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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) July 6, 1998
ARCHSTONE COMMUNITIES TRUST
(formerly known as Security Capital Pacific Trust)
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
1-10272 74-6056896
(Commission File Number) (I.R.S. Employer Identification No.)
7670 South Chester Street, Englewood, Colorado 80112
(Address of Principal Executive Offices) (Zip Code)
(303) 708-5959
(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On July 6, 1998, Security Capital Pacific Trust, a Maryland real estate
investment trust ("PTR"), announced that the merger of Security Capital Atlantic
Incorporated, a Maryland corporation, with and into PTR had closed and was to
become effective on July 7, 1998, and that PTR had changed its name to
"Archstone Communities Trust." This announcement is filed as an exhibit hereto
and is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits.
2.1 Articles of Merger merging Security Capital Atlantic
Incorporated with and into PTR.
4.1 Amended and Restated Declaration of Trust of PTR.
4.2 Amended and Restated Bylaws of PTR.
10.1 Amendment No. 1 to Third Amended and Restated Investor Agreement
99.1 Press Release Dated July 6, 1998.
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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.
ARCHSTONE COMMUNITIES TRUST
Dated: July 7, 1998
/s/ Jeffrey A. Klopf
-----------------------------------------
Jeffrey A. Klopf
Secretary
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Exhibit 2.1
ARTICLES OF MERGER
Merging
SECURITY CAPITAL ATLANTIC INCORPORATED
(a corporation of the State of Maryland)
Into
SECURITY CAPITAL PACIFIC TRUST
(a real estate investment trust of the State of Maryland)
SECURITY CAPITAL ATLANTIC INCORPORATED, a corporation organized and
existing under the laws of the State of Maryland (the "East"), and SECURITY
CAPITAL PACIFIC TRUST, a real estate investment trust organized and existing
under the laws of the State of Maryland, which shall be the surviving
corporation and which shall continue its existence under the name "Archstone
Communities Trust" ("West"), agree that East shall be merged with and into West.
The terms and conditions of the merger and the mode of carrying the same into
effect are as herein set forth in these Articles of Merger.
FIRST: The parties to these Articles of Merger are West, a real estate
investment trust organized and existing under the laws of the State of Maryland,
and East, a corporation organized and existing under the laws of the State of
Maryland.
SECOND: East shall be merged with and into West in accordance with the
Corporations and Associations Article of the Annotated Code of Maryland (the
"Maryland Code") and West shall survive the merger and continue under the name
"Archstone Communities Trust" (the "Surviving Entity"). At the Effective Time
(as defined below) of the merger, the separate existence of East shall cease in
accordance with the provisions of the Maryland Code. From and after the
Effective Time, the Surviving Entity shall continue its existence as a real
estate investment trust under the Maryland Code, shall succeed to all of the
properties, liabilities and other assets and shall be subject to all of the
liabilities and obligations of East without further action by either of the
parties hereto, and will continue to be governed by the laws of the State of
Maryland, including the Maryland Code. At the Effective Time, the declaration of
trust and bylaws of West in effect immediately prior to the Effective Time shall
become the declaration of trust and bylaws of the Surviving Entity. At the
Effective Time, the trustees and officers in office immediately prior to the
Effective Time shall be the trustees and officers of the Surviving Entity, and
such persons shall hold such positions until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation, or removal, in accordance with the declaration of trust and bylaws
of the Surviving Entity.
THIRD: The merger shall be effective as of 12:01 a.m. on July 7, 1998 (the
"Effective Time").
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FOURTH: The resident agent and office of each of East and West is The
Prentice-Hall Corporation System, Maryland, located at 11 East Chase Street,
Baltimore, State of Maryland 21202. The principal office of West is located at
7670 South Chester Street, Englewood, Colorado 80112. West has no principal
office located in the State of Maryland. The principal office of East is located
at Six Piedmont Center, Suite 600, Atlanta, Georgia 30305 and the post office
address of the principal office of East in the State of Maryland is c/o The
Prentice-Hall Corporation System, Maryland, 11 East Chase Street, Baltimore,
Maryland 21202. Neither East nor West owns any interest in land in any county in
the State of Maryland.
FIFTH: The terms and conditions of the transaction set forth in these
Articles of Merger were advised, authorized and approved by each party to these
Articles of Merger in the manner and by the vote required by East's articles of
incorporation or West's declaration of trust, as the case may be, and the laws
of the State of Maryland.
SIXTH: The merger was duly (a) advised by the board of directors of East by
the adoption of a resolution declaring that the merger set forth in these
Articles of Merger was advisable on substantially the terms and conditions set
forth or referred to in the resolution and directing that the proposed merger be
submitted for consideration at the annual meeting of the shareholders of East
and (b) approved by the shareholders of East by the vote required by its
articles of incorporation and the Maryland Code.
SEVENTH: The merger was duly (a) advised by the board of trustees of West
by the adoption of a resolution declaring that the merger set forth in these
Articles of Merger was advisable on substantially the terms and conditions set
forth or referred to in the resolution and directing that the proposed merger be
submitted for consideration at the annual meeting of the shareholders of West
and (b) approved by the shareholders of West by the vote required by its
declaration of trust and the Maryland Code.
EIGHTH: The charter of the Surviving Entity will not be amended as a result
of the Merger.
NINTH: The total number of shares of beneficial interest of all classes
which West has authority to issue is two hundred fifty million (250,000,000)
shares of beneficial interest, of the par value of one dollar ($1.00) each, all
such shares having an aggregate par value of two hundred fifty million dollars
($250,000,000). Of such shares of beneficial interest, nine million two hundred
thousand (9,200,000) shares have been classified as Series A Cumulative
Convertible Preferred Shares of Beneficial Interest, four million two hundred
thousand (4,200,000) shares have been classified as Series B Cumulative
Redeemable Preferred Shares, two million (2,000,000) shares have been classified
as Series C Cumulative Redeemable Preferred Shares ("West New Preferred Stock")
and two million five hundred thousand (2,500,000) shares have been classified as
Junior Participating Preferred Shares.
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The total number of shares of stock of all classes which East has authority
to issue is two hundred fifty million (250,000,000) shares, all such shares
having an aggregate par value of two million five hundred thousand dollars
($2,500,000). Of such two hundred fifty million shares, two million (2,000,000)
shares have been classified as Series A Cumulative Redeemable Preferred Stock
and seven hundred forty six thousand thirty two (746,032) shares have been
classified as Series A Junior Participating Preferred Stock.
TENTH: As of the Effective Time, by virtue of the Merger and without any
action on the part of West, East, or any holder of any of the following
securities:
(a) Cancellation of Treasury Stock and West-Owned East Capital Stock.
Each share of the common stock, $.01 par value per share, of East ("East Common
Stock"), together with the rights (the "East Rights") attached thereto to
purchase Series A Junior Participating Preferred Stock of East (the "East Junior
Preferred Stock") issued pursuant to the Rights Agreement, dated as of March 12,
1996, between East and The First National Bank of Boston, as Rights Agent (as it
may be amended), that is owned by East or any subsidiary of East, and each share
of East Common Stock (with the associated East Rights) that is owned by West or
any subsidiary of West shall automatically be cancelled and retired and shall
cease to exist, and no consideration shall be delivered or deliverable in
exchange therefor. Each share of Series A Cumulative Redeemable Preferred Stock
of East ("East Series A Preferred Stock") that is owned by East or any
subsidiary of East, and each share of East Series A Preferred Stock that is
owned by West or any subsidiary of West shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be delivered or
deliverable in exchange therefor.
(b) Conversion of East Common Stock. Subject to Article ELEVENTH, each
issued and outstanding share of East Common Stock (with the associated East
Rights), other than shares cancelled pursuant to paragraph (a) of this Article,
shall be converted into the right to receive one (1) (the "Exchange Ratio")
validly issued, fully paid, and nonassessable share of beneficial interest,
$1.00 par value per share, of West ("West Common Stock"), together with the
rights (the "West Rights") attached thereto to purchase Junior Participating
Preferred Stock of West issued pursuant to the Rights Agreement, dated as of
July 21, 1994 between West and Chemical Bank, as Rights Agent (as amended). The
consideration to be issued to the holders of East Common Stock is referred to
herein as the "Merger Consideration."
(c) Conversion of East Series A Preferred Stock. Subject to Article
ELEVENTH, each issued and outstanding share of East Series A Preferred Stock,
other than shares cancelled pursuant to paragraph (a) of this Article, shall be
converted into the right to receive one validly issued, fully paid, and
nonassessable share of West New Preferred Stock.
(d) Cancellation and Retirement of East Capital Stock. All shares of
East Common Stock (with the associated East Rights and any shares of East Junior
Preferred Stock issuable upon exercise thereof) converted into the right to
receive the Merger Consideration
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pursuant to paragraph (b) of this Article shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of East Common Stock (with
the associated East Rights) shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration in accordance with
paragraph (b) of this Article, and any cash in lieu of fractional shares of West
Stock pursuant to paragraph (e) of Article ELEVENTH, upon surrender of such
certificate in accordance with Article ELEVENTH. As of the Effective Time, all
shares of East Series A Preferred Stock converted into the right to receive West
New Preferred Stock pursuant to paragraph (c) of this Article shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of East
Series A Preferred Stock shall cease to have any rights with respect thereto,
except the right to receive West New Preferred Stock in accordance with
paragraph (c) of this Article upon surrender of such certificate in accordance
with Article ELEVENTH.
(e) Conversion of East Stock Options. Each option granted by East to
purchase shares of East Common Stock (an "East Stock Option") which is
outstanding and unexercised immediately prior to the Effective Time shall cease
to represent a right to acquire such shares and shall be converted into an
option to purchase shares of West Common Stock (a "West Stock Option") in an
amount and at an exercise price determined as provided below (and otherwise
subject to the terms and conditions of East's 1996 Share Option Plan for Outside
Trustees or 1997 Long-Term Incentive Plan and the agreements evidencing grants
thereunder, but having the same vesting, exercise, and termination dates that
such East Stock Options had immediately prior to the Effective Time).
(i) The number of shares of West Common Stock to be subject to
the West Stock Option shall be equal to the product of (A) the number of shares
of East Common Stock subject to the East Stock Option immediately prior to the
Effective Time and (B) the Exchange Ratio.
(ii) The exercise price per share of West Common Stock under the
West Stock Option shall be equal to (A) the exercise price per share of East
Common Stock under the East Stock Option immediately prior to the Effective Time
divided by (B) the Exchange Ratio.
ELEVENTH:
(a) Exchange Agent. As soon as reasonably practicable after the
Effective Time, West shall deposit the Merger Consideration and the West New
Preferred Stock with a bank or trust company designated by West and reasonably
acceptable to East to act as exchange agent (the "Exchange Agent"), for the
benefit of the holders of shares of East Common Stock and holders of shares of
East Series A Preferred Stock, respectively, for exchange in accordance with
this Article ELEVENTH.
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(b) Exchange Procedures. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of an outstanding certificate
or certificates which prior thereto represented shares of East Common Stock or
shares of East Series A Preferred Stock (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to such
certificate shall pass, only upon delivery of such certificates to such Exchange
Agent), and (ii) instructions for use in effecting the surrender of such
certificates for the Merger Consideration or West New Preferred Stock, as the
case may be. Upon surrender to the Exchange Agent of such certificates for
cancellation, together with such letter of transmittal, the holder of such
certificates shall be entitled to a certificate or certificates representing the
number of full shares of West Common Stock or West New Preferred Stock, as the
case may be, and the amount of cash, if any, into which the aggregate number of
shares of East Common Stock or East Series A Preferred Stock previously
represented by such certificate or certificates surrendered shall have been
converted pursuant to these Articles of Merger. The Exchange Agent shall accept
such certificates upon compliance with such reasonable terms and conditions as
the Exchange Agent may impose to effect an orderly exchange thereof in
accordance with normal exchange practices. After the Effective Time, there shall
be no further transfer on the records of East or its transfer agent of
certificates representing shares of East Common Stock or East Series A Preferred
Stock and if such certificates are presented to East for transfer, they shall be
cancelled against delivery of certificates for West Common Stock and cash, if
any, or West New Preferred Stock as hereinabove provided. If any certificate for
such West Common Stock or West New Preferred Stock is to be issued in, or if
cash is to be remitted to, a name other than that in which the certificate for
East Common Stock or East Series A Preferred Stock surrendered for exchange is
registered, it shall be a condition of such exchange that the certificate so
surrendered shall be properly endorsed, with signature guaranteed, or otherwise
in proper form for transfer and that the person requesting such exchange shall
pay to West or its transfer agent any transfer or other taxes required by reason
of the issuance of a certificate for such West Common Stock or West New
Preferred Stock in a name other than that of the registered holder of the
certificate surrendered, or establish to the satisfaction of West or its
transfer agent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this paragraph, each certificate for shares of
East Common Stock or East Series A Preferred Stock shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration or West New Preferred Stock, respectively. No
interest will be paid or will accrue on any cash payable in lieu of any
fractional shares of West Common Stock.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to West Common Stock or West New Preferred
Stock with a record date after the Effective time shall be paid to the holder of
any unsurrendered certificate for shares of East Common Stock or East New
Preferred Stock with respect to the shares of West Common Stock or West Series A
Preferred Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to paragraph (e) of this
Article until the surrender of such certificate in accordance with this Article.
Subject to the effect of applicable laws, following surrender of any such
certificate, there shall be paid to the holder of the certificate
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representing whole shares of West Common Stock or West New Preferred Stock
issued in exchange therefor, without interest, (i) at the time of such surrender
the amount of any cash payable in lieu of a fractional share of West Common
Stock to which such holder is entitled pursuant to paragraph (e) of this Article
and the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of West Common
Stock or West New Preferred Stock, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such whole shares of West Common Stock or West
New Preferred Stock.
(d) No Further Ownership Rights in East Capital Stock. All shares of
West Common Stock and West New Preferred Stock issued and all cash paid upon the
surrender for exchange of certificates representing shares of East Common Stock
or East Series A Preferred Stock in accordance with the terms of this Article
(including any cash paid pursuant to paragraph (e) of this Article) shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of East Common Stock or East Series A Preferred Stock
theretofore represented by such certificates.
(e) No Fractional Shares of West Common Stock or West New Preferred
Stock.
(i) No certificates or scrip representing fractional shares of West
Common or West New Preferred Stock shall be issued upon the surrender for
exchange of certificates representing shares of East Common Stock, and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a shareholder of West. Notwithstanding any other provision of these
Articles of Merger, each holder of shares of East Common Stock exchanged
pursuant to the Merger who would have otherwise been entitled to receive a
fraction of a share of West Common Stock (after taking into account all shares
of East Common Stock held of record by such holder at the Effective Time) shall
receive, in lieu of such fraction of a share, cash in an amount determined and
paid as stated in paragraphs 2.2(e)(ii)-(v) of this Article.
(ii) As promptly as practicable after the Effective Time, the Exchange
Agent shall determine the excess (such excess being referred to as the "Excess
Shares") of (A) the aggregate number of whole shares of West Common Stock
issuable pursuant to paragraph (b) of this Article ELEVENTH over (B) the
aggregate number of whole shares of West Common Stock to be distributed to
former holders of East Common Stock pursuant to paragraph (b) of this Article
after taking into account the payment of cash in lieu of fractional shares of
West Common Stock (on the premise that the entitlement of each holder of shares
of East Common Stock to receive cash in lieu of a fractional share of West
Common Stock shall be calculated taking into account all shares of East Common
Stock held of record at the Effective Time by such holder). Following the
Effective Time, the Exchange Agent shall, on behalf of the former holders of
East Common Stock, sell the Excess Shares at then-prevailing prices on the New
York Stock Exchange ("NYSE") in the manner provided in paragraph (e)(iii) of
this Article.
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(iii) The sale of the Excess Shares by the Exchange Agent shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. The Exchange Agent shall use
reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in the Exchange Agent's sole judgment, is
practicable consistent with obtaining the best execution of such sales in light
of prevailing market conditions. Until the net proceeds of such sale or sales
have been distributed to the holders of the certificates formerly representing
East Common Stock, the Exchange Agent shall hold such proceeds in trust for such
holders (the "Common Shares Trust"). West shall pay all commissions, transfer
taxes and other out-of-pocket transactions costs, including the expenses and
compensation of the Exchange Agent incurred in connection with such sale of the
Excess Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each former holder of East Common Stock is entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction, the numerator of which is the amount of the
fractional share interest to which such former holder of East Common Stock is
entitled (after taking into account all shares of East Common Stock held of
record at the Effective Time by such holder) and the denominator of which is the
aggregate amount of fractional share interest to which all former holders of
East Common Stock are entitled.
