right expires without
having been converted or exercised, the Conversion Price then in
effect shall be readjusted to the Conversion Price which then
would be in effect if such rights, options, warrants or
convertible, exchangeable or exercisable securities or share
appreciation rights had not been issued, but such readjustment
shall not affect the number of shares of Common Stock or other
Stock of the Corporation delivered upon any conversion prior to
the date such readjustment is made.
(iii) In the event that the Corporation shall distribute to all holders
of its Class A Common Stock any of its assets (other than cash
dividends payable on or after the date of consummation of the
Merger which together with all prior cash dividends of the
Corporation and the Predecessor paid on or after April 1, 1997,
do not exceed the amount of retained earnings of the Corporation
accrued on or after April 1, 1997 and on or prior to the date of
payment of such dividends) or debt securities, or rights,
options, warrants or convertible, exchangeable or exercisable
securities of the Corporation (including securities issued for
cash, but excluding distributions of Stock of the Corporation
referred to in section 7(d)(i) hereof, then in each such case,
the Conversion Price shall be adjusted to equal the Conversion
Price in effect immediately prior to such distribution less an
amount equal to the then fair market value (as reasonably
determined by
747131.5
- 17 -
<PAGE>
the Board, in good faith and as described in a resolution of the
Board) of the portion of the assets or debt securities of the
Corporation so distributed or of such rights, options, warrants
or convertible, exchangeable or exercisable securities applicable
to one share of Class A Common Stock. Such adjustment shall
become effective immediately after the record date for the
determination of shares entitled to receive such distribution.
Notwithstanding the foregoing, no adjustment of the Conversion
Price shall be made upon the distribution to holders of Common
Stock of such rights, options, warrants or convertible,
exchangeable or exercisable securities, assets or debt securities
if the plan or arrangement under which such rights, options,
warrants or convertible, exchangeable or exercisable securities,
assets or debt securities are issued provides for their issuance
to Holders of Class A Preferred Stock in the same pro rata
amounts upon conversion thereof. Such adjustment shall be made
successively whenever any event listed above shall occur.
(iv) Anything in this section 7(d) to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this section
7(d), as it in its reasonable discretion shall determine to be
advisable in order that any share dividends, subdivision of
shares, distribution of rights to purchase shares or securities,
or distribution of securities convertible into or exchangeable or
exercisable for shares hereafter made by the Corporation to its
stockholders, shall not be taxable.
(v) Whenever the Conversion Price is adjusted as provided in this
section 7(d), or the Class A Preferred Stock becomes convertible
into shares, securities, property or assets pursuant to section
7(e) hereof, or the Corporation reduces the Conversion Price
pursuant to section 7(f) hereof, the Corporation shall prepare a
notice of such adjustment of the Conversion Price setting forth
the adjusted Conversion Price (or describing such event, as the
case may be) and the date on which such adjustment (or event)
becomes effective, and setting forth in reasonable detail the
facts requiring such adjustment and the calculation of such
adjustment (or describing the shares, securities, property or
assets into which the Class A Preferred Stock shall become
convertible), and shall mail such
747131.5
- 18 -
<PAGE>
notice of adjustment to all Holders of Class A Preferred Stock as
set forth in section 7(i) hereof.
(vi) In any case in which this section 7(d) provides that an
adjustment shall become effective immediately after a record date
for an event, the Corporation may defer until the occurrence of
such event:
(A) issuing to the Holder of any Class A Preferred Stock
converted after such record date and before the occurrence
of such event the additional shares of Class A Common Stock
issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Class A
Common Stock issuable upon such conversion before giving
effect to such adjustment, and
(B) paying to such Holder any amount in cash in lieu of any
fractional share of Class A Common Stock pursuant to section
7(c).
(vii) For purposes of any computations of Aggregate Consideration
Receivable or other consideration pursuant to this section 7(d),
the following shall apply:
(A) in the case of the issuance of Common Stock or Common Stock
Equivalents for cash, the consideration shall be the amount
of such cash, provided that in no case shall any deduction
be made for any commissions, discounts or other expenses
incurred by the Corporation for any underwriting of the
issue or otherwise in connection therewith; and
(B) in the case of the issuance of Common Stock or Common Stock
Equivalents for a consideration in whole or in part other
than cash, the consideration other than cash shall be deemed
to be the fair market value thereof as reasonably determined
in good faith by the Board or a duly authorized committee
thereof (irrespective of the accounting treatment thereof),
and described in a resolution of the Board or such
committee.
(viii) If, after an adjustment a Holder of Class A Preferred Stock may,
upon conversion of such security, receive two or more classes of
Stock of
747131.5
- 19 -
<PAGE>
the Corporation, the Corporation shall determine on a fair basis
the allocation of the adjusted Conversion Price between such
classes of Stock. After such allocation, the conversion right and
the Conversion Price of each class of Stock of the Corporation
shall thereafter be subject to adjustment on terms comparable to
those applicable to Class A Common Stock in this section 7.
(e) Effect of Reclassification, Consolidation, Merger or Sale. Unless all
of the shares of Class A Preferred Stock shall have been redeemed or
converted on or prior to the effective date of any of the events
referred to in clauses (i), (ii) and (iii) of this section 7(e), if
any of the following events occur, namely:
(i) any reclassification or change of outstanding shares of Class A
Common Stock issuable upon conversion of the Class A Preferred
Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a
subdivision or combination),
(ii) any consolidation or merger of the Corporation with another
Person shall be effected as a result of which holders of Class A
Common Stock issuable upon conversion of the Class A Preferred
Stock shall be entitled to receive shares, securities or other
property or assets (including cash) with respect to or in
exchange for such Class A Common Stock, or
(iii) any sale or conveyance of the properties and assets of the
Corporation as, or substantially as, an entirety to any other
Person,
then the Corporation or such successor or purchasing Person, as
the case may be, shall make provisions in its constituent
documents to establish that each share of Class A Preferred Stock
then outstanding (or the successor shares referred to in section
5(b) hereof) shall be convertible into the kind and amount of
shares and other securities or property or assets (including
cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the
number of shares of Class A Common Stock issuable upon conversion
of such Class A Preferred Stock immediately prior to such
reclassification, change, consolidation, merger, sale or
conveyance, each share of Class A Preferred Stock being treated
equally. Such provisions shall provide for adjustments which
747131.5
- 20 -
<PAGE>
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this section 7.
If this section 7(e) applies with respect to a transaction,
section 7(d) hereof shall not apply with respect to that
transaction. The above provisions of this section 7(e) shall
similarly apply to successive reclassifications, consolidations,
mergers and sales.
(f) Subdivision, Reclassification or Combination of Preferred Stock. The
Corporation shall not (i) subdivide or reclassify the Class A
Preferred Stock or (ii) combine the Class A Preferred Stock, unless
the Corporation simultaneously subdivides, reclassifies or combines,
at the same rate, each share being treated equally, all classes of
Preferred Stock.
(g) Taxes on Shares Issued. The issuance of share certificates upon
conversion of Class A Preferred Stock shall be made without charge to
the converting Holder for any tax in respect of the issuance thereof.
(h) Shares to be Fully Paid. The Corporation covenants that all shares of
Class A Common Stock or Class B Preferred Stock which may be issued
upon conversion of Class A Preferred Stock will upon issuance be
validly issued, fully paid and nonassessable by the Corporation and
free from all taxes, liens and charges with respect to the issuance
thereof.
(i) Notice to Holders Prior to Certain Actions.
(i) In the event:
(A) that the Corporation shall take any action that would
require an adjustment in the Conversion Price pursuant to
section 7(d)(i) or (iii) hereof;
(B) that any event described in section 7(e) hereof shall occur;
(C) the Corporation reduces the Conversion Price pursuant to
section 7(f) hereof; or
(D) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation;
the Corporation shall cause notice of such proposed action
or event to be mailed to each Holder of record of Class A
Preferred Stock at
747131.5
- 21 -
<PAGE>
its address appearing on the share transfer books of the
Corporation, as promptly as possible but in any event no
later than the later of (x) the date 30 days prior to the
record date for such proposed action or the effective date
of such event or (y) the date on which the Corporation first
publicly announces such proposed action or event.
(ii) In the event that the Corporation shall take any action that
would require an adjustment in the Conversion Price, pursuant to
section 7(d)(ii) hereof, the Corporation shall cause notice of
such proposed action or event to be mailed to each Holder of
record of Class A Preferred Stock at its address appearing on the
share transfer books of the Corporation, as promptly as possible
but in no event later than the date that the Corporation provides
public notice of such proposed action or event.
(iii) In any event, such notice shall specify:
(A) the record date as of which the holders of record of Class A
Common Stock are to be determined, or
(B) the date on which such proposed event is expected to become
effective, and the date as of which it is expected that
holders of record of Class A Common Stock shall be entitled
to exchange their Class A Common Stock for securities or
other property deliverable upon such event.
Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such action or event.
8 Reacquired Shares. Any shares of Class A Preferred Stock which are
converted, purchased, redeemed or otherwise acquired by the Corporation,
shall be retired and canceled by the Corporation promptly thereafter. No
such shares of Class A Preferred Stock shall upon their cancellation be
reissued.
9 Covenant regarding employee equity plans. For so long as any shares of
Class A Preferred Stock are outstanding, the Corporation will not:
(a) grant to any employees or officers of the Corporation or any of its
Subsidiaries, or to any consultants or service providers to the
Corporation or any of its Subsidiaries, or to any director of the
Corporation or any of its Subsidiaries, under an employee benefit plan
or similar
747131.5
- 22 -
<PAGE>
arrangement adopted by the Corporation, any options to purchase Class
A Common Stock Equivalents having an exercise price per share less
than the fair market value of a Common Stock Equivalent on the date of
grant of such option as determined in good faith by any reasonable
method by the Board, or
(b) except through a stock purchase plan qualified under or with terms and
conditions substantially similar to a plan qualified under Section 423
of the Internal Revenue Code, issue or sell to any employees or
officers of the Corporation or any of its Subsidiaries, or to any
consultants or service providers to the Corporation or any of its
Subsidiaries, or to any director of the Corporation or any of its
Subsidiaries, or to any stockholder of the Corporation, any Common
Stock Equivalents at a price per share below the fair market value of
such Common Stock Equivalent on the date of such issuance or sale as
determined in good faith by any reasonable method by the Board.
10 Certain Restrictions on Transfer; Legend.
Holders shall not transfer shares of Class A Preferred Stock or Class A
Common Stock to any Bank Holding Company, unless, after giving effect to
such transfer, such Bank Holding Company:
(i) would, together with its Aggregated Transferors, own no more than
4.9% of any class of Voting Stock of the Corporation or
(ii) is not limited by the Bank Holding Company Act of 1956, as
amended, to holding not more than 4.9% of the Voting Stock of the
Corporation.
SECOND: The shares of Class A Preferred Stock have been classified and
designated by the Board of Directors under the authority contained in the
Charter.
THIRD: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges
these Articles Supplementary to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
747131.5
- 23 -
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on
its behalf by its President and attested to by its Secretary on this 28th of
January, 1999.
ATTEST: CAPITAL TRUST, INC.
/s/ Edward L. Shugrue III By:/s/ John R. Klopp (SEAL)
- - ----------------------------- ----------------------
Edward L. Shugrue III John R. Klopp
Assistant Secretary President
747131.5
- 24 -
<PAGE>
CAPITAL TRUST, INC.
-------------------
ARTICLES SUPPLEMENTARY
CLASS B 9.5% CUMULATIVE CONVERTIBLE NON-VOTING
PREFERRED STOCK
(par value $.01 per share)
FIRST: Capital Trust, Inc., a Maryland corporation (hereinafter called
the "Corporation"), does hereby certify to the State Department of Assessments
and Taxation of Maryland pursuant to Section 2-208 of the Maryland General
Corporation Law that, under a power contained in Section 6.3 of the charter of
the Corporation (the "Charter"), the Board of Directors of the Corporation (the
"Board of Directors"), by unanimous written consent dated November 11, 1998,
classified and designated 12,639,405 unissued and unclassified shares (the
"Shares") of Preferred Stock (as defined in the Charter) as shares of Class B
9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01 per
share, with the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption of shares as set forth
herein, which upon any restatement of the Charter may be made part of Article VI
of the Charter, with any necessary or appropriate changes to the enumeration or
lettering of sections or subsections thereof:
CLASS B 9.5% CUMULATIVE CONVERTIBLE NON-VOTING
PREFERRED STOCK
1 Designation and Amount. The class of Preferred Stock of the Corporation
created hereby shall be designated as Class B 9.5% Cumulative Convertible
Non-Voting Preferred Stock, and the number of shares constituting such
class shall be 12,639,405, par value $.01 per share.
2 Definitions. As used in these Articles Supplementary, the following terms
shall have the following meanings:
(a) "Aggregate Consideration Receivable" by the Corporation in connection
with the issuance of any shares of Common Stock or any Common Stock
Equivalents means the sum of:
(i) the aggregate consideration paid to the Corporation for such
shares of Common Stock or Common Stock Equivalents and
(ii) the aggregate consideration or premiums, if any, stated in such
Common Stock Equivalents to be payable for the Common Stock upon
the exercise or conversion of such Common Stock Equivalents,
753363.5
<PAGE>
calculated in each case in accordance with section 7(d)(vii)
hereof. In case all or any portion of the consideration to be
received by the Corporation may be paid in a form other than
cash, the value of such consideration shall be determined in good
faith by the Board or a duly authorized committee thereof
(irrespective of the accounting treatment thereof), and described
in a resolution of the Board or such committee.
(b) "Aggregated Transferor" of a Person shall mean any other Person other
than the Corporation who previously held Voting Stock of the
Corporation now held by such Person.
(c) "Annual Dividend Rate" has the meaning set forth in section 3(a)
hereof.
(d) "Bank Holding Company" means a bank holding company (as defined in
Section 1841 (a) of the Bank Holding Company Act of 1956, as amended)
or any affiliate (as defined in Section 1841 (k) of the Bank Holding
Company Act of 1956, as amended) of any bank holding company (as
defined in Section 1841 (a) of the Bank Holding Company Act of 1956,
as amended).
(e) "Board" means the Board of Directors of the Corporation.
(f) "Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of New York, New York are
authorized or obligated by law or executive order to close.
(g) "Charter" means the charter, as defined in Section 1- 101(e) of the
Maryland General Corporation Law, of the Corporation.
(h) "Class A Articles Supplementary" means Articles Supplementary filed
with and accepted for record by the State Department of Assessment and
Taxation of Maryland on or about January 28, 1999, establishing the
Class A Preferred Stock pursuant to Article VI of the Charter, as the
same may be amended, supplemented or modified from time to time in
accordance with the terms hereof and pursuant to applicable law and
upon any restatement of the Charter shall mean the terms of the Class
A Preferred Stock as set forth in Article VI of the Charter.
(i) "Class A Common Stock" means the class A common stock, par value $.01
per share, of the Corporation, having the designations and rights,
qualifications, limitations and restrictions set forth in the Charter.
(j) "Class A Preferred Stock" means the Class A 9.5% Cumulative
Convertible Preferred Stock, par value $.01
75336
- 2 -
<PAGE>
per share, of the Corporation, established pursuant to the Class A
Articles Supplementary.
(k) "Class B Articles Supplementary" means these Articles Supplementary
filed with and accepted for record by the State Department of
Assessment and Taxation of Maryland on or about January 28, 1999,
establishing the Class B Preferred Stock pursuant to Article VI of the
Charter, as the same may be amended, supplemented or modified from
time to time in accordance with the terms hereof and pursuant to
applicable law and upon any restatement of the Charter shall mean the
terms of the Class B Preferred Stock as set forth in Article VI of the
Charter.
(l) "Class B Common Stock" means the class B common stock, par value $.01
per share, of the Corporation, having the designations and rights,
qualifications, limitations and restrictions set forth in the Charter.
(m) "Class B Preferred Stock" means the Class B 9.5% Cumulative
Convertible Non-Voting Preferred Stock, par value $.01 per share, of
the Corporation, established pursuant to these Articles Supplementary.
(n) "Common Stock" means, collectively, the Class A Common Stock and the
Class B Common Stock.
(o) "Common Stock Equivalents" means, without double counting:
(i) Common Stock, where one share of Common Stock shall constitute
one Common Stock Equivalent,
(ii) Stock of the Corporation (including without limitation the
Preferred Stock) convertible into Common Stock, where any one
share of Stock of the Corporation shall constitute a number of
Common Stock Equivalents equal to the number of shares of
Common Stock issuable in respect of such Stock,
(iii) any rights, warrants, options and convertible, exchangeable or
exercisable securities entitling the holder thereof to
subscribe for or purchase any Common Stock, where any such
rights, warrants, options and convertible, exchangeable or
exercisable securities shall constitute a number of Common
Share Equivalents equal to the number of shares of Common Stock
issuable in respect of such rights, warrants, options or
convertible, exchangeable or exercisable securities, and
753363.5
- 3 -
<PAGE>
(iv) any stock appreciation rights entitling the holders thereof to
any interest in an increase in value, however measured, of
Common Stock, where any such stock appreciation rights shall
constitute a number of Common Share Equivalents equal to the
shares of Common Stock equivalent, as nearly as it may be
calculated, to such share appreciation rights.
(p) "Conversion Date" has the meaning set forth in section 7(b) hereof.
(q) "Conversion Notice" has the meaning set forth in section 7(b) hereof.
(r) "Conversion Price" has the meaning set forth in section 7(a) hereof.
(s) "Corporation" means Capital Trust, Inc., a Maryland corporation.
(t) "D/E Ratio" means, as of the date of determination, the ratio of (i)
the sum of (x) the total Indebtedness of the Corporation and its
consolidated Subsidiaries as reflected on the Corporation's most
recent regularly prepared consolidated balance sheet, plus (y) all
Indebtedness issued by the Corporation and its consolidated
subsidiaries since the date of such consolidated balance sheet less
all Indebtedness retired or repurchased by the Corporation and its
subsidiaries since that date, plus (z) the Corporation's pro rata
share, based upon its percentage equity ownership interest therein, of
aggregate total Indebtedness of Equity Affiliates, to (ii) the excess
of total assets (including the Corporation's equity in its Equity
Affiliates) over total liabilities of the Corporation and its
subsidiaries, as reflected on the Corporation's most recent regularly
prepared consolidated balance sheet, in each case determined in
accordance with GAAP and after giving effect to the incurrence of any
proposed Indebtedness and the application of proceeds of such
Indebtedness.
(u) "Dividend Payment Date" has the meaning set forth in section 3(a)
hereof.
(v) "Dividend Period" has the meaning set forth in section 3(a) hereof.
(w) "Effective Purchase Price per Share" at which the Corporation issues
any shares of Common Stock or any Common Stock Equivalents means an
amount equal to:
753363.5
- 4 -
<PAGE>
(i) the Aggregate Consideration Receivable by the Corporation in
connection with the issuance of such shares of Common Stock or
Common Stock Equivalents divided by
(ii) the number of shares of Common Stock and Common Stock
Equivalents so issued.
(x) "Equity Affiliate" means any Person in which the Corporation or any of
its consolidated Subsidiaries has an equity interest which is or, in
accordance with GAAP, should be accounted for on the equity method in
the Corporation's consolidated financial statements.
(y) "Exempted Transaction" means each and any of the following:
(i) the issuance, from the Issuance Date through the date of the
Exempted Transaction, of Common Stock Equivalents to employees
or officers of the Corporation or any of its Subsidiaries, or to
consultants or service providers to the Corporation or any of
its Subsidiaries, or to directors of the Corporation or any of
its Subsidiaries, under an employee benefit plan or similar
arrangement adopted by the Corporation in an amount not to
exceed 10% of the aggregate number of Common Stock Equivalents
outstanding on the date of such Exempted Transaction,
(ii) the issuance of any shares of Common Stock or Preferred Stock of
the Corporation upon the conversion of any shares of Common
Stock or Preferred Stock, and
(iii) the issuance of any Stock of the Corporation in exchange, in
whole or in part, for any acquisition by the Corporation of
shares of stock or other assets of any kind.
(z) "Fair Market Value" of a share of Common Stock means, as of any date,
the average of the closing prices of Class A Common Stock for the 20
consecutive Trading Days next preceding the date five days prior to
the date in question. The closing price for each day shall be:
(i) if the Class A Common Stock is listed or admitted for trading on
the New York Stock Exchange or any other national securities
exchange, the last sale price, or the closing bid price if no
sale occurred, of one share of Class A Common Stock on the New
York Stock Exchange or, if not then listed on the New York Stock
Exchange, the principal securities exchange on which the Class
753363.5
- 5 -
<PAGE>
A Common Stock is listed or admitted for trading; or
(ii) if not listed or admitted for trading as described in clause (i)
of this section 2(z), the average of the closing sale price or,
in the absence of a closing sale price, the average of the
highest bid and lowest asked prices of one share of Class A
Common Stock quoted in the NASDAQ National Market System or any
similar system of automated dissemination of quotations of
securities prices then in common use, if so quoted; or
(iii) if not quoted as described in clause (ii) of this section 2(z),
the average of the highest bid and lowest offered quotations for
one share of Class A Common Stock as reported by the National
Quotation Bureau Incorporated if at least two securities dealers
have inserted both bid and offered quotations for shares of
Class A Common Stock on at least five of the 20 consecutive
Trading Days next preceding the date five days prior to the date
in question.
If none of the conditions set forth above is met, the closing price of
one share of Class A Common Stock on any day or the average of such
closing prices for any period shall be the fair market value of one
share of Common Stock for such day or period as determined in good
faith by the Board.
"Fair Market Value" of a share of Preferred Stock means the Fair
Market Value of a number of fully paid and nonassessable shares of
Class A Common Stock equal to the ratio of (a) the Liquidation
Preference for such Preferred Stock plus an amount equal to the
dividends per share accrued and unpaid thereon as of the date of such
determination to (b) the Conversion Price in effect as of the date of
such determination.
(aa) "GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the American Institute of
Certified Public Accountants acting through its Accounting Principles
Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently
applied for all periods after the date hereof so as to properly
reflect the financial condition, results of operations and changes in
financial position of any Person, except that any accounting principle
or practice required to be changed by such Accounting Principles Board
or Financial Accounting Standards Board (or other appropriate board or
committee of such Boards)
753363.5
- 6 -
<PAGE>
in order to continue as a generally accepted accounting principle or
practice may be so changed.
(bb) "Holder" of a share of Class A Preferred Stock or a share of Class B
Preferred Stock means the Person in whose name such share of Class A
Preferred Stock or Class B Preferred Stock is registered on the books
of the Corporation.
"Holder" of a share of Class A Common Stock or a share of Class B
Common Stock means the Person in whose name such share of Class A
Common Stock or Class B Common Stock is registered on the books of the
Corporation.
(cc) "Incur" means to issue, assume, guarantee, incur or otherwise become
liable for.
(dd) "Indebtedness" means, with respect to any Person, without duplication,
any liability of such Person (i) for borrowed money, (ii) evidenced by
bonds, debentures, notes or other similar instruments, (iii)
constituting capitalized lease obligations, (iv) incurred or assumed
as the deferred purchase price of property, or pursuant to conditional
sale obligations and title retention agreements (but excluding trade
accounts payable arising in the ordinary course of business) and (v)
which are secured by any Lien on any property or asset of such first
referred to Person.
(ee) "Issuance Date" means, with respect to any Preferred Stock, the date
on which such Preferred Stock is issued by the Corporation.
(ff) "Junior Stock" means Common Stock and any other class or series of
Stock of the Corporation now or hereafter authorized, issued or
outstanding which is subject, under the terms of the Charter, to the
following restrictions and limitations:
(i) no dividend or distribution can be declared or paid on the
shares of such class or series unless all accrued dividends and
other amounts then due with respect to the Preferred Stock shall
have been paid in full,
(ii) in the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the Holders of
the Preferred Stock shall be entitled to receive out of assets
of the Corporation available for distribution to shareholders,
the amount specified in section 4 hereof, before any payment
shall be made or any
753363.5
- 7 -
<PAGE>
assets distributed to the holders of such other class or series
of Stock of the Corporation, and
(iii) shares of such class or series may not be redeemed under any
circumstances, either at the option of the Corporation or of any
holder thereof, unless all of the outstanding Preferred Stock
have theretofore been redeemed or converted.
(gg) "Lien" means any lien, mortgage, deed of trust, pledge, charge or
other encumbrance of any kind, including, without limitation, any
conditional sale or other title retention agreement and any lease in
the nature thereof.
(hh) "Liquidation Preference" means, with respect to each share of
Preferred Stock, an amount equal to $2.69.
(ii) "Merger" means the simultaneous mergers of Capital Trust, a California
business trust, with and into Captrust Limited Partnership, a Maryland
limited partnership ("Captrust"), and of Captrust with and into the
Corporation.
(jj) "Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint-stock
company, a trust, a business trust, a government or any agency or any
political subdivision, any unincorporated organization or any other
entity.
(kk) "Preferred Stock" means, collectively, the Class A Preferred Stock and
the Class B Preferred Stock.
(ll) "Predecessor" means Capital Trust, a California business trust, as the
predecessor of the Corporation in the Merger.
(mm) "Restricted Payment" has the meaning set forth in section 3(c) hereof.
(nn) "Stock" means any shares of stock, rights, warrants or options to
purchase shares of stock, securities convertible into or exchangeable
or exercisable for shares of stock and participations in or other
equivalents of or interests (other than security interests) in shares
of stock, however designated and whether voting or nonvoting, of any
Person.
(oo) "Subsidiary" means:
753363.5
- 8 -
<PAGE>
(i) any corporation 50% or more of the Voting Stock of which is
owned, directly or indirectly, by the Corporation, or
(ii) any other Person whose accounts are required under GAAP to be
included in the Corporation's consolidated financial statements.