(iv) Notwithstanding the provisions of paragraphs (e)(ii) and (iii) of
this Article, West may elect at its option, exercised prior to the Effective
Time, in lieu of the issuance and sale of Excess Shares and the making of the
payments hereinabove contemplated, to pay each former holder of East Common
Stock an amount in cash equal to the product obtained by multiplying (A) the
fractional share interest to which such former holder (after taking into account
all shares of East Common Stock held of record at the Effective Time by such
holder) would otherwise be entitled by (B) the closing price of West Common
Stock as reported on the NYSE Composite Tape (as reported in The Wall Street
Journal, or, if not reported therein, any other authoritative source) on the
Closing Date, and, in such case, all references herein to the cash proceeds of
the sale of the Excess Shares and similar references shall be deemed to mean and
refer to the payments calculated as set forth in this paragraph (e)(iv).
(v) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of certificates formerly representing East
Common Stock with respect to any fractional share interests, the Exchange Agent
shall make available such amounts to such holders subject to and in accordance
with the terms of paragraph (b) of this Article.
(f) Termination of Exchange Fund. Any portion of the Merger
Consideration or West New Preferred Stock deposited with the Exchange Agent
pursuant to this Article (the "Exchange Fund") which remains undistributed to
the holders of the certificates formerly representing shares of East Common
Stock or East Series A Preferred Stock for twelve months after the Effective
Time shall be delivered to West, upon demand, and any holders of shares of East
Common Stock or East Series A Preferred Stock who have not theretofore complied
with this
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Article shall thereafter look only to West and only as general creditors thereof
for payment of their claim for West Common Stock, West New Preferred Stock, any
cash in lieu of fractional shares of West Common Stock, and any dividends or
distributions with respect to West Common Stock or West New Preferred Stock to
which such holders may be entitled.
(g) No Liability. None of West, East or the Exchange Agent shall be
liable to any person in respect of any shares of West Common Stock or West New
Preferred Stock (or dividends or distributions with respect to either) or cash
from the Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any certificates formerly
representing shares of East Common Stock or East Series A Preferred Stock shall
not have been surrendered prior to five years after the Effective Time (or
immediately prior to such earlier date on which any West Common Stock, West New
Preferred Stock, cash in lieu of fractional shares of West Common Stock or
dividends or distributions with respect to West Common Stock or West New
Preferred Stock in respect of such certificate would otherwise escheat to or
become the property of any governmental entity, any such shares, cash, dividends
or distributions in respect of such certificate shall, to the extent permitted
by applicable law, become the property of West, free and clear of all claims or
interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund as directed by West on a daily basis. Any
interest and other income resulting from such investments shall be paid to West.
TWELFTH: The parties hereto intend that the execution of these Articles of
Merger constitute the adoption of a "plan of reorganization" within the meaning
of Treasury Regulations (S) 1.368-1(c).
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IN WITNESS WHEREOF, SECURITY CAPITAL ATLANTIC INCORPORATED, a Maryland
corporation, and SECURITY CAPITAL PACIFIC TRUST, a Maryland real estate
investment trust, the entities parties to the merger, have caused these Articles
of Merger to be signed in their respective names and on their behalf and
witnessed or attested all as of the 30th day of June, 1998. Each of the
individuals signing these Articles of Merger on behalf of SECURITY CAPITAL
ATLANTIC INCORPORATED or SECURITY CAPITAL PACIFIC TRUST acknowledges these
Articles of Merger to be the act of such respective entity and, as to all other
matters or facts required to be verified under oath, that to the best of his or
her knowledge, information and belief, these matters are true in all material
respects and that this statement is made under the penalties of perjury.
SECURITY CAPITAL ATLANTIC INCORPORATED
a Maryland corporation
By: /S/ JEFFREY A. KLOPF (SEAL)
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Jeffrey A. Klopf, Senior Vice President
Attest:
/S/ MARK W. PEARSON
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Mark W. Pearson, Assistant Secretary
SECURITY CAPITAL PACIFIC TRUST
a Maryland real estate investment trust
By: /S/ JEFFREY A. KLOPF (SEAL)
----------------------------------------
Jeffrey A. Klopf, Senior Vice President
Attest:
/S/ MARK W. PEARSON
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Mark W. Pearson, Assistant Secretary
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Exhibit 4.1
SECURITY CAPITAL PACIFIC TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE I. THE TRUST........................................................ 1
Section 1. Name....................................................... 1
Section 2. Resident Agent............................................. 2
Section 3. Nature of Trust............................................ 2
Section 4. Powers and Purposes........................................ 2
Section 5. Conflicts of Interest...................................... 3
ARTICLE II. SHARES.......................................................... 3
Section 1. Shares of Beneficial Interest.............................. 3
Section 2. Series A Preferred Shares.................................. 5
Section 3. Series B Preferred Shares.................................. 5
Section 4. Series C Preferred Shares.................................. 5
Section 5. Sale of Shares............................................. 5
Section 6. General Nature............................................. 5
Section 7. Acquisition of Shares...................................... 6
Section 8. Transferability; Transfer Restrictions
and Ownership Limitations.................................. 6
Section 9. Exemptions from Certain Provisions of Maryland Law......... 21
ARTICLE III. SHAREHOLDERS................................................... 21
Section 1. Meetings................................................... 21
Section 2. Voting..................................................... 22
Section 3. Distributions.............................................. 22
Section 4. Annual Report.............................................. 22
Section 5. Inspection Rights.......................................... 22
Section 6. Nonliability and Indemnification........................... 22
Section 7. Notice of Nonliability..................................... 23
ARTICLE IV. THE TRUSTEES.................................................... 23
Section 1. Number, Qualification, Compensation and Term............... 23
Section 2. Resignation, Removal and Death............................. 24
Section 3. Vacancies.................................................. 25
Section 4. Successor Trustees......................................... 25
Section 5. Meetings and Action Without a Meeting...................... 25
Section 6. Authority.................................................. 26
Section 7. Powers..................................................... 26
Section 8. Right to Own Shares........................................ 28
Section 9. Transactions with Trust.................................... 28
Section 10. Limitation of Liability.................................... 28
Section 11. Indemnification............................................ 29
Section 12. Persons Dealing with Trustees.............................. 29
Section 13. Administrative Powers...................................... 29
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
Section 14. Election of Officers....................................... 29
Section 15. Committees and Delegation of Powers and Duties............. 30
ARTICLE V. TERMINATION AND DURATION......................................... 30
Section 1. Termination................................................ 30
Section 2. Organization as a Corporation.............................. 31
Section 3. Merger, Consolidation or Sale.............................. 31
Section 4. Duration................................................... 31
ARTICLE VI. AMENDMENTS...................................................... 31
Section 1. Amendment by Shareholders.................................. 31
Section 2. Amendment by Trustees...................................... 31
Section 3. Requirements of Maryland Law............................... 31
ARTICLE VII. MISCELLANEOUS.................................................. 31
Section 1. Construction............................................... 31
Section 2. Headings for Reference Only................................ 32
Section 3. Filing and Recording....................................... 32
Section 4. Applicable Law............................................. 32
Section 5. Certifications............................................. 32
Section 6. Severability............................................... 32
Section 7. Bylaws..................................................... 33
Section 8. Recording.................................................. 33
ARTICLE VIII. LIMITATION OF LIABILITY AND INDEMNIFICATION................... 33
Section 1. Limitation of Liability of Officers and Employees.......... 33
Section 2. Indemnification of Officers and Employees.................. 33
Section 3. Insurance.................................................. 34
ANNEX A CUMULATIVE CONVERTIBLE SERIES A PREFERRED SHARES OF BENEFICIAL INTEREST
ANNEX B SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES OF BENEFICIAL INTEREST
ANNEX C SERIES C CUMULATIVE REDEEMABLE PREFERRED SHARES OF BENEFICIAL INTEREST
ANNEX D JUNIOR PARTICIPATING PREFERRED SHARES OF BENEFICIAL INTEREST
</TABLE>
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SECURITY CAPITAL PACIFIC TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
This Amended and Restated Declaration of Trust of Security Capital Pacific
Trust is made as of June 30, 1998.
RECITALS
1. Security Capital Pacific Trust, a Maryland real estate investment trust
(the "Trust"), desires to amend and restate its declaration of trust as
currently in effect and as hereinafter amended and to change its name to
Archstone Communities Trust.
2. The amendment to and restatement of the declaration of trust of the
Trust as hereinafter set forth was advised by the Board of Trustees (the
"Board") of the Trust and approved by the shareholders (the "Shareholders") of
the Trust as required by law.
3. The Trustees desire that the Trust continue to qualify as a "real
estate investment trust" under the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and under Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended ("Title 8"),
so long as such qualification, in the opinion of the Trustees, is advantageous
to the Shareholders of the Trust.
4. The beneficial interests in the Trust are divided into transferable
Shares of one or more classes of shares of beneficial interest evidenced by
certificates.
DECLARATION
NOW, THEREFORE, the Trustees hereby declare that they hold the duties of
Trustees hereunder and hold all assets of the Trust presently existing and
hereafter to be received, and all rents, income, profits and gains therefrom,
from whatever source derived, in trust for the Shareholders in accordance with
the terms and conditions hereinafter provided, which are all of the provisions
of the Trust's declaration of trust as currently in effect and as hereinafter
amended.
ARTICLE I. THE TRUST
Section 1. Name.
(a) The Trust governed by this Amended and Restated Declaration of Trust
(as amended, supplemented or restated from time to time, this "Declaration of
Trust") is herein referred to as the "Trust" and shall be known by the name
"Archstone Communities Trust." So far as may be practicable, legal and
convenient, the affairs of the Trust shall be conducted and transacted under
such name, which name shall not refer to the Trustees individually or personally
or to the beneficiaries or Shareholders of the Trust, or to any officers,
employees or
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agents of the Trust. Under circumstances in which the Board determines that the
use of the name "Archstone Communities Trust" is not practicable, legal or
convenient, it may as appropriate use the Trustees' names with suitable
reference to their Trustee status, or some other suitable designation, or it may
adopt another name under which the Trust may hold property or operate in any
jurisdiction which name shall not, to the knowledge of the Board, refer to
beneficiaries or Shareholders of the Trust.
(b) Legal title to all of the properties subject from time to time to this
Declaration of Trust shall be transferred to, vested in and held by the Trust in
its own name or by the Trustees as joint tenants with right of survivorship as
Trustees of the Trust, except that the Board shall have the power to cause legal
title to any property of the Trust to be held by and/or in the name of one or
more of the Trustees, or any other person as nominee, on such terms, in such
manner and with such powers as the Board may determine, provided that the
interest of the Trust therein is, in the judgment of the Board, appropriately
protected.
(c) The Trust shall have the authority to operate under an assumed name or
names in such state or states or any political subdivision thereof where it
would not be legal, practical or convenient to operate in the name of the Trust.
The Trust shall have the authority to file such assumed name certificates or
other instruments in such places as may be required by applicable law to operate
under such assumed name or names.
Section 2. Resident Agent. The name and address of the resident agent of
the Trust in the State of Maryland is The Prentice-Hall Corporation System,
Maryland, 11 East Chase Street, Baltimore, Maryland 21202. The principal office
of the Trust is 7670 South Chester Street, Englewood, Colorado 80112. The Trust
may have such other offices or places of business within or without the State of
Maryland as the Board may from time to time determine.
Section 3. Nature of Trust. The Trust is a real estate investment trust
under Maryland law. The Trust is not intended to be, shall not be deemed to be
and shall not be treated as, a general partnership, limited partnership, joint
stock association or, except as provided in Section 2 of Article V, a
corporation. The Shareholders shall be beneficiaries in such capacity in
accordance with the rights conferred on them hereunder.
Section 4. Powers and Purposes. The Trust is formed pursuant to the
provisions of, and shall have all of the powers provided in, Title 8, as it may
be amended from time to time, and shall have such additional powers as are not
inconsistent with, and are appropriate with respect to, the purposes of the
Trust as set forth in this Declaration of Trust. The purposes of the Trust are
to purchase, hold, lease, manage, sell, exchange, develop, subdivide and improve
real property and interests in real property and to invest in notes, bonds and
other obligations secured by mortgages on real property, and in general, to do
all other things in connection with the foregoing and to have and exercise all
powers conferred by Maryland law on real estate investment trusts formed under
Maryland law, and to do any or all of the things set forth herein to the same
extent as natural persons might or could do. In addition, it is intended that
the business of the Trust shall be conducted so that the Trust will qualify (so
long as such
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qualification, in the opinion of the Board, is advantageous to the
Shareholders) as a "real estate investment trust" as defined in the Code.
Section 5. Conflicts of Interest. Any transactions between the Trust and
any Trustee or any affiliates thereof shall be approved by a majority of the
Trustees not otherwise interested in such transactions as being fair and
reasonable to the Trust.
ARTICLE II. SHARES
Section 1. Shares of Beneficial Interest.
(a) The units into which the beneficial interests in the Trust shall be
divided shall be designated as shares of beneficial interest ("Shares"), with a
par value of $1.00 per Share. Ownership of Shares shall be evidenced by
certificates in such form as shall be determined by the Board from time to time
in accordance with Maryland law. The owners of the Shares, who are the
beneficiaries of the Trust, shall be designated as "Shareholders". The
certificates shall be negotiable and title thereto shall be transferred by
assignment or delivery in all respects as a stock certificate of a Maryland
corporation. The Shares shall consist of common shares of beneficial interest,
par value $1.00 per Share (the "Common Shares"), and such other types or classes
of Shares as the Board may create and authorize from time to time and designate
as representing a beneficial interest in the Trust. The consideration paid for
the issuance of Shares shall be determined by the Board and shall consist of
money paid, tangible or intangible property or labor or services actually
performed. Shares shall not be issued until the full amount of the consideration
has been received by the Trust. The Board may authorize Share dividends or Share
splits. All Shares issued hereunder shall be, when issued, fully paid, and no
assessment shall ever be made on the Shareholders.
(b) Immediately before the adoption of this Declaration of Trust, the total
number of Shares of all classes which the Trust had authority to issue was
150,000,000 consisting of 135,669,950 Common Shares, 9,200,000 Cumulative
Convertible Series A Preferred Shares of Beneficial Interest, par value $1.00
per Share (the "Series A Preferred Shares"), 4,200,000 Series B Cumulative
Redeemable Preferred Shares of Beneficial Interest, par value $1.00 per Share
(the "Series B Preferred Shares") and 930,050 Junior Participating Preferred
Shares, representing an aggregate par value of $150,000,000. Immediately after
the adoption of this Declaration of Trust, the total number of Shares of all
classes which the Trust has authority to issue is 250,000,000 consisting of
232,100,000 Common Shares, 9,200,000 Series A Preferred Shares, 4,200,000 Series
B Preferred Shares and 2,000,000 Series C Cumulative Redeemable Preferred Shares
of Beneficial Interest, par value $1.00 per Share (the "Series C Preferred
Shares") and 2,500,000 Junior Participating Preferred Shares, representing an
aggregate par value of $250,000,000, provided that the Board may amend this
Declaration of Trust, without Shareholder consent, to increase or decrease the
aggregate number of Shares or the number of Shares of any class which the Trust
has authority to issue. A description of the Junior Participating Preferred
Shares, including the preferences, conversions and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of
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redemption thereof, is set forth in Annex D hereto, which is
hereby incorporated by references as if it were set forth in this Section 1(b)
in its entirety.
(c) The Board may classify or reclassify any unissued Shares from time to
time by setting or changing the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or distributions,
qualifications or terms or conditions of redemption of the Shares by filing
articles supplementary pursuant to Maryland law. The Board is authorized to
issue from the authorized but unissued Shares of the Trust preferred Shares in
series and to establish from time to time the number of preferred Shares to be
included in each such series and to fix the designation and any preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Shares
of each series. Except for Shares so classified or reclassified and any
preferred Shares issued hereunder, all other Shares shall be designated as
Common Shares, each of which Common Shares shall be equal in all respects to
every other Common Share. The authority of the Board with respect to each
unissued series shall include, but not be limited to, determination of the
following:
(i) The number of Shares constituting such series and the distinctive
designation of such series;
(ii) The rate of dividend, if any, payable on Shares of such series
and whether (and, if so, on what terms and conditions) such dividends shall
be cumulative (and, if so, whether unpaid dividends shall compound or
accrue interest) or shall be payable in preference or in any other relation
to the dividends payable on any other class or series of Shares;
(iii) Whether Shares of such series shall have voting rights in
addition to the voting rights provided by law and, if so, the terms and
extent of such voting rights;
(iv) Whether Shares of such series shall be issued with the privilege
of conversion or exchange and, if so, the terms and conditions of such
conversion or exchange (including, without limitation, the price or prices
or the rate or rates of conversion or exchange or any terms for adjustment
thereof);
(v) Whether Shares of such series may be redeemed and, if so, the
terms and conditions on which they may be redeemed (including, without
limitation, the dates on or after which they may be redeemed and the price
or prices at which they may be redeemed, which price or prices may be
different in different circumstances or at different redemption dates);
(vi) The amount, if any, payable on Shares of such series upon the
voluntary liquidation, dissolution or winding up of the Trust in preference
to Shares of any other class or series and whether Shares of such series
shall be entitled to participate generally in distributions on the Common
Shares under such circumstances;
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(vii) The amount, if any, payable on Shares of such series upon the
involuntary liquidation, dissolution or winding up of the Trust in
preference to Shares of any other class or series and whether Shares of
such series shall be entitled to participate generally in distributions on
the Common Shares under such circumstances;
(vii) Sinking fund provisions, if any, for the redemption or purchase
of Shares of such series (including any similar fund, however designated);
and
(ix) Any other relative rights, preferences, limitations and powers of
Shares of such series.