(pp) "Trading Day" means, with respect to the Class A Common Stock: (i) if
the Class A Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business; (ii) if the Class A Common Stock is not
listed or admitted for trading on any national securities exchange,
but quoted on the NASDAQ National Market System, any similar system of
automated dissemination of quotations of securities prices or the
National Quotation Bureau Incorporated, each day on which quotations
may be made on such system; or (iii) if the Class A Common Stock is
not quoted on any system or listed or admitted for trading on any
securities exchange, a Business Day.
(qq) "Voting Stock" means, with respect to the Corporation, all classes of
Stock of the Corporation then outstanding and normally entitled to
vote for the election of directors of the Corporation. Any reference
to a percentage of Voting Stock shall refer to the percentage of votes
eligible to be cast for the election of directors which are
attributable to the applicable Voting Stock.
3 Dividends.
(a) Payment of Dividends. The Holders of the Class B Preferred Stock shall
be entitled to receive, when, as and if declared by the Board, out of
funds legally available therefor, cash dividends per share at the rate
of 9.5% per annum on the Liquidation Preference (the "Annual Dividend
Rate"). Such dividends shall accrue (whether or not declared) from and
including the Issuance Date to and including the date on which the
Liquidation Preference is paid on such shares or on which such shares
are converted or redeemed and, to the extent not paid for any Dividend
Period, will be cumulative. Dividends on the Class B Preferred Stock
shall accrue on a daily basis whether or not the Corporation shall
have earnings or surplus at the time.
Semi-annual dividend periods (each a "Dividend Period") shall commence
on and include the sixteenth day of December and June of each year and
shall end on and include the fifteenth day of June and December,
respectively, of such or the following year; provided
753363.5
- 9 -
<PAGE>
however, that the first Dividend Period shall be deemed to commence on
December 16, 1998 and shall end on and include June 15, 1999.
Dividends on the Class B Preferred Stock shall be payable, when, as
and if declared, semi-annually, in arrears, no later than December 26
and June 25 of each year commencing June 25, 1999 (each such date, a
"Dividend Payment Date"), except that if any such date is not a
Business Day, then such dividend shall be paid on the next succeeding
Business Day. Each such dividend shall be payable to Holders of Class
B Preferred Stock at the close of business on the record date
established by the Board, which record date shall be not more than 60
days prior to the date fixed for payment thereof.
The amount of dividends payable per share of Class B Preferred Stock
for each full Dividend Period shall be computed by applying the Annual
Dividend Rate to the Liquidation Preference and dividing such amount
by two. The amount of dividends payable for any period shorter than a
full Dividend Period shall be computed on the basis of actual days
elapsed and a 360-day year consisting of twelve 30 day months.
The Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on either class of Preferred
Stock unless the Corporation simultaneously declares or pays or sets
apart for payment dividends or makes distributions, at the same rate,
each share being treated equally, on the other class of Preferred
Stock.
(b) Distribution of Partial Dividend Payments. Except as otherwise
provided in these Articles Supplementary, if on any Dividend Payment
Date the Corporation pays less than the total amount of dividends then
accrued with respect to Preferred Stock, the amount so paid shall be
distributed ratably, each share being treated equally, among the
Holders of the Preferred Stock based upon the number shares of
Preferred Stock then held by each such Holder.
(c) Limitations on Certain Payments. Unless all accrued dividends and
other amounts then accrued through the end of the last Dividend Period
and unpaid with respect to the Preferred Stock shall have been paid in
full, the Corporation shall not declare or pay or set apart for
payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption, exchange or other
retirement of, any Stock of the Corporation other than the Preferred
Stock (each, a "Restricted Payment"); provided, however, that a
"Restricted Payment" shall not include:
753363.5
- 10 -
<PAGE>
(i) any dividend or distribution payable solely in Junior Stock, or
(ii) the acquisition of any Stock of the Corporation in exchange
solely for Junior Stock.
4 Liquidation Preference.
In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the Holders of Preferred
Stock shall be entitled to receive out of assets of the Corporation
available for distribution to stockholders, an amount per share equal to
the Liquidation Preference plus the amount of all dividends per share
accrued and unpaid thereon through the date of final distribution to
stockholders, whether or not declared, before any payment shall be made or
any assets distributed to the holders of any other class or series of Stock
of the Corporation.
If the assets and funds thus distributed among the Holders of Preferred
Stock shall be insufficient to permit the payment to such Holders of the
full preferential amount described above, then the entire assets and funds
of the Corporation legally available for distribution shall be distributed
ratably, each share being treated equally, among the Holders of Preferred
Stock based on the number of shares of Preferred Stock then held by each
such Holder.
In determining whether a distribution of any dividend or the redemption or
other acquisition of Stock of the Corporation is permitted under Maryland
law, no effect shall be given to amounts, to the extent such amounts would
be needed, if the Corporation were to be liquidated, dissolved or wound up
at the time of such distribution, to satisfy the preferential rights upon
liquidation, dissolution or winding up of the Corporation of Holders of the
Class B Preferred Stock.
5 Consolidation, Merger and Sale of Assets, etc. Unless all of the
outstanding shares of Preferred Stock shall have been redeemed or converted
on or prior to the effective date of any consolidation, merger or transfer
referred to below involving the Corporation, without the approval of the
Holders of a majority of the outstanding shares of Preferred Stock, voting
together as a single class, but voting together as a separate class from
the Common Stock, the Corporation shall not consolidate with or merge into,
or transfer all or substantially all of its assets to, another Person
unless:
(a) in the case of a merger or consolidation, the Corporation is the
surviving entity, the rights and preferences of the Preferred Stock
are not modified, the Corporation, as the surviving entity, does not
have outstanding any shares of Stock that are not shares of Junior
Stock, and, immediately after the consummation of such merger or
753363.5
- 11 -
<PAGE>
consolidation and after giving effect thereto, the D/E Ratio of the
Corporation shall not exceed 5:1, or
(b) the surviving, resulting or acquiring Person is a Person organized
under the laws of the United States, any state thereof or the District
of Columbia, or a Person organized under the laws of a foreign
jurisdiction whose equity securities are listed on a national
securities exchange in the United States or authorized for quotation
on the NASDAQ National Market System, the Corporation shall make
effective provision such that, upon consummation of such transaction,
the Holders of Preferred Stock shall receive preferred shares of the
surviving entity having substantially identical terms as the Preferred
Stock surrendered by them, the surviving, resulting or acquiring
Person does not have outstanding any shares of Stock that are not
shares of Junior Stock and, immediately after the consummation of such
consolidation, merger or transfer, the D/E Ratio of such Person shall
not exceed 5:1.
6 Voting Rights of Preferred Stock.
(a) Voting Rights of the Class B Preferred Stock. Except for the voting
rights described in sections 5 and 6(b) hereof, the Class B Preferred
Stock shall not have voting rights and shall not be counted in
determining the presence of a quorum.
(b) Preferred Stock Class Vote. The affirmative vote of the Board and the
Holders of a majority of the outstanding shares of Preferred Stock
voting together as a single class, but voting together as a separate
class from the Common Stock, shall be required in order:
(i) to amend, alter or repeal any of the provisions of these
Articles Supplementary or of the Class A Article Supplementary;
(ii) to authorize, create or issue any class or series of Stock of
the Corporation that are not Junior Stock; and
(iii) for the Corporation to Incur any Indebtedness if the
Corporation's D/E Ratio would then exceed 5:1.
Any Preferred Stock owned, directly or indirectly, by the
Corporation or any of its Subsidiaries shall not have voting
rights hereunder and shall not be counted in determining the
presence of a quorum.
753363.5
- 12 -
<PAGE>
7 Conversion Right.
(a) Right of Conversion. Each share of Class B Preferred Stock shall be
convertible at the option of the Holder thereof at any time and from
time to time in whole or in part into:
(i) a number of fully paid and nonassessable shares of Class B
Common Stock equal to the ratio of:
(x) the Liquidation Preference of such Class B Preferred Stock
plus an amount equal to all dividends per share accrued and
unpaid thereon as of the Conversion Date to
(y) the Conversion Price in effect on the Conversion Date, or
(ii) an equal number of fully paid and nonassessable shares of Class
A Preferred Stock, if the Holder (a) would not, together with
such Holder's Aggregated Transferors, upon the issuance of such
Class A Preferred Stock, own more than 4.9% of any class of
Voting Stock of the Corporation or (b) is not limited by the
Bank Holding Company Act of 1956, as amended, to holding no more
than 4.9% of any class of Voting Stock of the Corporation,
or into such additional or other securities, cash or property and at
such other rates as required in accordance with the provisions of this
section 7.
For purposes of these Articles Supplementary, the "Conversion Price"
shall initially be $2.69 per share and shall be adjusted from time to
time in accordance with the provisions of this section 7.
(b) Conversion Procedures. In order to exercise the conversion right, the
Holder of any shares of Class B Preferred Stock to be converted in
whole or in part shall surrender the certificate or certificates
representing such shares to the Corporation and shall give written
notice to the Corporation ("Conversion Notice") that the Holder elects
to convert such shares or the portion thereof specified in said notice
into shares of Class B Common Stock or Class A Preferred Stock, as
provided herein and as specified by the Holder in the Conversion
Notice. The Conversion Notice shall also (i) state the name or names
(with address) in which the certificates for Class B Common Stock or
Class A Preferred Stock, as the case may be, shall be issued and (ii)
if Class B Preferred Stock is to be converted into Class A Preferred
Stock, contain a certification by the Holder that the Holder either
(a) will not, together with such Holder's
753363.5
- 13 -
<PAGE>
Aggregated Transferors, upon the issuance of such Class A Preferred
Stock, own more than 4.9% of any class of Voting Stock of the
Corporation or (b) is not limited by the Bank Holding Company Act of
1956, as amended, to holding no more than 4.9% of any class of Voting
Stock of the Corporation. Each certificate representing Class B
Preferred Stock surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the same name as the
registration of such Class B Preferred Stock, be duly endorsed by, or
be accompanied by instruments of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its duly authorized
attorney.
As promptly as practicable after receipt of a Conversion Notice and
surrender of the certificate or certificates representing the shares
of Class B Preferred Stock relating thereto, the Corporation shall
issue and deliver to such Holder (or upon the written order of such
Holder) a certificate or certificates for the number of full shares of
Class B Common Stock, or Class A Preferred Stock, as specified in the
Conversion Notice, issuable upon the conversion of such Class B
Preferred Stock or portion thereof in accordance with the provisions
of this section 7, and a check or cash in respect of any fractional
shares issuable upon such conversion, as provided in section 7(c)
hereof. In the event that less than all the shares of Class B
Preferred Stock represented by a certificate are to be converted, the
Corporation shall issue and deliver or cause to be issued and
delivered to (or upon the written order of) the Holder of the Class B
Preferred Stock so surrendered, without charge to such Holder, a new
certificate or certificates representing a number of shares of Class B
Preferred Stock equal to the unconverted portion of the surrendered
certificate.
Each conversion shall be deemed to have been effected on the date (the
"Conversion Date") on which the certificate or certificates
representing such shares of Class B Preferred Stock shall have been
surrendered to the Corporation or its transfer agent and a Conversion
Notice with respect to such shares shall have been received by the
Corporation, as described above. Any Person in whose name any
certificate or certificates for Class B Common Stock or Class A
Preferred Stock shall be issuable upon conversion shall be deemed to
have become the holder of record of the shares represented thereby on
the Conversion Date, provided, however, if the certificate or
certificates evidencing such Class B Preferred Stock are surrendered
on any date when the share transfer books of the Corporation shall be
closed, the Holder shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all
753363.5
- 14 -
<PAGE>
purposes until the next succeeding day on which such share transfer
books are open, but such conversion shall be at the Conversion Price
in effect on the date on which such certificate or certificates shall
have been surrendered.
Except as otherwise provided in this section 7, no payment or
adjustment will be made for dividends or other distributions with
respect to any Class B Common Stock or Class A Preferred Stock
issuable upon conversion of Class B Preferred Stock as provided
herein.
(c) Cash Payments in Lieu of Fractional Shares. No fractional shares or
scrip representing fractional shares shall be issued upon conversion
of Preferred Stock. If any fractional share, would, but for this
section 7(c), be issuable upon the conversion of any Class B Preferred
Stock, the Corporation shall make a payment therefor in cash on the
first Business Day immediately preceding the Conversion Date equal to
the Fair Market Value of such fractional share.
(d) Adjustment of Conversion Price for Conversion into Common Stock. The
Conversion Price with respect to the conversion of the Class B
Preferred Stock into Class B Common Stock shall be adjusted from time
to time by the Corporation as follows:
(i) in the event that the Corporation shall at any time after the
Issuance Date:
(A) declare a dividend or make a distribution on the shares of
Class B Common Stock in shares of Class B Common Stock,
(B) subdivide or reclassify the shares of Class B Common Stock
into a greater number of shares,
(C) combine the shares of Class B Common Stock into a smaller
number of shares,
(D) pay a dividend or make a distribution on the shares of
Class B Common Stock in any class of its Stock other than
shares of Class B Common Stock, or
(E) reclassify the shares of Class B Common Stock other than
as set forth in section 7(d)(i)(B),
then the conversion right and the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder
of any shares of
753363.5
- 15 -
<PAGE>
Class B Preferred Stock thereafter surrendered for conversion
into shares of Class B Common Stock shall be entitled to receive
the number of shares of Class B Common Stock or other Stock of
the Corporation which such Holder would have owned or have been
entitled to receive after the happening of any of the events
described above had such shares of Class B Preferred Stock been
converted into shares of Class B Common Stock immediately prior
to the happening of such event. An adjustment made pursuant to
this section 7(d)(i) shall become effective immediately after
the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in
the case of subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event
referred to above shall occur.
(ii) In the event that the Corporation shall at any time after the
Issuance Date issue any Common Stock or any Common Stock
Equivalents other than in an Exempted Transaction, at an
Effective Purchase Price per Share less than the Conversion
Price in effect immediately prior to the date of such issuance,
then such Conversion Price shall be adjusted to equal:
(A) the sum of:
(1) the product of:
(a) the number of shares of Common Stock and Common
Stock Equivalents outstanding immediately prior to
such issuance and
(b) the Conversion Price in effect immediately prior
to such issuance and
(2) the Aggregate Consideration Receivable by the
Corporation in connection with such issuance
divided by:
(B) the sum of:
(1) the number of shares of Common Stock and Common Stock
Equivalents outstanding immediately prior to such
issuance and
753363.5
- 16 -
<PAGE>
(2) the number of additional shares of Common Stock and
Common Stock Equivalents so issued.
For example, if on any given date the Corporation has 20,000,000
shares of Common Stock and Common Stock Equivalents outstanding,
the Corporation issues warrants exercisable at $1 per share to
purchase an additional 1,000,000 shares of Common Stock for a
purchase price of $1 per warrant, and the Conversion Price in
effect on such date is $2.69, then the Conversion Price shall be
adjusted to equal $2.66, which is calculated as follows:
$2.66 per share =
[(20,000,000shares x $2.69/share) + $2,000,000]/
(20,000,000 shares + 1,000,000 shares).
Such adjustment shall be made successively whenever any shares,
rights, warrants, options, convertible, exchangeable or
exercisable securities or share appreciation rights are issued
at an Effective Purchase Price per Share that is less than the
Conversion Price in effect on the date of such issuance. To the
extent that any right, option, warrant, convertible or
exercisable security or share appreciation right expires without
having been converted or exercised, the Conversion Price then in
effect shall be readjusted to the Conversion Price which then
would be in effect if such rights, options, warrants or
convertible, exchangeable or exercisable securities or share
appreciation rights had not been issued, but such readjustment
shall not affect the number of shares of Common Stock or other
Stock of the Corporation delivered upon any conversion prior to
the date such readjustment is made.
(iii) In the event that the Corporation shall distribute to all
holders of its Class B Common Stock any of its assets (other
than cash dividends payable on or after the date of consummation
of the Merger which together with all prior cash dividends of
the Corporation and the Predecessor paid on or after April 1,
1997, do not exceed the amount of retained earnings of the
Corporation accrued on or after April 1, 1997 and on or prior to
the date of payment of such dividends) or debt securities, or
rights, options, warrants or convertible, exchangeable or
exercisable securities of the Corporation (including securities
issued for cash, but excluding distributions of Stock of the
753363.5
- 17 -
<PAGE>
Corporation referred to in section 7(d)(i) hereof, then in each
such case, the Conversion Price shall be adjusted to equal the
Conversion Price in effect immediately prior to such
distribution less an amount equal to the then fair market value
(as reasonably determined by the Board, in good faith and as
described in a resolution of the Board) of the portion of the
assets or debt securities of the Corporation so distributed or
of such rights, options, warrants or convertible, exchangeable
or exercisable securities applicable to one share of Class B
Common Stock. Such adjustment shall become effective immediately
after the record date for the determination of shares entitled
to receive such distribution. Notwithstanding the foregoing, no
adjustment of the Conversion Price shall be made upon the
distribution to holders of Common Stock of such rights, options,
warrants or convertible, exchangeable or exercisable securities,
assets or debt securities if the plan or arrangement under which
such rights, options, warrants or convertible, exchangeable or
exercisable securities, assets or debt securities are issued
provides for their issuance to Holders of Class B Preferred
Stock in the same pro rata amounts upon conversion thereof. Such
adjustment shall be made successively whenever any event listed
above shall occur.
(iv) Anything in this section 7(d) to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this section
7(d), as it in its reasonable discretion shall determine to be
advisable in order that any share dividends, subdivision of
shares, distribution of rights to purchase shares or securities,
or distribution of securities convertible into or exchangeable
for shares hereafter made by the Corporation to its
stockholders, shall not be taxable.
(v) Whenever the Conversion Price is adjusted as provided in this
section 7(d), or the Class B Preferred Stock becomes convertible
into shares, securities, property or assets pursuant to section
7(e) hereof, or the Corporation reduces the Conversion Price
pursuant to section 7(f) hereof, the Corporation shall prepare a
notice of such adjustment of the Conversion Price setting forth
the adjusted Conversion Price (or describing such event, as the
case may be) and the date on which such adjustment (or event)
753363.5
- 18 -
<PAGE>
becomes effective, and setting forth in reasonable detail the
facts requiring such adjustment and the calculation of such
adjustment (or describing the shares, securities, property or
assets into which the Class B Preferred Stock shall become
convertible), and shall mail such notice of adjustment to all
Holders of Class B Preferred Stock as set forth in section 7(i)
hereof.
(vi) In any case in which this section 7(d) provides that an
adjustment shall become effective immediately after a record
date for an event, the Corporation may defer until the
occurrence of such event:
(A) issuing to the Holder of any Class B Preferred Stock
converted after such record date and before the occurrence
of such event the additional shares of Class B Common Stock
issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Class B
Common Stock issuable upon such conversion before giving
effect to such adjustment, and
(B) paying to such Holder any amount in cash in lieu of any
fractional share of Class B Common Stock pursuant to
section 7(c).
(vii) For purposes of any computations of Aggregate Consideration
Receivable or other consideration pursuant to this section 7(d),
the following shall apply:
(A) in the case of the issuance of Common Stock or Common Stock
Equivalents for cash, the consideration shall be the amount
of such cash, provided that in no case shall any deduction
be made for any commissions, discounts or other expenses
incurred by the Corporation for any underwriting of the
issue or otherwise in connection therewith; and
(B) in the case of the issuance of Common Stock or Common Stock
Equivalents for a consideration in whole or in part other
than cash, the consideration other than cash shall be
deemed to be the fair market value thereof as reasonably
determined in good faith by the Board or a duly authorized
committee thereof (irrespective of the accounting treatment
753363.5
- 19 -
<PAGE>
thereof), and described in a resolution of the Board or
such committee.
(viii) If, after an adjustment a Holder of Class B Preferred Stock
may, upon conversion of such security, receive two or more
classes of Stock of the Corporation, the Corporation shall
determine on a fair basis the allocation of the adjusted
Conversion Price between such classes of Stock of the
Corporation. After such allocation, the conversion right
and the Conversion Price of each class of Stock shall
thereafter be subject to adjustment on terms comparable to
those applicable to Class B Common Stock in this section 7.
(e) Effect of Reclassification, Consolidation, Merger or Sale. Unless all
of the shares of Class B Preferred Stock shall have been redeemed or
converted on or prior to the effective date of any of the events
referred to in clauses (i), (ii) and (iii) of this section 7(e), if
any of the following events occur, namely:
(i) any reclassification or change of outstanding shares of Class B
Common Stock issuable upon conversion of the Class B Preferred
Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of
a subdivision or combination),
(ii) any consolidation or merger of the Corporation with another
Person shall be effected as a result of which holders of Class B
Common Stock issuable upon conversion of the Class B Preferred
Stock shall be entitled to receive shares, securities or other
property or assets (including cash) with respect to or in
exchange for such Class B Common Stock, or
(iii) any sale or conveyance of the properties and assets of the
Corporation as, or substantially as, an entirety to any other
Person,
then the Corporation or such successor or purchasing Person, as
the case may be, shall make provisions in its constituent
documents to establish that each share of Class B Preferred
Stock then outstanding (or the successor shares referred to in
section 5(b) hereof) shall be convertible into the kind and
amount of shares and other securities or property or assets
(including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the
number of shares of Class B
753363.5
- 20 -
<PAGE>
Common Stock issuable upon conversion of such Class B Preferred
Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance, each share of Class B
Preferred Stock being treated equally. Such provisions shall
provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this
section 7.
If this section 7(e) applies with respect to a transaction,
section 7(d) hereof shall not apply with respect to that
transaction. The above provisions of this section 7(e) shall
similarly apply to successive reclassifications, consolidations,
mergers and sales.
(f) Subdivision, Reclassification or Combination of Preferred Stock. The
Corporation shall not (i) subdivide or reclassify the Class B
Preferred Stock or (ii) combine the Class B Preferred Stock, unless
the Corporation simultaneously subdivides, reclassifies or combines,
at the same rate, each share being treated equally, all classes of
Preferred Stock.
(g) Taxes on Shares Issued. The issuance of share certificates upon
conversion of Class B Preferred Stock shall be made without charge to
the converting Holder for any tax in respect of the issuance thereof.
(h) Shares to be Fully Paid. The Corporation covenants that all shares of
Class B Common Stock or Class A Preferred Stock which may be issued
upon conversion of Class B Preferred Stock will upon issuance be
validly issued, fully paid and nonassessable by the Corporation and
free from all taxes, liens and charges with respect to the issuance
thereof.
(i) Notice to Holders Prior to Certain Actions.
(i) In the event:
(A) that the Corporation shall take any action that would
require an adjustment in the Conversion Price pursuant to
section 7(d)(i) or (iii) hereof;
(B) that any event described in section 7(e) hereof shall
occur;
(C) the Corporation reduces the Conversion Price pursuant to
section 7(f) hereof; or
753363.5
- 21 -
<PAGE>
(D) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation;
the Corporation shall cause notice of such proposed action or
event to be mailed to each Holder of record of Class B Preferred
Stock at its address appearing on the share transfer books of
the Corporation, as promptly as possible but in any event no
later than the later of (x) the date 30 days prior to the record
date for such proposed action or the effective date of such
event or (y) the date on which the Corporation first publicly
announces such proposed action or event.
(ii) In the event that the Corporation shall take any action that
would require an adjustment in the Conversion Price, pursuant to
section 7(d)(ii) hereof, the Corporation shall cause notice of
such proposed action or event to be mailed to each Holder of
record of Class B Preferred Stock at its address appearing on
the share transfer books of the Corporation, as promptly as
possible but in no event later than the date that the
Corporation provides public notice of such proposed action or
event.
(iii) In any event, such notice shall specify:
(A) the record date as of which the holders of record of Class
B Common Stock are to be determined, or
(B) the date on which such proposed event is expected to become
effective, and the date as of which it is expected that
holders of record of Class B Common Stock shall be entitled
to exchange their Class B Common Stock for securities or
other property deliverable upon such event.
Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such action or event.
8 Reacquired Shares. Any shares of Class B Preferred Stock which are
converted, purchased, redeemed or otherwise acquired by the Corporation,
shall be retired and canceled by the Corporation promptly thereafter. No
such shares of Class B Preferred Stock shall upon their cancellation be
reissued.
753363.5
- 22 -
<PAGE>
9 Covenant regarding employee equity plans. For so long as any shares of
Class B Preferred Stock are outstanding, the Corporation will not:
(a) grant to any employees or officers of the Corporation or any of its
Subsidiaries, or to any consultants or service providers to the
Corporation or any of its Subsidiaries, or to any director of the
Corporation or any of its Subsidiaries, under an employee benefit plan
or similar arrangement adopted by the Corporation, any options to
purchase Class B Common Stock Equivalents having an exercise price per
share less than the fair market value of a Common Stock Equivalent on
the date of grant of such option as determined in good faith by any
reasonable method by the Board, or
(b) except through a stock purchase plan qualified under or with terms and
conditions substantially similar to a plan qualified under Section 423
of the Internal Revenue Code, issue or sell to any employees or
officers of the Corporation or any of its Subsidiaries, or to any
consultants or service providers to the Corporation or any of its
Subsidiaries, or to any director of the Corporation or any of its
Subsidiaries, or to any stockholder of the Corporation, any Common
Stock Equivalents at a price per share below the fair market value of
such Common Stock Equivalent on the date of such issuance or sale as
determined in good faith by any reasonable method by the Board.
10 Certain Restrictions on Transfer; Legend.
(a) The Class B Preferred Stock and the Class B Common Stock may be
transferred by a Bank Holding Company only:
(i) in accordance with applicable federal and state securities laws
and
(ii) unless the Corporation shall have received an opinion of counsel
stating that the restriction in this section 10(a)(ii) is not
applicable under the circumstances:
(A) in a widely dispersed offering in which no more than 2% of
the outstanding Class B Common Stock and Stock of the
Corporation convertible into Class B Common Stock are
transferred to any one holder, or
(B) to a transferee who has agreed in writing acceptable to the
Corporation to be bound by the restrictions set forth in
this section 10.
753363.5
- 23 -
<PAGE>
(b) Holder agrees that substantially the following legend shall be placed
on the certificates representing any Class B Preferred Stock and Class
B Common Stock;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
LIMITATIONS UPON TRANSFER AND CONVERSION CONTAINED IN THE ARTICLES
SUPPLEMENTARY CREATING THE CLASS B 9.5% CUMULATIVE CONVERTIBLE
NON-VOTING PREFERRED STOCK AND THE BY-LAWS OF THE CORPORATION (COPIES
OF WHICH ARE ON FILE AT THE OFFICE OF THE CORPORATION)."
SECOND: The shares of Class B Preferred Stock have been classified and
designated by the Board of Directors under the authority contained in the
Charter.
THIRD: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges
these Articles Supplementary to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
753363.5
- 24 -
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 28th of January, 1999.
ATTEST: CAPITAL TRUST, INC.
/s/ Edward L. Shugrue III By:/s/ John R. Klopp (SEAL)
- - ------------------------ -----------------------
Edward L. Shugrue III John R. Klopp
Assistant Secretary President
753363.5
- 25 -
Exhibit 3.2
CAPITAL TRUST, INC.
AMENDED AND RESTATED
BYLAWS
<PAGE>
TABLE OF CONTENTS
-----------------
Page
ARTICLE I OFFICES.........................................................1
Section 1. PRINCIPAL OFFICE....................................1
Section 2. ADDITIONAL OFFICES..................................1
ARTICLE II MEETINGS OF STOCKHOLDERS........................................1
Section 1. PLACE...............................................1
Section 2. ANNUAL MEETING......................................1
Section 3. SPECIAL MEETINGS....................................1
Section 4. NOTICE..............................................1
Section 5. SCOPE OF NOTICE.....................................2
Section 6. ORGANIZATION........................................2
Section 7. QUORUM..............................................2
Section 8. VOTING..............................................2
Section 9. PROXIES.............................................2
Section 10. VOTING OF STOCK BY CERTAIN HOLDERS..................3
Section 11. INSPECTORS..........................................4
Section 12. NOMINATIONS AND PROPOSALS BY
STOCKHOLDERS........................................4
Section 13. VOTING BY BALLOT....................................6
ARTICLE III DIRECTORS.......................................................6
Section 1. GENERAL POWERS......................................6
Section 2. NUMBER, TENURE AND QUALIFICATIONS...................6
Section 3. ANNUAL AND REGULAR MEETINGS.........................6
Section 4. SPECIAL MEETINGS....................................7
Section 5. NOTICE..............................................7
Section 6. QUORUM..............................................7
Section 7. VOTING..............................................7
Section 8. TELEPHONE MEETINGS..................................7
Section 9. INFORMAL ACTION BY DIRECTORS........................7
Section 10. VACANCIES...........................................7
Section 11. COMPENSATION........................................8
Section 12. LOSS OF DEPOSITS....................................8
Section 13. SURETY BONDS........................................8
Section 14. RELIANCE............................................8
Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS................................8
ARTICLE IV COMMITTEES......................................................9
Section 1. NUMBER, TENURE AND QUALIFICATIONS...................9
Section 2. POWERS..............................................9
-i-
<PAGE>
Section 3. MEETINGS............................................9
Section 4. TELEPHONE MEETINGS..................................9
Section 5. INFORMAL ACTION BY COMMITTEES.......................9
Section 6. VACANCIES...........................................9
ARTICLE V OFFICERS.......................................................10
Section 1. GENERAL PROVISIONS.................................10
Section 2. REMOVAL AND RESIGNATION............................10
Section 3. VACANCIES..........................................10
Section 4. CHAIRMAN OF THE BOARD..............................10
Section 5. VICE CHAIRMEN......................................10
Section 6. CHIEF EXECUTIVE OFFICER............................11
Section 7. CHIEF OPERATING OFFICER............................11
Section 8. CHIEF FINANCIAL OFFICER............................11
Section 9. CHIEF INVESTMENT OFFICER...........................11
Section 10. PRESIDENT..........................................11
Section 11. MANAGING DIRECTORS.................................11
Section 12. VICE PRESIDENTS....................................11
Section 13. SECRETARY..........................................11
Section 14. TREASURER..........................................12
Section 15. ASSISTANT SECRETARIES AND ASSISTANT
TREASURERS.........................................12
Section 16. SALARIES...........................................12
ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS..........................13
Section 1. CONTRACTS..........................................13
Section 2. CHECKS AND DRAFTS..................................13
Section 3. DEPOSITS...........................................13
ARTICLE VII STOCK..........................................................13
Section 1. CERTIFICATES.......................................13
Section 2. TRANSFERS..........................................14
Section 3. REPLACEMENT CERTIFICATE............................14
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF
RECORD DATE........................................14
Section 5. STOCK LEDGER.......................................15
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS................15
ARTICLE VIII ACCOUNTING YEAR................................................15
ARTICLE IX DISTRIBUTIONS..................................................16
Section 1. AUTHORIZATION......................................16
Section 2. CONTINGENCIES......................................16
ARTICLE X INVESTMENT POLICY..............................................16
-ii-
<PAGE>
ARTICLE XI SEAL...........................................................16
Section 1. SEAL...............................................16
Section 2. AFFIXING SEAL......................................16
ARTICLE XII INDEMNIFICATION AND ADVANCE OF EXPENSES........................17
ARTICLE XIII WAIVER OF NOTICE...............................................17
ARTICLE XIV AMENDMENT OF BYLAWS............................................17
-iii-
<PAGE>
CAPITAL TRUST, INC.
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located at such place or places as the Board of Directors may
designate.
Section 2. ADDITIONAL OFFICES. The Corporation may have additional
offices at such places as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE. All meetings of stockholders shall be held at the
principal office of the Corporation or at such other place within the United
States as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the stockholders for
the election of directors and the transaction of any business within the powers
of the Corporation shall be held on a date and at the time set by the Board of
Directors.
Section 3. SPECIAL MEETINGS. The president, chief executive officer or
Board of Directors may call special meetings of the stockholders. Special
meetings of stockholders shall also be called by the secretary of the
Corporation upon the written request of the holders of shares entitled to cast
not less than 33 percent (33%) of all the votes entitled to be cast at such
meeting. Such request shall state the purpose of such meeting and the matters
proposed to be acted on at such meeting. The secretary shall inform such
stockholders of the reasonably estimated cost of preparing and mailing notice of
the meeting and, upon payment to the Corporation by such stockholders of such
costs, the secretary shall give notice to each stockholder entitled to notice of
the meeting. Unless requested by the stockholders entitled to cast a majority of
all the votes entitled to be cast at such meeting, a special meeting need not be
called to consider any matter which is substantially the same as a matter voted
on at any special meeting of the stockholders held during the preceding twelve
months.
Section 4. NOTICE. Not less than ten nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time and
place of the meeting and, in the case of a special meeting or as otherwise may
be required by any statute, the purpose for which the meeting is called, either
by mail or by presenting it to such stockholder personally or by leaving it at
his residence or usual
<PAGE>
place of business. If mailed, such notice shall be deemed to be given when
deposited in the United States mail addressed to the stockholder at his post
office address as it appears on the records of the Corporation, with postage
thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Corporation may be
transacted at an annual meeting of stockholders without being specifically
designated in the notice, except such business as is required by any statute to
be stated in such notice. No business shall be transacted at a special meeting
of stockholders except as specifically designated in the notice. A Board
member's attendance at a meeting constitutes waiver of notice.
Section 6. ORGANIZATION. At every meeting of stockholders, the chairman
of the board, if there be one, shall conduct the meeting or, in the case of
vacancy in office or absence of the chairman of the board, one of the following
officers present shall conduct the meeting in the order stated: the vice
chairman of the board, if there be one, the president, the vice presidents in
their order of rank and seniority, or a chairman chosen by the stockholders
entitled to cast a majority of the votes which all stockholders present in
person or by proxy are entitled to cast, shall act as chairman, and the
secretary, or, in his absence, an assistant secretary, or in the absence of both
the secretary and assistant secretaries, a person appointed by the chairman
shall act as secretary.
Section 7. QUORUM. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this section
shall not affect any requirement under any statute or the charter of the
Corporation for the vote necessary for the adoption of any measure. If, however,
such quorum shall not be present at any meeting of the stockholders, the
stockholders entitled to vote at such meeting, present in person or by proxy,
shall have the power to adjourn the meeting from time to time to a date not more
than 120 days after the original record date without notice other than
announcement at the meeting. At such adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 8. VOTING. A plurality of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient to
elect a director. Each share may be voted for as many individuals as there are
directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called and
at which a quorum is present shall be sufficient to approve any other matter
which may properly come before the meeting, unless more than a majority of the
votes cast is required by statute or by the charter of the Corporation. Unless
otherwise provided in the charter, each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders.
Section 9. PROXIES. A stockholder may cast the votes entitled to be
cast by the shares of the stock owned of record by him either in person or by
proxy executed in writing by the stockholder or by his duly authorized agent.
Such proxy shall be filed with the secretary
-2-
<PAGE>
of the Corporation before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy.
Section 10. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the
Corporation registered in the name of a corporation, partnership, trust or other
entity, if entitled to be voted, may be voted by the president or a vice
president, a general partner or trustee thereof, as the case may be, or a proxy
appointed by any of the foregoing individuals, unless some other person who has
been appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the partners
of a partnership presents a certified copy of such bylaw, resolution or
agreement, in which case such person may vote such stock. Any director or other
fiduciary may vote stock registered in his name as such fiduciary, either in
person or by proxy.
Shares of stock of the Corporation directly or indirectly owned by it
shall not be voted at any meeting and shall not be counted in determining the
total number of outstanding shares entitled to be voted at any given time,
unless they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding shares
at any given time.
The Board of Directors may adopt by resolution a procedure by which a
stockholder may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may make the certification, the purpose for which the
certification may be made, the form of certification and the information to be
contained in it; if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books within which the certification must be received by
the Corporation; and any other provisions with respect to the procedure which
the Board of Directors considers necessary or desirable. On receipt of such
certification, the person specified in the certification shall be regarded as,
for the purposes set forth in the certification, the stockholder of record of
the specified stock in place of the stockholder who makes the certification.
Notwithstanding any other provision of the chapter of the Corporation
or these Bylaws, Title 3, Subtitle 7 of the Corporations and Associations
Article of the Annotated Code of Maryland (or any successor statute) shall not
apply to any acquisition by Veqtor Finance Company, LLC, a Delaware limited
liability company ("Veqtor"), or any affiliates thereof, or a Permitted
Transferee of Veqtor (as defined herein) of shares of stock of the Corporation.
For purposes of this section, the term "Permitted Transferee of Veqtor" includes
each of the following entities to the extent any such entity acquires shares of
stock of the Corporation, directly or indirectly, from Veqtor: Capital Trust
Investors Limited Partnership, an Illinois limited partnership, V2 Holdings LLC,
a Delaware limited liability company, BankAmerica Investment Corporation, an
Illinois corporation, First Chicago Capital Corporation, a Delaware corporation,
and Wells Fargo & Company, a Delaware corporation. This section may be repealed,
in whole or in part, at any time, whether before or after an acquisition of
control shares and, upon such
-3-
<PAGE>
repeal, may, to the extent provided by any successor bylaw, apply to any prior
or subsequent control share acquisition.
Section 11. INSPECTORS. At any meeting of stockholders, the chairman of
the meeting may appoint one or more persons as inspectors for such meeting. Such
inspectors shall ascertain and report the number of shares represented at the
meeting based upon their determination of the validity and effect of proxies,
count all votes, report the results and perform such other acts as are proper to
conduct the election and voting with impartiality and fairness to all the
stockholders.
Each report of an inspector shall be in writing and signed by him or by
a majority of them if there is more than one inspector acting at such meeting.
If there is more than one inspector, the report of a majority shall be the
report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
Section 12. NOMINATIONS AND PROPOSALS BY STOCKHOLDERS.
(a) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors
and the proposal of business to be considered by the stockholders may be made at
an annual meeting of stockholders (i) pursuant to the Corporation's notice of
meeting, (ii) by or at the direction of the Board of Directors or (iii) by any
stockholder of the Corporation who was a stockholder of record both at the time
of giving of notice provided for in this Section 12(a) and at the time of the
annual meeting, who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section 12(a).
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1)
of this Section 12, the stockholder must have given timely notice thereof in
writing to the secretary of the Corporation and such other business must
otherwise be a proper matter for action by stockholders. To be timely, a
stockholder's notice shall be delivered to the secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced by more than
30 days or delayed by more than 60 days from such anniversary date or if the
Corporation has not previously held an annual meeting, notice by the stockholder
to be timely must be so delivered not earlier than the close of business on the
90th day prior to such annual meeting and not later than the close of business
on the later of the 60th day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting is
first made by the Corporation. In no event shall the public announcement of a
postponement or adjournment of an annual meeting to a later date or time
commence a new time period for the giving of a stockholder's notice as described
above. Such stockholder's notice shall set forth (i) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
-4-
<PAGE>
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); (ii) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and of the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the name
and address of such stockholder, as they appear on the Corporation's books, and
of such beneficial owner and (y) the number of shares of each class of stock of
the Corporation which are owned beneficially and of record by such stockholder
and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a) (2) of this Section 12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement by the Corporation naming all of the nominees for director
or specifying the size of the increased Board of Directors at least 70 days
prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 12 (a) shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the secretary at the principal executive
offices of the Corporation not later than the close of business on the tenth day
following the day on which such public announcement is first made by the
Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected (i) pursuant to the
Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) provided that the Board of Directors has determined that
directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record both at the time of giving of notice
provided for in this Section 12(b) and at the time of the special meeting, who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in this Section 12(b). In the event the Corporation calls a special
meeting of stockholders for the purpose of electing one or more directors to the
Board of Directors, any such stockholder may nominate a person or persons (as
the case may be) for election to such position as specified in the Corporation's
notice of meeting, if the stockholder's notice containing the information
required by paragraph (a) (2) of this Section 12 shall be delivered to the
secretary at the principal executive offices of the Corporation not earlier than
the close of business on the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting. In no event shall the
public announcement of a postponement or adjournment of a special meeting to a
later date or time commence a new time period for the giving of a stockholder's
notice as described above.
-5-
<PAGE>
(c) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 12. The chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this Section 12 and, if any proposed
nomination or business is not in compliance with this Section 12, to declare
that such nomination or proposal shall be disregarded.
(2) For purposes of this Section 12, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15 (d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 12, a
stockholder shall also comply with all applicable requirements of state law and
of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 12. Nothing in this Section 12 shall be deemed
to affect any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 13. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided that the number thereof shall never be less than the minimum number
required by the Maryland General Corporation Law, nor more than 15, and further
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board
of Directors shall be held immediately after and at the same place as the annual
meeting of stockholders, no notice other than this Bylaw being necessary. The
Board of Directors may provide, by resolution, the time and place, either within
or without the State of Maryland, for the holding of regular meetings of the
Board of Directors without other notice than such resolution.
-6-
<PAGE>
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board, president or by
a majority of the directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix any place, either within
or without the State of Maryland, as the place for holding any special meeting
of the Board of Directors called by them.
Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, facsimile transmission,
United States mail or courier to each director at his business or residence
address. Notice by personal delivery, by telephone or a facsimile transmission
shall be given at least two days prior to the meeting. Notice by mail shall be
given at least five days prior to the meeting and shall be deemed to be given
when deposited in the United States mail properly addressed, with postage
thereon prepaid. Telephone notice shall be deemed to be given when the director
is personally given such notice in a telephone call to which he is a party.
Facsimile transmission notice shall be deemed to be given upon completion of the
transmission of the message to the number given to the Corporation by the
director and receipt of a completed answer-back indicating receipt. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting of the Board of Directors need be stated in the notice, unless
specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the directors shall constitute a
quorum for transaction of business at any meeting of the Board of Directors,
provided that, if less than a majority of such directors are present at said
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice, and provided further that if, pursuant to the
charter of the Corporation or these Bylaws, the vote of a majority of a
particular group of directors is required for action, a quorum must also include
a majority of such group.
The directors present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough directors to leave less than a quorum.
Section 7. VOTING. The action of the majority of the directors present
at a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute.
Section 8. TELEPHONE MEETINGS. Directors may participate in a meeting
by means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.
Section 9. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting, if a consent in writing to such action is signed by each
director and such written consent is filed with the minutes of proceedings of
the Board of Directors.
-7-
<PAGE>
Section 10. VACANCIES. If for any reason any or all the directors cease
to be directors, such event shall not terminate the Corporation or affect these
Bylaws or the powers of the remaining directors hereunder (even if fewer than
three directors remain). Any vacancy on the Board of Directors for any cause
other than an increase in the number of directors shall be filled by a majority
of the remaining directors, even if such majority is less than a quorum. Any
vacancy in the number of directors created by an increase in the number of
directors may be filled by a majority vote of the entire Board of Directors. Any
individual so elected as director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualifies.
Section 11. COMPENSATION. Directors shall not receive any stated salary
for their services as directors but, by resolution of the Board of Directors,
may receive compensation per year and/or per meeting and/or per visit to real
property or other facilities owned or leased by the Corporation and for any
service or activity they performed or engaged in as directors. Directors may be
reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 12. LOSS OF DEPOSITS. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings and
loan association, or other institution with whom moneys or stock of the
Corporation have been deposited.
Section 13. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his duties.
Section 14. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his duties with respect to the
Corporation, be fully justified and protected with regard to any act or failure
to act in reliance in good faith upon the books of account or other records of
the Corporation, upon an opinion of counsel or upon reports made to the
Corporation by any of its officers or employees or by the advisers, accountants,
appraisers or other experts or consultants selected by the Board of Directors or
officers of the Corporation, regardless of whether such counsel or expert may
also be a director.
Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS. The directors shall have no responsibility to devote their full time to
the affairs of the Corporation. Any director or officer, employee or agent of
the Corporation, in his personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to or in
competition with those of or relating to the Corporation.
-8-
<PAGE>
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors
may appoint from among its members an Executive Committee, an Audit Committee, a
Compensation Committee, a Performance Compensation Committee and other
committees, composed of one or more directors, to serve at the pleasure of the
Board of Directors.
Section 2. POWERS. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.
Section 3. MEETINGS. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A majority
of the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The act of a majority of the committee
members present at a meeting shall be the act of such committee. The Board of
Directors may designate a chairman of any committee, and such chairman or any
two members (if there are more than two members) of any committee may fix the
time and place of its meeting unless the Board shall otherwise provide. In the
absence of any member of any such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint another director
to act in the place of such absent member. Each committee shall keep minutes of
its proceedings.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent in writing to such action is signed
by each member of the committee and such written consent is filed with the
minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace any
absent or disqualified member or to dissolve any such committee.
-9-
<PAGE>
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Corporation shall
include a chairman of the board, two vice chairmen, a chief executive officer, a
president, a secretary and a treasurer and may include a chief operating
officer, a chief financial officer, one or more managing directors, one or more
vice presidents, one or more assistant secretaries and one or more assistant
treasurers. In addition, the Board of Directors may from time to time appoint
such other officers with such powers and duties as they shall deem necessary or
desirable. The officers of the Corporation shall be elected annually by the
Board of Directors at the first meeting of the Board of Directors held after
each annual meeting of stockholders, except that the chief executive officer may
appoint one or more vice presidents, assistant secretaries and assistant
treasurers. If the election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as may be convenient. Each officer
shall hold office until his successor is elected and qualifies or until his
death, resignation or removal in the manner hereinafter provided. Any two or
more offices except president and vice president may be held by the same person.
In its discretion, the Board of Directors may leave unfilled any office except
that of president, treasurer and secretary. Election of an officer or agent
shall not of itself create contract rights between the Corporation and such
officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Corporation may be removed by the Board of Directors if in its judgment the best
interests of the Corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed. Any
officer of the Corporation may resign at any time by giving written notice of
his resignation to the Board of Directors, the chairman of the board, the
president or the secretary. Any resignation shall take effect at any time
subsequent to the time specified therein or, if the time when it shall become
effective is not specified therein, immediately upon its receipt. The acceptance
of a resignation shall not be necessary to make it effective unless otherwise
stated in the resignation. Such resignation shall be without prejudice to the
contract rights, if any, of the Corporation.
Section 3. VACANCIES. A vacancy in any office may be filled by the
Board of Directors for the balance of the term.
Section 4. CHAIRMAN OF THE BOARD. The Board of Directors shall
designate a chairman of the board. The chairman of the board shall preside over
the meetings of the Board of Directors and of the stockholders at which he shall
be present. The chairman of the board shall perform such other duties as may be
assigned to him or them by the Board of Directors.
Section 5. VICE CHAIRMEN. The Vice Chairmen shall have the general
responsibility for the implementation of the policies of the Corporation, as
determined by the Board of Directors, and for the management of the business and
affairs of the Corporation.
-10-
<PAGE>
Section 6. CHIEF EXECUTIVE OFFICER. The Board of Directors may
designate a chief executive officer. In the absence of such designation, the
chairman of the board shall be the chief executive officer of the Corporation.
Subject to the direction of the Board of Directors, the chief executive officer
shall in general supervise and control all of the business and affairs of the
Corporation and shall exercise chief executive powers and such specific powers
and shall perform such duties as from time to time may be conferred upon or
assigned to him by the Board of Directors or any committee thereof designated by
it to so act. He may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or
agent of the Corporation or shall be required by law to be otherwise executed.
Section 7. CHIEF OPERATING OFFICER. The Board of Directors may
designate a chief operating officer. The chief operating officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.
Section 8. CHIEF FINANCIAL OFFICER. The Board of Directors may
designate a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.
Section 9. CHIEF INVESTMENT OFFICER. The Board of Directors may
designate a chief investment officer. The chief investment officer shall have
the responsibilities and duties as set forth by the Board of Directors or the
chief executive officer.
Section 10. PRESIDENT. The president shall have general executive
powers and shall have such specific powers and shall perform all duties incident
to the office of president and such other duties as may be prescribed by the
Board of Directors from time to time. In the absence of a designation of a chief
operating officer by the Board of Directors, the president shall be the chief
operating officer.
Section 11. MANAGING DIRECTORS. The Board of Directors may designate
one or more managing directors. A managing director shall have the
responsibilities and duties as set forth by the Board of Directors or chief
executive officer.
Section 12. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there be
more than one vice president, the vice presidents in the order designated at the
time of their election or, in the absence of any designation, then in the order
of their election) shall perform the duties of the president and when so acting
shall have all the powers of and be subject to all the restrictions upon the
president; and shall perform such other duties as from time to time may be
assigned to him by the president or by the Board of Directors. The Board of
Directors may designate one or more vice presidents as executive vice president
or as vice president for particular areas of responsibility.
Section 13. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in
-11-
<PAGE>
accordance with the provisions of these Bylaws or as required by law; (c) be
custodian of the corporate records and of the seal of the Corporation; (d) keep
a register of the post office address of each stockholder which shall be
furnished to the secretary by such stockholder; (e) have general charge of the
share transfer books of the Corporation; and (f) in general perform such other
duties as from time to time may be assigned to him by the chief executive
officer, the president or by the Board of Directors.
Section 14. TREASURER. The treasurer shall have the custody of the
funds and securities of the Corporation and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. In the absence of a designation of a chief financial officer by
the Board of Directors, the treasurer shall be the chief financial officer of
the Corporation.
The treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at the
regular meetings of the Board of Directors or whenever it may so require, an
account of all his transactions as treasurer and of the financial condition of
the Corporation.
If required by the Board of Directors, the treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, moneys and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 15. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
assistant secretaries and assistant treasurers, in general, shall perform such
duties as shall be assigned to them by the secretary or treasurer, respectively,
or by the president or the Board of Directors. The assistant treasurers shall,
if required by the Board of Directors, give bonds for the faithful performance
of their duties in such sums and with such surety or sureties as shall be
satisfactory to the Board of Directors.
Section 16. SALARIES. The salaries and other compensation of the
officers shall be fixed from time to time by the Board of Directors and no
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he is also a director.
-12-
<PAGE>
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Directors may authorize any officer
or agent to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Corporation and such authority may be general
or confined to specific instances. Any agreement, deed, mortgage, lease or other
document executed by one or more of the directors or by an authorized person
shall be valid and binding upon the Board of Directors and upon the Corporation
when authorized or ratified by action of the Board of Directors.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or agent of the
Corporation in such manner as shall from time to time be determined by the Board
of Directors.
Section 3. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may designate.
ARTICLE VII
STOCK
Section 1. CERTIFICATES. Each stockholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of stock held by him in the Corporation. Each certificate
shall be signed by the chairman of the board, the president or a vice president
and countersigned by the secretary or an assistant secretary or the treasurer or
an assistant treasurer and may be sealed with the seal, if any, of the
Corporation. The signatures may be either manual or facsimile. Certificates
shall be consecutively numbered; and if the Corporation shall, from time to
time, issue several classes of stock, each class may have its own number series.
A certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued. Each certificate representing shares
which are restricted as to their transferability or voting powers, which are
preferred or limited as to their dividends or as to their allocable portion of
the assets upon liquidation or which are redeemable at the option of the
Corporation, shall have a statement of such restriction, limitation, preference
or redemption provision, or a summary thereof, plainly stated on the
certificate. If the Corporation has authority to issue stock of more than one
class, the certificate shall contain on the face or back a full statement or
summary of the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of each
class of stock and, if the Corporation is authorized to issue any preferred or
special class in series, the differences in the relative rights and preferences
between the shares of each series to the extent they have been set and the
authority of the Board of Directors to set the relative rights and preferences
of subsequent series. In lieu of such statement or summary, the certificate may
state that the Corporation will furnish a full statement
-13-
<PAGE>
of such information to any stockholder upon request and without charge. If any
class of stock is restricted by the Corporation as to transferability, the
certificate shall contain a full statement of the restriction or state that the
Corporation will furnish information about the restrictions to the stockholder
on request and without charge.
Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a stock certificate duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of record of any
share of stock as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share or
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Maryland.
Notwithstanding the foregoing, transfers of shares of any class of
stock will be subject in all respects to the charter of the Corporation and all
of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board
of Directors may direct a new certificate to be issued in place of any
certificate previously issued by the Corporation alleged to have been lost,
stolen or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing the
issuance of a new certificate, an officer designated by the Board of Directors
may, in his discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or the owner's
legal representative to advertise the same in such manner as he shall require
and/or to give bond, with sufficient surety, to the Corporation to indemnify it
against any loss or claim which may arise as a result of the issuance of a new
certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The
Board of Directors may set, in advance, a record date for the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders or determining stockholders entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of stockholders for any other proper purpose. Such date, in any
case, shall not be prior to the close of business on the day the record date is
fixed and shall be not more than ninety days and, in the case of a meeting of
stockholders, not less than ten days, before the date on which the meeting or
particular action requiring such determination of stockholders of record is to
be held or taken.
In lieu of fixing a record date, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not longer
than 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a
-14-
<PAGE>
meeting of stockholders, such books shall be closed for at least ten days before
the date of such meeting.
If no record date is fixed and the stock transfer books are not closed
for the determination of stockholders, (a) the record date for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day on which the notice of meeting is
mailed or the 30th day before the meeting, whichever is the closer date to the
meeting; and (b) the record date for the determination of stockholders entitled
to receive payment of a dividend or an allotment of any other rights shall be
the close of business on the day on which the resolution of the directors,
declaring the dividend or allotment of rights, is adopted.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, except when (i) the determination has been
made through the closing of the transfer books and the stated period of closing
has expired or (ii) the meeting is adjourned to a date more than 120 days after
the record date fixed for the original meeting, in either of which case a new
record date shall be determined as set forth herein.
Section 5. STOCK LEDGER. The Corporation shall maintain at its
principal office or at the office of its counsel, accountants or transfer agent,
an original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any other
provision of the charter or these Bylaws, the Board of Directors may issue units
consisting of different securities of the Corporation. Any security issued in a
unit shall have the same characteristics as any identical securities issued by
the Corporation, except that the Board of Directors may provide that for a
specified period securities of the Corporation issued in such unit may be
transferred on the books of the Corporation only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Directors shall have the power, from time to time, to fix
the fiscal year of the Corporation by a duly adopted resolution.
-15-
<PAGE>
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the
stock of the Corporation may be authorized and declared by the Board of
Directors, subject to the provisions of law and the charter of the Corporation.
Dividends and other distributions may be paid in cash, property or stock of the
Corporation, subject to the provisions of law and the charter.
Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other distributions such sum or sums as the Board of
Directors may from time to time, in its absolute discretion, think proper as a
reserve fund for contingencies, for equalizing dividends or other distributions,
for repairing or maintaining any property of the Corporation or for such other
purpose as the Board of Directors shall determine to be in the best interest of
the Corporation, and the Board of Directors may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE X
INVESTMENT POLICY
Subject to the provisions of the charter of the Corporation, the Board
of Directors may from time to time adopt, amend, revise or terminate any policy
or policies with respect to investments by the Corporation as it shall deem
appropriate in its sole discretion.
ARTICLE XI
SEAL
Section 1. SEAL. The Board of Directors may authorize the adoption of a
seal by the Corporation. The seal shall contain the name of the Corporation and
the year of its incorporation and the words "Incorporated Maryland." The Board
of Directors may authorize one or more duplicate seals and provide for the
custody thereof.
Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the word
"(SEAL)" adjacent to the signature of the person authorized to execute the
document on behalf of the Corporation.
-16-
<PAGE>
ARTICLE XII
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his service
in that capacity or (b) any individual who, while a director of the Corporation
and at the request of the Corporation, serves or has served another corporation,
real estate investment trust, partnership, joint venture, trust, employee
benefit plan or any other enterprise as a director, officer, partner or trustee
of such corporation, real estate investment trust, 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 Corporation may, with
the approval of its Board of Directors, provide such indemnification and advance
for expenses to a person who served a predecessor of the Corporation in any of
the capacities described in (a) or (b) above and to any employee or agent of the
Corporation or a predecessor of the Corporation.
Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or charter of the Corporation
inconsistent with this Article, shall apply to or affect in any respect the
applicability of the preceding paragraph with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the charter of
the Corporation or these Bylaws or pursuant to applicable law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at nor the purpose
of any meeting need be set forth in the waiver of notice, unless specifically
required by statute. The attendance of any person at any meeting shall
constitute a waiver of notice of such meeting, except where such person attends
a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Board of Directors shall have the exclusive power to adopt, alter
or repeal any provision of these Bylaws and to make new Bylaws.
-17-
Exhibit 4.2
=======================================
CAPITAL TRUST, INC.
TO
WILMINGTON TRUST COMPANY
Trustee
-----------------------
FIRST SUPPLEMENTAL
INDENTURE
Dated as of January 28, 1999
=======================================
798885.2
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of January 28, 1999, between
Capital Trust, Inc., a Maryland corporation (the "Company"), having its
principal office at 605 Third Avenue, New York, New York 10016 and Wilmington
Trust Company, a banking corporation duly organized and existing under the laws
of the State of Delaware, as trustee under the Indenture referred to below
(herein called the "Trustee").
RECITALS
WHEREAS, Capital Trust, a California business trust ("Capital Trust"),
has heretofore executed and delivered to the Trustee a certain indenture, dated
as of July 28, 1998 (the "Indenture"), pursuant to which convertible debentures
designated as the 8.25% Step Up Convertible Junior Subordinated Debentures of
Capital Trust (herein called the "Securities") were issued. All terms used in
this First Supplemental Indenture which are defined in the Indenture shall have
the meanings assigned to them in the Indenture;
WHEREAS, Capital Trust entered into an agreement and plan of merger,
dated as of November 12, 1998, by and among Capital Trust, Captrust Limited
Partnership, a Maryland limited partnership (the "Limited Partnership"), and the
Company (the "Merger Agreement"), whereby (i) Capital Trust will merge with and
into the Limited Partnership (the "Limited Partnership Merger"), with the result
that the Limited Partnership will be the surviving entity in the Limited
Partnership Merger, and (ii) the Limited Partnership will merge with and into
the Company (the "Company Merger," and together with the Limited Partnership
Merger, the "Mergers"), with the result that the Company will be the surviving
entity in the Company Merger.
WHEREAS, Section 9.1 of the Indenture provides that Capital Trust shall
not enter the Mergers unless the Company assumes all the obligations of Capital
Trust under the Securities and the Indenture pursuant to a supplemental
indenture;
WHEREAS, Section 8.1 of the Indenture provides that without the consent
of the Holders of any of the Securities at the time Outstanding, the Company,
when authorized by a resolution of its Board of Directors, and the Trustee may
enter into an indenture supplemental to the Indenture to evidence the succession
of another corporation to Capital Trust and the assumption by the successor
corporation of the covenants, agreements and obligations of Capital Trust under
the Securities and under the Indenture in the case of a merger involving Capital
Trust pursuant to Article 9 of the Indenture;
WHEREAS, the Company pursuant to the foregoing authority, proposes in
and by this First Supplemental Indenture to amend the Indenture upon the
consummation of the Mergers to reflect the assumption by the Company of all the
obligations of Capital Trust under the Securities and the Indenture; and
798885.2
<PAGE>
WHEREAS, all things necessary to make this First Supplemental Indenture
a valid agreement of the Company and the Trustee and a valid amendment of and
supplement to the Indenture have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities upon the
consummation of the Mergers as follows:
ARTICLE ONE
PROVISIONS OF
GENERAL APPLICATION
SECTION 1.1 Assumption of Obligations. The Company assumes the due and
punctual payment of the principal of, premium, if any, and interest (including
Additional Sums and Compound Interest) on all of the Securities according to
their tenor, and the due and punctual performance and observance of all of the
covenants, agreements and conditions of the Indenture to be performed or
observed by Capital Trust.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1 Incorporation of Indenture. All the provisions of this
First Supplemental Indenture shall be deemed to be incorporated in, and made a
part of, the Indenture; and the Indenture, as supplemented and amended by this
First Supplemental Indenture, shall be read, taken and construed as one and the
same instrument.
SECTION 2.2 Application of First Supplemental Indenture. The provisions
and benefit of this First Supplemental Indenture shall be effective with respect
to Securities outstanding prior to and after the execution hereof.
SECTION 2.3 Headings. The headings of the Articles and Sections of the
First Supplemental Indenture are inserted for convenience of reference; and
shall not be deemed to be a part thereof.
798885.2
-2-
<PAGE>
SECTION 2.4 Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 2.5 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this First Supplemental Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
SECTION 2.6 Successors and Assigns. All covenants and agreements in
this First Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 2.7 Separability Clause. In case any provision in this First
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 2.8 Governing Law. This agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of New York,
without regard to its principles of conflicts of law.
798885.2
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
Attest: CAPITAL TRUST, INC.
/s/ Edward L. Shugrue III By: /s/ John R. Klopp
- - --------------------------- ----------------------------------------
Edward L. Shugrue III, Name: John R. Klopp
Secretary Title: President
Attest: WILMINGTON TRUST COMPANY,
as Trustee
/s/ I.A. Lennon By: /s/ Mary C. St. Amand
- - --------------------------- ----------------------------------------
Name: Mary C. St. Amand
Title: Assistant Vice President
798885.2
-4-
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 28th day of January, 1999, before me personally came John R.
Klopp, to me known, who, being by me duly sworn, did depose and say that he is
President of CAPITAL TRUST, INC., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
/s/ Julie A. Fergang
------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission Expires: September 21, 2000
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On the 27th day of January, 1999, before me personally came Mary C. St.
Amand, to me known, who, being by me duly sworn, did depose and say that she is
an Assistant Vice President of WILMINGTON TRUST COMPANY, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ Patricia W. Zink
------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission Expires: July 12, 1999
798885.2
-5-
Exhibit 10.1
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 LONG-TERM INCENTIVE STOCK PLAN
705348.10
<PAGE>
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 LONG-TERM INCENTIVE STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. On May 23, 1997, the Board of Trustees
of Capital Trust, a California business trust (the "Predecessor"), the
predecessor of Capital Trust, Inc., a Maryland corporation (the "Company")
adopted, subject to the approval of shareholders, an incentive share
compensation plan known as the "1997 Long- Term Incentive Share Plan," which
permits the grant of Incentive Share Options, Nonqualified Share Options, Share
Appreciation Rights, Restricted Shares, Performance Units, Performance Shares
and Share Units. The plan became effective upon shareholder approval on July 15,
1997 and was amended by Amendment No. 1 effective on that date which changed all
references to "California Real Estate Investment Trust" in the plan to "Capital
Trust." On May 11, 1998, the Board of Trustees of the Predecessor adopted,
subject to the approval of shareholders, the "Amended and Restated 1997
Long-Term Incentive Share Plan" which amended and restated the original plan.
The amended and restated plan became effective upon shareholder approval on
January 28, 1999. Upon consummation of the reorganization of the Predecessor
into the Company on January 28, 1999 after such shareholder approval was
obtained, the Company succeeded to and assumed the amended and restated plan. On
January 28, 1999, the amended and restated plan was further amended, effective
on that date to change all references to "Capital Trust" to "Capital Trust,
Inc." and make additional technical revisions that reflect the different capital
and governance structure of the Company (hereinafter referred to as the "Plan").
The terms of the Plan are set forth herein.
The Plan is designed to comply with the performance-based compensation
exemption under the proposed regulations to Internal Revenue Code Section 162(m)
issued by the Department of Treasury.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success of the Company and its Subsidiaries by providing incentives to Eligible
Individuals that will link their personal interests to the long-term financial
success of the Company and its Subsidiaries and to growth in stockholder value.
The Plan is designed to provide flexibility to the Company and its Subsidiaries
in their ability to motivate, attract, and retain the services of Eligible
Individuals upon whose judgment, interest, and special effort the successful
conduct of their operations is largely dependent.
1.3 Duration of the Plan. The Plan became effective on July 15, 1997
and shall remain in effect, subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 13 hereof, until all Stock
subject to it shall have been purchased or acquired according to the provisions
herein. However, in no event may an Award be granted under the Plan on or after
July 15, 2007.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Amended and Restated Director Stock Plan" means the Amended
and Restated 1997 Non- Employee Director Stock Plan of the
Company.
(b) "Award" or "Awards" means, individually or collectively, a
grant under this Plan of Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units, Performance Stock or Stock Units.
705348.10
<PAGE>
(c) "Award Agreement" means the agreement required under Article 3
hereof evidencing an Award under this Plan.
(d) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
(e) "Board" or "Board of Directors" means the Board of Directors
of the Company.
(f) "Cause" means the occurrence of any one of the following:
(i) The willful and continued failure by a Participant to
substantially perform his/her duties (other than any
such failure resulting from the Participant's
disability), after a written demand for substantial
performance is delivered to the Participant that
specifically identifies the manner in which the
Company or any of its Subsidiaries, as the case may
be, believes that the Participant has not
substantially performed his/her duties, and the
Participant has failed to remedy the situation within
ten (10) business days of receiving such notice; or
(ii) the Participant's conviction for committing a felony
in connection with the employment or service
relationship; or
(iii) the willful engaging by the Participant in gross
misconduct materially and demonstrably injurious to
the Company or any of its Subsidiaries. However, no
act, or failure to act, on the Participant's part
shall be considered "willful" unless done, or omitted
to be done, by the Participant not in good faith and
without reasonable belief, that his/her action or
omission was in the best interest of the Company or
any of its Subsidiaries.
(g) "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) any Person (other than Veqtor Finance Company, LLC or
its affiliates as that term is defined under the
rules and regulations promulgated under the Exchange
Act, a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any
of its Subsidiaries, or a corporation owned directly
or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership
of Stock of the Company), is or becomes the
Beneficial Owner, directly or indirectly, of 20% or
more of the Voting Securities of the Company;
(ii) the Board shall at any time consist of a majority of
individuals (the "New Majority") who where elected or
appointed Directors of the Company without the
approval of a majority of the Directors either (A) in
office prior to the election or appointment of the
first of the Directors comprising the New Majority,
or (B) appointed by or elected with the approval of
such Directors; or
(iii) the Stockholders of the Company approve (A) a plan of
complete liquidation of the Company; or (B) an
agreement for the sale or disposition of all or
substantially all the Company's assets; or (C) a
merger or consolidation of the Company with any other
corporation, other than a merger or consolidation
which would result in the Voting Securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity), at least 50% of
the combined voting power of the Voting Securities of
705348.10
-2-
<PAGE>
the Company (or such surviving entity) outstanding
immediately after such merger or consolidation.
However, in no event shall a Change in Control be deemed to
have occurred, with respect to a Participant, if the
Participant is part of a purchasing group which consummates
the Change in Control transaction. The Participant shall be
deemed "part of a purchasing group..." for purposes of the
preceding sentence if the Participant is an equity participant
or has agreed to become an equity participant in the
purchasing company or group (except for (i) passive ownership
of less than 5% of the combined voting power of the purchasing
company or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not deemed to
be significant, as determined prior to the Change in Control
by a majority of the nonemployee continuing members of the
Board).
(h) "Class B Common Stock" means the class B common stock, $.01
par value, in the Company.
(i) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(j) "Committee" means the committee appointed by the Board to
administer the Plan pursuant to Article 3 hereof.
(k) "Common Stock" means the class A common stock, $.01 par value,
in the Company.
(l) "Company" means Capital Trust Inc., a Maryland corporation, or
any successor thereto.
(m) "Convertible Securities" means the Common Stock, the Class B
Common Stock, the Preferred Stock and any securities issued by
the Company or any subsidiary thereof in capital raising or
merger and acquisition transactions that are by their terms
exercisable, convertible or exchangeable into or for Common
Stock.
(n) "Covered Employee" means any Participant designated prior to
the grant of Restricted Stock, Performance Units or
Performance Stock by the Committee who is or may be a "covered
employee" within the meaning of Section 162(m)(3) of the Code
in the year in which such Restricted Stock, Performance Units
or Performance Stock are taxable to such Participant.
(o) "Director" means a member of the Board.
(p) "Election Form" means the form under which a Participant
elects to receive Stock granted under a Stock Unit Award upon
the occurrence of certain events.
(q) "Eligible Individual" means an employee of the Company or any
of its Subsidiaries, including an employee who is an officer
or a Director of the Company or any of its Subsidiaries, or a
consultant or service provider to the Company or any of its
Subsidiaries who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of
the Company and its Subsidiaries.
"Eligible Individual" also may include any other employee,
consultant or service provider, identified by the Committee,
in special situations involving extraordinary performance,
promotion, retention, or recruitment.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
705348.10
-3-
<PAGE>
(s) "Fair Market Value" means the closing price of the Stock on a
securities exchange, or if the Stock was not traded on an
exchange, the average of the highest price and lowest price at
which the Stock was traded, as reported on the Nasdaq National
Market, on the relevant date, or on the most recent date on
which the Stock was traded prior to such date.
(t) "Incentive Stock Option" or "ISO" means an option to purchase
Stock, granted to a Participant pursuant to Article 6 hereof,
which is designated as an incentive stock option and is
intended to meet the requirements of Section 422 of the Code.
(u) "Nonqualified Stock Option" or "NQSO" means an option to
purchase Stock, granted to a Participant pursuant to Article 6
hereof, which is not intended to be an Incentive Stock Option.
(v) "Option" or "Options" means an Incentive Stock Option or a
Nonqualified Stock Option.
(w) "Option Agreement" means an Award Agreement evidencing an
Option Award granted under Article 6 hereof.
(x) "Outside Director" means any Director who qualifies as an
"outside director" as that term is defined in Section 162(m)
of the Code and the regulations issued thereunder.
(y) "Participant" means an Eligible Individual who has been
granted an Award under the Plan.
(z) "Performance Stock" means an Award, designated as performance
stock, granted to a Participant pursuant to Article 9 hereof.
(aa) "Performance Unit" means an Award, designated as a performance
unit, granted to a Participant pursuant to Article 9 hereof.
(bb) "Period of Restriction" means the period during which the
transfer of Restricted Stock is restricted, during which the
Participant is subject to a substantial risk of forfeiture,
pursuant to Article 8 hereof.
(cc) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d) thereof.
(dd) "Plan" means this Amended and Restated 1997 Long-Term
Incentive Stock Plan of the Company, as herein described and
as hereafter from time to time amended.
(ee) "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of
interests" under generally accepted accounting principles.
(ff) "Preferred Stock" means the class A 9.5% cumulative
convertible preferred stock, $.01 par value, in the Company,
and the class B 9.5% cumulative convertible non-voting
preferred stock, $.01 par value, in the Company.
(gg) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 8 hereof.
(hh) "Restricted Stock Agreement" means an Award Agreement
evidencing a Restricted Stock Award granted under Article 8
hereof.
(ii) "Stock" means the Common Stock.
705348.10
-4-
<PAGE>
(jj) "Subsidiary" means any corporation of which more than 50% (by
number of votes) of the combined voting power of outstanding
securities is owned, directly or indirectly, by the Company.
(kk) "Stock Unit" means a derivative interest in Stock granted to a
Participant pursuant to Article 9 hereof which is credited to
a bookkeeping account and paid out on a one-for-one basis in
Stock.
(ll) "Stock Appreciation Right" or "SAR" means an Award, designated
as a Stock Appreciation Right, granted to a Participant
pursuant to Article 7 hereof.
(mm) "Voting Securities" means Stock or securities of any class or
classes of securities of the Company, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect
a majority of the Directors.
2.2 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Board or by a
committee (the "Committee") consisting of not less than two (2) Directors who
shall be appointed from time to time by, and shall serve at the discretion of,
the Board of Directors. To the extent required to comply with Rule 16b-3 under
the Exchange Act, each member of the Committee shall qualify as a "Non-Employee
Director" as defined in Rule 16b-3 or any successor definition adopted by the
Securities and Exchange Commission or Awards made under the Plan will be made in
accordance with another available exception, including approval by the full
Board of Directors or the stockholders. To the extent required to comply with
Code Section 162(m), each member of the Committee also shall be an Outside
Director.
3.2 Authority of the Committee. Subject to the provisions of the Plan,
the Committee shall have full power to construe and interpret the Plan; to
establish, amend or waive rules and regulations for its administration; to
accelerate the exercisability of any Award or the end of a Performance Period
(as defined herein) or the termination of any Period of Restriction or any Award
Agreement, or any other instrument relating to an Award under the Plan; and
(subject to the provisions of Article 13 hereof) to amend the terms and
conditions of any outstanding Option, Stock Appreciation Right or other Award to
the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Notwithstanding the foregoing, the Committee shall have
no authority to adjust upwards the amount payable to a Covered Employee with
respect to a particular Award. Also notwithstanding the foregoing, no action of
the Committee (other than pursuant to Section 4.3 hereof or Section 9.6 hereof)
may, without the consent of the person or persons entitled to exercise any
outstanding Option or Stock Appreciation Right or to receive payment of any
other outstanding Award, adversely affect the rights of such person or persons.
3.3 Selection of Participants. The Committee shall have the authority
to grant Awards under the Plan, from time to time, to such Eligible Individuals
(including officers and Directors who are employees) as may be selected by it.
The Committee shall select Participants from among those who they have
identified as being Eligible Individuals.
3.4 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive and
705348.10
-5-
<PAGE>
binding on all persons, including the Company and its Subsidiaries, its
stockholders, employees, and Participants and their estates and beneficiaries,
and such determinations and decisions shall not be reviewable.
3.5 Delegation of Certain Responsibilities. The Committee may, in its
sole discretion, delegate to an officer or officers of the Company the
administration of the Plan under this Article 3; provided, however, that no such
delegation by the Committee shall be made with respect to the administration of
the Plan as it affects officers of the Company or its Subsidiaries and provided
further that the Committee may not delegate its authority to correct errors,
omissions or inconsistencies in the Plan. The Board or the Committee may
delegate to the Chief Executive Officer of the Company its authority under this
Article 3 to grant Awards to Eligible Individuals who are not Covered Employees
or who are not officers or Directors of the Company or its Subsidiaries subject
to the reporting requirements of Section 16(a) of the Exchange Act. All
authority delegated by the Board or the Committee under this Section 3.5 shall
be exercised in accordance with the provisions of the Plan and any guidelines
for the exercise of such authority that may from time to time be established by
the Board or the Committee.
3.6 Procedures of the Board or the Committee. All determinations of the
Board or the Committee shall be made by not less than a majority of its members
present at the meeting (in person or otherwise) at which a quorum is present. A
majority of the entire Board or the Committee shall constitute a quorum for the
transaction of business. Any action required or permitted to be taken at a
meeting of the Board or the Committee may be taken without a meeting if a
unanimous written consent, which sets forth the action, is signed by each member
of the Board or the Committee and filed with the minutes for proceedings of the
Board or the Committee. Service on the Board or the Committee shall constitute
service as a Director of the Company so that members of the Board or the
Committee shall be entitled to indemnification, limitation of liability and
reimbursement of expenses with respect to their services as members of the Board
or the Committee to the same extent that they are entitled under the Company's
charter and Maryland law for their services as Directors of the Company.
3.7 Award Agreements. Each Award under the Plan shall be evidenced, as
necessary, by an Award Agreement which shall be signed by an authorized officer
of the Company and by the Participant, and shall contain such terms and
conditions as may be approved by the Board or the Committee. Such terms and
conditions need not be the same in all cases.
3.8 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Board or the Committee may impose such conditions on any Award
(including, without limitation, the right of the Board or the Committee to limit
the time of exercise to specified periods) as may be required to satisfy the
requirements of Rule 16b-3 (or any successor rule) under the Exchange Act ("Rule
16b-3").