Section 2. Series A Preferred Shares. The Board has classified 9,200,000
Shares of the Trust as Series A Preferred Shares. A description of the Series A
Preferred Shares, including the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof, is set forth in Annex A hereto, which is
hereby incorporated by reference as if it were set forth in this Section 2 in
its entirety.
Section 3. Series B Preferred Shares. The Board has classified 4,200,000
Shares of the Trust as Series B Preferred Shares. A description of the Series B
Preferred Shares, including the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof, is set forth in Annex B hereto, which is
hereby incorporated by reference as if it were set forth in this Section 3 in
its entirety.
Section 4. Series C Preferred Shares. The Board has classified 2,000,000
Shares of the Trust as Series C Preferred Shares. A description of the Series C
Preferred Shares, including the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof, is set forth in Annex C hereto, which is
hereby incorporated by reference as if it were set forth in this Section 4 in
its entirety.
Section 5. Sale of Shares. The Board, in its discretion, may from time to
time issue or sell or contract to issue or sell to such party or parties and for
such consideration, as allowed by Maryland law, at such time or times, and on
such terms as the Board may deem appropriate. In connection with any issuance of
Shares, the Board, in its discretion, may provide for the issuance of fractional
Shares or may provide for the issuance of scrip for fractions of Shares and
determine the terms of such scrip including, but not limited to, the time within
which any such scrip must be surrendered in exchange for Shares and the right,
if any, of holders of scrip upon the expiration of the time so fixed, the right,
if any, to receive proportional distributions, and the right, if any, to redeem
scrip for cash, or the Board may, in its discretion, or if it sees fit at the
option of each holder, provide in lieu of scrip for the adjustment of fractions
in cash. Except as may be provided in any agreement between the Trust and any of
its Shareholders, the Shareholders shall have no preemptive rights of any kind
whatsoever (including, but not limited
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to, the right to purchase or subscribe for or otherwise acquire any Shares of
the Trust of any class, whether now or hereafter authorized, or any securities
or obligations convertible into or exchangeable for, or any right, warrant or
option to purchase such Shares, whether or not such Shares are issued and/or
disposed of for cash, property or other consideration of any kind).
Section 6. General Nature. All Shares shall be personal property
entitling the Shareholders only to those rights provided in this Declaration of
Trust or in the resolution creating any class or series of Shares. The legal
ownership of the property of the Trust and the right to conduct the business of
the Trust are vested exclusively in the Trustees; the Shareholders shall have no
interest therein other than beneficial interest in the Trust conferred by their
Shares and shall have no right to compel any partition, division, dividend or
distribution of the Trust or any of its property. The death of a Shareholder
shall not terminate the Trust or give his or her legal representative any rights
against other Shareholders, the Trustees or the Trust property, except the
right, exercised in accordance with applicable provisions of the Trust's Bylaws
(the "Bylaws"), to receive a new certificate for Shares in exchange for the
certificate held by the deceased Shareholder.
Section 7. Acquisition of Shares. The Trust may repurchase or otherwise
acquire its own Shares at such price or prices as may be determined by the
Board, and for such purpose the Trust may create and maintain such reserves as
are deemed necessary and proper. Shares issued hereunder and purchased or
otherwise acquired for the account of the Trust shall not, so long as they
belong to the Trust, either receive distributions (except that they shall be
entitled to receive distributions payable in Shares of the Trust) or be voted at
any meeting of the Shareholders. Such Shares may, in the discretion of the
Board, be disposed of by the Board at such time or times, to such party or
parties, and for such consideration, as the Board may deem appropriate or may be
returned to the status of authorized but unissued Shares of the Trust.
Section 8. Transferability; Transfer Restrictions and Ownership
Limitations. Shares in the Trust shall be transferable (subject to the further
provisions of this Section 8) in accordance with the procedure prescribed from
time to time in the Bylaws. The persons in whose name the Shares are registered
on the books of the Trust shall be deemed the absolute owners thereof and, until
a transfer is effected on the books of the Trust, the Board shall not be
affected by any notice, actual or constructive, of any transfer. Any issuance,
redemption or transfer of Trust Shares which would operate to disqualify the
Trust as a REIT, shall be null and void ab initio.
(a) Definitions. For purposes of this Section 8, the following terms shall
have the following meanings:
"Adoption Date" shall mean the date of the adoption of the ownership
restrictions contained in this Section 8 by resolution of the Board, which
shall be deemed to occur upon the Board's adoption of this Declaration of
Trust.
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"Beneficial Ownership" shall mean, except as provided below in the
following sentence, ownership of Shares by a Person (whether or not treated
as an individual for purposes of Section 544 of the Code) who is or would
be treated as an owner of such Shares either directly or constructively
through the application of Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code. However, Section 544 shall be modified so that no
corporate shareholder of an Excluded Holder owning directly or indirectly
less than 10% of the stock of such Excluded Holder shall be treated as
owning any of the Shares of the Trust owned by such Excluded Holder so long
as no individual directly or indirectly owns 50 percent or more in value of
the stock of such corporate shareholder. "Beneficial Ownership" shall also
mean beneficial ownership as defined under Rule 13(d) under the Securities
Exchange Act of 1934, as amended, and, with respect to such meaning,
Beneficial Ownership by any Person shall include Beneficial Ownership by
other Persons who are part of the same group as the original Person for
purposes of such Rule 13(d). The terms "Beneficial Owner," "Beneficially
Owns," "Beneficially Own" and "Beneficially Owned" shall have correlative
meanings.
"Charitable Beneficiary" shall mean an organization or organizations
described in Sections 170(b)(1)(A) and 170(c) of the Code and identified by
the Board as the beneficiary or beneficiaries of the Excess Share Trust.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Constructive Ownership" shall mean ownership of Shares by a Person
who would be treated as an owner of such Shares, either directly or
constructively, through the application of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. The terms "Constructive Owner",
"Constructively Owns", "Constructively Owning" and "Constructively Owned"
shall have correlative meanings.
"Excess Shares" shall mean Shares resulting from an exchange described
in subsection (c) of this Section 8.
"Excess Share Trust" shall mean the trust created pursuant to
subsections (c) and (o) of this Section 8.
"Excess Share Trustee" shall mean a person, who shall be unaffiliated
with the Trust, any Purported Beneficial Transferee and any Purported
Record Transferee, identified by the Board as the trustee of the Excess
Share Trust.
"Excluded Holder" shall mean Security Capital Group and its
affiliates, successors or assignees, but only to the extent that Security
Capital Group Beneficially Owns not more than 49% of the outstanding
Shares. However, an affiliate, successor or assignee of Security Capital
Group shall be treated as an Excluded Holder only if the Board determines,
based on such evidence as it deems appropriate, that any ownership
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of Shares by such affiliate, successor or assignee will not jeopardize the
status of the Trust as a REIT.
"Existing Holder" shall mean any Person (other than an Excluded
Holder) who is, or would be upon the exchange of Units, debt or any
security of the Trust, the Beneficial Owner of Shares in excess of the
Ownership Limit both on and immediately after the Adoption Date, so long
as, but only so long as, such Person Beneficially Owns or would, upon
exchange of Units, debt or any security of the Trust, Beneficially Own
Shares in excess of the Ownership Limit.
"Existing Holder Limit" for any Existing Holder shall mean the
percentage of the outstanding Shares Beneficially Owned, or which would be
Beneficially Owned upon the exchange of Units, debt or any security of the
Trust, by such Existing Holder on and immediately after the Adoption Date,
and, after any adjustment pursuant to subsection (i) of this Section 8,
shall mean such percentage of the outstanding Shares as so adjusted. Any
Existing Holder Limit shall not be modified except as provided in
subsection (i) of this Section 8. From the Adoption Date until the
Restriction Termination Date, the Trust shall maintain and, upon request,
make available to each Existing Holder, a schedule which sets forth the
then current Existing Holder Limit for each Existing Holder.
"Market Price" shall mean the last reported sales price reported on
the NYSE for Shares on the trading day immediately preceding the relevant
date, or if not then traded on the NYSE, the last reported sales price for
Shares on the trading day immediately preceding the relevant date as
reported on any exchange or quotation system over or through which such
Shares may be traded, or if not then traded over or through any exchange or
quotation system, then the market price of such Shares on the relevant date
as determined in good faith by the Board.
"Non-U.S. Person" shall mean a Person other than a U.S. Person.
"Ownership Limit" shall initially mean 9.8%, in number of Shares or
value, of the outstanding Shares, and, after any adjustment as set forth in
subsection (j) of this Section 8, shall mean such lesser or greater
percentage of the outstanding Shares as so adjusted. The number and value
of the outstanding Shares of the Trust shall be determined by the Board in
good faith, which determination shall be conclusive for all purposes
hereof.
"Person" shall mean an individual, corporation, partnership, estate,
trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity.
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"Presumption" shall mean the assumption, subject to subsection (v) of
this Section 8, that the Excluded Holders are Non-U.S. Persons and own a
percentage of the outstanding Shares (by value) equal to 49.99%.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, as defined in subsection
(c) of this Section 8, the beneficial holder of such Shares, if such
Transfer had been valid under subsection (b) of this Section 8.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, as defined in subsection
(c) of this Section 8, the record holder of such Shares, if such Transfer
had been valid under subsection (b) of this Section 8.
"REIT" shall mean a real estate investment trust under Section 856 of
the Code.
"REIT Provisions of the Code" means Sections 856 through 860 of the
Code and any successor or other provisions of the Code relating to REITs
(including provisions as to the attribution of ownership of beneficial
interests therein) and the regulations promulgated thereunder.
"Related Tenant Limit" shall mean 9.9% by value of the outstanding
Shares of the Trust.
"Related Tenant Owner" shall mean any Constructive Owner who also
owns, directly or indirectly, an interest in a Tenant, which interest is
equal to or greater than (i) 9.9% of the combined voting power of all
classes of stock of such Tenant, (ii) 9.9% of the total number of shares of
all classes of stock of such Tenant or (iii) if such Tenant is not a
corporation, 9.9% of the assets or net profits of such Tenant, in each case
only if such ownership would cause the Trust to fail the 95% gross income
test set forth in Section 856(c)(2) of the Code or the 75% gross income
test set forth in Section 856(c)(3) of the Code.
"Restriction Termination Date" shall mean the first day after the
Adoption Date on which the Board determines that it is no longer in the
best interests of the Trust to continue to qualify as a REIT.
"Security Capital Group" shall mean Security Capital Group
Incorporated, a Maryland corporation.
"Shares" shall mean the shares of beneficial interest of the Trust as
may be authorized and issued from time to time pursuant to this Article II.
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"Tenant" shall mean any tenant (including a subtenant) of (i) the
Trust, (ii) a subsidiary of the Trust which is deemed to be a "qualified
REIT subsidiary" under Section 856(i) (2) of the Code or (iii) a
partnership or limited liability company in which the Trust or one or more
of its qualified REIT subsidiaries is a partner or a member.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of Shares (including (i) the granting of any option or
entering into any agreement for the sale, transfer or other disposition of
Shares, (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Shares, but
excluding the exchange of Units, debt or any security of the Trust for
Shares and (iii) any transfer or other disposition of any interest in
Shares as a result of a change in the marital status of the holder
thereof), whether voluntary or involuntary, whether of record,
constructively or beneficially and whether by operation of law or
otherwise. The terms "Transfers" and "Transferred" shall have correlative
meanings.
"Units" shall mean units of any partnership which are convertible into
or exchangeable for Shares or in respect of which any Shares may be issued
in satisfaction of a unitholder's redemption right.
"U.S. Person" shall mean a person defined as a "United States Person"
in Section 7701(a)(30) of the Code.
(b) Ownership Limitation.
(i) Except as provided in subsections (l) and (u) of this Section 8
and subject to subsection (b)(ix) of this Section 8, from the Adoption Date
until the Restriction Termination Date, no Person or Persons acting as a
group (other than an Excluded Holder or an Existing Holder) shall
Beneficially Own Shares in excess of the Ownership Limit.
(ii) Except as provided in subsections (l) and (u) of this Section 8
and subject to subsection (b)(ix) of this Section 8, from the Adoption Date
until the Restriction Termination Date, any Transfer which, if effective,
would result in any Person (other than an Excluded Holder or an Existing
Holder) Beneficially Owning Shares in excess of the Ownership Limit shall
be void ab initio as to the Transfer of the Shares which would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit; and the
intended transferee shall acquire no rights in such Shares.
(iii) Except as provided in subsections (l) and (u) of this Section 8
and subject to subsection (b)(ix) of this Section 8, from the Adoption Date
until the Restriction Termination Date, any Transfer which, if effective,
would result in any Existing Holder Beneficially Owning Shares in excess of
the applicable Existing Holder Limit shall be void ab initio as to the
Transfer of the Shares which would be otherwise Beneficially
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Owned by such Existing Holder in excess of the applicable Existing Holder
Limit; and such Existing Holder shall acquire no rights in such Shares.
(iv) Except as provided in subsections (l) and (u) of this Section 8
and subject to subsection (b)(ix) of this Section 8, from the Adoption Date
until the Restriction Termination Date, any Transfer which, if effective,
would result in the Shares being beneficially owned (as provided in Section
856(a) of the Code) by fewer than 100 Persons (determined without reference
to any rules of attribution) shall be void ab initio as to the Transfer of
the Shares which would be otherwise beneficially owned (as provided in
Section 856(a) of the Code) by the transferee; and the intended transferee
shall acquire no rights in such Shares.
(v) Except as provided in subsection (l) of this Section 8 and subject
to subsection (b)(ix) of this Section 8, from the Adoption Date until the
Restriction Termination Date, any Transfer which, if effective, would
result in the Trust being "closely held" within the meaning of Section
856(h) of the Code shall be void ab initio as to the Transfer of the Shares
which would cause the Trust to be "closely held" within the meaning of
Section 856(h) of the Code; and the intended transferee shall acquire no
rights in such Shares.
(vi) Subject to subsection (b)(ix) of this Section 8, from the
Adoption Date until the Restriction Termination Date, any Transfer of
Shares to a Non-U.S. Person (other than an Excluded Holder) shall be void
ab initio as to the Transfer of such Shares if, as a result of such
Transfer, the fair market value of Shares owned directly or indirectly by
Non-U.S. Persons would comprise 50% or more of the fair market value of the
issued and outstanding Shares of the Trust (determined based on the
Presumption); and such Non-U.S. Person shall acquire no rights in such
Shares.
(vii) Subject to subsection (b)(ix) of this Section 8, from the
Adoption Date until the Restriction Termination Date, any Transfer of
Shares which, if effective, would result in any Related Tenant Owner
Constructively Owning Shares in excess of the Related Tenant Limit shall be
void ab initio as to the Transfer of such Shares which would be otherwise
Constructively Owned by such Related Tenant Owner in excess of the Related
Tenant Limit; and the intended transferee shall acquire no rights in such
Shares.
(viii) Subject to subsection (b)(ix) of this Section 8, from the
Adoption Date until the Restriction Termination Date, any Transfer which,
if effective, would result in the disqualification of the Trust as a REIT
by virtue of actual, Beneficial or Constructive Ownership of Shares shall
be void ab initio as to such portion of the Transfer resulting in the
disqualification; and the intended transferee shall acquire no rights in
such Shares.
(ix) Nothing contained in this Section 8 shall preclude the settlement
of any transaction entered into through the facilities of the New York
Stock Exchange (the
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"NYSE"). The fact that the settlement of any transaction is permitted shall
not negate the effect of any other provision of this Section 8 and any
transferee in such a transaction shall be subject to all of the provisions
and limitations set forth in this Section 8.
(c) Excess Shares.
(i) If, notwithstanding the other provisions contained in this Section
8, at any time after the Adoption Date until the Restriction Termination
Date, there is a purported Transfer which is not void ab initio pursuant to
subsection (b) of this Section 8 such that (i) any Person (other than an
Excluded Holder or an Existing Holder) would Beneficially Own Shares in
excess of the applicable Ownership Limit or (ii) any Existing Holder would
Beneficially Own Shares in excess of the applicable Existing Holder Limit,
then, except as otherwise provided in subsection (l) of this Section 8,
Shares directly owned by such Person or Existing Holder, as the case may
be, shall be automatically exchanged for an equal number of Excess Shares
until such Person or Existing Holder, as the case may be, does not
Beneficially Own Shares in excess of the applicable Ownership Limit or
Existing Holder Limit. Such exchange shall be effective as of the close of
business on the business day prior to the date of the purported Transfer.