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares of Stock. With respect to calendar year 1999, the
maximum number of shares of Stock that may be made the subject of Awards granted
under the Plan shall be equal to (i) ten percent (10%) of the number of shares
of Stock that were outstanding on a fully diluted basis with respect to the
shares of Stock underlying any outstanding Convertible Securities as of December
31, 1998 (rounded downward if necessary to eliminate fractional shares of
stock), minus (ii) the number of shares of Stock remaining subject to or issued
in respect of Awards which were granted prior to December 31, 1998, which
maximum number shall be reduced by the number of shares of Stock remaining
subject to or issued in respect of Awards which were granted prior to December
31, 1998 under the Amended and Restated Director Stock Plan and the number of
shares of Stock made the subject of Awards under the Amended and Restated
Director Stock Plan during the 1999 calendar year. Thereafter, for any given
calendar year, the maximum number of shares of Stock that may be made the
subject of Awards granted under the Plan shall be equal to (i) ten percent (10%)
of the number of shares of Stock that were outstanding on a fully diluted basis
with respect to the shares of Stock underlying any outstanding Convertible
Securities as of the end of the immediately preceding calender year (rounded
downward if necessary to eliminate fractional shares of stock), minus (ii) the
number of shares of Stock remaining subject to or issued in respect of Awards
which were granted under the Plan through the last day of the immediately
preceding calendar year (the
705348.10
-6-
<PAGE>
"Year End Date"), which maximum number shall be reduced by the number of shares
of Stock remaining subject to or issued in respect of Awards which were granted
through the Year End Date under the Amended and Restated Director Stock Plan and
the number of shares of Stock made the subject of Awards under the Amended and
Restated Director Stock Plan during the current calendar year. Notwithstanding
the foregoing, (i) the maximum number of shares of Stock that may be the subject
of Awards granted to any Eligible Individual during any calendar year may not
exceed 500,000 shares of Stock, (ii) the maximum amount payable in cash to any
Eligible Individual with respect to any Performance Period (as defined herein)
pursuant to any Performance Unit or Performance Stock Award shall be $1,000,000
and (iii) the maximum number of shares of Stock covered by outstanding ISOs when
combined with the number of shares of Stock issued pursuant to the exercise of
ISOs granted under the Plan shall not exceed 2,500,000 shares of Stock. Upon a
change in capitalization or authorized shares of stock (as described in Section
4.3 hereof) the maximum number of shares of Stock shall be adjusted in number
and kind pursuant to Section 4.3 hereof. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Stock or out of the
Stock held in the Company's treasury, or partly out of each, the number of
shares of Stock as shall be determined by the Board. Upon the granting of an
Award, the number of shares of Stock available under this Section 4.1 for the
granting of further Awards shall be reduced as follows:
(a) In connection with the granting of an Award (other than
the granting of a Performance Unit denominated in dollars), the number of shares
of Stock shall be reduced by the number of shares of Stock in respect of which
the Award is granted or denominated.
(b) In connection with the granting or a Performance Unit
denominated in dollars, the number of shares of Stock shall be reduced by an
amount equal to the quotient of (a) the dollar amount in which the Performance
Unit is denominated, divided by (b) the Fair Market Value of a share of Stock on
the date the Performance Unit is granted.
4.2 Lapsed Awards. If any Award (other than Restricted Stock) granted
under this Plan terminates, expires, or lapses for any reason, any share of
Stock subject to such Award again shall be available for the grant of an Award
under the Plan, subject to Section 7.2 hereof.
4.3 Adjustments in Authorized Stock. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, stock split-up, stock combination, or other change affecting the
Company's Common Stock, such adjustment shall be made in the number and class of
shares of Stock which may be delivered under the Plan, and in the number and
class of and/or price of shares of Stock subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Stock, Performance
Units and Stock Units granted under the Plan, as may be determined to be
appropriate and equitable by the Board or the Committee, in its sole discretion,
to prevent dilution or enlargement of rights; and provided that the number of
shares of Stock subject to any Award shall always be a whole number. Any
adjustment of an Incentive Stock Option under this paragraph shall be made in
such a manner so as not to constitute a modification within the meaning of
Section 424(h)(3) of the Code.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include
all employees of and consultants or service providers to the Company or any of
its Subsidiaries who, in the opinion of the Board or the Committee, are Eligible
Individuals. "Eligible Individuals" may include employees who are members of the
Board, but may not include Directors who are not employees of the Company or any
of its Subsidiaries.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Board or the Committee may from time to time select those Eligible Individuals
to whom Awards shall be granted and determine the nature and amount of each
Award. No individual shall have any right to be granted an Award under this Plan
even if previously granted an Award.
705348.10
-7-
<PAGE>
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Eligible Individuals at any time and from time to time
as shall be determined by the Board or the Committee. The Board or the Committee
shall have the sole discretion, subject to the requirements of the Plan, to
determine the actual number of shares of Stock subject to Options granted to any
Participant. The Board or the Committee may grant any type of Option that is
permitted by law at the time of grant including, but not limited to, ISOs and
NQSOs; provided, however, ISOs may only be granted to Eligible Individuals who
are employees of the Company or a Subsidiary at the time of grant. Unless
otherwise expressly provided at the time of grant, Options granted under the
Plan will be NQSOs.
6.2 Limitation on Exercisability. The aggregate Fair Market Value
(determined as of the date of grant) of the shares of Stock issuable pursuant to
an ISO under this Plan and under any other plan of the Company, any parent
corporation or any Subsidiary of the Company, which are exercisable for the
first time by any employee during any calendar year, shall not exceed $100,000.
Options for shares of Stock which are exercisable for the first time by any
employee during any calendar year in excess of $100,000 shall be treated as
NQSOs, in accordance with Section 422(d)(1) of the Code.
6.3 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other provisions as the Board or the Committee shall
determine. The Option Agreement shall specify whether the Option is intended to
be an Incentive Stock Option within the meaning of Section 422 of the Code, or a
Nonqualified Stock Option whose grant is not intended to be subject to the
provisions of Section 422 of the Code.
6.4 Option Price. The purchase price per share of an Option shall be
determined by the Board or the Committee but shall not be less than the Fair
Market Value of the Stock on the date the Option is granted.
An Incentive Stock Option granted to an employee, who at the time of
grant, owns (within the meaning of Section 425(d) of the Code) Stock possessing
more than 10% of the total combined voting power of all classes of Stock of the
Company, shall have an exercise price which is at least 110% of the Fair Market
Value of the Stock subject to the Option.
6.5 Duration of Options. Each Option shall expire at such time as the
Board or the Committee shall determine at the time of grant; provided, however,
that no ISO shall be exercisable later than the tenth (10th) anniversary date of
its grant, and no ISO granted to any individual who owns more than 10% of the
Voting Securities of the Company shall be exercisable later than the fifth (5th)
anniversary date of its grant.
6.6 Exercise of Options. Subject to Section 3.8 hereof, Options granted
under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Board or the Committee shall in each instance
approve, which need not be the same for all Participants.
6.7 Payment. Options shall be exercised by the delivery of a written
notice to the Company setting forth the number of shares of Stock with respect
to which the Option is to be exercised, accompanied by full payment for the
shares of Stock. The purchase price upon exercise of any Option shall be payable
to the Company in full either (a) in cash or its equivalent, (b) by tendering
previously acquired Stock having a Fair Market Value at the time of exercise
equal to the total purchase price, (c) by foregoing compensation under rules
established by the Board or the Committee, or (d) by a combination of (a), (b),
or (c). The proceeds from such a payment shall be added to the general funds of
the Company and shall be used for general purposes. As soon as practicable,
after receipt of written notification and payment, the Company shall deliver to
the Participant Stock certificates in an appropriate amount based upon the
number of Options exercised, issued in the Participant's name.
705348.10
-8-
<PAGE>
6.8 Restrictions on Stock Transferability. The Board or the Committee
shall impose such restrictions on any Stock acquired pursuant to the exercise of
an Option under the Plan as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities law, under the
requirements of any securities exchange upon which such Stock is then listed and
under any applicable blue sky or state securities laws.
6.9 Termination of Employment or Service Due to Death, Disability, or
Retirement. In the event the employment or service of a Participant is
terminated by reason of death, the Participant's outstanding Options may be
exercised by such person or persons as shall have acquired the Participant's
rights under the Option pursuant to Article 10 hereof, or by will or by the laws
of descent and distribution, at any time prior to the expiration date of the
Options or within one (1) year after such date of termination of employment or
service, whichever period is shorter, but only to the extent that the
Participant was entitled to exercise the Options at the date of his termination.
In the event the employment of a Participant is terminated by reason of
disability (as defined under the then established rules of the Company or any of
its Subsidiaries, as the case may be), the Participant's outstanding Options may
be exercised at any time prior to the expiration date of the Options or within
one (1) year after such date of termination of employment or service, whichever
period is shorter but only to the extent that the Participant was entitled to
exercise the Options on the date of his termination. In the event the employment
or service of a Participant who is an employee is terminated by reason of
retirement, the Participant's outstanding Options may be exercised (subject to
Section 3.8 hereof) at any time prior to the expiration date of the Options or
within ninety (90) days after such date of termination of employment or service,
whichever period is shorter, but only to the extent that the Participant was
entitled to exercise the Options on the date of his termination. In its sole
discretion, the Company may extend the ninety (90) days to up to one (1) year,
but in no event beyond the expiration date of the Option. In the case of
Incentive Stock Options, the favorable tax treatment prescribed under Section
422 of the Code may not be available if the Options are not exercised within the
time period prescribed by Section 422 of the Code after termination of
employment for death, disability, or retirement.
6.10 Termination of Employment or Service for Other Reasons. If the
employment or service of a Participant shall terminate for any reason other than
death, disability, retirement (in the case of an employee) or for Cause, the
Participant shall have the right to exercise outstanding Options at any time
prior to the expiration date of the Options or within the ninety (90) days after
the date of his termination, whichever period is shorter, but only to the extent
that the Participant was entitled to exercise the Options at the date of his
termination of employment or service. In its sole discretion, the Company may
extend the ninety (90) days to up to one (1) year, but in no event beyond the
expiration date of the Option.
If the employment or service of the Participant shall terminate for
Cause, all of the Participant's outstanding Options shall be immediately
forfeited back to the Company.
6.11 Nontransferability of Options. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution.
Further, all Options granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Board or the Committee, in any of the
following forms:
(a) In tandem with Options;
(b) In addition to Options;
(c) Independent of Options; or
705348.10
-9-
<PAGE>
(d) In any combination of (a), (b), or (c).
The Board or the Committee shall have the sole discretion, subject to the
requirements of the Plan, to determine the actual number of shares of Stock
subject to SARs granted to any Participant.
7.2 Exercise of SARs in Tandem with Options. SARs granted in tandem
with Options may be exercised for all or part of the shares of Stock subject to
the related Option upon the surrender of the related Options representing the
right to purchase an equivalent number of shares of Stock. SARs may be exercised
only with respect to the Stock for which its related Option is then exercisable.
Stock with respect to which SARs shall have been exercised may not be subject
again to an Award under the Plan.
Notwithstanding any other provision of the Plan to the contrary, with
respect to an SAR granted in lieu of an Incentive Stock Option, (i) the SAR will
expire no later than the expiration of the underlying Incentive Stock Option;
(ii) the SAR amount may be for no more than one hundred percent (100%) of the
difference between the exercise price of the underlying Incentive Stock Option
and the Fair Market Value of the Stock subject to the underlying Incentive Stock
Option at the time the SAR is exercised; and (iii) the SAR may be exercised only
when the Fair Market Value of the Stock subject to the Incentive Stock Option
exceeds the exercise price of the Incentive Stock Option.
7.3 Exercise of SARs in Addition to Options. SARs granted in addition
to Options shall be deemed to be exercised upon the exercise of the related
Options. The deemed exercise of SARs granted in addition to Options shall not
necessitate a reduction in the number of related Options.
7.4 Exercise of SARs Independent of Options. Subject to Sections 3.8
and 7.5 hereof, SARs granted independently of Options may be exercised upon
whatever terms and conditions the Board or the Committee, in its sole
discretion, imposes upon the SARs, including, but not limited to, a
corresponding proportional reduction in previously granted Options.
7.5 Payment of SAR Amount. Upon exercise of the SAR, the holder shall
be entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a share of
Stock on the date of exercise over the price fixed by the
Board or the Committee at the date of grant (which price shall
not be less than one hundred percent (100%) of the market
price of a share of Stock on the date of grant) (the "Exercise
Price"); by
(b) The number of shares of Stock with respect to which the SAR is
exercised.
7.6 Form and Timing of Payment. Payment to a Participant, upon SAR
exercise, will be made in cash or Stock, at the discretion of the Board or the
Committee, within ten (10) calendar days of the exercise.
7.7 Term of SAR. The term of an SAR granted under the Plan shall not
exceed ten (10) years.
7.8 Termination of Employment or Service. In the event the employment
or service of a Participant is terminated by reason of death, disability,
retirement (in the case of an employee), for Cause, or any other reason, the
exercisability of any outstanding SAR granted in tandem with or in addition to
an Option shall terminate in the same manner as its related Option as specified
under Sections 6.8 and 6.9 hereof. The exercisability of any outstanding SARs
granted independent of Options also shall terminate in the manner provided under
Sections 6.8 and 6.9 hereof.
7.9 Nontransferability of SARs. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution.
705348.10
-10-
<PAGE>
Further, all SARs granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Board or the Committee, at any time and from time to time, may
grant Restricted Stock under the Plan to such Participants and in such amounts
as it shall determine. In the case of Covered Employees, the Board or the
Committee may condition the vesting or lapse of the Period of Restriction
established pursuant to Section 8.4 hereof upon the attainment of one or more of
the Performance Goals (as defined below) utilized for purposes of Performance
Units and Performance Stock pursuant to Article 9 hereof.
8.2 Restricted Stock Agreement. Each grant of Restricted Stock shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or periods, the number of shares of Restricted Stock granted, and
such other provisions as the Board or the Committee shall determine.
8.3 Transferability. Except as provided in this Article 8 or in Section
3.8 hereof, the Restricted Stock granted hereunder may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the termination
of the applicable Period of Restriction or for such period of time as shall be
established by the Board or the Committee and as shall be specified in the
Restricted Stock Agreement, or upon earlier satisfaction of other conditions
(including any Performance Goals) as specified by the Board or the Committee in
its sole discretion and set forth in the Restricted Stock Agreement. All rights
with respect to the Restricted Stock granted to a Participant under the Plan
shall be exercisable during his lifetime only by such Participant.
8.4 Other Restrictions. The Board or the Committee shall impose such
other restrictions on any Restricted Stock granted pursuant to the Plan as it
may deem advisable including, without limitation, restrictions under applicable
Federal or state securities laws, and the Board or the Committee may legend
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
8.5 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4 hereof, each certificate representing
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the Amended
and Restated 1997 Long-Term Incentive Stock Plan of Capital Trust,
Inc., in the rules and administrative procedures adopted pursuant to
such Plan, and in a Restricted Stock Agreement dated . A copy of the
Plan, such rules and procedures and such Restricted Stock Agreement may
be obtained from the Secretary of Capital Trust, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this
Article and subject to applicable securities laws and restrictions imposed
pursuant thereto, Restricted Stock shall become transferable by the Participant
after the last day of the Period of Restriction. Once the Stock is released from
the restrictions, the Participant shall be entitled to have the legend required
by Section 8.5 hereof removed from his Stock certificate.
8.7 Voting Rights. During the Period of Restriction, Participants
holding Restricted Stock granted hereunder may exercise full voting rights with
respect to such Stock.
8.8 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
such Stock while they are so held. If any such dividends or distributions are
paid in Stock, the Stock shall be subject to the same restrictions on
transferability as the Restricted Stock with respect to which they were paid.
705348.10
-11-
<PAGE>
8.9 Termination of Employment or Service. In the event that a
Participant terminates his employment or service with the Company or any of its
Subsidiaries for any reason or is terminated for Cause during the Period of
Restriction, then any Restricted Stock still subject to restrictions as of the
date of such termination shall automatically be forfeited and returned to the
Company; provided, however, that in the event of an involuntary termination of
the employment or service of a Participant by the Company or any of its
Subsidiaries other than for Cause, the Board or the Committee, in its sole
discretion (subject to Section 3.8 hereof), may waive the automatic forfeiture
of any or all such Stock and may add such new restrictions to such Restricted
Stock as it deems appropriate.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE STOCK AND STOCK UNITS
9.1 Grant of Performance Units, Performance Stock or Stock Units.
Subject to the terms and provisions of the Plan, Performance Units, Performance
Stock or Stock Units may be granted to Participants at any time and from time to
time as shall be determined by the Board or the Committee. The Board or the
Committee shall have complete discretion in determining the number of
Performance Units, Performance Stock or Stock Units granted to each Participant.
9.2 Value of Performance Units and Performance Stock. The Board or the
Committee shall set certain periods to be determined in advance by the Board or
the Committee (the "Performance Periods"). Prior to each grant of Performance
Units or Performance Stock, the Board or the Committee shall establish an
initial value for each Performance Unit and an initial number of shares of Stock
for each share of Performance Stock granted to each Participant for that
Performance Period. Prior to each grant of Performance Units or Performance
Stock, the Board or the Committee also shall set the performance goals (the
"Performance Goals") that will be used to determine the extent to which the
Participant receives a payment of the value of the Performance Units or number
of shares of Stock for the Performance Stock awarded for such Performance
Period. These goals will be based on the attainment, by the Company or its
Subsidiaries, of certain objective or subjective performance measures, which
shall include one or more of the following: total stockholder return, return on
equity, return on capital, asset growth, earnings per share, market price, stock
price, revenues, costs, net income, cash flow and retained earnings. Such
Performance Goals also may be based upon the attainment of specified levels of
performance of the Company or one or more Subsidiaries under one or more
measures described above relative to the performance of other corporations. With
respect to each such performance measure utilized during a Performance Period,
the Board or the Committee shall assign percentages to various levels of
performance which shall be applied to determine the extent to which the
Participant shall receive a payout of the values of Performance Units and number
of shares of Performance Stock awarded. With respect to Covered Employees, all
Performance Goals shall be objective performance goals satisfying the
requirements for "performance-based compensation" within the meaning of Section
162(m)(4) of the Code, and shall be set by the Board or the Committee within the
time period prescribed by Section 162(m) of the Code and related regulations.
9.3 Payment of Performance Units and Performance Stock. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Stock shall be entitled to receive the value thereof as determined by the Board
or the Committee. The Board or the Committee shall make this determination by
first determining the extent to which the Performance Goals set pursuant to
Section 9.2 hereof have been met. It will then determine the applicable
percentage (which may exceed one hundred percent (100%)) to be applied to, and
will apply such percentage to, the value of Performance Units or number of
shares of Performance Stock to determine the payout to be received by the
Participant. In addition, with respect to Performance Units and Performance
Stock granted to any Covered Employee, no payout shall be made hereunder except
upon written certification by the Board or the Committee that the applicable
Performance Goal or Goals have been satisfied to a particular extent.
705348.10
-12-
<PAGE>
9.4 Value of Stock Units. Subject to the terms and provisions of the
Plan, Stock Units may be granted to Participants at any time and from time to
time on such terms as shall be determined by the Board or the Committee. The
Board or the Committee shall have complete discretion in determining the number
of Stock Units granted to each Participant. Stock Units shall be payable in
Stock upon the occurrence of certain trigger events set forth on the
Participant's Election Form in his or her complete discretion (the "Trigger
Events"). The terms and conditions of the Trigger Events may vary by Stock Unit
Award, by Participant, or both. The Election Form shall be filed with the
Secretary of the Company prior to the date on which any Stock Unit Award is
made. Such election will be irrevocable as to any Stock Unit Award made after
delivery of the Election Form to the Company, and it shall continue in effect
until revoked, increased or decreased prospectively by Participant prior to the
grant of any future Stock Unit Award for which the change is effective.
9.5 Accounting for Stock Units. The Participant's Stock Unit Award
shall be credited by the Company to a bookkeeping account to reflect the
Company's liability to that Participant (the "Stock Unit Account"). Each Stock
Unit is credited as a Stock equivalent on the date so credited. Additional Stock
equivalents may be added to the Stock Unit Account equal to the amount of Stock
that could be purchased with dividends equal to that paid on one share of Stock,
multiplied by the number of Stock equivalents then existing in the Stock Unit
Account, based on the Fair Market Value of the Stock on the date a dividend is
paid. Because the Trigger Events of each Stock Unit Award may differ, the
Company shall establish a separate Stock Unit Account for each separate Stock
Unit Award. Upon the occurrence of particular Trigger Events, the holder of a
Stock Unit Award shall be entitled to receive a number of shares of Stock which
corresponds to the number of Stock Units granted as part of the initial Stock
Unit Award, as such amount may have been increased to reflect dividends paid
with respect thereto. Because the payout of Stock Unit Awards is not based on
objective performance goals, such award will not constitute "performance-based"
compensation within the meaning of Section 162(m)(4)(C) of the Code and, as
such, will count toward the annual $1,000,000 deduction limit.
9.6 Board or Committee Discretion to Adjust Awards. Subject to Section
3.2 hereof regarding Awards to Covered Employees, the Board or the Committee
shall have the authority to modify, amend or adjust the terms and conditions of
any Performance Unit Award, Performance Stock Award or Stock Unit Award, at any
time or from time to time, including but not limited to the Performance Goals.
9.7 Form of Payment. The value of a Performance Unit or a share of
Performance Stock may be paid in cash, Stock or a combination thereof as
determined by the Board or the Committee. In the case of Stock Units, payment
shall be made in Stock. Payment may be made in a lump sum or installments as
prescribed by the Board or the Committee. If any payment is to be made on a
deferred basis, the Board or the Committee may provide for the payment of
dividend equivalents or interest during the deferral period.
9.8 Termination of Employment or Service Due to Death, Disability, or
Retirement. In the case of death, disability, or retirement (in the case of a
Participant who is an employee) (each of disability and retirement as defined
under the established rules of the Company or any of its Subsidiaries, as the
case may be), the holder of a Performance Unit or Performance Stock shall
receive a prorated payment based on the Participant's number of full months of
service during the Performance Period and on the percentage of the Performance
Goals achieved through the date of termination, as computed by the Board or the
Committee. Payment shall be made at the time payments are made to Participants
who did not terminate service during the Performance Period. In the case of
Stock Units, all such Stock Units held, to the extent vested at the date of such
Participant's termination of employment or service, will be paid as set forth in
the Participant's Election Form.
9.9 Termination of Employment or Service for Other Reasons. In the
event that a Participant terminates employment or service with the Company or
any of its Subsidiaries for any reason other than death, disability, or
retirement, all Performance Units and Performance Stock shall be forfeited;
provided, however, that in the event of an involuntary termination of the
employment or service of the Participant by the Company or any of its
Subsidiaries other than for Cause, the Board or the Committee in its sole
discretion may waive the automatic forfeiture provisions and pay out on a pro
rata basis. In the case of termination other than for Cause, all Stock Units
held, to the extent
705348.10
-13-
<PAGE>
vested at the date of such Participant's termination of employment or service,
will be paid as set forth in the Participant's Election Form. However, in the
event of termination for Cause, all Stock Units held will be forfeited.
9.10 Nontransferability. No Performance Units, Performance Stock or
Stock Units granted under the Plan may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period or, in the case of Stock Units, vesting and payment. All rights with
respect to Performance Units, Performance Stock and Stock Units granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively and
who may include a trustee under a will or living trust) to whom any benefit
under the Plan is to be paid in case of his death before he receives any or all
of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Board or the Committee, and
will be effective only when filed by the Participant in writing with the Board
or the Committee during his lifetime. In the absence of any such designation or
if all designated beneficiaries predecease the Participant, benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate.
ARTICLE 11. RIGHTS OF EMPLOYEES
11.1 Employment or Service. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any of its Subsidiaries to
terminate any Participant's employment or service at any time, nor confer upon
any Participant any right to continue in the employ or service of the Company or
any of its Subsidiaries.
11.2 Participation. No individual shall have the right to be selected
as a Participant, or, having been so selected, to be selected again as a
Participant.
11.3 No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving
any Participant, beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Board or the Committee in accordance with the terms and
provisions of the Plan. Except as expressly provided in this Plan, neither the
Company nor any of its Subsidiaries shall be required or be liable to make any
payment under the Plan.
11.4 No Right to Company Assets. Neither the Participant nor any other
person shall acquire, by reason of the Plan, any right in or title to any
assets, funds or property of the Company or any of its Subsidiaries whatsoever
including, without limiting the generality of the foregoing, any specific funds,
assets, or other property which the Company or any of its Subsidiaries, in its
sole discretion, may set aside in anticipation of a liability hereunder. Any
benefits which become payable hereunder shall be paid from the general assets of
the Company or the applicable subsidiary. The Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company or any of its Subsidiaries. Nothing contained in the Plan
constitutes a guarantee by the Company or any of its Subsidiaries that the
assets of the Company or the applicable Subsidiary shall be sufficient to pay
any benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1 Stock-Based Awards. Notwithstanding any other provisions of the
Plan, in the event of a Change in Control, all Stock-based Awards granted under
this Plan shall immediately vest one hundred percent (100%) in each Participant
(subject to Section 3.8 hereof), including Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights, Restricted Stock and Stock Units.
705348.10
-14-
<PAGE>
12.2 Performance-Based Awards. Notwithstanding any other provisions of
the Plan, in the event of a Change in Control, all performance-based Awards
granted under this Plan shall be immediately paid out in cash, including
Performance Units and Performance Stock. The amount of the payout shall be based
on the higher of: (i) the extent, as determined by the Board or the Committee,
to which Performance Goals, established for the Performance Period then in
progress have been met up through and including the effective date of the Change
in Control or (ii) one hundred percent (100%) of the value on the date of grant
of the Performance Units or number of shares of Performance Stock.
12.3 Pooling Transactions. Notwithstanding anything contained in the
Plan or any agreement to the contrary, in the event of a Change in Control which
is also intended to constitute a Pooling Transaction, the Board or the Committee
shall take such actions, if any, which are specifically recommended by an
independent accounting firm retained by the Company to the extent reasonably
necessary in order to assure that the Pooling Transaction will qualify as such,
including but not limited to (a) deferring the vesting, exercise, payment or
settlement with respect to any Award, (b) providing that the payment or
settlement in respect of any Award be made in the form of cash, Stock or
securities of a successor or acquired of the Company, or a combination of the
foregoing and (c) providing for the extension of the term of any Award to the
extent necessary to accommodate the foregoing, but not beyond the maximum term
permitted for any Award.
ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION
13.1 Amendment, Modification and Termination. At any time and from time
to time, the Board may terminate, amend, or modify the Plan, subject to the
approval of the stockholders of the Company if required by the Code, by the
insider trading rules of Section 16 of the Exchange Act, by any securities
exchange or system on which the Stock is then listed or reported or by any
regulatory body having jurisdiction with respect hereto.
13.2 Awards Previously Granted. No termination, amendment or
modification of the Plan other than pursuant to Section 4.3 hereof shall in any
manner adversely affect any Award theretofore granted under the Plan, without
the written consent of the Participant.
ARTICLE 14. WITHHOLDING
14.1 Tax Withholding. The Company and any of its Subsidiaries shall
have the power and the right to deduct or withhold, or require a Participant to
remit to the Company or any of its Subsidiaries, an amount sufficient to satisfy
Federal, state and local taxes (including the Participant's FICA obligation)
required by law to be withheld with respect to any grant, exercise, or payment
made under or as a result of this Plan.
14.2 Stock Delivery or Withholding. With respect to withholding
required upon the exercise of Nonqualified Stock Options, or upon the lapse of
restrictions on Restricted Stock, Participants may elect, subject to the
approval of the Board or the Committee, to satisfy the withholding requirement,
in whole or in part, by tendering to the Company previously acquired Stock or by
having the Company withhold Stock, in each such case in an amount having a Fair
Market Value equal to the amount required to be withheld to satisfy the tax
withholding obligations described in Section 14.1 hereof. The value of the Stock
to be tendered or withheld is to be based on the Fair Market Value of the Stock
on the date that the amount of tax to be withheld is to be determined. All Stock
withholding elections shall be irrevocable and made in writing, signed by the
Participant on forms approved by the Board or the Committee in advance of the
day that the transaction becomes taxable.
Stock withholding elections made by Participants who are subject to the
short-swing profit restrictions of Section 16 of the Exchange Act must comply
with the additional restrictions of Section 16 and Rule 16b-3 in making their
elections.
705348.10
-15-
<PAGE>
ARTICLE 15. EFFECT OF CERTAIN TRANSACTIONS
Effect of Certain Transactions. Subject to Section 12 hereof, or as
otherwise provided in an agreement, in the event of (a) the liquidation or
dissolution of the Company or (b) a merger, consolidation or combination of the
Company (a "Transaction"), the Plan and the Awards issued hereunder shall
continue in effect in accordance with their respective terms except that
following a Transaction each Participant shall be entitled to receive in respect
of each share of Stock subject to any outstanding Options or Awards, as the case
may be, upon exercise of any Option or payment or transfer in respect of any
Award, the same number and kind of Stock, securities, cash, property, or other
consideration that each holder of a share of Stock was entitled to receive in
the Transaction in respect of a share of Stock; provided, however, that such
Stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options or Awards prior to such Transaction.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of
Stock under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or securities
exchanges as may be required.
16.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of New York.
Effective Date of this Amended and Restated 1997 Long-Term Incentive Stock Plan:
January 28, 1999
705348.10
Exhibit 10.2
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 NON-EMPLOYEE DIRECTOR STOCK PLAN
705366.9
<PAGE>
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 NON-EMPLOYEE DIRECTOR STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. On May 23, 1997, the Board of Trustees
of Capital Trust, a California business trust (the "Predecessor"), the
predecessor of Capital Trust, Inc., a Maryland corporation (the "Company")
adopted, subject to the approval of stockholders, an incentive share plan for
non-employee members of the Board of Trustees known as the "1997 Non-Employee
Trustee Share Plan", which permited the grant of Nonqualified Share Options,
Share Appreciation Rights, Restricted Shares, Performance Units, Performance
Share and Share Units. The plan became effective upon shareholder approval on
July 15, 1997 and was amended by Amendment No. 1 effective on that date which
changed all references to "California Real Estate Investment Trust" in the plan
to "Capital Trust." On May 11, 1998, the Board of Trustees adopted, subject to
the approval of shareholders, the Amended and Restated 1997 Non-Employee Trustee
Share Plan which amended and restated the original plan. The amended and
restated plan became effective upon shareholder approval on January 28, 1999.
Upon consummation of the reorganization of the Predecessor into the Company on
January 28, 1998 after such shareholder approval was obtained, the Company
succeeded to and assumed the amended and restated plan. On January 28, 1999, the
amended and restated plan was further amended, effective on that date to change
all references to "Capital Trust" to "Capital Trust, Inc." and make additional
technical revisions that reflect the different capital and governance structure
of the Company (hereinafter referred to as the "Plan"). The terms of the Plan
are set forth herein.
1.2 Purpose of the Plan. The Purpose of the Plan is to promote the
success of the Company by providing incentives to Directors that will link their
personal interests to the long-term financial success of the Company and to
growth in stockholder value. The Plan is designed to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of
Directors upon whose judgment, interest and special effort the successful
conduct of the Company's operations is largely dependent.
1.3 Duration of the Plan. The Plan became effective on July 15, 1997,
and shall remain in effect, subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 13 hereof, until all Stock
subject to it shall have been purchased or acquired according to the provisions
herein. However, in no event may an Award be granted under the Plan on or after
July 15, 2007.
ARTICLE 2. DEFINITIONS AND CONSTRUCTIONS
2.1 Definitions: Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Amended and Restated Incentive Stock Plan" means the
Amended and Restated 1997 Long-Term Incentive Stock
Plan.
(b) "Award" or "Awards" means, individually or
collectively, a grant under this Plan of Nonqualified
Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Units, Performance Stock, or Stock
Units.
(c) "Award Agreement" means the agreement required under
Article 3 hereof evidencing an Award under this Plan.
(d) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
705366.9
<PAGE>
(e) "Board" or "Board of Directors" means the Board of
Directors of the Company.
(f) "Change in Control" shall be deemed to have occurred
if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) any Person (other than Veqtor
Finance Company, LLC or its
affiliates as that term is defined
under the rules and regulations
promulgated under the Exchange Act,
a Director or other fiduciary
holding securities under an employee
benefit plan of the Company, or a
corporation owned directly or
indirectly by the stockholders of
the Company in substantially the
same proportions as their ownership
of Stock of the Company), is or
becomes the Beneficial Owner,
directly or indirectly, of 20% or
more of the Voting Securities of the
Company;
(ii) the Board shall at any time consist
of a majority of individuals (the
"New Majority") who where elected or
appointed Directors of the Company
without the approval of a majority
of the Directors either (A) in
office prior to the election or
appointment of the first of the
Directors comprising the New
Majority, or (B) appointed by or
elected with the approval of such
Directors; or
(iii) the stockholders of the Company
approve (A) a plan of complete
liquidation of the Company; or (B)
an agreement for the sale or
disposition of all or substantially
all the Company's assets; or (C) a
merger or consolidation of the
Company with any other corporation,
other than a merger or consolidation
which would result in the Voting
Securities of the Company
outstanding immediately prior
thereto continuing to represent
(either by remaining outstanding or
by being converted into voting
securities of the surviving entity),
at least 50% of the combined voting
power of the Company (or such
surviving entity) outstanding
immediately after such merger or
consolidation.
However, in no event shall a Change in Control be deemed to
have occurred, with respect to a Participant, if the
Participant is part of a purchasing group which consummates
the Change in Control transaction. The Participant shall be
deemed "part of a purchasing group..." for purposes of the
preceding sentence if the Participant is an equity participant
or has agreed to become an equity participant in the
purchasing company or group (except for (i) passive ownership
of less than 5% of the Voting Securities of the purchasing
company or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not deemed to
be significant, as determined prior to the Change in Control
by a majority of the non-employee continuing members of the
Board).
(g) "Class B Common Stock" means the class B common
stock, $.01 par value, in the Company.
(h) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(i) "Common Stock" means the class A common stock, $.01
par value, in the Company.
(j) "Company" means Capital Trust, Inc., a Maryland
corporation, or any successor thereto.
705366.9
-2-
<PAGE>
(k) "Convertible Securities" means the Common Stock, the
Class B Common Stock, the Preferred Stock and any
securities issued by the Company or any subsidiary
thereof in capital raising or merger and acquisition
transactions that are by their terms exercisable,
convertible or exchangeable into or for Common Stock.
(l) "Director" means a member of the Board.
(m) "Election Form" means the form under which a
Participant elects to receive Stock granted under a
Stock Unit Award upon the occurrence of certain
events.
(n) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(o) "Fair Market Value" means the closing price of the
Stock on a securities exchange or, if not traded on
an exchange, the average of the highest price and
lowest price at which the Stock was traded as
reported on the Nasdaq National Market, on the
relevant date, or on the most recent date on which
the Stock was traded prior to such date.
(p) "Nonqualified Stock Option" or "NQSO" means an option
to purchase Stock, which is not intended to satisfy
the requirements of Section 422 of the Code, granted
under Article 6 hereof.
(q) "Option" or "Options" means a Nonqualified Stock
Option.
(r) "Option Agreement" means an Award Agreement
evidencing an Option Award granted under Article 6
hereof.
(s) "Participant" means a Director who has been granted
an Award under the Plan.
(t) "Performance Stock" means an Award, designated as a
share of performance stock, granted to a Participant
pursuant to Article 9 hereof.
(u) "Performance Unit" means an Award, designated as a
performance unit, granted to a Participant pursuant
to Article 9 hereof.
(v) "Period of Restriction" means the period during which
the transfer of Restricted Stock is restricted,
during which the Participant is subject to a
substantial risk of forfeiture, pursuant to Article 8
hereof.
(w) "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof; including a "group"
as defined in Section 13(d) thereof.
(x) "Plan" means this Amended and Restated 1997
Non-Employee Director Stock Plan of the Company, as
herein described and as hereafter from time to time
amended.
(y) "Pooling Transaction" means an acquisition of the
Company in a transaction which is intended to be
treated as a "pooling of interests" under generally
accepted accounting principles.
705366.9
-3-
<PAGE>
(z) "Preferred Stock" means the class A 9.5% cumulative
convertible preferred stock, $.01 par value, in the
Company and the class B 9.5% cumulative convertible
non-voting preferred stock, $.01 par value, in the
Company.
(aa) "Restricted Stock" means an Award granted to a
Participant pursuant to Article 8 hereof.
(bb) "Restricted Stock Agreement" means an Award Agreement
evidencing a Restricted Stock Award granted under
Article 8 hereof.
(cc) "Stock Unit" means a derivative interest in Stock
granted to a Participant pursuant to Article 9 hereof
which is credited to a bookkeeping account and paid
out on a one-for-one basis in Stock.
(dd) "Stock Appreciation Right" or "SAR" means an Award,
designated as a stock appreciation right, granted to
a Participant pursuant to Article 7 hereof.
(ee) "Stock" means the Common Stock.
(ff) "Voting Securities" means Stock or securities of any
class or classes of securities of the Company, the
holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the
Directors.
2.2 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 Authority of Board. The Plan shall be administered by the full
Board of Directors of the Company. Subject to the provisions of the Plan, the
Board shall have full power to construe and interpret the Plan; to establish,
amend or waive rules and regulations for its administration; to accelerate the
exercisability of any Award or the end of a Performance Period (as defined
herein) or the termination of any Period of Restriction or any Award Agreement,
or any other instrument relating to an Award under the Plan; and (subject to the
provisions of Article 13 hereof) to amend the terms and conditions of any
outstanding Option, Stock Appreciation Right or other Award to the extent such
terms and conditions are within the discretion of the Board as provided in the
Plan. Also notwithstanding the foregoing, no action of the Board (other than
pursuant to Section 4.3 hereof or Section 9.6 hereof) may, without the consent
of the person or persons entitled to exercise any outstanding Option or Stock
Appreciation Right or to receive payment of any other outstanding Award,
adversely affect the rights of such person or persons.
3.2 Selection of Participants. Subject to Section 5.1 hereof, the Board
shall have the authority to grant Awards under the Plan, from time to time, to
such Directors as may be selected by it.
3.3 Decisions Binding. All determinations and decisions made by the
Board pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders and Participants and their estates and
beneficiaries, and such determinations and decisions shall not be reviewable.
3.4 Delegation of Certain Responsibilities. The Board may, in its sole
discretion, delegate to the Chairman of the Board of the Company (or if there
shall be Co-Chairmen, individually or jointly to such Co-
705366.9
-4-
<PAGE>
Chairmen) the administration of the Plan under this Article 3; provided,
however, that the Board may not delegate its authority to correct errors,
omissions or inconsistencies in the Plan and the Board may not delegate its
authority under this Article 3 to grant Awards to Directors. All authority
delegated by the Board under this Section 3.4 shall be exercised in accordance
with the provisions of the Plan and any guidelines for the exercise of such
authority that may from time to time be established by the Board.
3.5 Procedures of the Board. All Awards and other determinations of the
Board shall be made by not less than a majority of its members present at the
meeting (in person or otherwise) at which a quorum is present. A majority of the
entire Board shall constitute a quorum for the transaction of business. Any
action required or permitted to be taken at a meeting of the Board may be taken
without a meeting if a unanimous written consent, which sets forth the action,
is signed by each member of the Board and filed with the minutes for proceedings
of the Board.
3.6 Award Agreements. Each Award under the Plan shall be evidenced by
an Award Agreement which shall be signed by the Chairman of the Board (or by a
Vice Chairman) on behalf of the Board and by the Participant, and shall contain
such terms and conditions as may be approved by the Board. Such terms and
conditions need not be the same in all cases.
3.7 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Board may impose such conditions on any Award (including, without
limitation, the right of the Board to limit the time of exercise to specified
periods) as may be required to satisfy the requirements of Rule 16b-3 (or any
successor rule), under the Exchange Act ("Rule 16b-3").
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares of Stock. With respect to calendar year 1999, the
maximum number of shares of Stock that may be made the subject of Awards granted
under the Plan shall be equal of (i) ten (10%) percent of the number of shares
of Stock that were outstanding on a fully diluted basis with respect to the
Stock underlying any outstanding Convertible Securities as of December 31, 1998
(rounded downward if necessary to eliminate fractional shares of stock), minus
(ii) the number of shares of Stock remaining subject to or issued in respect of
Awards which were granted prior to December 31, 1998, which maximum number shall
be reduced by the number of shares of Stock remaining subject to or issued in
respect of Awards which were granted prior to December 31, 1998 under the
Amended and Restated Incentive Stock Plan and the number of shares of Stock made
the subject of Awards under the Amended and Restated Incentive Stock Plan during
the 1999 calendar year. Thereafter, for any given calendar year, the maximum
number of shares of Stock that may be made the subject of Awards granted under
the Plan shall be equal to (i) ten (10%) percent of the number of shares of
Stock that were outstanding on a fully diluted basis with respect to the Stock
underlying any outstanding Convertible Securities as of the end of the
immediately preceding calender year (rounded downward if necessary to eliminate
fractional shares of stock), minus (ii) the number of shares of Stock remaining
subject to or issued in respect of Awards which were granted under the Plan
through the last day of the immediately preceding calendar year (the "Year End
Date"), which maximum number shall be reduced by the number of shares of Stock
remaining subject to or issued in respect of Awards which were granted prior to
the Year End Date under the Amended and Restated Incentive Stock Plan and the
number of shares of Stock made the subject of Awards under the Amended and
Restated Incentive Stock Plan during the current calendar year. Upon a change in
the capitalization or authorized Stock (as described in Section 4.3 hereof) the
maximum number of shares of Stock shall be adjusted in number and kind pursuant
to Section 4.3 hereof. The Company shall reserve for the purposes of the Plan,
out of its authorized but unissued stock or out of such numbers of shares of
Stock held in the Company's treasury, or partly out of each, such number of
shares of Stock as shall be determined by the Board. Upon the granting of an
Award, the number of shares of Stock available under Section 4.1 hereof for the
granting of further Awards shall be reduced as follows:
705366.9
-5-
<PAGE>
(a) In connection with the granting of an Award (other than
the granting of a Performance Unit denominated in dollars), the number of shares
of Stock shall be reduced by the number of shares of Stock in respect of which
the Award is granted or denominated.
(b) In connection with the granting of a Performance Unit
denominated in dollars, the number of shares of Stock shall be reduced by an
amount equal to the quotient of (a) the dollar amount in which the Performance
Unit is denominated, divided by (b) the Fair Market Value of a share of Stock on
the date the Performance Unit is granted.
4.2 Lapsed Awards. If any Award (other than Restricted Stock) granted
under this Plan terminates, expires, or lapses for any reason, any Stock subject
to such Award again shall be available for the grant of an Award under the Plan,
subject to Section 7.2 hereof.
4.3 Adjustments in Authorized Stock. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, stock combination, or other change affecting the Company's
Common Stock, such adjustment shall be made in the number and class of Stock
which may be delivered under the Plan, and in the number and class of and/or
price of Stock subject to outstanding Options, Stock Appreciation Rights,
Restricted Stock, Performance Stock, Performance Units and Stock Units granted
under the Plan, as may be determined to be appropriate and equitable by the
Board, in its sole discretion, to prevent dilution or enlargement of rights; and
provided that the number of shares of Stock subject to any Award shall always be
a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include
all Directors who are not and have not been at any time, within the preceding
three (3) years, employees of the Company or any of its Subsidiaries.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Board may from time to time select those Directors to whom Awards shall be
granted and determine the nature and amount of each Award. No Director shall
have any right to be granted an Award under this Plan even if previously granted
an Award.
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Directors at any time and from time to time as shall
be determined by the Board. The Board shall have the sole discretion, subject to
the requirements of the Plan, to determine the actual number of shares of Stock
subject to Options granted to any Participant. Options granted under the Plan
will be NQSOs.
6.2 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option price, the duration of the Option, the
number of shares of Stock to which the Option pertains, and such other
provisions as the Board shall determine.
6.3 Option Price. The purchase price per share of Stock covered by an
Option shall be determined by the Board.
6.4 Duration of Options. Each Option shall expire at such time as the
Board shall determine at the time of grant.
6.5 Exercise of Options. Subject to Section 3.7 hereof, Options granted
under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Board shall in each instance approve, which
need not be the same for all Participants.
705366.9
-6-
<PAGE>
6.6 Payment. Options shall be exercised by the delivery of a written
notice to the Company setting forth the number of shares of Stock with respect
to which the Option is to be exercised, accompanied by full payment for the
Stock. The Option price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, (b) by tendering shares of
previously acquired Company Stock having a Fair Market Value at the time of
exercise equal to the total Option price, (c) by foregoing compensation under
rules established by the Board, or (d) by a combination of (a), (b), or (c). The
proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general purposes. As soon as practicable, after receipt of
written notification and payment, the Company shall deliver to the Participant
Stock certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.
6.7 Restrictions on Stock Transferability. The Board shall impose such
restrictions on any Stock acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities law, under the requirements of any
securities exchange upon which such Stock is then listed and under any
applicable blue sky or state securities laws.
6.8 Termination of Service Due to Death, Disability, or Retirement. In
the event a Participant dies while serving as a Director, any of such
Participant's outstanding Options may be exercised at any time prior to the
expiration date of the Options or within one (1) year after his death, whichever
period is shorter, but only to the extent that the Participant was entitled to
exercise the Options at the date of his termination of service, by such person
or persons as shall have acquired the Participant's rights under the Option
pursuant to Article 10 hereof or by will or by the laws of descent and
distribution. In the event a Participant is unable to serve as a Director by
reason of disability (as defined under the then established rules of the
Company), the Participant shall have the right to exercise outstanding Options
at any time prior to the expiration date of the Options or within one (1) year
after his disability, whichever period is shorter, but only to the extent that
the Participant was entitled to exercise the Options on the date of his
termination of service. In the event a Participant retires from the Board, the
Participant shall have the right to exercise outstanding Options at any time
prior to the expiration date of the Options or within ninety (90) days after his
retirement, whichever period is shorter, but only to the extent that the
Participant was entitled to exercise the Options on the date of his termination
of service. In its sole discretion, the Board may extend the ninety (90) days to
up to one (1) year, but in no event beyond the expiration date of the Option.
6.9 Termination of Service for Other Reasons. If a Participant ceases
service as a Director for any reason other than death, disability, retirement or
removal, the Participant shall have the right to exercise outstanding Options at
any time prior to the expiration date of the Options or within the ninety (90)
days after the date of his termination, whichever period is shorter, but only to
the extent that the Participant was entitled to exercise the Options at the date
of his termination of service. In its sole discretion, the Board may extend the
ninety (90) days to up to one (1) year, but in no event beyond the expiration
date of the Option.
Notwithstanding anything contained herein, if a Director is
removed from service, all of the Participant's outstanding Options shall be
immediately forfeited back to the Company.
6.10 Limited Transferability of Options. No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution
or as provided for by the Board. Further, all Options (except for Options on
which SARs were granted) granted to a Participant under the Plan, unless
transferable, shall be exercisable during his lifetime only by such Participant.
If the Option Agreement provides, an Option may be transferred by a Participant
to the Participants children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are
the only partners (collectively, "Permitted Family Members"); provided, however,
that the Participant may not receive any consideration for the transfer. The
holder of an Option transferred pursuant to this section shall be bound by the
same terms and conditions that governed the Option during the period that it was
held by the Participant.
705366.9
-7-
<PAGE>
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Board, in any of the following forms:
(a) In tandem with Options;
(b) In addition to Options;
(c) Independent of Options; or
(d) In any combination of (a), (b), or (c).
The Board shall have the sole discretion, subject to the requirements of the
Plan, to determine the actual number of shares of Stock subject to SARs granted
to any Participant.
7.2 Exercise of SARs in Tandem with Options. SARs granted in tandem
with Options may be exercised for all or part of the Stock subject to the
related Option upon the surrender of the related Options representing the right
to purchase an equivalent number of shares of Stock. The SAR may be exercised
only with respect to the shares of Stock for which its related Option is then
exercisable. Option Stock with respect to which the SAR shall have been
exercised may not be subject again to an Award under the Plan.
7.3 Exercise of SARs in Addition to Options. SARs granted in addition
to Options shall be deemed to be exercised upon the exercise of the related
Options. The deemed exercise of SARs granted in addition to Options shall not
necessitate a reduction in the number of related Options.
7.4 Exercise of SARs Independent of Options. Subject to Section 3.7
hereof and Section 7.5 hereof, SARs granted independently of Options may be
exercised upon whatever terms and conditions the Board, in its sole discretion,
imposes upon the SARs, including, but not limited to, a corresponding
proportional reduction in previously granted Options.
7.5 Payment of SAR Amount. Upon exercise of the SAR, the holder shall
be entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a
share of Stock on the date of exercise over the price
fixed by the Board at the date of grant (which price
shall not be less than one hundred percent (100%) of
the market price of a share of Stock on the date of
grant) (the "Exercise Price"); by
(b) The number of shares of Stock with respect to which
the SAR is exercised.
7.6 Form and Timing of Payment. Payment to a Participant, upon SAR
exercise, will be made in cash or Stock, at the discretion of the Board, within
ten (10) calendar days of the exercise.
7.7 Term of SAR. The term of an SAR granted under the Plan shall not
exceed ten (10) years.
7.8 Termination of Service. In the event a Participant ceases service
as a Director by reason of death, disability, retirement, removal or any other
reason, the exercisability of any outstanding SAR granted in tandem with or in
addition to an Option shall terminate in the same manner as its related Option
as specified under Sections 6.8 and 6.9 hereof. The exercisability of any
outstanding SARs granted independent of Options also shall terminate in the
manner provided under Sections 6.8 and 6.9 hereof.
705366.9
-8-
<PAGE>
7.9 Nontransferability of SARs. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Board, at any time and from time to time, may grant Restricted
Stock under the Plan to such Participants and in such amounts as it shall
determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced, as necessary, by a Restricted Stock Agreement that shall specify the
Period of Restriction, or periods, the number of shares of Stock of Restricted
Stock granted, and such other provisions as the Board shall determine.
8.3 Transferability. Except as provided in this Article 8, the
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or for such period of time as shall be
established by the Board and as shall be specified in the Restricted Stock
Agreement, or upon earlier satisfaction of other conditions (including any
Performance Goals, as defined below) as specified by the Board in its sole
discretion and set forth in the Restricted Stock Agreement. All rights with
respect to the Restricted Stock granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.
8.4 Other Restrictions. The Board shall impose such other restrictions
on any Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
securities laws, and the Board may legend certificates representing Restricted
Stock to give appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4 hereof, each certificate representing
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares of stock represented
by this certificate, whether voluntary, involuntary, or by operation of
law, is subject to certain restrictions on transfer set forth in the
Amended and Restated 1997 Non-Employee Directors Stock Plan of Capital
Trust, Inc. in the rules and administrative procedures adopted pursuant
to such Plan, and in a Restricted Stock Agreement dated ___________. A
copy of the Plan, such rules and procedures, and such Restricted Stock
Agreement may be obtained from the Secretary of Capital Trust, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this
Article and subject to applicable securities laws and restrictions imposed
pursuant thereto, Restricted Stock shall become transferable by the Participant
after the last day of the Period of Restriction. Once the Stock is released from
the restrictions, the Participant shall be entitled to have the legend required
by Section 8.5 hereof removed from his Stock certificate.
8.7 Voting Rights. During the Period of Restriction, Participants
holding Restricted Stock granted hereunder may exercise full voting rights with
respect to such Stock.
8.8 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
such Stock while they are so held. If any such dividends or distributions are
paid in Stock, the Stock shall be subject to the same restrictions on
transferability as the Restricted Stock with respect to which they were paid.