If, after exchanging all of the Shares owned directly by a Person or
Existing Holder, such Person or Existing Holder still Beneficially Owns
Shares in excess of the applicable Ownership Limit or Existing Holder
Limit, Shares owned by such Person or Existing Holder constructively
through the application of Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code, shall be exchanged for an equal number of Excess
Shares until such Person or Existing Holder, as the case may be, does not
Beneficially Own Shares in excess of the applicable Ownership Limit or
Existing Holder Limit. If such Person or Existing Holder owns Shares
constructively through one or more Persons and the Shares held by such
other Persons must be exchanged for an equal number of Excess Shares, the
exchange of Shares by such other Persons shall be pro rata. However, if
such Person or Existing Holder owns Shares constructively through an
Excluded Holder, the Excluded Holder shall not have to exchange its Shares
for Excess Shares and the exchange shall be pro rata among the other
Persons.
(ii) If, notwithstanding the other provisions contained in this
Section 8, at any time after the Adoption Date until the Restriction
Termination Date, there is a purported Transfer of Shares or any sale,
transfer, gift, assignment, devise or other disposition of shares or other
interests of a direct or indirect Shareholder of the Trust which is not
void ab initio pursuant to subsection (b) of this Section 8 and which, if
effective, would cause the Trust to become "closely held" within the
meaning of Section 856(h) of the Code, then any Shares being Transferred
which would cause the Trust to be "closely held" within the meaning of
Section 856(h) of the Code (rounded up to the nearest whole Share) shall be
automatically exchanged for an equal number of Excess Shares and be treated
as provided in this Section 8. Such designation and treatment shall be
effective as of the close of business on the business day prior to the date
of the purported Transfer. If, after the exchange of any such Shares, the
Trust is still "closely held"
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within the meaning of Section 856(h) of the Code, any individual whose
Beneficial Ownership of Shares in the Trust increased as a result of the
sale, transfer, gift, assignment, devise or other disposition of shares or
other interests of a direct or indirect Shareholder of the Trust or any
other event and is one of the five individuals who caused the Trust to be
"closely held" within the meaning of Section 856(h) of the Code, shall
exchange Shares owned directly for an equal number of Excess Shares until
the Trust is not "closely held" within the meaning of Section 856(h) of the
Code. If similarly situated individuals exist, the exchange shall be pro
rata. If, after applying the foregoing provisions, the Trust is still
"closely held" within the meaning of Section 856(h) of the Code, then any
Shares constructively owned by such individuals shall be exchanged for
Excess Shares (other than Shares held by an Excluded Holder), on a pro rata
basis among similarly situated individuals, until the Trust is not "closely
held" within the meaning of Section 856(h) of the Code.
(iii) If, at any time after the Adoption Date until the Restriction
Termination Date, an event other than a purported Transfer (an "Event")
occurs which would (i) cause any Person (other than an Excluded Holder or
an Existing Holder) to Beneficially Own Shares in excess of the Ownership
Limit or (ii) cause an Existing Holder to Beneficially Own Shares in excess
of the Existing Holder Limit, then, except as otherwise provided in
subsection (l) of this Section 8, Shares Beneficially Owned by such Person
or Existing Holder, as the case may be, shall be automatically exchanged
for an equal number of Excess Shares to the extent necessary to eliminate
such excess ownership. Such exchange shall be effective as of the close of
business on the business day prior to the date of the Event. In determining
which Shares are exchanged, Shares Beneficially Owned by any Person who
caused the Event to occur shall be exchanged before any Shares not so held
are exchanged. If similarly situated Persons exist, the exchange shall be
pro rata. If any Person is required to exchange Shares pursuant to this
subsection (c)(iii), such Person shall first exchange Shares directly held
by such Person before exchanging Shares owned constructively through the
application of Section 544 of the Code, as modified by Section 856(h)(1)(B)
of the Code. If such Person or Existing Holder owns Shares constructively
through one or more Persons and the Shares held by such other Persons must
be exchanged for an equal number of Excess Shares, the exchange of Shares
by such other Persons shall be pro rata. However, if such Person or
Existing Holder owns Shares constructively through an Excluded Holder, the
Excluded Holder shall not have to exchange its Shares for Excess Shares and
the exchange shall be pro rata among the other Persons.
(iv) If, at any time after the Adoption Date until the Restriction
Termination Date, an Event occurs which would cause the Trust to become
"closely held" within the meaning of Section 856(h) of the Code, then
Shares Beneficially Owned by any Person or Existing Holder (other than an
Excluded Holder), as the case may be, shall be automatically exchanged for
an equal number of Excess Shares to the extent necessary to eliminate such
excess ownership. Such exchange shall be effective as of the close of
business on the business day prior to the date of the Event. In determining
which Shares
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are exchanged, Shares Beneficially Owned by any Person (other than an
Excluded Holder) who caused the Event to occur shall be exchanged before
any Shares not so held are exchanged. If similarly situated Persons exist,
the exchange shall be pro rata. If any Person is required to exchange
Shares pursuant to this subsection (c)(iv), such Person shall first
exchange Shares directly held by such Person before exchanging Shares owned
constructively through the application of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code. If any Person (other than an
Excluded Holder) owns Shares constructively through one or more Persons and
the Shares held by such other Persons must be exchanged for an equal number
of Excess Shares, the exchange of Shares by such other Persons shall be pro
rata. However, if such Person or Existing Holder owns Shares constructively
through an Excluded Holder, the Excluded Holder shall not have to exchange
its Shares for Excess Shares and the exchange shall be pro rata among the
other Persons.
(v) If, notwithstanding the other provisions contained in this Article
II, there is a purported Transfer of Shares which is not void ab initio
pursuant to subsection (b) of this Section 8 to (i) a Non-U.S. Person
(other than an Excluded Holder) or (ii) a U.S. Person whose Shares would be
treated as owned indirectly by a Non-U.S. Person (other than an Excluded
Holder), then any Shares being Transferred which would result in the fair
market value of Shares owned directly or indirectly by Non-U.S. Persons
comprising 50% or more of the fair market value of the issued and
outstanding Shares of the Trust (determined based on the Presumption) shall
be automatically exchanged for an equal number of Excess Shares and be
treated as provided in this Section 8. Such designation and treatment shall
be effective as of the close of business on the business day prior to the
date of the purported Transfer.
(vi) If, notwithstanding the other provisions contained in this
Article II, there is an event other than those described in subsection
(c)(v) of this Section 8 (a "Non-U.S. Event") which would result in the
fair market value of Shares owned directly or indirectly by Non-U.S.
Persons comprising 50% or more of the fair market value of the issued and
outstanding Shares of the Trust (determined based on the Presumption), then
Shares owned directly or indirectly by Non-U.S. Persons (other than by an
Excluded Holder) shall be automatically exchanged for an equal number of
Excess Shares to the extent necessary to eliminate such excess ownership.
Such exchange shall be effective as of the close of business on the
business day prior to the date of the Non-U.S. Event. In determining which
Shares are exchanged, Shares owned directly or indirectly by any Non-U.S.
Person who caused the Non-U.S. Event to occur shall be exchanged before any
Shares not so held are exchanged. If similarly situated Persons exist, the
exchange shall be pro rata. If the Non-U.S. Event was not caused by a Non-
U.S. Person, Shares owned directly or indirectly by Non-U.S. Persons (other
than Shares owned directly or indirectly by an Excluded Holder) shall be
chosen by random lot and exchanged for Excess Shares until Non-U.S. Persons
do not own directly or indirectly 50% or more of the issued and outstanding
Shares (determined based on the Presumption).
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(vii) If, notwithstanding the other provisions contained in this
Section 8, at any time after the Adoption Date until the Restriction
Termination Date, there is a purported Transfer of Shares or any sale,
transfer, gift, assignment, devise or other disposition of shares or other
interests of a direct or indirect Shareholder of the Trust which, if
effective, would cause any Related Tenant Owner to Constructively Own
Shares in excess of the Related Tenant Limit, then any Shares purportedly
owned by such Related Tenant Owner which would cause such Related Tenant to
Constructively Own Shares in excess of the Related Tenant Limit shall be
automatically exchanged for an equal number of Excess Shares and be treated
as provided in this Section 8. Such designation and treatment shall be
effective as of the close of business on the business day prior to the date
of the purported Transfer or event described in the preceding sentence. In
determining which Shares are exchanged, Shares owned directly or indirectly
by any Person (other than an Excluded Holder) who caused the Related Tenant
Event to occur shall be exchanged before any Shares not so held are
exchanged. If similarly situated Persons exist, the exchange shall be pro
rata. If the Related Tenant Limit is still exceeded and the Related Tenant
Event was not caused by the Related Tenant Owner in question, Shares owned
directly or indirectly by such Related Tenant Owner (other than Shares
owned directly or indirectly by an Excluded Holder) shall be exchanged for
Excess Shares until the Related Tenant Owner does not own Shares in excess
of the Related Tenant Limit. If, after the exchanges described above in
this subsection (c)(vii), the Related Tenant Owner still owns Shares in
excess of the Related Tenant Limit, Shares owned directly or indirectly by
the Excluded Holders shall be exchanged pro rata for Excess Shares until
the Related Tenant Owner does not own Shares in excess of the Related
Tenant Limit.
(viii) If, at any time after the Adoption Date until the Restriction
Termination Date, there is an event (a "Related Tenant Event") which would
cause any Related Tenant Owner to Constructively Own Shares in excess of
the Related Tenant Limit, then Shares which would cause the Related Tenant
Limit to be exceeded shall be automatically exchanged for an equal number
of Excess Shares to the extent necessary to eliminate such excess
ownership. Such exchange shall be effective as of the close of business on
the business day prior to the date of the Related Tenant Event. In
determining which Shares are exchanged, Shares owned directly or indirectly
by any Person (other than an Excluded Holder) who caused the Related Tenant
Event to occur shall be exchanged before any Shares not so held are
exchanged. If similarly situated Persons exist, the exchange shall be pro
rata. If the Related Tenant Limit is still exceeded and the Related Tenant
Event was not caused by the Related Tenant Owner in question, Shares owned
directly or indirectly by such Related Tenant Owner (other than Shares
owned directly or indirectly by an Excluded Holder) shall be exchanged for
Excess Shares until the Related Tenant Owner does not own Shares in excess
of the Related Tenant Limit. If, after the exchanges described above in
this subsection (c)(viii), the Related Tenant Owner still owns Shares in
excess of the Related Tenant Limit, Shares owned directly or indirectly by
the Excluded Holders shall be exchanged pro rata for Excess Shares until
the Related Tenant Owner does not own Shares in excess of the Related
Tenant Limit.
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(ix) If, notwithstanding the other provisions contained in this
Section 8, at any time after the Adoption Date until the Restriction
Termination Date, there is a purported Transfer of Shares or any sale,
transfer, gift, assignment, devise or other disposition of shares or other
interests of a direct or indirect Shareholder of the Trust which, if
effective, would result in the disqualification of the Trust as a REIT by
virtue of actual, Beneficial or Constructive Ownership of Shares, then any
Shares being Transferred which would result in such disqualification shall
be automatically exchanged for an equal number of Excess Shares and shall
be treated as provided in this Section 8. Such designation and treatment
shall be effective as of the close of business on the business day prior to
the date of the purported Transfer.
(x) If, at any time after the Adoption Date until the Restriction
Termination Date, notwithstanding the other provisions contained in this
Section 8, there is an event (a "Prohibited Owner Event") which would
result in the disqualification of the Trust as a REIT by virtue of actual,
Beneficial or Constructive Ownership of Shares, then Shares which would
result in the disqualification of the Trust shall be automatically
exchanged for an equal number of Excess Shares to the extent necessary to
avoid such disqualification. Such exchange shall be effective as of the
close of business on the business day prior to the date of the Prohibited
Owner Event. In determining which Shares are exchanged, Shares owned
directly or indirectly by any Person (other than the Excluded Holder) who
caused the Prohibited Owner Event to occur shall be exchanged before any
Shares not so held are exchanged. If similarly situated Persons exist, the
exchange shall be pro rata. If the Trust is still disqualified, Shares
owned directly or indirectly by Persons who did not cause the Prohibited
Owner Event to occur (other than Shares owned directly or indirectly by an
Excluded Holder) shall be chosen by random lot and exchanged for Excess
Shares until the Trust is no longer disqualified as a REIT. If, after the
exchanges described above in this subsection (c)(x), the Trust is still
disqualified as a REIT, Shares owned directly or indirectly by the Excluded
Holders shall be exchanged pro rata for Excess Shares until the Trust is no
longer disqualified as a REIT.
(d) Prevention of Transfer. If the Board or its designee shall at any time
determine in good faith that a Transfer has taken place in violation of
subsection (b) of this Section 8 or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership (determined without reference to any
rules of attribution) of any Shares in violation of subsection (b) of this
Section 8, the Board or its designee shall take such action as it deems
advisable to refuse to give effect to or to prevent such Transfer, including,
but not limited to, refusing to give effect to such Transfer on the books of the
Trust or instituting proceedings to enjoin such Transfer; provided, however,
that any Transfers or attempted Transfers in violation of subsection (b) of this
Section 8 shall automatically result in the designation and treatment described
in subsection (c) of this Section 8, irrespective of any action (or non-action)
by the Board.
(e) Notice to Trust. Any Person who acquires or attempts to acquire Shares
in violation of subsection (b) of this Section 8, or any Person who is a
transferee such that Excess
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Shares result under subsection (c) of this Section 8, shall immediately give
written notice or, with respect to a proposed or attempted Transfer, give at
least 30 days' prior written notice to the Trust of such event and shall provide
to the Trust such other information as the Trust may request in order to
determine the effect, if any, of such Transfer or attempted Transfer on the
Trust's status as a REIT.
(f) Information for Trust. From the Adoption Date until the Restriction
Termination Date:
(i) Every Beneficial Owner of more than 5% (or such other percentage,
between 0.5% and 5%, as provided in the income tax regulations promulgated
under the Code) of the number or value of outstanding Shares of the Trust
shall, within 30 days after January 1 of each year, give written notice to
the Trust stating the name and address of such Beneficial Owner, the number
of Shares Beneficially Owned and a description of how such Shares are held;
and each such Beneficial Owner shall provide to the Trust such additional
information as the Trust may reasonably request in order to determine the
effect, if any, of such Beneficial Ownership on the Trust's status as a
REIT; and
(ii) Each Person who is a Beneficial Owner of Shares and each Person
(including the Shareholder of record) who is holding Shares for a
Beneficial Owner shall provide to the Trust in writing such information
with respect to direct, indirect and constructive ownership of Shares as
the Board deems reasonably necessary to comply with the provisions of the
Code applicable to a REIT, to determine the Trust's status as a REIT, to
comply with the requirements of any taxing authority or governmental agency
or to determine any such compliance.
(g) Other Action by Board. Subject to subsection (b) of this Section 8,
nothing contained in this Section 8 shall limit the authority of the Board to
take such other action as it deems necessary or advisable to protect the Trust
and the interests of its Shareholders by preservation of the Trust's status as a
REIT; provided, however, that no provision of this Section 8 shall preclude the
settlement of any transaction entered into through the facilities of the NYSE.
(h) Ambiguities. In the case of an ambiguity in the application of any of
the provisions of this Section 8, including any definition contained in
subsection (a) of this Section 8, the Board shall have the power to determine
the application of the provisions of this Section 8 with respect to any
situation based on the facts known to it.
(i) Modification of Existing Holder Limits. The Existing Holder Limits may
be modified as follows:
(i) Subject to the limitations provided in subsection (k) of this
Section 8, the Board may grant options which result in Beneficial Ownership
of Shares by an Existing Holder pursuant to an option plan approved by the
Board and/or the Shareholders. Any
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such grant shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under subsection (k) of this
Section 8 to permit the Beneficial Ownership of Shares issuable upon the
exercise of such option.
(ii) Subject to the limitations provided in subsection (k) of this
Section 8, an Existing Holder may elect to participate in a dividend
reinvestment plan approved by the Board which results in Beneficial
Ownership of Shares by such participating Existing Holder and any
comparable reinvestment plan of any partnership, wherein those Existing
Holders holding Units are entitled to purchase additional Units. Any such
participation shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under subsection (k) of this
Section 8 to permit Beneficial Ownership of the Shares acquired as a result
of such participation.
(iii) The Board shall reduce the Existing Holder Limit for any
Existing Holder after any Transfer permitted in this Section 8 by such
Existing Holder by the percentage of the outstanding Shares so Transferred
or after the lapse (without exercise) of an option described in subsection
(i)(i) of this Section 8 by the percentage of the Shares which the option,
if exercised, would have represented, but in either case no Existing Holder
Limit shall be reduced to a percentage which is less than the Ownership
Limit.
(j) Increase or Decrease in Ownership Limit. Subject to the limitations
provided in subsection (k) of this Section 8, the Board may from time to time
increase or decrease the Ownership Limit; provided, however, that any decrease
may only be made prospectively as to subsequent holders (other than a decrease
as a result of a retroactive change in existing law which would require a
decrease to retain REIT status, in which case such decrease shall be effective
immediately).
(k) Limitations on Changes in Existing Holder and Ownership Limits.