705366.9
-9-
<PAGE>
8.9 Termination of Service. In the event that a Participant ceases to
be a Director of the Company for any reason during the Period of Restriction,
then any Restricted Stock still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company;
provided, however, that in the event that Participant ceases to be a Director
for any reason other than removal, the Board, in its sole discretion (subject to
Section 3.7 hereof) may waive the automatic forfeiture of any and all Stock and
may add such new restrictions to such Restricted Stock as it deems appropriate.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE STOCK AND STOCK UNITS
9.1 Grant of Performance Units, Performance Stock or Stock Units.
Subject to the terms and provisions of the Plan, Performance Units, Performance
Stock or Stock Units may be granted to Participants at any time and from time to
time as shall be determined by the Board. The Board shall have complete
discretion in determining the number of Performance Units, shares of Performance
Stock or Stock Units granted to each Participant.
9.2 Value of Performance Units and Performance Stock. The Board shall
set certain periods to be determined in advance by the Board (the "Performance
Periods"). Prior to each grant of Performance Units or Performance Stock, the
Board shall establish an initial value for each Performance Unit and an initial
number of shares of Stock for each share of Performance Stock granted to each
Participant for that Performance Period. Prior to each grant of Performance
Units or Performance Stock, the Board also shall set the Performance Goals (the
"Performance Goals") that will be used to determine the extent to which the
Participant receives a payment of the value of the Performance Units or number
of shares of Stock for the Performance Stock awarded for such Performance
Period. These goals will be based on the attainment by the Company of certain
objective or subjective performance measures, which may include one or more of
the following: total stockholder return, return on equity, return on capital,
earnings per share, asset growth, market share, stock price, revenues, costs,
net income, cash flow and retained earnings. Such Performance Goals also may be
based upon the attainment of specified levels of performance of the Company
under one or more of the measures described above relative to the performance of
other corporations. With respect to each such performance measure utilized
during a Performance Period, the Board shall assign percentages to various
levels of performance which shall be applied to determine the extent to which
the Participant shall receive a payout of the values of Performance Units and
number of shares of Performance Stock awarded.
9.3 Payment of Performance Units and Performance Stock. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Stock shall be entitled to receive the value thereof as determined by the Board.
The Board shall make this determination by first determining the extent to which
the Performance Goals set pursuant to Section 9.2 hereof have been met. It will
then determine the applicable percentage (which may exceed one hundred percent
(100%)) to be applied to, and will apply such percentage to, the value of
Performance Units or number of shares of Performance Stock to determine the
payout to be received by the Participant.
9.4 Value of Stock Units. Subject to the terms and provisions of the
Plan, Stock Units may be granted to Participants at any time and from time to
time on such terms as shall be determined by the Board. The Board shall have
complete discretion in determining the number of Stock Units granted to each
Participant. Stock Units shall be payable in Stock upon the occurrence of
certain trigger events set forth on the Participant's Election Form in his or
her complete discretion (the "Trigger Events"). The terms and conditions of the
Trigger Events may vary by Stock Unit Award, by Participant, or both. The
Election Form shall be filed with the Secretary of the Company prior to the date
on which any Stock Unit Award is made. Such election will be irrevocable as to
any Stock Unit Award made after delivery of the Election Form to the Company,
and it shall continue in effect until revoked, increased or decreased
prospectively by a Participant prior to the grant of any future Stock Unit Award
for which the change is effective.
9.5 Accounting for Stock Units. A Participant's Stock Unit Award shall
be credited by the Company to a bookkeeping account to reflect the Company's
liability to that Participant (the "Stock Unit Account"). Each Stock Unit is
credited as a Stock equivalent on the date so credited. Additional Stock
equivalents may be added to
705366.9
-9-
<PAGE>
the Stock Unit Account equal to the amount of Stock that could be purchased with
dividends equal to that paid on one share of Stock, multiplied by the number of
stock equivalents then existing in the Stock Unit Account, based on the Fair
Market Value of the Stock on the date a dividend is paid on the Stock. Because
the Trigger Events for each Stock Unit Award may differ, the Company shall
establish a separate Stock Unit Account for each separate Stock Unit Award. Upon
the occurrence of particular Trigger Events, the holder of a Stock Unit Award
shall be entitled to receive a number of shares of Stock which corresponds to
the number of Stock Units granted as part of the initial Stock Unit Award, as
such amount may have been increased to reflect dividends paid with respect
thereto.
9.6 Board Discretion to Adjust Awards. The Board shall have the
authority to modify, amend or adjust the terms and conditions of any Performance
Unit Award, Performance Stock Award or Stock Unit Award, at any time or from
time to time, including but not limited to the Performance Goals.
9.7 Form of Payment. The value of a Performance Unit or Performance
Stock may be paid in cash, Stock or a combination thereof as determined by the
Board. In the case of Stock Units, payment shall be made in Stock. Payment may
be made in a lump sum or installments as prescribed by the Board. If any payment
is to be made on a deferred basis, the Board may provide for the payment of
dividend equivalents or interest during the deferral period.
9.8 Termination of Service Due to Death, Disability or Retirement. In
the case of death, disability or retirement (each of disability and retirement
as defined under the established rules of the Company), the holder of a
Performance Unit or Performance Stock shall receive a prorated payment based on
the Participant's number of full months of service during the Performance Period
and on the percentage of the Performance Goals achieved through the date of
termination, as computed by the Board. Payment shall be made at the time
payments are made to Participants who did not terminate service during the
Performance Period. In the case of Stock Units, all such Stock Units held to the
extent vested on the date that the Participant ceases to be a Director, will be
paid as set forth in the Participant's Election Form.
9.9 Termination of Service for Other Reasons. In the event that a
Participant ceases to be a Director of the Company for any reason other than
death, disability or retirement, the Board shall have the discretion to
determine the disposition of the Participant's Performance Units and Performance
Stock. In the case of termination other than due to removal, all Stock Units
held to the extent vested on the date that the Participant ceases to be a
Director, will be paid as set forth in the Participant's Election Form. However,
in the event of termination due to removal, all Stock Units held will be
forfeited.
9.10 Nontransferability. No Performance Units, Performance Stock or
Stock Units granted under the Plan may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period or, in the case of Stock Units, until payment. All rights with respect to
Performance Units, Performance Stock and Stock Units granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively and
who may include a trustee under a will or living trust) to whom any benefit
under the Plan is to be paid in case of his death before he receives any or all
of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Board, and will be effective
only when filed by the Participant in writing with the Board during his
lifetime. In the absence of any such designation or if all designated
beneficiaries predecease the Participant, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
705366.9
-11-
<PAGE>
ARTICLE 11. RIGHTS OF DIRECTORS
11.1 Directorship. Nothing in the Plan shall interfere with or limit in
any way the right of the Board of Directors or stockholders under applicable law
to remove any Participant from the Board at any time, nor confer upon any
Participant any right to continue in the service of the Company.
11.2 Participation. No Director shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
11.3 No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving
any Participant, beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Board in accordance with the terms and provisions of the
Plan. Except as expressly provided in this Plan, the Company shall not be
required or be liable to make any payment under the Plan.
11.4 No Right to Company Assets. Neither the Participant nor any other
person shall acquire, by reason of the Plan, any right in or title to any
assets, funds or property of the Company whatsoever including, without limiting
the generality of the foregoing, any specific funds, assets, or other property
which the Company, in its sole discretion, may set aside in anticipation of a
liability hereunder. Any benefits which become payable hereunder shall be paid
from the general assets of the Company. The Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company. Nothing contained in the Plan constitutes a guarantee by
the Company that the assets of the Company shall be sufficient to pay any
benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1 Stock-Based Awards. Notwithstanding any other provisions of the
Plan, in the event of a Change in Control, all Stock-based Awards granted under
this Plan shall immediately vest one hundred percent (100%) in each Participant,
including Nonqualified Stock Options, Stock Appreciation Rights, Restricted
Stock and Stock Units.
12.2 Performance-Based Awards. Notwithstanding any other provision of
the Plan, in the event of a Change in Control, all performance-based Awards
granted under this Plan shall be immediately paid out in cash, including
Performance Units and Performance Stock. The amount of the payout shall be based
on the higher of: (i) the extent, as determined by the Board, to which
Performance Goals, established for the Performance Period then in progress have
been met up through and including the effective date of the Change in Control or
(ii) one hundred percent (100%) of the value on the date of grant of the
Performance Units or number of Performance Stock.
12.3 Pooling Transactions. Notwithstanding anything contained in the
Plan or any agreement to the contrary, in the event of a Change in Control which
is also intended to constitute a Pooling Transaction, the Committee shall take
such actions, if any, which are specifically recommended by an independent
accounting firm retained by the Company to the extent reasonably necessary in
order to assure that the Pooling Transaction will qualify as such, including but
not limited to (a) deferring the vesting, exercise, payment or settlement with
respect to any Award, (b) providing that the payment or settlement in respect of
any Award be made in the form of cash, Stock or securities of a successor or
acquired of the Company, or a combination of the foregoing and (c) providing for
the extension of the term of any Award to the extent necessary to accommodate
the foregoing, but not beyond the maximum term permitted for any Award.
ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION
13.1 Amendment, Modification and Termination. At any time and from time
to time, the Board may terminate, amend or modify the Plan, subject to the
approval of the stockholders of the Company if required by the
705366.9
-12-
<PAGE>
Code, by the insider trading rules of Section 16 of the Exchange Act, by any
securities exchange or system on which the Stock is then listed or reported, or
by any regulatory body having jurisdiction with respect hereto.
13.2 Awards Previously Granted. No termination, amendment or
modification of the Plan other than pursuant to Section 4.3 hereof shall in any
manner adversely affect any Award theretofore granted under the Plan, without
the written consent of the Participant.
ARTICLE 14. WITHHOLDING
Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
ARTICLE 15. EFFECT OF CERTAIN TRANSACTIONS
Effect of Certain Transactions. Subject to Section 12 hereof, or as
otherwise provided in an agreement, in the event of (a) the liquidation or
dissolution of the Company or (b) a merger, consolidation or combination of the
Company (a "Transaction"), the Plan and the Awards issued hereunder shall
continue in effect in accordance with their respective terms except that
following a Transaction each Participant shall be entitled to receive in respect
of each share of Stock subject to any outstanding Options or Awards, as the case
may be, upon exercise of any Option or payment or transfer in respect of any
Award, the same number and kind of Stock, securities, cash, property, or other
consideration that each holder of a share of Stock was entitled to receive in
the Transaction in respect of a share; provided, however, that such Stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were applicable
to the Options or Awards prior to such Transaction.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of
Stock under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or securities
exchanges as may be required.
16.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of New York.
Effective Date of this Amended and Restated 1997 Non-Employee Director Stock
Plan: January 28, 1998
705366.9
-13-
Exhibit 10.3
CAPITAL TRUST, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of
Capital Trust, Inc., a Maryland corporation, and any corporate successor to all
or substantially all of the assets or voting stock of Capital Trust, Inc. which
shall by appropriate action adopt the Plan (the "Company") and certain of its
subsidiaries with opportunities to purchase class A common stock, par value $.01
per share, of the Company (the "Common Stock").
1. Definitions. For purposes of administration of the Plan,
the following terms shall have the meanings indicated:
"Authorization Form" shall be defined in Section 6 hereof.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the committee of the Board, if any,
appointed to administer the Plan.
"Compensation" means the amount of money reportable on the
employee's Federal Income Tax Withholding Statement, excluding allowances and
reimbursements for expenses such as relocation allowances for travel expenses,
income or gains on the exercise of Company stock options and similar items,
whether or not shown on the employee's Federal Income Tax Withholding Statement.
"Continuity of Control" shall be defined in Section 19 hereof.
"Designated Subsidiary" shall be defined in Section 4 hereof.
"Exercise Date" shall be defined in Section 11 hereof.
"Investment Account" shall mean the separate account for each
participating employee reflecting the number of shares of Common Stock purchased
under the Plan that have not been withdrawn by the employee.
"Offering Commencement Date" shall be defined in Section 5
hereof.
703524.9
<PAGE>
"Offerings" shall be defined in Section 5 hereof.
"Option" shall be defined in Section 11 hereof.
"Plan" shall mean the Capital Trust 1998 Employee Stock
Purchase Plan.
"Plan Period" shall be defined in Section 5 hereof.
2. Share Authorization. The maximum number of shares of Common
Stock that may be issued under the Plan is (a) 1,000,000 minus (b) the number of
shares of Common Stock subject to or issued under the Company's 1998
Non-Employee Stock Purchase Plan.
3. Administration. The Plan will be administered by the Board
or by the Committee. The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
4. Eligibility. Participation in the Plan will neither be
permitted nor denied contrary to the requirements of Section 423 of the Code and
regulations promulgated thereunder. All employees of the Company, including
directors who are employees, and all employees of any subsidiary of the Company
(as defined in Section 424(f) of the Code) designated by the Board or the
Committee from time to time (a "Designated Subsidiary"), are eligible to
participate in any one or more of the offerings of Options to purchase Common
Stock under the Plan provided that:
(a) they are regularly employed by the Company or a
Designated Subsidiary for more than twenty (20) hours a week
and for more than five (5) months in a calendar year, and they
have been employed, as of the applicable Offering Commencement
Date (as defined below), for at least three (3) months; and
(b) they are employees of the Company or a Designated
Subsidiary on the first day of the applicable Plan Period (as
defined below).
No employee may be granted an Option hereunder if such
employee, immediately after the option is granted, owns five (5%) percent or
more of the total combined voting power or value of the stock of the Company or
any subsidiary. For purposes of the preceding sentence, the attribution rules of
Section 424(d) of the Code shall apply in determining the stock ownership of an
employee, and all stock which the employee has a contractual right to purchase
shall be treated as stock owned by the employee.
5. Offerings. Common Stock shall be offered for purchase under
the Plan through a series of successive offerings ("Offerings") until such time
as (i) the maximum number of shares of Common Stock available for issuance under
the Plan shall have been issued pursuant
703524.9
2
<PAGE>
to purchase rights granted under the Plan or (ii) the Plan shall have been
sooner terminated in accordance with Section 22 hereof. The initial Offering
will begin upon the later of (i) January 1, 1999 or (ii) the effective date of
the Registration Statement on Form S-8 covering the shares of Common Stock
issuable under the Plan, and will end on June 30, 1999. The second Offering will
begin on July 1, 1999 and end on December 31, 1999. Subsequent Offerings will
begin on the successive January 1 or July 1 (each, an "Offering Commencement
Date"). Each Offering Commencement Date will begin a six (6) month period (a
"Plan Period") during which payroll deductions will be made and held for the
purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve (12)
months or less for subsequent Offerings.
6. Participation. An employee eligible on the Offering
Commencement Date of any Offering may participate in such Offering by completing
and forwarding a payroll deduction authorization form ("Authorization Form") to
the employee's appropriate payroll office at least thirty (30) days prior to the
applicable Offering Commencement Date. The Authorization Form will authorize a
regular payroll deduction from the Compensation received by the employee during
the Plan Period. Unless an employee files a new form or withdraws from the Plan,
the employee's deductions and purchases will continue at the same rate for
future Offerings under the Plan as long as the Plan remains in effect.
7. Deductions. The Company will maintain payroll deduction
accounts for participating employees. Payroll deductions may be at a set dollar
amount not less than $10.00 or a rate of any whole percentage of Compensation,
subject to the limitations in Section 11 hereof, with any change in Compensation
during the Plan Period to result in an automatic corresponding change in the
dollar amount withheld.
No employee may be granted an Option (as defined in Section 11
hereof) which permits the employee's rights to purchase Common Stock under this
Plan and any other stock purchase plan of the Company and its subsidiaries, to
accrue at a rate which exceeds $25,000 of the fair market value of such Common
Stock (determined at the Offering Commencement Date of the Plan Period) for each
calendar year in which the Option is outstanding at any time.
8. Deduction Changes. An employee may decrease or discontinue
payroll deductions once during any Plan Period, by filing a new Authorization
Form. However, an employee may not increase his payroll deduction during a Plan
Period. If an employee elects to discontinue his payroll deductions during a
Plan Period, but does not elect to withdraw the employee's funds pursuant to
Section 10 hereof, funds deducted prior to the election to discontinue will be
applied to the purchase of Common Stock on the Exercise Date.
9. Interest. Interest will not be paid on any employee
accounts, except to the extent that the Board or the Committee, in its sole
discretion, elects to credit employee accounts with interest at such per annum
rate as it may from time to time determine.
703524.9
3
<PAGE>
10. Withdrawal of Funds. An employee may at any time prior to
the close of business on the last business day in a Plan Period and for any
reason permanently draw out the balance accumulated in the employee's account
and thereby withdraw from participation in an Offering. Partial withdrawals are
not permitted. The employee may not begin participation again during the
remainder of the Plan Period. The employee may participate in any subsequent
Offering in accordance with terms and conditions established by the Board or the
Committee.
11. Purchase of Stock. On the Offering Commencement Date of
each Plan Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, such number of shares of whole Common Stock obtained by dividing
the amount collected from the participant through payroll deductions during the
Plan Period for which such Option is outstanding, together with any amount
carried over from the preceding Plan Period pursuant to this Section 11, by the
Option Price in effect for the Plan Period. However, the maximum number of
shares of Common Stock purchasable by any participant during any one Plan Period
shall not exceed $12,500 divided by the fair market value of a share of Common
Stock on the first business day of the applicable Plan Period.
The purchase price for each share of Common Stock purchased
shall be 85% of the average of the closing prices of the Common Stock on each
business day of the applicable Offering, provided the purchase price shall not
be less than the lesser of (i) 85% of the closing price on the first business
day of such Plan Period or (ii) 85% of the closing price on the last business
day of the Plan Period (the "Option Price"). Such closing prices shall be (a)
the closing price on any national securities exchange on which the Common Stock
is listed, (b) the closing price of the Common Stock on the Nasdaq National
Market or (c) the average of the closing bid and asked prices in the
over-the-counter-market, whichever is applicable, as published in The Wall
Street Journal.
Each employee who continues to be a participant in the Plan on
the Exercise Date shall be deemed to have exercised the employee's Option at the
Option Price on such date and shall be deemed to have purchased from the Company
the number of full shares of Common Stock reserved for the purpose of the Plan
that the employee's accumulated payroll deductions on such date will pay for
pursuant to the formula set forth above (but not in excess of the maximum number
determined in the manner set forth above). The Company, or its designated agent,
shall hold in its name or in the name of its nominee all certificates for the
Common Stock purchased until the Common Stock is withdrawn under Section 13
hereof.
Any balance remaining in an employee's payroll deduction
account at the end of a Plan Period will be automatically refunded to the
employee, except that any balance which is less than the purchase price of one
share of Common Stock will be carried forward into the employee's payroll
deduction account for the following Offering, unless the employee elects not to
participate in the following Offering under the Plan, in which case the balance
in the employee's account shall be refunded.
703524.9
4
<PAGE>
12. Employee's Rights as a Stockholder. No participating
employee shall have any right as a stockholder with respect to any shares of
Common Stock under the Plan until the Common Stock has been purchased in
accordance with Section 11 hereof.
All cash dividends paid with respect to the Common Stock in a
employee's Investment Account shall, unless otherwise directed by the Board or
Committee, be used to purchase additional shares of Common Stock on the next
date such stock is purchased pursuant to Section 11 hereof, subject to the
limitations in Section 11 hereof. Such shares of Common Stock shall be added to
the employee's Investment Account.
Each employee shall be entitled to direct the Company, or its
designated agent, as to the voting of any Common Stock held in the employee's
Investment Account.
13. Withdrawal from Investment Account. An employee shall have
the right to request, not more than once per calendar quarter, that a
certificate be issued for all or a portion of the Common Stock credited to his
Investment Account by giving notice to the Company; provided that if any of the
Common Stock with respect to which a certificate has been requested has been
credited to the employee's Investment Account for less than one (1) year, the
employee shall not be permitted to participate in the Offering that commences
immediately after such certificate is issued.
Each certificate withdrawn by a employee may be registered
only in the name of the employee, or if the employee so directs, in the names of
the employee and one other person, as joint tenants with right of survivorship,
tenants in common, or as community property, or (in the Company's sole
discretion) in the street name of a brokerage firm, bank or other nominee holder
designated by the employee to the extent and in the manner permitted by
applicable law.
14. Rights Not Transferable. No employee shall be permitted to
sell, assign, transfer, pledge, or otherwise dispose of or encumber either the
payroll deductions credited to his or her payroll deduction account, Common
Stock credited to his or her Investment Account, or any rights with regard to
the exercise of an Option or to receive stock under the Plan other than by will
or the laws of descent and distribution, and such right and interest shall not
be liable for, or subject to, the debts, contracts, or liabilities of the
employee. If any such action is taken by the employee, or any claim is asserted
by any other party in respect of such right and interest whether by garnishment,
levy, attachment or otherwise, such action or claim will be treated as an
election to withdraw in accordance with Section 10 or Section 13 hereof,
whichever is applicable.
15. Rights on Retirement, Death or Termination of Employment.
In the event an employee's employment shall be terminated prior to the last
business day of a Plan Period by reason of resignation, layoff or discharge, no
payroll deduction shall be taken from any pay due and owing to an employee and
the balance in the employee's payroll deduction account and the shares of Common
Stock in the employee's Investment Account shall be paid in cash or issued to
the employee, as the case may be. In the event an employee's employment shall be
terminated (a) within ninety (90) days of the last day of the current Offering
by reason of retirement or disability, or (b)
703524.9
5
<PAGE>
at any time during the current Offering by reason of death, the employee (or the
employee's a beneficiary previously designated in a revocable notice signed by
the employee (with any spousal consent required under state law) or, in the
absence of such a designated beneficiary, the executor or administrator of the
employee's estate or, if no such executor or administrator has been appointed to
the knowledge of the Company, to such other person(s) as the Company may, in its
discretion, designate) shall have the right prior to the end of the current
Offering to elect to have the balance of his or her payroll deduction account
either paid to the employee in cash or applied at the end of the current
Offering toward the purchase of Common Stock and the Company shall otherwise
issue to the employee the Stock in his Investment Account. If an employee's
employment shall be terminated more than ninety (90) days from the last day of
the current Offering by reason of retirement or disability, the balance of the
employee's payroll deduction account and the shares in the employee's Investment
Account shall be paid in cash or issued to the employee, as the case may be. If,
prior to the last business day of the Plan Period, the Designated Subsidiary by
which an employee is employed shall cease to be a subsidiary of the Company, or
if the employee is transferred to a subsidiary of the Company that is not a
Designated Subsidiary, the employee shall be deemed to have terminated
employment for the purposes of this Plan.
16. Optionees Not Stockholders. Neither the granting of an
Option to an employee nor the deductions from his pay shall constitute such
employee a stockholder of the shares of Common Stock covered by an Option under
this Plan until such stock has been purchased by the employee.
17. Application of Funds. All funds received or held by the
Company under this Plan may be combined with other corporate funds and may be
used for any corporate purpose.
18. Adjustment in Case of Changes Affecting Common Stock. In
the event of a subdivision of outstanding shares of Common Stock, or the payment
of a dividend in Common Stock, the number of shares of Stock approved for this
Plan, and the share limitation set forth in Section 11 hereof, shall be
increased proportionately, and such other adjustment shall be made as may be
deemed equitable by the Board or the Committee. In the event of any other change
affecting the Common Stock such adjustment shall be made as may be deemed
equitable by the Board or the Committee to give proper effect to such event.
19. Merger. If the Company shall at any time merge or
consolidate with another corporation and the holders of the capital stock of the
Company immediately prior to such merger or consolidation continue to hold at
least 80% by voting power of the capital stock of the surviving corporation
("Continuity of Control"), the holder of each Option then outstanding will
thereafter be entitled to receive at the next Exercise Date upon the exercise of
such Option for each share of Common Stock as to which such Option shall be
exercised the securities or property which a holder of Common Stock was entitled
to receive at the time of such merger, and the Committee shall take such steps
in connection with such merger as the Committee shall deem necessary to assure
that the provisions of Section 18 hereof shall thereafter be applicable, as
nearly as reasonably may be, in
703524.9
6
<PAGE>
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with
or into another corporation which does not involve Continuity of Control, or of
a sale of all or substantially all of the assets of the Company while
unexercised Options remain outstanding under the Plan, (a) subject to the
provisions of clauses (b) and (c), after the effective date of such transaction,
each holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive in lieu of Common Stock shares of such stock or other
securities as the holders of Common Stock received pursuant to the terms of such
transaction; or (b) all outstanding Options may be canceled by the Board or the
Committee as of a date prior to the effective date of any such transaction and
all payroll deductions shall be paid out to the participating employees; or (c)
all outstanding Options may be canceled by the Board or the Committee as of the
effective date of any such transaction, provided that notice of such
cancellation shall be given to each holder of an Option, and each holder of an
Option shall have the right to exercise such Option in full based on payroll
deductions then credited to his account as of a date determined by the Board or
the Committee, which date shall not be less than ten (10) days preceding the
effective date of such transaction.
20. Amendment of the Plan. The Board may at any time, and from
time to time, amend this Plan in any respect, except that (a) if the approval of
any such amendment by the stockholders of the Company is required by Section 423
of the Code, such amendment shall not be effected without such approval, and (b)
in no event may any amendment be made which would cause the Plan to fail to
comply with Section 423 of the Code.
21. Insufficient Stock. In the event that the total number of
shares of Common Stock specified in elections to be purchased under any Offering
plus the number of shares of Common Stock purchased under previous Offerings
under this Plan exceeds the maximum number of shares of Common Stock issuable
under this Plan, the Board or the Committee will allot the Common Stock then
available on a pro rata basis.
22. Termination of the Plan. This Plan may be terminated at
any time by the Board or the Committee. The Plan will terminate in any case on
the date on which all or substantially all of the unissued Common Stock reserved
for issuance under the Plan have been purchased. Upon termination of this Plan
all amounts in the payroll deduction accounts of participating employees shall
be promptly refunded.
23. Governmental Regulations. The Company's obligation to sell
and deliver Common Stock under this Plan is subject to listing on a national
stock exchange or quotation on the Nasdaq National Market and the approval of
all governmental authorities required in connection with the authorization,
issuance or sale of such Common Stock.
The Plan shall be governed by New York law except to the
extent that such law is preempted by federal law.
703524.9
7
<PAGE>
The Plan is intended to constitute a "Stock Purchase Plan"
within the meaning of Rule 16b-3(b)(5) promulgated under the Securities Exchange
Act of 1934.
24. Issuance of Stock. Stock may be issued upon exercise of an
Option from authorized but unissued Common Stock, from stock held in the
treasury of the Company, or from any other proper source.
25. Notification upon Sale of Stock. Each employee agrees, by
entering the Plan, to promptly give the Company notice of any disposition of
Common Stock purchased under the Plan where such disposition occurs within two
(2) years after the date of grant of the Option pursuant to which such Common
Stock were purchased.
26. Effective Date and Approval of Stockholders. The Plan was
adopted by the Board of Trustees of Capital Trust, a California business trust
(the "Predecessor"), the predecessor of the Company to become effective as of
April 24, 1998, subject to approval of the Predecessor's shareholders on or
before April 23, 1999. The shareholders of the Predecessor approved the Plan on
January 28, 1999 and the Plan thereupon became effective. Upon consummation of
the reorganization of the Predecessor into the Company on January 28, 1999 after
such shareholder approval was obtained, the Company succeeded to and assumed the
Plan. On January 28, 1999, the Plan was amended, effective on that date to
change all references to "Capital Trust" to "Capital Trust, Inc." and make
additional technical revisions that reflect the different capital and governance
structure of the Company.
703524.9
8
Exhibit 10.4
CAPITAL TRUST, INC.
1998 NON-EMPLOYEE STOCK PURCHASE PLAN
1. Purpose
The purpose of this Plan is to provide eligible non-employees of
Capital Trust, Inc., a Maryland corporation, and any corporate successor to all
or substantially all of the assets or voting stock of Capital Trust, Inc., which
shall by appropriate action adopt the Plan (the "Company") and certain of its
subsidiaries with opportunities to purchase class A common stock, par value $.01
per share, of the Company (the "Common Stock").
2. Definitions
2.1 "Account" shall mean the separate bookkeeping account established
and maintained by the Committee or the Board, as the case may be, for each
Participant for each Plan Period to record the contributions made on his or her
behalf to purchase Common Stock under this Plan.
2.2 "Beneficiary" shall mean the person designated as such in
accordance with Section 11 hereof.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Committee" shall mean the Committee of the Board, if any,
appointed to administer the Plan.
2.5 "Common Stock" shall have the meaning set forth in the Preamble
hereof.
2.6 "Company" shall have the meaning set forth in the Preamble hereof.
2.7 "Continuity of Control" shall have the meaning set forth in Section
13 hereof.
2.8 "Election Form" shall mean the form which an Eligible Non-Employee
shall be required to properly complete in writing and timely file at least
thirty (30) days prior to the applicable Offering Commencement Date in order to
make any of the elections available to an Eligible Non-Employee under this Plan.
2.9 "Eligible Non-Employee" shall mean key consultants, other service
providers and non-employee directors of the Company or certain of its
subsidiaries.
2.10 "Exercise Date" shall have the meaning set forth in Section 8
hereof.
2.11 "Offering(s)" shall mean the series of successive offerings
through which Common Stock shall be offered for purchase under the Plan.
760131.12
<PAGE>
2.12 "Offering Commencement Date" shall have the meaning set forth in
Section 5 hereof.
2.13 "Option" shall have the meaning set forth in Section 8 hereof.
2.14 "Option Price" shall mean the purchase price for each share of
Common Stock which is 85% of the average of the closing price of the Common
Stock on each business day of the applicable Offering, provided the purchase
price shall not be less than the lesser of (i) 85% of the closing price on the
first business day of such Plan Period or (ii) 85% of the closing price on the
last business day of the Plan Period. Such closing prices shall be (a) the
closing price on any national securities exchange on which the Common Stock is
listed, (b) the closing price of the Common Stock on The Nasdaq National Market,
or (c) the average of the closing bid and asked prices in the over-the-counter
market, whichever is applicable, as published in The Wall Street Journal.
2.15 "Participant" shall mean (a) for each Plan Period an Eligible
Non-Employee who has elected to purchase Common Stock in accordance with Section
6 hereof in such Plan Period and (b) any person for whom a share of Common Stock
is held pending delivery under Section 9 hereof.
2.16 "Plan" shall mean this Capital Trust, Inc. 1998 Non-Employee Stock
Purchase Plan.
2.17 "Plan Period" shall mean the six (6) month period, beginning on
each Offering Commencement Date, during which the Participant may make
contributions to his or her Account.
2.18 "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any successor to such
rule.
3. Stock Authorization
The maximum number of shares of Common Stock that may be issued under
the Plan shall be equal to (i) 1,000,000 minus (ii) the number of shares of
Common Stock remaining subject to or issued under the Company's 1998 Employee
Stock Purchase Plan.
4. Administration
The Plan will be administered by either the Committee or by the Board.
The Committee or the Board, as the case may be, has the authority to make rules
and regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
760131.12
-2-
<PAGE>
5. Offerings
Common Stock shall be offered through Offerings until such time as (i)
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been issued pursuant to purchase rights granted under the Plan
or (ii) the Plan shall have been sooner terminated in accordance with Section 15
hereof. The initial Offering will begin upon the later of (i) January 1, 1999 or
(ii) the effective date of the Registration Statement on Form S-8 covering the
Common Stock issuable under the Plan, and will end on June 30, 1999. The second
Offering will begin on July 1, 1999 and end on December 31, 1999. Subsequent
Offerings will begin on the successive January 1 or July 1 (each an "Offering
Commencement Date"). Each Offering Commencement Date will begin a Plan Period.
The Board or the Committee may, at its discretion, choose a different Plan
Period of twelve (12) months or less for subsequent Offerings.
6. Participation
Each person who is an Eligible Non-Employee shall be a Participant in
this Plan for the related Plan Period if he or she properly completes and timely
files an Election Form with the Committee or the Board, as the case may be, to
elect to participate in this Plan. An Election Form may require an Eligible
Non-Employee to provide such information and to agree to take such action (in
addition to the action required under Section 7 hereof) as the Committee or the
Board, as the case may be, deems necessary or appropriate in light of the
purpose of this Plan or for the orderly administration of this Plan.
7. Contributions
(a) In General. Each Participant's Election Form under Section 6 hereof
shall specify the contributions that he or she proposes to make for the related
Plan Period. Such contributions shall be expressed as a specific dollar amount
that the Participant proposes to contribute in cash, subject to the restrictions
noted in Section 8(a) hereof. The Participant shall have delivered to the
Committee or the Board, as the case may be, either in installments or in a lump
sum, the full contribution amount, as noted on the applicable Election Form, no
later than five (5) days prior to the last day of the Plan Period for which such
contribution is being made.
No Participant may be granted an Option which permits his or
her rights to purchase Common Stock under this Plan and any other stock purchase
plan of the Company and its subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such Common Stock (determined at the
Offering Commencement Date of the Plan Period) for each calendar year in which
the Option is outstanding at any time.
(b) Changes in Contributions and Withdrawals. (i) A Participant shall
have the right to amend his or her Election Form once during any Plan Period to
reduce or to stop his or her contributions, and such election shall be effective
immediately for cash contributions and as soon as practicable after the
Committee or the Board, as the case may be, actually receives such
760131.12
-3-
<PAGE>
amended Election Form. If a Participant elects to stop his or her contributions
during a Plan Period, but does not elect to withdraw his or her funds pursuant
to this Section, funds contributed prior to his or her election to stop
contributions will be applied to the purchase of Common Stock on the Exercise
Date. A Participant may at any time prior to the close of business on the last
business day in a Plan Period, and for any reason, permanently draw out the
balance accumulated in the Participant's Account and thereby withdraw from
participation in an Offering. Partial withdrawals are not permitted. The
Participant may not begin participation again during the remainder of the Plan
Period. The Participant may participate in any subsequent Offering in accordance
with the terms and conditions established by the Committee or the Board, as the
case may be.
(ii) A Participant shall have the right to request, not more
than once per calendar quarter, that a certificate be issued for all or a
portion of the Common Stock credited to his or her Account by giving notice to
the Company; provided that if any of the Common Stock with respect to which a
certificate has been requested has been credited to the Participant's Account
for less than one (1) year, the Participant shall not be permitted to
participate in the Offering that commences immediately after such certificate is
issued.
(iii) Each certificate withdrawn by a Participant may be
registered only in the name of the Participant, or if the Participant so
directs, the names of the Participant and one other person, as joint tenants
with right of survivorship, tenants in common, or as community property, or (in
the Company's sole discretion) in the street name of a brokerage firm, bank or
other nominee holder designated by the Participant to the extent and in the
manner permitted by applicable law.
(c) Account Credits, General Assets and Taxes. All contributions made
by a Participant under this Plan shall be held by the Company. All funds
received or held by the Company under this Plan may be combined with other
corporate funds and may be used for any corporate purpose. No interest shall be
paid or accrued on any such contributions, except to the extent that the
Committee or the Board, in its sole discretion, elects to credit the Accounts of
Participants with interest at such per annum rate as it may from time to time
determine. Each Participant's right to the contributions credited to his or her
Account shall be that of a general and unsecured creditor of the Company.
(d) Automatic Refunds. Any balance remaining in a Participant's Account
at the end of a Plan Period will be automatically refunded to the Participant,
except that any balance which is less than the purchase price of one (1) share
of Common Stock will be carried forward into the Participant's Account for the
following Offering, unless the Participant elects not to participate in the
following Offering under the Plan, in which case the balance in the
Participant's Account shall be refunded. The balance credited to the Account of
a Participant who is a non-employee director automatically shall be refunded in
full (without interest) if his or her status as a member of the Board terminates
for any reason whatsoever during a Plan Period. Such refunds shall be
760131.12
-4-
<PAGE>
made as soon as practicable after the Committee or the Board, as the case may
be, has actual notice of any such termination.
8. Purchase of Stock
(a) Option Exercise. (i) On the Offering Commencement Date of each Plan
Period, the Company will grant each Participant an option ("Option") to purchase
on the last business day of such Plan Period (the "Exercise Date"), at the
Option Price hereinafter provided for, such number of whole shares of Common
Stock obtained by dividing the amount contributed by the Participant during the
Plan Period for which such Option is outstanding, together with any amount
carried over from the preceding Plan Period pursuant to Section 7(d) hereof, by
the Option Price in effect for the Plan Period. However, the maximum number of
shares of Common Stock purchasable by any Participant during any one Plan Period
shall not exceed $12,500 divided by the fair market value of a share of Common
Stock on the first business day of the applicable Plan period.
(ii) Each Eligible Non-Employee who continues to be a
Participant in the Plan on the Exercise Date shall be deemed to have exercised
his Option at the Option Price on such date and shall be deemed to have
purchased from the Company the number of full shares of Common Stock reserved
for the purpose of the Plan that his or her accumulated contributions on such
date will pay for pursuant to the formula set forth above (but not in excess of
the maximum number determined in the manner set forth above). The Company, or
its designated agent, shall hold in its name or in the name of its nominee all
certificates for Common Stock purchased until the Common Stock are withdrawn
under Section 7(b) hereof.
(b) Insufficient Stock. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offering plus the
number of shares of Common Stock purchased under previous Offerings under this
Plan exceeds the maximum number of shares of Common Stock issuable under this
Plan, the Committee or the Board, as the case may be, will allot the Common
Stock then available on a pro rata basis.
9. Issuance of Stock
Common Stock may be issued upon exercise of an Option from authorized
but unissued Common Stock, from stock held in the treasury of the Company, or
from any other proper source. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on a national stock exchange
or quotation on The Nasdaq National Market and the approval of all governmental
authorities required in connection with the authorization, issuance or sale of
such Common Stock.
760131.12
-5-
<PAGE>
10. Participant's Rights as a Stockholder
(a) In General. No Participant shall have any rights as a stockholder
with respect to Common Stock under the Plan until the Common Stock has been
purchased in accordance with Section 8 hereof. Neither the granting of an Option
to a Participant nor the contributions made by such Participant into his or her
Account shall constitute such Participant a stockholder of the shares of Common
Stock covered by an Option under this Plan until such stock has been purchased
by such Participant.
(b) Dividends. All cash dividends paid with respect to Common Stock in
an Account shall, unless otherwise directed by the Committee or the Board, as
the case may be, be used to purchase additional Common Stock on the next date
stock are eligible to be purchased pursuant to Section 5 hereof, but subject to
the limitations of Section 8(a) hereof. Such Common Stock shall be added to the
Participant's Account.
(c) Voting. Each Participant shall be entitled to direct the Company's
or its designated agent, as to the voting of any Common Stock held in the
Participant's Account.
11. Designation of Beneficiary
A Participant may designate on his or her Election Form a Beneficiary
(a) who shall receive the balance credited to his or her Account if the
Participant dies before the end of a Plan Period and (b) who shall receive the
Common Stock, if any, purchased for the Participant under this Plan if the
Participant dies after the end of a Plan Period but before either the
certificate representing such Common Stock has been delivered to the Participant
or before such Common Stock has been credited to a brokerage account maintained
for the Participant. Such designation may be revised in writing at any time by
the Participant by filing an amended Election Form, and his or her revised
designation shall be effective at such time as the Committee or the Board, as
the case may be, receives such amended Election Form. If a deceased Participant
fails to designate a Beneficiary or, if no person so designated survives a
Participant or, if after checking his or her last known mailing address, the
whereabouts of the person so designated are unknown, then the Participant's
estate shall be treated as his or her designated Beneficiary under this Section
11.
12. Transferability
Neither the balance credited to a Participant's Account nor any rights
to exercise any Option under this Plan may be assigned, encumbered, alienated,
transferred, pledged, or otherwise disposed of in any way by a Participant
during his or her lifetime or by his or her Beneficiary or by any other person
during his or her lifetime, and such right and interest shall not be liable for,
or subject to, the debts, contracts, or liabilities of the Participant or any
Beneficiary. If any action is taken by the Participant, or any claim is asserted
by any other party in respect of such right and interest whether by garnishment,
levy, attachment or otherwise, such action or claim will be treated as an
election to withdraw in accordance with Section 7(b) hereof.
760131.12
-6-
<PAGE>
13. Adjustment in Case of Changes Affecting Common Stock; Merger
(a) Adjustment. In the event of a subdivision of outstanding Common
Stock, or the payment of a dividend in Common Stock, the number of shares of
Common Stock approved for this Plan, and the stock limitation set forth in
Section 8(a) hereof, shall be increased proportionately, and such other
adjustment shall be made as may be deemed equitable by the Committee or the
Board, as the case may be. In the event of any other change affecting the Common
Stock such adjustment shall be made as may be deemed equitable by the Committee
or the Board, as the case may be, to give proper effect to such event.
(b) Merger. (i) If the Company shall at any time merge or consolidate
with another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of Common Stock was entitled to receive at the time of
such merger, and the Committee or the Board, as the case may be, shall take such
steps in connection with such merger as the Committee shall deem necessary to
assure that the provisions of subsection (a) above shall thereafter be
applicable, as nearly as reasonably may be, in relation to the said securities
or property as to which such holder of such Option might thereafter be entitled
to receive thereunder.
(ii) In the event of a merger or consolidation of the Company
with or into another corporation which does not involve Continuity of Control,
or of a sale of all or substantially all of the assets of the Company while
unexercised Options remain outstanding under the Plan, (x) subject to the
provisions of clauses (y) and (z), after the effective date of such transaction,
each holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive in lieu of Common Stock, shares of such stock or other
securities as the holders of Common Stock received pursuant to the terms of such
transaction; or (y) all outstanding Options may be canceled by the Committee or
the Board, as the case may be, as of a date prior to the effective date of any
such transaction and all contributions shall be paid out to the Participants; or
(z) all outstanding Options may be canceled by the Committee or the Board, as
the case may be, as of the effective date of any such transaction, provided that
notice of such cancellation shall be given to each holder of an Option, and each
holder of an Option shall have the right to exercise such Option in full based
on contributions then credited to his or her Account as of a date determined by
the Committee or the Board, as the case may be, which date shall not be less
than ten (10) days preceding the effective date of such transaction.
14. Amendment or Termination
This Plan may be amended by the Board from time to time to the extent
that the Board deems necessary or appropriate, and any such amendment shall be
subject to the approval of the Company's stockholders to the extent such
approval is required under applicable laws or the rules
760131.12
-7-
<PAGE>
of an exchange on which the Company is listed; provided, however, no amendment
shall be retroactive unless the Board in its discretion determines that such
amendment is in the best interest of the Company or such amendment is required
by applicable law to be retroactive. The Committee or the Board, as the case may
be, may also terminate this Plan at any time. This Plan will terminate in any
case on the date on which all or substantially all of the unissued Common Stock
reserved for issuance under the Plan have been purchased. Upon termination of
this Plan all amounts in the Accounts of Participants shall be promptly
refunded.
15. Headings, References and Construction
The headings to sections in this Plan have been included for
convenience of reference only. This Plan shall be interpreted and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law principles of such state.
16. Effective Date and Approval of Stockholders
The Plan was adopted by the Board of Trustees of Capital Trust, a
California business trust (the "Predecessor"), the predecessor of the Company to
become effective as of November 1, 1998, subject to approval of the
Predecessor's shareholders on or before November 1, 1999. The shareholders of
the Predecessor approved the Plan on January 28, 1999 and the Plan thereupon
became effective. Upon consummation of the reorganization of the Predecessor
into the Company on January 28, 1999 after such shareholder approval was
obtained, the Company succeeded to and assumed the Plan. On January 28, 1999,
the Plan was amended, effective on that date to change all references to
"Capital Trust" to "Capital Trust, Inc." and make additional technical revisions
that reflect the different capital and governance structure of the Company.
760131.12
-8-
Exhibit 10.5
CAPITAL TRUST, INC.
STOCK PURCHASE LOAN PLAN
1. Purpose
The purpose of the Capital Trust, Inc. Stock Purchase Loan Plan (the
"Plan") is to promote the interests of Capital Trust, Inc. and its stockholders
by providing opportunities for Participants (as defined herein) to purchase
class A common stock, par value $.01 per share (the "Common Stock"), of Capital
Trust, Inc., a Maryland corporation (the "Company"), with financing provided by
the Company, thereby aligning their personal interests to the long-term
financial success of the Company and growth in stockholder value. Pursuant to
the Plan, the Company may extend loans ("Plan Loans") to Participants to finance
purchases of issued and outstanding stock in the secondary trading market or of
authorized but unissued stock directly from the Company.
The Plan is intended to qualify as an "eligible plan" that provides for
the purchase of Common Stock, as "margin stock," with financing provided by Plan
Loans in accordance with section 221.4 of Regulation U (12 CFR 221.4)
promulgated by the Federal Reserve Board.
2. Stock Authorization
(a) The maximum number of shares of authorized but unissued
Common Stock that the Company may issue and sell to Participants with financing
provided by Plan Loans shall be 500,000 ("Authorized Stock"); provided, however,
that any stock issued to Participants under the Plan and subsequently reacquired
by the Company shall again become Authorized Stock available for sale under the
Plan.
(b) In the event that, as a result of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, stock split-up, stock combination, or other change affecting the
Common Stock, (i) the number of shares of Common Stock is increased or decreased
or (ii) the Common Stock are changed into or exchanged for a different number or
kind of stock or other securities of the Company or of another organizational
entity, the Plan Administrator shall make appropriate and equitable adjustment
to the remaining Authorized Stock available for issuance with financing under
the Plan.
(c) The maximum number of Authorized Stock shall not be
affected by purchases of any issued and outstanding stock in the secondary
trading market financed with Plan Loans.
3. Participants
The Company may extend Plan Loans to any trustee or officer, equal or
senior in rank to Vice President, of the Company, or to any consultant or
service provider to the Company who, in the opinion of the Plan Administrator,
can contribute to the growth and profitability of the
762190.10
<PAGE>
Company (each a "Participant"). The Plan Administrator shall have the complete
authority to select the Participants eligible to participate in the Plan.
4. Administration
The Plan will be administered by either a committee appointed by the
board of directors of the Company to administer the Plan, or by the board of
directors itself (the "Plan Administrator"). The Plan Administrator has the
authority to extend Plan Loans and authorize the sale of Authorized Stock to be
purchased with financing provided by Plan Loans, from time to time, as
determined by the Plan Administrator. The Plan Administrator has the authority
to make rules and regulations for the administration of the Plan and its
interpretation and decisions with regard thereto shall be final and conclusive.
5. Terms of Plan Loans
(a) The Company may extend Plan Loans with a principal amount
equal to up to 100% of the purchase price of Common Stock purchased with the
Plan Loans. Subject to the foregoing, the principal amount of any Plan Loan
shall be determined by the Plan Administrator.
(b) Plan Loans shall bear interest at an interest rate which
shall be determined by the Plan Administrator, provided that such interest rate
shall be no less than the applicable Federal rate in effect pursuant to Section
1274(d) of the Internal Revenue Code of 1986, as amended, and shall be
compounded no less than semi-annually.
(c) The Plan Administrator shall have the discretion to
determine other terms and conditions of Plan Loans extended under the Plan,
including but not limited to, those relating to: maturity of the Plan Loans; the
recourse or non-recourse nature of the Plan Loans; the forgiveness of any or all
of the principal and/or interest due on the Plan Loans; conditions for
forgiveness of principal and/or interest, such as length of employment or
service, change of control events, performance measures or otherwise; the
deferral of interest payments; Company commitments to make tax gross up payments
to cover taxes incurred as a result of any forgiveness; or options to call or
put the Common Stock to satisfy the Plan Loans.
6. Loan Documents
Each Participant who receives a Plan Loan from the Company shall be
required to sign (i) a loan agreement (which sets forth the terms and conditions
of the Plan Loans), (ii) a secured promissory note and (iii) a pledge and
security agreement (which sets forth the terms and conditions for the pledge of
the Common Stock purchased with financing provided by the Plan Loan)
(collectively the "Loan Documents"). The form and terms and conditions of the
Loan Documents shall be determined by the Plan Administrator.
762190.10
-2-
<PAGE>
7. Offer and Acceptance of Common Stock
(a) Offers to sell Common Stock to Participants with financing
provided by Plan Loans shall be made in writing. The written offers shall
specify the number of shares of Common Stock to be offered to the Participant,
the portion of the purchase price to be financed with Plan Loans and an outline
of the terms thereof and the date by which the offer must be accepted. All
offers shall be subject to the condition that the Purchase Agreement (as defined
herein) and the Loan Documents shall be executed and delivered by the
Participant.
(b) A Participant may accept a Company offer to sell shares of
Common Stock by delivering a written acceptance to the Secretary of the Company.
At the time of his/her acceptance, such Participant shall also execute a
purchase agreement pursuant to which the Participant agrees to purchase the
Common Stock (the "Purchase Agreement") and the related Loan Documents and shall
deliver to the Secretary of the Company such documents along with payment of the
portion of the aggregate purchase price not financed with Plan Loans as
specified in the Purchase Agreement.
(c) Any offer to sell shares of Common Stock made pursuant to
the Plan must be accepted within the time specified in the offer. If acceptance
does not occur within the specified time, the offer shall be deemed withdrawn.
(d) No offer or sale of Common Stock to Participants with
financing provided by Plan Loans shall be made until the effective date of the
Registration Statement on Form S-8 covering the Authorized Stock available for
issuance under the Plan or unless made pursuant to an exemption from
registration under the Securities Act of 1933, as amended.
8. Issuance of Stock
(a) Upon execution of the Purchase Agreement and Loan
Documents and receipt by the Company of the purchase price for the Common Stock
in accordance with Section 7 hereof, the stock will be deemed to be fully paid
and nonassessable Common Stock. Stock certificates representing the Common Stock
shall be registered in the Participants' names, but shall be held in custody by
the Company for their account.
(b) Certificates representing Common Stock issued pursuant to
the Plan shall bear such legends as the Company may deem appropriate.
9. Secondary Trading Market Purchases
Any secondary trading market purchases of Common Stock financed with
Plan Loans shall be made in compliance with the Company's policy and procedures
governing trading in stock of the Company and applicable provisions of the
Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder.
762190.10
-3-
<PAGE>
10. Amendment or Termination
This Plan may be amended by the Plan Administrator from time to time to
the extent that the Plan Administrator deems it necessary or appropriate, and
any such amendment shall be subject to the approval of the Company's
stockholders to the extent such approval is required under applicable laws or
the rules of the exchange on which the Company is listed. The Plan Administrator
may also terminate this Plan at any time. No amendment or termination of the
Plan shall adversely affect any Plan Loan extended under the Plan, without the
written consent of the Participant.
11. Headings, References and Construction
The headings to sections in this Plan have been included for
convenience of reference only. This Plan shall be interpreted and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law principles of such state.
12. Effective Date and Approval of Stockholders
The Plan was adopted by the Board of Trustees of Capital Trust, a
California business trust (the "Predecessor"), the predecessor of the Company to
become effective as of November 1, 1998, subject to approval of the
Predecessor's shareholders on or before November 1, 1999. The shareholders of
the Predecessor approved the Plan on January 28, 1999 and the Plan thereupon
became effective. Upon consummation of the reorganization of the Predecessor
into the Company on January 28, 1999 after such shareholder approval was
obtained, the Company succeeded to and assumed the Plan. On January 28, 1999,
the Plan was amended, effective on that date to change all references to
"Capital Trust" to "Capital Trust, Inc." and make additional technical revisions
that reflect the different capital and governance structure of the Company.
762190.10
-4-