(i) Neither the Ownership Limit nor any Existing Holder Limit may
be increased (nor may any additional Existing Holder Limit be created) if,
after giving effect to such increase (or creation), five individual
Beneficial Owners of Shares (including all of the then Existing Holders)
could Beneficially Own, in the aggregate, more than 49.9% in number or
value of the outstanding Shares.
(ii) Prior to the modification of any Existing Holder Limit or
Ownership Limit pursuant to subsection (i) or (j) of this Section 8, the
Board may require such opinions of counsel, affidavits, undertakings or
agreements as it may deem necessary or advisable in order to determine or
ensure the Trust's status as a REIT.
(iii) No Ownership Limit may be increased to a percentage which is
greater than 9.9%.
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(l) Waivers by the Board. The Board, upon receipt of a ruling from the
Internal Revenue Service, an opinion of counsel to the effect that such
exemption will not result in the Trust being "closely held" within the meaning
of Section 856(h) of the Code or such other evidence as the Board deems
necessary in its sole discretion, may exempt, on such conditions and terms as
the Board deems necessary in its sole discretion, a Person from the Ownership
Limit or the Existing Holder Limit, as the case may be, if the Board obtains
such representations and undertakings from such Person as the Board may deem
appropriate and such Person agrees that any violation or attempted violation
shall result in, to the extent necessary, the exchange of Shares held by such
Person for Excess Shares in accordance with subsection (c) of this Section 8.
(m) Legend. Each certificate for Shares shall bear substantially the
following legend:
The securities represented by this certificate are subject to restrictions
on ownership and transfer for purposes of the Trust's maintenance of its
status as a real estate investment trust under the Internal Revenue Code of
1986, as amended. Except as otherwise provided pursuant to the Amended and
Restated Declaration of Trust of the Trust, no Person may Beneficially Own
Shares in excess of 9.8% (or such greater percentage as may be determined
by the Board of Trustees of the Trust) of the number or value of the
outstanding Shares of the Trust (unless such Person is an Existing Holder
or an Excluded Holder). Any Person who attempts or proposes to Beneficially
Own Shares in excess of the above limitations must notify the Trust in
writing at least 30 days prior to such proposed or attempted Transfer. In
addition, Share ownership by and transfers of Shares to non-U.S. persons
and certain tenants of the Trust are subject to certain restrictions. If
the restrictions on transfer are violated, the securities represented
hereby shall be designated and treated as Excess Shares which shall be held
in trust by the Excess Share Trustee for the benefit of the Charitable
Beneficiary. All capitalized terms in this legend have the meanings defined
in the Amended and Restated Declaration of Trust of the Trust, a copy of
which, including the restrictions on transfer, shall be furnished to each
Shareholder on request and without charge.
(n) Severability. If any provision of this Section 8 or any application
of any such provision is determined to be void, invalid or unenforceable by any
court having jurisdiction over the issue, the validity and enforceability of the
remaining provisions shall be affected only to the extent necessary to comply
with the determination of such court.
(o) Transfer of Excess Shares. Upon any purported Transfer which results
in Excess Shares pursuant to subsection (c) of this Section 8, such Excess
Shares shall be deemed to have been transferred to the Excess Share Trustee, as
trustee of a special trust for the exclusive benefit of the Charitable
Beneficiary or Charitable Beneficiaries to whom an interest in such Excess
Shares may later be transferred pursuant to subsection (c) of this Section 8.
Excess Shares so held in trust shall be issued and outstanding Shares of the
Trust. The Purported Record
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Transferee or Purported Record Holder shall have no rights in such Excess Shares
except as provided in subsection (r) of this Section 8.
(p) Distributions on Excess Shares. Any dividends (whether taxable as a
dividend, return of capital or otherwise) on Excess Shares shall be paid to the
Excess Share Trust for the benefit of the Charitable Beneficiary. Upon
liquidation, dissolution or winding up, the Purported Record Transferee shall
receive the lesser of (i) the amount of any distribution made upon liquidation,
dissolution or winding up or (ii) the price paid by the Purported Record
Transferee for the Shares, or if the Purported Record Transferee did not give
value for the Shares, the Market Price of the Shares on the day of the event
causing the Shares to be held in trust. Any such dividend paid or distribution
paid to the Purported Record Transferee in excess of the amount provided in the
preceding sentence prior to the discovery by the Trust that the Shares with
respect to which the dividend or distribution was made had been exchanged for
Excess Shares shall be repaid to the Excess Share Trust for the benefit of the
Charitable Beneficiary.
(q) Voting of Excess Shares. The Excess Share Trustee shall be entitled
to vote the Excess Shares for the benefit of the Charitable Beneficiary on any
matter. Any vote taken by a Purported Record Transferee prior to the discovery
by the Trust that the Excess Shares were held in trust shall, subject to
applicable law, be rescinded ab initio, provided, however, that if the Trust has
taken irreversible action, a vote need not be rescinded. The owner of the Excess
Shares shall be deemed to have given an irrevocable proxy to the Excess Share
Trustee to vote the Excess Shares for the benefit of the Charitable Beneficiary.
(r) Non-Transferability of Excess Shares. Excess Shares shall be
transferable only as provided in this subsection (r). At the direction of the
Trust, the Excess Share Trustee shall transfer the Shares held in the Excess
Share Trust to a Person whose ownership of the Shares will not violate the
Ownership Limit or Existing Holder Limit. If Shares were transferred to the
Excess Share Trustee pursuant to subsection (c)(i), (c)(ii), (c)(iii) or (c)(iv)
of this Section 8, at the direction of the Trust, the Excess Share Trustee shall
transfer the Shares held by the Excess Share Trustee to a Person who makes the
highest offer for the Excess Shares and pays the purchase price and whose
ownership of the Shares will not violate the Ownership Limit. If Shares were
transferred to the Excess Shares Trustee pursuant to subsection (c)(v) or
(c)(vi) of this Section 8, at the direction of the Trust, the Excess Share
Trustee shall transfer the Shares held by the Excess Share Trustee to the U.S.
Person who makes the highest offer for the Excess Shares and pays the purchase
price. If such a transfer is made to a Person, the interest of the Charitable
Beneficiary shall terminate and proceeds of the sale shall be payable to the
Purported Record Transferee and to the Charitable Beneficiary. The Purported
Record Transferee shall receive (i) the lesser of (A) the price paid by the
Purported Record Transferee for the Shares or, if the Purported Record
Transferee did not give value for the Shares, the Market Price of the Shares on
the day of the event causing the Shares to be held in trust, and (B) the price
received by the Excess Share Trust from the sale or other disposition of the
Shares minus (ii) any dividend paid or distribution paid to the Purported Record
Transferee which the Purported Record Transferee was under an obligation to
repay to the Excess Share Trustee but has not repaid to the Excess Share Trustee
at the time of the distribution of the proceeds. Any proceeds
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in excess of the amount payable to the Purported Record Transferee shall be paid
to the Charitable Beneficiary. Prior to any transfer of any Excess Shares by the
Excess Share Trustee, the Trust must have waived in writing its purchase rights
under subsection (t) of this Section 8. It is expressly understood that the
Purported Record Transferee may enforce the provisions of this Section 8 against
the Charitable Beneficiary.
(s) Acting as Agent. If any of the foregoing restrictions on transfer of
Excess Shares is determined to be void, invalid or unenforceable by any court of
competent jurisdiction, then the Purported Record Transferee may be deemed, at
the option of the Trust, to have acted as an agent of the Trust in acquiring
such Excess Shares and to hold such Excess Shares on behalf of the Trust.
(t) Call by Trust on Excess Shares. Excess Shares shall be deemed to have
been offered for sale to the Trust, or its designee, at a price per Share equal
to the lesser of (i) the price per Share in the transaction which created such
Excess Shares (or, in the case of a devise, gift or other transaction in which
no value was given for such Excess Shares, the Market Price at the time of such
devise, gift or other transaction) and (ii) the Market Price of the Shares to
which such Excess Shares relate on the date the Trust, or its designee, accepts
such offer (the "Redemption Price"). The Trust shall have the right to accept
such offer for a period of 90 days after the later of (A) the date of the
Transfer which resulted in such Excess Shares and (B) the date the Board
determines in good faith that a Transfer resulting in Excess Shares has
occurred, if the Trust does not receive a notice of such Transfer pursuant to
subsection (e) of this Section 8, but in no event later than a permitted
Transfer pursuant to and in compliance with the terms of subsection (r) of this
Section 8. Unless the Board determines that it is in the interests of the Trust
to make earlier payments of all of the amount determined as the Redemption Price
per Share in accordance with the preceding sentence, the Redemption Price may be
payable at the option of the Board at any time up to but not later than five
years after the date the Trust accepts the offer to purchase the Excess Shares.
In no event shall the Trust have an obligation to pay interest to the Purported
Record Transferee.
(u) Underwritten Offerings. The Ownership Limit shall not apply to the
acquisition of Shares or rights, options or warrants for, or securities
convertible into, Shares by an underwriter in a public offering, provided that
the underwriter makes a timely distribution of such Shares or rights, options or
warrants for, or securities convertible into, Shares.
(v) Waiver of Presumption. The Excluded Holders may, in their sole
discretion, with prior notice to and the approval of the Board, waive in writing
all or any portion of the Presumption on such terms and conditions as they in
their sole discretion determine.
Section 9. Exemptions from Certain Provisions of Maryland Law. The
provisions of Title 3, Subtitle 6 of the Corporations and Associations Article
of the Annotated Code of Maryland entitled "Special Voting Requirements"
(Section 3-601 through and including Section 3-604), or any successor statute,
shall not apply to any business combination between (i) the Trust and (ii)
Security Capital Group or any person in which Security Capital Group or any
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wholly owned subsidiary directly holds an equity interest in such person at the
time of such combination). The provisions of Title 3, Subtitle 7 of the
Corporations and Associations Article of the Annotated Code of Maryland entitled
"Voting Rights of Certain Control Shares" (Section 3-701 through and including
Section 3-709), or any successor statute, shall not apply to any Shares owned or
acquired by Security Capital Group or any person in which Security Capital Group
or any wholly owned subsidiary of Security Capital Group then directly holds an
equity interest (but such provisions shall apply to any Shares acquired by such
person after Security Capital Group or such wholly owned subsidiary no longer
directly holds an equity interest in such person). The foregoing exemptions
shall only apply to the extent Security Capital Group beneficially owns 49% or
less of the Shares.
ARTICLE III. SHAREHOLDERS
Section 1. Meetings.
(a) There shall be an annual meeting of Shareholders at such time and
place, either within or without the State of Maryland, as the Board shall
prescribe, at which Trustees shall be elected or re-elected and any other proper
business may be conducted. The annual meeting of Shareholders shall be held upon
reasonable notice at a convenient location and within a reasonable period
following delivery of the annual report. Special meetings of Shareholders may be
called by a majority of the Trustees or by any officer of the Trust, and shall
be called upon the written request of Shareholders holding in the aggregate not
less than 25 percent of the outstanding Shares of the Trust entitled to vote in
the manner provided in the Bylaws. If there shall be no Trustees, the officers
of the Trust shall promptly call a special meeting of the Shareholders for the
election of successor Trustees. Written or printed notice stating the place,
date and time of the Shareholders' meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than 10 nor more than 60 days before the day of the meeting
either personally or by mail, by or at the direction of the Board or any officer
or the person calling the meeting, to each Shareholder of record entitled to
vote at such meeting. No other business than that which is stated in the call
for a special meeting shall be considered at such meeting.
(b) A majority of the outstanding Shares entitled to vote at any meeting
represented in person or by proxy shall constitute a quorum at such meeting.
Whenever any action is to be taken by the Shareholders, it shall, except as
otherwise required by law or this Declaration of Trust or the Bylaws, be
authorized by a majority of the number of votes entitled to be cast on the
matter.
Section 2. Voting. At each meeting of Shareholders, each Shareholder
entitled to vote shall have the right to vote, in person or by proxy, the number
of Shares of the Trust owned by him or her on each matter on which the vote of
the Shareholders is taken. In any election of Trustees in which more than one
vacancy is to be filled, each Shareholder may vote the number of Shares of the
Trust owned by him or her for each vacancy to be filled. There
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shall be no right of cumulative voting. Each outstanding Share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of Shareholders, except (i) to the extent that this Declaration of Trust
or articles supplementary (to the extent permitted by Maryland law) limit or
deny voting rights to the holders of the Shares of any class or series or (ii)
as otherwise provided by Maryland law.
Section 3. Distributions. The Board may from time to time pay to
Shareholders such dividends or distributions in cash, property or other assets
of the Trust or in securities of the Trust or from any other source as the Board
in its discretion shall determine. The Board shall endeavor to authorize the
Trust to pay such dividends and distributions as shall be necessary for the
Trust to qualify as a REIT under the REIT Provisions of the Code (so long as
such qualification, in the opinion of the Board, is in the best interests of the
Shareholders); however, Shareholders shall have no right to any dividend or
distribution unless and until authorized by the Board. The exercise of the
powers and rights of the Board pursuant to this Section 3 shall be subject to
the provisions of any class or series of Shares at the time outstanding. The
receipt by any Person in whose name any Shares are registered on the records of
the Trust or by his or her duly authorized agent shall be a sufficient discharge
for all dividends or distributions payable or deliverable in respect of such
Shares and from all liability with respect to the application thereof.
Section 4. Annual Report. The Trust shall prepare an annual report
concerning its operations for the preceding fiscal year in the manner and within
the time prescribed by Title 8.
Section 5. Inspection Rights. The books and records of the Trust shall be
open to inspection upon the written demand of a Shareholder at any reasonable
time for a purpose reasonably related to his or her interests as a Shareholder.
Such inspection by a Shareholder may be made in person or by agent or attorney
and the right of inspection includes the right to make extracts. Demand of
inspection shall be made in writing on the Chief Executive Officer or the
Secretary of the Trust at the principal office of the Trust.
Section 6. Nonliability and Indemnification. Shareholders shall not be
personally or individually liable in any manner whatsoever for any debt, act,
omission or obligation incurred by the Trust or the Board and shall be under no
obligation to the Trust or its creditors with respect to their Shares other than
the obligation to pay to the Trust the full amount of the consideration for
which the Shares were issued or to be issued. The Shareholders shall not be
liable to assessment and the Board shall have no power to bind the Shareholders
personally. The Trust shall indemnify and hold each Shareholder harmless from
and against all claims and liabilities, whether they proceed to judgment or are
settled or otherwise brought to a conclusion, to which such Shareholder may
become subject by reason of his or her being or having been a Shareholder, and
shall reimburse such Shareholder for all legal and other expenses reasonably
incurred by him or her in connection with any such claim or liability; provided,
however, that such Shareholder must give prompt notice as to any such claims or
liabilities or suits and must take such action as will permit the Trust to
conduct the defense thereof. The rights accruing to
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a Shareholder under this Section 6 shall not exclude any other right to which
such Shareholder may be lawfully entitled, nor shall anything contained herein
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein; provided,
however, that the Trust shall have no liability to reimburse Shareholders for
taxes assessed against them by reason of their ownership of Shares, nor for any
losses suffered by reason of changes in the market value of securities of the
Trust. No amendment to this Declaration of Trust increasing or enlarging the
liability of the Shareholders shall be made without the unanimous vote or
written consent of all of the Shareholders.
Section 7. Notice of Nonliability. The Board shall use every reasonable
means to assure that all persons having dealings with the Trust shall be
informed that the private property of the Shareholders and the Trustees shall
not be subject to claims against and obligations of the Trust to any extent
whatever. The Board shall cause to be inserted in every written agreement,
undertaking or obligation made or issued on behalf of the Trust, an appropriate
provision to the effect that the Shareholders and the Trustees shall not be
personally liable thereunder, and that all parties concerned shall look solely
to the Trust property for the satisfaction of any claim thereunder, and
appropriate reference shall be made to this Declaration of Trust. The omission
of such a provision from any such agreement, undertaking or obligation, or the
failure to use any other means of giving such notice, shall not, however, render
the Shareholders or the Trustees personally liable or such agreement,
undertaking or obligation unenforceable.
ARTICLE IV. THE TRUSTEES
Section 1. Number, Qualification, Compensation and Term.
(a) The Board shall be comprised of not less than three nor more than 15
Trustees. The current number of Trustees is 12, which may be changed from time
to time by resolution of the Board within the limits provided in the preceding
sentence. Trustees may succeed themselves in office. Trustees shall be
individuals who are at least 21 years old and not under any legal disability. No
Trustee shall be required to give bond, surety or securities to secure the
performance of his or her duties or obligations hereunder. No reduction in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his or her term. Whenever a vacancy among the
Trustees shall occur, until such vacancy is filled as provided in Section 3, the
Trustee or Trustees continuing in office, regardless of their number, shall have
all of the powers granted to the Board and shall discharge all of the duties
imposed on the Board by this Declaration of Trust. The Trustees shall receive
such fees for their services and expenses as they shall deem reasonable and
proper. A majority of the Trustees shall not be officers or employees of the
Trust.
(b) The Board shall be divided into three classes of Trustees, designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of Trustees constituting the entire
Board. The term of office of each Trustee shall be three years and until his or
her successor is elected and qualifies, subject to prior death, resignation or
removal. At the 1999 annual meeting of Shareholders, Class I Trustees shall be
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elected; at the 2000 annual meeting of Shareholders, Class II Trustees shall be
elected; and at the 2001 annual meeting of Shareholders, Class III Trustees
shall be elected. At each succeeding annual meeting of Shareholders, beginning
in 2002, successors to the class of Trustees whose term expires at such annual
meeting shall be elected. If the authorized number of Trustees constituting the
Board is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of Trustees in each class as nearly equal
as possible, and any additional Trustee of any class elected to fill a vacancy
resulting from an increase in such class shall hold office until the next annual
meeting of shareholders, but in no case shall a decrease in the number of
Trustees constituting the Board shorten the term of any incumbent Trustee. The
names, classes and addresses of the current Trustees, are as follows:
<TABLE>
<CAPTION>
Name Class Address
- ---------------------- ----- -----------------------------------------------------
<S> <C> <C>
James A. Cardwell I 7670 South Chester Street, Englewood, Colorado 80112
Manuel A. Garcia III I 7670 South Chester Street, Englewood, Colorado 80112
James H. Polk, III II 7670 South Chester Street, Englewood, Colorado 80112
John T. Kelley, III I 7670 South Chester Street, Englewood, Colorado 80112
Calvin K. Kessler II 7670 South Chester Street, Englewood, Colorado 80112
William G. Myers II 7670 South Chester Street, Englewood, Colorado 80112
Ned S. Holmes I 7670 South Chester Street, Englewood, Colorado 80112
James C. Potts III 7670 South Chester Street, Englewood, Colorado 80112
John M. Richman III 7670 South Chester Street, Englewood, Colorado 80112
John C. Schweitzer III 7670 South Chester Street, Englewood, Colorado 80112
R. Scot Sellers III 7670 South Chester Street, Englewood, Colorado 80112
</TABLE>
The records of the Trust shall be revised to reflect the names, classes and
addresses of the current Trustees, at such times as any change has occurred. The
Board may, but is not required to, amend this Declaration of Trust, without
Shareholder consent, at such times as the names, classes and addresses of the
Trustees have changed.
Section 2. Resignation, Removal and Death. A Trustee may resign at any
time by giving written notice thereof in recordable form to the other Trustees
at the principal office of the Trust. The acceptance of a resignation shall not
be necessary to make it effective. A Trustee may be removed with or without
cause by the shareholders by the affirmative vote of two-thirds of all of the
votes entitled to be cast in the election of Trustees or by the Trustees then in
office by a two-thirds vote (which action shall be taken only by vote at a
meeting and not by authorization without a meeting, notwithstanding anything in
Section 5 of this Article IV to the contrary). Upon the resignation or removal
of any Trustee, he or she shall execute and deliver such documents and render
such accounting as the remaining Trustee or Trustees shall require and shall
thereupon be discharged as Trustee. Upon the incapacity or death of any Trustee,
his or her status as a Trustee shall immediately terminate, and his or her legal
representatives shall perform the acts set forth in the preceding sentence.
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Section 3. Vacancies. The resignation, removal, incompetency or death of
any or all of the Trustees shall not terminate the Trust or affect its
continuity. During a vacancy, the remaining Trustee or Trustees may exercise the
powers of the Trustees hereunder. Whenever there shall be a vacancy or vacancies
among the Trustees (including vacancies resulting from an increase in the number
of Trustees), such vacancy or vacancies shall be filled (i) at a special meeting
of Shareholders called for such purpose (which may be by written consent), (ii)
by the Trustee or Trustees then in office or (iii) at the next annual meeting of
Shareholders. Trustees elected at special meetings of Shareholders to fill
vacancies or appointed by the remaining Trustee or Trustees to fill vacancies
shall hold office until the next annual meeting of Shareholders.
Section 4. Successor Trustees. The right, title and interest of the
Trustees in and to the Trust property shall vest automatically in all persons
who may hereafter become Trustees upon their due election and qualification
without any further act, and thereupon they shall have the same rights,
privileges, powers, duties and immunities as though named as Trustees in this
Declaration of Trust. Appropriate written evidence of the election and
qualification of successor Trustees shall be filed with the records of the Trust
and in such other offices or places as the Board may deem necessary, appropriate
or desirable. Upon the resignation, removal or death of a Trustee, he or she
(and upon his or her death, his or her estate) shall automatically cease to have
any right, title or interest in or to any of the Trust property, and the right,
title and interest of such Trustee in and to the Trust property shall vest
automatically in the remaining Trustee or Trustees without any further act.
Section 5. Meetings and Action Without a Meeting. The Board may act with or
without a meeting. Except as otherwise provided herein, any action of a majority
of Trustees present at a duly convened meeting of the Board shall be conclusive
and binding as an action of the Board. A quorum for meetings of the Board shall
be a majority of all of the Trustees in office. Action may be taken without a
meeting in any manner and by any means permitted by Maryland law only by
unanimous consent of all of the Trustees in office and shall be evidenced by a
written certificate or instrument signed by all of the Trustees in office. Any
action taken by the Board in accordance with the provisions of this Section 5
shall be conclusive and binding on the Trust, the Trustees and the Shareholders,
as an action of all of the Trustees, collectively, and of the Trust. Any deed,
mortgage, evidence of indebtedness or other instrument, agreement or document of
any character, whether similar or dissimilar, executed by one or more of the
Trustees, when authorized at a meeting or by written authorization without a
meeting in accordance with the provisions of this Section 5, shall be valid and
binding on the Trustees, the Trust and the Shareholders.
Section 6. Authority. The Trustees may hold the legal title to all property
belonging to the Trust. They shall have absolute and exclusive control,
management and disposition thereof, and absolute and exclusive control over the
management and conduct of the business affairs of the Trust, free from any power
or control on the part of the Shareholders, in the same manner as if they were
the absolute owners thereof, subject only to the express limitations in this
Declaration of Trust.
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Section 7. Powers. The Board shall have all of the powers necessary,
convenient or appropriate to effectuate the purposes of the Trust and may take
any action which it deems necessary or desirable and proper to carry out such
purposes. Any determination of the purposes of the Trust made by the Board in
good faith shall be conclusive. In construing the provisions of this Declaration
of Trust, the presumption shall be in favor of the grant of powers to the Board.
Without limiting the generality of the foregoing, the Board's powers on behalf
of the Trust shall include the following:
(a) To purchase, acquire through the issuance of Shares in the Trust,
obligations of the Trust or otherwise, mortgage, sell, acquire on lease, hold,
manage, improve, lease to others, option, exchange, release and partition real
estate interests of every nature, including freehold, leasehold, mortgage,
ground rent and other interests therein; and to erect, construct, alter, repair,
demolish or otherwise change buildings and structures of every nature.
(b) To purchase, acquire through the issuance of Shares in the Trust,
obligations of the Trust or otherwise, option, sell and exchange stocks, bonds,
notes, certificates of indebtedness and securities of every nature.
(c) To purchase, acquire through the issuance of Shares in the Trust,
obligations of the Trust or otherwise, mortgage, sell, acquire on lease, hold,
manage, improve, lease to others, option and exchange personal property of every
nature.
(d) To hold legal title to property of the Trust in the name of the Trust,
or in the name of one or more of the Trustees for the Trust, or of any other
person for the Trust, without disclosure of the interest of the Trust therein.
(e) To borrow money for the purposes of the Trust and to give notes or
other negotiable or nonnegotiable instruments of the Trust therefor; to enter
into other obligations or guarantee the obligations of others on behalf of and
for the purposes of the Trust; and to mortgage or pledge or cause to be
mortgaged or pledged real and personal property of the Trust to secure such
notes, debentures, bonds, instruments or other obligations.
(f) To lend money on behalf of the Trust and to invest the funds of the
Trust.
(g) To create reserve funds for such purposes as it deems advisable.
(h) To deposit funds of the Trust in banks and other depositories without
regard to whether such accounts will draw interest.
(i) To pay taxes and assessments imposed on or chargeable against the Trust
or the Trustees by virtue of or arising out of the existence, property, business
or activities of the Trust.
(j) To purchase, issue, sell or exchange Shares of the Trust as provided in
Article II.
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(k) To exercise with respect to property of the Trust, all options,
privileges and rights, whether to vote, assent, subscribe or convert, or of any
other nature; to grant proxies; and to participate in and accept securities
issued under any voting trust agreement.
(l) To participate in any reorganization, readjustment, consolidation,
merger, dissolution, sale or purchase of assets, lease or similar proceedings of
any corporation, partnership or other organization in which the Trust shall have
an interest and in connection therewith to delegate discretionary powers to any
reorganization, protective or similar committee and to pay assessments and other
expenses in connection therewith.
(m) To engage or employ agents, representatives and employees of any
nature, or independent contractors, including, but not limited to, transfer
agents for the transfer of Shares in the Trust, registrars, underwriters for the
sale of Shares in the Trust, independent certified public accountants, attorneys
at law, appraisers and real estate agents and brokers; and to delegate to one or
more Trustees, agents, representatives, employees, independent contractors or
other persons such powers and duties as the Board deems appropriate.
(n) To determine conclusively the allocation between capital and income of
the receipts, holdings, expenses and disbursements of the Trust, regardless of
the allocation which might be considered appropriate in the absence of this
provision.
(o) To determine conclusively the value from time to time and to revalue
the real estate, securities and other property of the Trust by means of
independent appraisals.
(p) To compromise or settle claims, questions, disputes and controversies
by, against or affecting the Trust.
(q) To solicit proxies of the Shareholders.
(r) To adopt a fiscal year for the Trust and to change such fiscal year in
accordance with the REIT Provisions of the Code.
(s) To adopt and use a seal.
(t) To merge the Trust with or into any other trust, corporation or other
entity in accordance with Maryland law.
(u) To deal with the Trust property in every way, including joint ventures,
partnerships and any other combinations or associations, which it would be
lawful for an individual to deal with the same, whether similar to or different
from the ways herein specified.
(v) To determine whether or not, at any time or from time to time, to
attempt to cause the Trust to qualify for taxation, or to terminate the status
of the Trust, as a REIT.
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(w) To make, adopt, amend or repeal Bylaws containing provisions relating
to the business of the Trust, the conduct of its affairs, its rights or powers
and the rights or powers of its Shareholders, Trustees or officers not
inconsistent with law or this Declaration of Trust.
(x) To do all other such acts and things as are incident to the foregoing
and to exercise all powers which are necessary or useful to carry on the
business of the Trust, to promote any of the purposes of the Trust and to carry
out the provisions of this Declaration of Trust.
Section 8. Right to Own Shares. A Trustee may acquire, hold and dispose of
Shares in the Trust for his or her individual account and may exercise all
rights of a Shareholder to the same extent and in the same manner as if he or
she were not a Trustee.
Section 9. Transactions with Trust. Subject to the provisions of Section 5
of Article I, and to any restrictions in this Declaration of Trust or adopted by
the Board in the Bylaws or by resolution, the Trust may enter into any contract
or transaction of any kind (including, but not limited to, for the purchase or
sale of property or for any type of services, including those in connection with
underwriting or the offer or sale of securities of the Trust) with any person,
including any Trustee, officer, employee or agent of the Trust or any person
affiliated with a Trustee, officer, employee or agent of the Trust, whether or
not any of them has a financial interest in such transaction.
Section 10. Limitation of Liability. To the maximum extent that Maryland
law in effect from time to time permits limitation of the liability of trustees
of a real estate investment trust, no Trustee of the Trust shall be liable to
the Trust or to any Shareholder for money damages. Neither the amendment nor
repeal of this Section 10, nor the adoption or amendment of any other provision
of this Declaration of Trust inconsistent with this Section 10, shall apply to
or affect in any respect the applicability of the preceding sentence with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption. In the absence of any Maryland statute limiting the
liability of trustees of a Maryland real estate investment trust for money
damages in a suit by or on behalf of the Trust or by any Shareholder, no Trustee
of the Trust shall be liable to the Trust or to any Shareholder for money
damages except to the extent that (i) the Trustee actually received an improper
benefit or profit in money, property or services, for the amount of the benefit
or profit in money, property or services actually received; or (ii) a judgment
or other final adjudication adverse to the Trustee is entered in a proceeding
based on a finding in the proceeding that the Trustee's action or failure to act
was the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding.
Section 11. Indemnification. The Trust shall indemnify each Trustee, to the
fullest extent permitted by Maryland law, as amended from time to time, in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he or she was a Trustee of the Trust or is or was serving at the request of
the Trust as a director, trustee, officer, partner, manager,
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member, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, limited liability company, other enterprise
or employee benefit plan, from all claims and liabilities to which such person
may become subject by reason of service in such capacity and shall pay or
reimburse reasonable expenses, as such expenses are incurred, of each Trustee in
connection with any such proceedings.
Section 12. Persons Dealing with Trustees. No corporation, person, transfer
agent or other party shall be required to examine or investigate the trusts,
terms or conditions contained in this Declaration of Trust or otherwise
applicable to the Trust, and every such corporation, person, transfer agent or
other party may deal with Trust property and assets as if the Trustees were the
sole and exclusive owners thereof free of all trusts; and no such corporation,
person, transfer agent or other party dealing with the Trustees or with the
Trust or Trust property and assets shall be required to see to the application
of any money or property paid or delivered to any Trustee, or nominee, agent or
representative of the Trust or the Trustees. A certificate executed by or on
behalf of the Trustees or by any other duly authorized representative of the
Trust delivered to any person or party dealing with the Trust or Trust property
and assets, or, if relating to real property, recorded in the deed records for
the county or district in which such real property lies, certifying as to the
identity and authority of the Trustees, agents or representatives of the Trust
for the time being, or as to any action of the Trustees or of the Trust, or of
the Shareholders, or as to any other fact affecting or relating to the Trust or
this Declaration of Trust, may be treated as conclusive evidence thereof by all
persons dealing with the Trust. No provision of this Declaration of Trust shall
diminish or affect the obligation of the Trustees and every other representative
or agent of the Trust to deal fairly and act in good faith with respect to the
Trust and the Shareholders insofar as the relationship and accounting among the
parties to the Trust is concerned; but no third party dealing with the Trust or
with any Trustee, agent or representative of the Trust shall be obliged or
required to inquire into, investigate or be responsible for the discharge and
performance of such obligation.
Section 13. Administrative Powers. The Board shall have the power to pay
the expenses of administration of the Trust, including all legal and other
expenses in connection with the preparation and carrying out of the acquisition
of properties and the issuance of Shares; and to employ such officers, experts,
counsel, managers, salesmen, agents, workmen, clerks and other persons as they
deem appropriate.
Section 14. Election of Officers. The Board shall annually elect a
Chairman of the Board (or two or more Co-Chairmen of the Board) and a Secretary
of the Trust. The Board may also annually elect one or more Vice Presidents, a
Treasurer, Assistant Secretaries, Assistant Treasurers and such other officers
as the Board shall deem proper. Except as required by law, the officers of the
Trust need not be Trustees. All officers and agents of the Trust shall have such
authority and perform such duties in the management of the Trust as may be
provided in the Bylaws or as may be determined by the Board not inconsistent
with the Bylaws. Any officer or agent elected or appointed by the Board may be
removed by the Board whenever in its judgment the best interest of the Trust
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
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any officer or agent shall not of itself create contract rights. The Board shall
fix the compensation of all officers.
Section 15. Committees and Delegation of Powers and Duties. The Board may,
in its discretion, by resolution passed by a majority of the Trustees, designate
from among its members one or more committees which shall consist of one or more
Trustees. The Board may designate one or more Trustees as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Such committees shall have and may exercise such
powers as shall be conferred or authorized by the resolution appointing them
(including, but not limited to, the determination of the type and amount of
consideration at which Shares are to be issued). A majority of any such
committee may determine its action and fix the time and place of its meetings,
unless the Board shall otherwise provide. The Board, by resolution passed by a
majority of the Trustees, may at any time change the membership of any such
committee, fill vacancies on it or dissolve it. The Bylaws, or a majority of the
Trustees, may authorize any one or more of the Trustees, or any one or more of
the officers or employees or agents of the Trust, on behalf of the Trust, to
exercise and perform any and all powers granted to the Board, and to discharge
any and all duties imposed on the Board, and to do any acts and to execute any
instruments deemed by such person or persons to be necessary or appropriate to
exercise such power or to discharge such duties, and to exercise his or her own
judgment in so doing.
ARTICLE V. TERMINATION AND DURATION
Section 1. Termination. Subject to the provisions of any class or series
of Shares at the time outstanding, after approval by a majority of the entire
Board of Trustees the Trust may be terminated at any meeting of Shareholders
called for such purpose, by the affirmative vote of the holders of not less than
a majority of the outstanding Shares. In connection with any termination of the
Trust, the Board, upon receipt of such releases or indemnity as they deem
necessary for their protection, may
(a) Sell and convert into cash the property of the Trust and distribute
the net proceeds among the Shareholders ratably; or
(b) Convey the property of the Trust to one or more persons, entities,
trusts or corporations for consideration consisting in whole or in part of cash,
shares of stock or other property of any kind, and distribute the net proceeds
among the Shareholders ratably, at valuations fixed by the Board, in cash or in
kind, or partly in cash and partly in kind.
Upon termination of the Trust and distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and place among the records
of the Trust an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the right, title and interest of all
Shareholders shall cease and be canceled and discharged.
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Section 2. Organization as a Corporation. If the Board deems it in the
best interests of the Shareholders that the Trust be organized as a corporation
under the laws of any state, the Board shall have full power to organize such
corporation, under the laws of such state as it may consider appropriate, in the
place and stead of the Trust without procuring the consent of any of the
Shareholders, in which event the capital stock of such corporation shall be and
remain the same as fixed under this Declaration of Trust and the Shareholders
shall receive and accept stock in such corporation on the same basis as they
hold Shares in the Trust.
Section 3. Merger, Consolidation or Sale. The Trust shall have the power
to (i) merge with or into another entity, (ii) consolidate the Trust with one or
more other entities into a new entity or (iii) sell or otherwise dispose of all
or substantially all of the assets of the Trust; provided that such action shall
have been approved by the Board of Trustees and by the Shareholders, at a
meeting called for such purpose, by the affirmative vote of the holders of not
less than a majority of the Shares then outstanding and entitled to vote
thereon.
Section 4. Duration. Subject to possible earlier termination in
accordance with the provisions of this Article V, the duration of the Trust
shall be perpetual or, in any jurisdiction in which such duration is not
permitted, then the Trust shall terminate on the latest date permitted by the
law of such jurisdiction.
ARTICLE VI. AMENDMENTS
Section 1. Amendment by Shareholders. Except as provided in Section 2 of
this Article VI and in Section 1 of Article III and in Article IV, this
Declaration of Trust may be amended only by the affirmative vote or written
consent of the holders of at least a majority of the Shares then outstanding and
entitled to vote thereon.
Section 2. Amendment by Trustees. The Trustees by a two-thirds vote may
amend provisions of this Declaration of Trust from time to time to enable the
Trust to qualify as a real estate investment trust under the REIT Provisions of
the Code or under Title 8.
Section 3. Requirements of Maryland Law. Except as provided in Article
II, Section 1(b) or in this Article VI, this Declaration of Trust may only be
amended in accordance with Section 8-501 of Title 8.
ARTICLE VII. MISCELLANEOUS
Section 1. Construction. This Declaration of Trust shall be construed in
such a manner as to give effect to the intent and purposes of the Trust and this
Declaration of Trust. If any provisions hereof appear to be in conflict, more
specific provisions shall control over general provisions. This Declaration of
Trust shall govern all of the relationships among the Trustees and Shareholders
of the Trust; and each provision hereof shall be effective for all purposes and
to all persons dealing with the Trust to the fullest extent possible under
applicable law in each jurisdiction in which the Trust shall engage in business.
In defining or interpreting
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the powers and duties of the Trust and the Trustees and officers of the Trust,
reference may be made, to the extent appropriate and not inconsistent with the
Code, Title 8 and this Declaration of Trust, to Titles 1 through 3 of the
Corporations and Associations Article of the Annotated Code of Maryland.
Section 2. Headings for Reference Only. Headings preceding the text of
articles, sections and subsections hereof have been inserted solely for
convenience and reference, and shall not be construed to affect the meaning,
construction or effect of this Declaration of Trust.
Section 3. Filing and Recording. This Declaration of Trust shall be filed
in the manner prescribed for real estate investment trusts under Maryland law
and may be filed for record in any county where real property is owned by the
Trust.
Section 4. Applicable Law. This Declaration of Trust has been executed
with reference to, and its construction and interpretation shall be governed by,
Maryland law, and the rights of all parties and the construction and effect of
every provision hereof shall be subject to and construed according to Maryland
law.
Section 5. Certifications. Any certificates signed by a person who,
according to the records of the State Department of Assessments and Taxation of
Maryland, appears to be a Trustee hereunder, shall be conclusive evidence as to
the matters so certified in favor of any person dealing with the Trust or the
Trustees or any one or more of them, and the successors or assigns of such
persons, which certificate may certify to any matter relating to the affairs of
the Trust, including, but not limited to, any of the following: a vacancy among
the Trustees; the number and identity of Trustees; this Declaration of Trust and
any amendments or supplements thereto, or any restated declaration of trust and
any amendments or supplements thereto, or that there are no amendments to this
Declaration of Trust or any restated declaration of trust; a copy of the Bylaws
or any amendment thereto; the due authorization of the execution of any
instrument or writing; the vote at any meeting of the Board or a committee
thereof or Shareholders; the fact that the number of Trustees present at any
meeting or executing any written instrument satisfies the requirements of this
Declaration of Trust; a copy of any Bylaw adopted by the Shareholders or the
identity of any officer elected by the Board; or the existence or nonexistence
of any fact or facts which in any manner relate to the affairs of the Trust. If
this Declaration of Trust or any restated declaration of trust is filed or
recorded in any recording office other than the State Department of Assessments
and Taxation of Maryland, any one dealing with real estate so located that
instruments affecting the same should be filed or recorded in such recording
office may rely conclusively on any certificate of the kind described above
which is signed by a person who according to the records of such recording
office appears to be a Trustee hereunder. In addition, the Secretary or any
Assistant Secretary of the Trust or any other officer of the Trust designated by
the Bylaws or by action of the Board may sign any certificate of the kind
described in this Section 5, and such certificate shall be conclusive evidence
as to the matters so certified in favor of any person dealing with the Trust,
and the successors and assigns of such person.
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Section 6. Severability. If any provision of this Declaration of Trust
shall be invalid or unenforceable, such invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other provision of this Declaration of Trust and
this Declaration of Trust shall be carried out, if possible, as if such invalid
or unenforceable provision were not contained herein.
Section 7. Bylaws. The Bylaws may be altered, amended or repealed, and
new Bylaws may be adopted, at any meeting of the Board by vote of a majority of
the Trustees, subject to repeal or change by action of the Shareholders of the
Trust entitled to vote thereon.
Section 8. Recording. This Declaration of Trust shall be filed in the
manner prescribed for real estate investment trusts under Maryland law and may
also be filed or recorded in such other places as the Board deems appropriate,
but failure to file for record this Declaration of Trust or any amendment hereto
in any office other than in the State Department of Assessments and Taxation of
Maryland shall not affect or impair the validity or effectiveness of this
Declaration of Trust or any amendment or supplement hereto.
ARTICLE VIII. LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Liability of Officers and Employees. To the
maximum extent that Maryland law in effect from time to time permits limitation
of the liability of officers, employees or agents of a real estate investment
trust, no officer, employee or agent of the Trust shall be liable to the Trust
or to any Shareholder for money damages. Neither the amendment nor repeal of
this Section 1, nor the adoption or amendment of any other provision of this
Declaration of Trust inconsistent with this Section 1, shall apply to or affect
in any respect the applicability of the preceding sentence with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption. In the absence of any Maryland statute limiting the liability of
officers, employees or agents of a Maryland real estate investment trust for
money damages in a suit by or on behalf of the Trust or by any Shareholder, no
officer, employee or agent of the Trust shall be liable to the Trust or to any
Shareholder for money damages except to the extent that (i) the officer,
employee or agent actually received an improper benefit or profit in money,
property or services, for the amount of the benefit or profit in money, property
or services actually received; or (ii) a judgment or other final adjudication
adverse to the officer, employee or agent is entered in a proceeding based on a
finding in the proceeding that the officer's, employee's or agent's action or
failure to act was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding.
Section 2. Indemnification of Officers and Employees. The Trust shall
indemnify each officer, employee and agent, to the fullest extent permitted by
Maryland law, as amended from time to time, in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she was an
officer, employee or agent of the Trust or is or was serving at the request of
the Trust as a director, trustee, officer, partner, manager, member, employee or
agent of another
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foreign or domestic corporation, partnership, joint venture, trust, limited
liability company, other enterprise or employee benefit plan, from all claims
and liabilities to which such person may become subject by reason of service in
such capacity and shall pay or reimburse reasonable expenses, as such expenses
are incurred, of each officer, employee or agent in connection with any such
proceedings.
Section 3. Insurance. Notwithstanding any other provisions of this
Declaration of Trust, the Trust, for purposes of providing indemnification for
its Trustees, officers, employees and agents, shall have the authority, without
specific Shareholder approval, to enter into insurance or other arrangements,
with persons or entities which are regularly engaged in the business of
providing insurance coverage, to indemnify all Trustees, officers, employees and
agents of the Trust against any and all liabilities and expenses incurred by
them by reason of their being Trustees, officers, employees or agents of the
Trust, whether or not the Trust would otherwise have the power under this
Declaration of Trust or under Maryland law to indemnify such persons against
such liability. Without limiting the power of the Trust to procure or maintain
any kind of insurance or other arrangement, the Trust may, for the benefit of
persons indemnified by it, (i) create a trust fund, (ii) establish any form of
self-insurance, (iii) secure its indemnity obligation by grant of any security
interest or other lien on the assets of the Trust or (iv) establish a letter of
credit, guaranty or surety arrangement. Any such insurance or other arrangement
may be procured, maintained or established within the Trust or with any insurer
or other person deemed appropriate by the Board regardless of whether all or
part of the stock or other securities thereof are owned in whole or in part by
the Trust. In the absence of fraud, the judgment of the Board as to the terms
and conditions of insurance or other arrangement and the identity of the insurer
or other person participating in any arrangement shall be conclusive, and such
insurance or other arrangement shall not be subject to voidability, nor subject
the Trustees approving such insurance or other arrangement to liability, on any
ground, regardless of whether Trustees participating in and approving such
insurance or other arrangement shall be beneficiaries thereof.
* * * * *
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IN WITNESS WHEREOF, the Trust has caused this Declaration of Trust to be
signed in its name and on its behalf as of the date first written above, by the
undersigned Vice President who acknowledges that to the best of his or her
knowledge, information and belief, the matters and facts set forth herein are
true in all material respects and that this statement is made under the
penalties for perjury.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ Ash K. Atwood
-------------------------------
Name: Ash K. Atwood
Title: Vice President
ATTEST:
/s/ Rick D. Jacobsen
- -----------------------------
Name: Rick D. Jacobsen
Title: Vice President
Being duly authorized
by resolution of
the Board of Trustees
<PAGE>
ANNEX A
CUMULATIVE CONVERTIBLE SERIES A PREFERRED
SHARES OF BENEFICIAL INTEREST
(a) Number of Shares and Designation. This class of preferred Shares shall
be designated as Cumulative Convertible Series A Preferred Shares of Beneficial
Interest ("Series A Preferred Shares") and the number of Shares which shall
constitute such series shall not be more than 9,200,000 Shares, par value $1.00
per Share, which number may be decreased (but not below the number thereof then
outstanding plus the number required to fulfill the Trust's obligations under
options, warrants or similar rights issued by the Trust) from time to time by
the Board.
(b) Definitions. For purposes of the Series A Preferred Shares, the
following terms shall have the meanings indicated:
"Board" shall mean the Board or any committee authorized by the Board
to perform any of its responsibilities with respect to the Series A
Preferred Shares.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"Call Date" shall mean the date of the notice to holders required
under subsection (e)(iv) of this Section 2.
"Common Shares" shall mean the common shares of beneficial interest of
the Trust, par value $1.00 per Share.
"Constituent Person" shall have the meaning set forth in subsection
(f)(viii) of this Section 2.
"Conversion Price" shall mean the conversion price per Common Share
for which the Series A Preferred Shares are convertible, as such Conversion
Price may have been and may be adjusted pursuant to subsection (f) of this
Section 2. The initial conversion price was $20.556 (equivalent to a
conversion rate of 1.2162 Common Shares for each Series A Preferred Share).
"Current Market Price" of publicly traded common shares or any other
class of shares or capital stock or other security of the Trust or any
other issuer for any day shall mean the last reported sales price, regular
way on such day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either
case as reported on the New York Stock Exchange (the "NYSE") or, if such
security is not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted for trading or, if not
A-1
<PAGE>
listed or admitted for trading on any national securities exchange, on the
National Market System of the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or, if such security is not
quoted on such National Market System, the average of the closing bid and
asked prices on such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on such day shall not
have been reported through NASDAQ, the average of the bid and asked prices
on such day as furnished by any NYSE member firm regularly making a market
in such security selected for such purpose by the Chairman of the Board or
the Board.
"Dividend Payment Date" shall mean the last calendar day of March,
June, September and December in each year, commencing on December 31, 1993;
provided, however, that if any Dividend Payment Date falls on any day other
than a Business Day, the dividend payment due on such Dividend Payment Date
shall be paid on the Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing on
April 1, July 1, October 1 and January 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which commenced on the
Issue Date and ended on and included December 31, 1994).
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a Common Share during the five consecutive Trading Days selected
by the Trust commencing not more than 20 Trading Days before, and ending
not later than, the earlier of the day in question and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. The term "ex date," when used with respect to any issuance or
distribution, means the first day on which the Common Shares trade regular
way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine such day's
Current Market Price.
"Fully Junior Shares" shall mean the Common Shares and any other class
or series of Shares of the Trust now or hereafter issued and outstanding
over which the Series A Preferred Shares have preference or priority in
both (i) the payment of dividends and (ii) the distribution of assets on
any liquidation, dissolution or winding up of the Trust.
"Issue Date" shall mean the first date on which the Series A Preferred
Shares were issued and sold.
"Junior Shares" shall mean the Common Shares and any other class or
series of Shares of the Trust now or hereafter issued and outstanding over
which the Series A Preferred Shares have preference or priority in the
payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Trust.
A-2
<PAGE>
"Non-Electing Share" shall have the meaning set forth in subsection
(f)(viii) of this Section 2.
"Parity Shares" shall have the meaning set forth in subsection (h)(ii)
of this Section 2.
"Person" shall mean any individual, firm, partnership, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Securities" and "Security" shall have the meanings set forth in
paragraph (C) of subsection (f)(vii) of this Section 2.
"Series A Preferred Shares" shall have the meaning set forth in
subsection (a) of this Section 2.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
a declaration of dividends or other distribution by the Board, the
allocation of funds to be so paid on any series or class of Shares of the
Trust; provided, however, that if any funds for any class or series of
Junior Shares or any class or series of Shares ranking on a parity with the
Series A Preferred Shares as to the payment of dividends are placed in a
separate account of the Trust or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Series A
Preferred Shares shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE, or if such securities are not listed or admitted
for trading on the NYSE, on the principal national securities exchange on
which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the National Market
System of NASDAQ, or if such securities are not quoted on such National
Market System, in the applicable securities market in which the securities
are traded.
"Transaction" shall have the meaning set forth in subsection (f)(viii)
of this Section 2.
"Transfer Agent" means ChaseMellon Shareholder Services, L.L.C., New
York City, New York, or such other agent or agents of the Trust as may be
designated by the Board or its designee as the transfer agent for the
Series A Preferred Shares.
"Voting Preferred Shares" shall have the meaning set forth in
subsection (i) of this Section 2.
A-3
<PAGE>
(c) Dividends.
(i) The holders of Series A Preferred Shares shall be entitled to
receive, when, as and if declared by the Board out of funds legally
available for such purpose, dividends payable in cash in an amount per
Series A Preferred Share equal to the greater of (i) $1.75 per annum or
(ii) the dividends (determined on each Dividend Payment Date) on the Common
Shares, or portion thereof, into which a Series A Preferred Share is
convertible. Such dividends shall equal the number of Common Shares, or
portion thereof, into which a Series A Preferred Share is convertible,
multiplied by the most current quarterly dividend on a Common Share on or
before the applicable Dividend Payment Date. Such dividends shall begin to
accrue and shall be fully cumulative from the Issue Date, whether or not in
any Dividend Period or Periods there shall be funds of the Trust legally
available for the payment of such dividends, and shall be payable
quarterly, when, as and if declared by the Board, in arrears on Dividend
Payment Dates, commencing on the first Dividend Payment Date after the
Issue Date. Each such dividend shall be payable in arrears to the holders
of record of Series A Preferred Shares, as they appear on the Share records
of the Trust at the close of business on such record dates, not more than
50 days preceding such Dividend Payment Dates thereof, as shall be fixed by
the Board. Accrued and unpaid dividends for any past Dividend Periods may
be declared and paid at any time and for such interim periods, without
reference to any regular Dividend Payment Date, to holders of record on
such date, not exceeding 50 days preceding the payment date thereof, as may
be fixed by the Board.
(ii) The amount of dividends payable for each full Dividend Period
for the Series A Preferred Shares shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series A Preferred Shares shall be computed on the basis of
twelve 30-day months and a 360-day year. Holders of Series A Preferred
Shares shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of cumulative dividends, as herein provided,
on the Series A Preferred Shares. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments
on the Series A Preferred Shares which may be in arrears.
(iii) So long as any Series A Preferred Shares are outstanding, no
dividends, except as described in the immediately following sentence, shall
be declared or paid or set apart for payment on any class or series of
Parity Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Series A
Preferred Shares for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Shares. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared on Series A Preferred
Shares and all dividends declared on any other class or series of Parity
Shares shall be declared ratably in proportion to the respective amounts
A-4
<PAGE>
of dividends accumulated and unpaid on the Series A Preferred Shares and
accumulated and unpaid on such Parity Shares.
(iv) So long as any Series A Preferred Shares are outstanding, no
dividends (other than dividends or distributions paid solely in, or
options, warrants or rights to subscribe for or purchase, Fully Junior
Shares) shall be declared, or paid or set apart for payment or other
distribution declared or made on Junior Shares, nor shall any Junior Shares
be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Shares made for purposes of an
employee incentive or benefit plan of the Trust or any subsidiary) for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such Shares) by the Trust, directly or
indirectly (except by conversion into or exchange for Fully Junior Shares),
unless in each case (i) the full cumulative dividends on all outstanding
Series A Preferred Shares and any other Parity Shares of the Trust shall
have been paid or declared and set apart for payment for all past Dividend
Periods with respect to the Series A Preferred Shares and all past dividend
periods with respect to such Parity Shares and (ii) sufficient funds shall
have been paid or declared and set apart for the payment of the dividend
for the current Dividend Period with respect to the Series A Preferred
Shares and the current dividend period with respect to such Parity Shares.
(d) Liquidation Preference.
(i) Upon any liquidation, dissolution or winding up of the Trust,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Trust (whether capital or surplus) shall be made to or set
apart for the holders of Junior Shares, the holders of the Series A
Preferred Shares shall be entitled to receive Twenty-Five Dollars ($25.00)
per Series A Preferred Share plus an amount equal to all dividends (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. If, upon any liquidation, dissolution or winding up of the
Trust, the assets of the Trust, or proceeds thereof, distributable among
the holders of the Series A Preferred Shares shall be insufficient to pay
in full the preferential amount aforesaid and liquidating payments on any
other class or series of Parity Shares, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series A Preferred
Shares and any such other Parity Shares ratably in accordance with the
respective amounts which would be payable on such Series A Preferred Shares
and any such other Parity Shares if all amounts payable thereon were paid
in full. For purposes of this subsection (d), (i) a consolidation or merger
of the Trust with one or more corporations, (ii) a sale or transfer of all
or substantially all of the Trust's assets or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, of the Trust.
(ii) Subject to the rights of the holders of any series or class or
classes of Shares ranking on a parity with or prior to the Series A
Preferred Shares upon
A-5
<PAGE>
liquidation, dissolution or winding up, upon any liquidation, dissolution
or winding up of the Trust, after payment shall have been made in full to
the holders of the Series A Preferred Shares, as provided in this
subsection (d), any other series or class or classes of Junior Shares
shall, subject to the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Shares shall not be
entitled to share therein.
(e) Redemption at the Option of the Trust.
(i) Subject to subsection (j) of this Section 2, the Series A
Preferred Shares shall not be redeemable by the Trust prior to the tenth
anniversary of the Issue Date. On and after the tenth anniversary of the
Issue Date, the Trust, at its option, may redeem the Series A Preferred
Shares, in whole at any time or from time to time in part at the option of
the Trust at a redemption price of Twenty-Five Dollars ($25.00) per Series
A Preferred Share, plus the amounts indicated in subsection (e)(ii) of this
Section 2.
(ii) Upon any redemption of Series A Preferred Shares pursuant to
this subsection (e), the Trust shall pay any accrued and unpaid dividends
in arrears for any Dividend Period ending on or prior to the Call Date. If
the Call Date falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of Series A Preferred
Shares at the close of business on such dividend payment record date shall
be entitled to the dividend payable on such Series A Preferred Shares on
the corresponding dividend payment date notwithstanding the redemption of
such Series A Preferred Shares before such Dividend Payment Date. Except as
provided above, the Trust shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on Series A Preferred Shares called
for redemption.
(iii) If full cumulative dividends on the Series A Preferred Shares
and any other class or series of Parity Shares of the Trust have not been
paid or declared and set apart for payment, the Series A Preferred Shares
may not be redeemed under this subsection (e) in part and the Trust may not
purchase or acquire Series A Preferred Shares, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of Series
A Preferred Shares or pursuant to subsection (j) of this Section 2.
(iv) Notice of the redemption of any Series A Preferred Shares under
this subsection (e) shall be mailed by first-class mail to each holder of
record of Series A Preferred Shares to be redeemed at the address of each
such holder as shown on the Trust's record, not less than 30 nor more than
90 days prior to the Call Date. Neither the failure to mail any notice
required by this subsection (e)(iv), nor any defect therein or in the
mailing thereof, to any particular holder, shall affect the sufficiency of
the notice or the validity of the proceedings for redemption with respect
to the other holders. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such mailed
notice shall state, as appropriate: (i) the Call Date; (ii) the
A-6
<PAGE>
number of Series A Preferred Shares to be redeemed and, if fewer than all
of the Series A Preferred Shares held by such holder are to be redeemed,
the number of Series A Preferred Shares to be redeemed from such holder;
(iii) the place or places at which certificates for such Series A Preferred
Shares are to be surrendered; (iv) the then-current Conversion Price; and
(v) that dividends on the Series A Preferred Shares to be redeemed shall
cease to accrue on such Call Date except as otherwise provided herein.
Notice having been mailed as aforesaid, from and after the Call Date
(unless the Trust shall fail to make available an amount of cash necessary
to effect such redemption), (A) except as otherwise provided herein,
dividends on the Series A Preferred Shares so called for redemption shall
cease to accrue, (B) such Series A Preferred Shares shall no longer be
deemed to be outstanding and (C) all rights of the holders thereof as
holders of Series A Preferred Shares of the Trust shall cease (except the
rights to convert and to receive cash payable upon such redemption, without
interest thereon, upon surrender and endorsement of their certificates if
so required and to receive any dividends payable thereon). The Trust's
obligation to provide cash in accordance with the preceding sentence shall
be deemed fulfilled if, on or before the Call Date, the Trust shall deposit
with a bank or trust company (which may be an affiliate of the Trust) which
has an office in the Borough of Manhattan, City of New York, and which has,
or is an affiliate of a bank or trust company which has, capital and
surplus of at least $50,000,000, necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption
of the Series A Preferred Shares so called for redemption. No interest
shall accrue for the benefit of the holders of Series A Preferred Shares to
be redeemed on any cash so set aside by the Trust. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the Call
Date shall revert to the general funds of the Trust, after which reversion
the holders of such Series A Preferred Shares so called for redemption
shall look only to the general funds of the Trust for the payment of such
cash.
(v) As promptly as practicable after the surrender in accordance with
such notice of the certificates for any such Series A Preferred Shares so
redeemed (properly endorsed or assigned for transfer, if the Trust shall so
require and if the notice shall so state), such Series A Preferred Shares
shall be exchanged for any cash (without interest thereon) for which such
Series A Preferred Shares have been redeemed. If fewer than all of the
outstanding Series A Preferred Shares are to redeemed, the Series A
Preferred Shares to be redeemed shall be selected by the Trust from
outstanding Series A Preferred Shares not previously called for redemption
by lot or pro rata (as nearly as may be) or by any other method determined
by the Trust in its sole discretion to be equitable. If fewer than all of
the Series A Preferred Shares represented by any certificate are redeemed,
then new certificates representing the unredeemed Series A Preferred Shares
shall be issued without cost to the holder thereof.
(f) Conversion. Holders of Series A Preferred Shares shall have the right
to convert all or a portion of such Series A Preferred Shares into Common
Shares, as follows:
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<PAGE>
(i) Subject to and upon compliance with the provisions of this
subsection (f), a holder of Series A Preferred Shares shall have the right,
at his or her option, at any time to convert such Series A Preferred Shares
into the number of fully paid and non-assessable Common Shares obtained by
dividing the aggregate liquidation preference of such Series A Preferred
Shares by the Conversion Price (as in effect at the time and on the date
provided for in subsection (f)(v) of this Section 2 by surrendering such
Series A Preferred Shares to be converted, such surrender to be made in the
manner provided in subsection (f)(ii) of this Section 2; provided, however,
that the right to convert Series A Preferred Shares called for redemption
pursuant to subsection (e) of this Section 2 shall terminate at the close
of business on the fifth Business Day prior to the Call Date fixed for such
redemption, unless the Trust shall default in making payment of the cash
payable upon such redemption under subsection (e) of this Section 2.
(ii) In order to exercise the conversion right, the holder of each
Series A Preferred Share to be converted shall surrender the certificate
representing such Series A Preferred Share, duly endorsed or assigned to
the Trust or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Trust that the holder thereof elects to convert such
Series A Preferred Shares. Unless the Series A Preferred Shares issuable on
conversion are to be issued in the same name as the name in which such
Series A Preferred Share is registered, each Series A Preferred Share
surrendered for conversion shall be accompanied by instruments of transfer,
in form satisfactory to the Trust, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Trust
demonstrating that such taxes have been paid).
(iii) Holders of Series A Preferred Shares at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such Series A Preferred Shares on the corresponding Dividend
Payment Date notwithstanding the conversion thereof following such dividend
payment record date and prior to such Dividend Payment Date. However,
Series A Preferred Shares surrendered for conversion during the period
between the close of business on any dividend payment record date and the
opening of business on the corresponding Dividend Payment Date (except
Series A Preferred Shares converted after the issuance of notice of
redemption with respect to a Call Date during such period, such Series A
Preferred Shares being entitled to such dividend on the Dividend Payment
Date) must be accompanied by payment of an amount equal to the dividend
payable on such Series A Preferred Shares on such Dividend Payment Date. A
holder of Series A Preferred Shares on a dividend payment record date who
(or whose transferee) tenders any such Series A Preferred Shares for
conversion into Common Shares on the corresponding Dividend Payment Date
shall receive the dividend payable by the Trust on such Series A Preferred
Shares on such date, and the converting holder need not include payment of
the amount of such dividend upon surrender of Series A Preferred Shares for
conversion. Except as provided above, the Trust shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted
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Series A Preferred Shares or for dividends on the Common Shares issued upon
such conversion.
(iv) As promptly as practicable after the surrender of certificates
for Series A Preferred Shares as aforesaid, the Trust shall issue and shall
deliver at such office to such holder, or on his or her written order, a
certificate or certificates for the number of full Common Shares issuable
upon the conversion of such Series A Preferred Shares in accordance with
provisions of this subsection (f), and any fractional interest in respect
of a Common Share arising upon such conversion shall be settled as provided
in subsection (f) (vi) of this Section 2.
(v) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for Series A Preferred Shares shall have been surrendered and
such notice (and if applicable, payment of an amount equal to the dividend
payable on such Series A Preferred Shares) received by the Trust as
aforesaid, and the person or persons in whose name or names any certificate
or certificates for Common Shares shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the
Common Shares represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at such time on such
date unless the Share transfer books of the Trust shall be closed on such
date, in which event such person or persons shall be deemed to have become
such holder or holders of record at the close of business on 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 Series A Preferred Shares shall have been surrendered and such notice
received by the Trust.
(vi) No fractional Common Shares or scrip representing fractions of
Common Shares shall be issued upon conversion of the Series A Preferred
Shares. Instead of any fractional interest in a Common Share which would
otherwise be deliverable upon the conversion of a Series A Preferred Share,
the Trust shall pay to the holder of such Series A Preferred Share an
amount in cash based on the Current Market Price of Common Shares on the
Trading Day immediately preceding the date of conversion. If more than one
Series A Preferred Share shall be surrendered for conversion at one time by
the same holder, the number of full Common Shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of Series A
Preferred Shares so surrendered.
(vii) The Conversion Price shall be adjusted from time to time as
follows:
(A) If the Trust shall after the Issue Date (i) pay a dividend
or make a distribution on its Shares in Common Shares, (ii) subdivide
its outstanding Common Shares into a greater number of Common Shares,
(iii) combine its outstanding Common Shares into a smaller number of
Common Shares or (iv) issue any Shares by reclassification of its
Common Shares, the Conversion Price
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in effect at the opening of business on the day following the date
fixed for the determination of Shareholders entitled to receive such
dividend or distribution or at the opening of business on the Business
Day next following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be
adjusted so that the holder of any Series A Preferred Share thereafter
surrendered for conversion shall be entitled to receive the number of
Common Shares which such holder would have owned or have been entitled
to receive after the happening of any of the events described above as
if such Series A Preferred Shares had been converted immediately prior
to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this paragraph (A)
shall become effective immediately after the opening of business on
the Business Day next following the record date (except as provided in
subsection (f)(xi) of this Section 2) in the case of a dividend or
distribution and shall become effective immediately after the opening
of business on the Business Day next following the effective date in
the case of a subdivision, combination or reclassification.
(B) If the Trust shall issue after the Issue Date rights,
options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 days after the record date mentioned
below) to subscribe for or purchase Common Shares at a price per
Common Share less than 94% (100% if a stand-by underwriter is used and
charges the Trust a commission) of the Fair Market Value per Common
Share on the record date for the determination of Shareholders
entitled to receive such rights, option or warrants, then the
Conversion Price in effect at the opening of business on the Business
Day next following such record date shall be adjusted to equal the
price determined by multiplying (i) the Conversion Price in effect
immediately prior to the opening of business on the Business Day next
following the date fixed for such determination by (ii) a fraction,
the numerator of which shall be the sum of (A) the number of Common
Shares outstanding on the close of business on the date fixed for such
determination and (B) the number of Common Shares which the aggregate
proceeds to the Trust from the exercise of such rights, option or
warrants for Common Shares would purchase at 94% of such Fair Market
Value (or 100% in the case of a stand-by underwriting), and the
denominator of which shall be the sum of (X) the number of Common
Shares outstanding on the close of business on the date fixed for such
determination and (Y) the number of additional Common Shares offered
for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except
as provided in subsection (f)(xi) of this Section 2). In determining
whether any rights, options or warrants entitle the holders of Common
Shares to subscribe for or purchase Common Shares at less than 94% of
such Fair Market Value (or 100% in the case of a stand-by
underwriting), there shall be taken into account
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any consideration received by the Trust upon issuance and upon
exercise of such rights, options or warrants, the value of such
consideration, if other than cash, to be determined by the Chairman of
the Board or the Board.
(C) If the Trust shall distribute to all holders of its Common
Shares any Shares of the Trust (other than Common Shares) or evidence
of its indebtedness or assets (excluding cumulative cash dividends or
distributions paid with respect to the Common Shares after September
30, 1993 which are not in excess of the following: the sum of (i) the
Trust's cumulative undistributed funds from operations at September
30, 1993, plus (ii) the cumulative amount of funds from operations, as
determined by the Board, after September 30, 1993, minus (iii) the
cumulative amount of dividends accrued or paid in respect of the
Series A preferred Shares or any other class or series of preferred
Shares of the Trust after the Issue Date) or rights, options or
warrants to subscribe for or purchase any of its securities (excluding
those rights, options and warrants issued to all holders of Common
Shares entitling them for a period expiring within 45 days after the
record date referred to in paragraph (B) above to subscribe for or
purchase Common Shares, which rights and warrants are referred to in
and treated under paragraph (B) above) (any of the foregoing being
hereinafter in this paragraph (C) collectively called the "Securities"
and individually a "Security"), then in each such case the Conversion
Price shall be adjusted so that it shall equal the price determined by
multiplying (A) the Conversion Price in effect immediately prior to
the close of business on the date fixed for the determination of
Shareholders entitled to receive such distribution by (B) a fraction,
the numerator of which shall be the Fair Market Value per Common Share
on the record date mentioned below less the then fair market value (as
determined by the Chairman of the Board or the Board, whose
determination shall be conclusive), of the portion of the Shares or
assets or evidences of indebtedness so distributed or of such rights
or warrants applicable to one Common Share, and the denominator of
which shall be the Fair Market Value per Common Share on the record
date mentioned below. Such adjustment shall become effective
immediately at the opening of business on the Business Day next
following (except as provided in subsection (f)(xi) of this Section 2)
the record date for the determination of Shareholders entitled to
receive such distribution. For purposes of this paragraph (C), the
distribution of a Security, which is distributed not only to the
holders of the Common Shares on the date fixed for the determination
of Shareholders entitled to such distribution of such Security, but
also is distributed with each Common Share delivered to a Person
converting a Series A Preferred Share after such determination date,
shall not require an adjustment of the Conversion Price pursuant to
this paragraph (C); provided that on the date, if any, on which a
person converting a Series A Preferred Share would no longer be
entitled to receive such Security with a Common Share (other than as a
result of the termination of all such Securities), a distribution of
such Securities shall be deemed to have occurred and the Conversion
Price shall be adjusted as provided
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<PAGE>
in this paragraph (C) (and such day shall be deemed to be "the date
fixed for the determination of the Shareholders entitled to receive
such distribution" and "the record date" within the meaning of the two
preceding sentences).
(D) In case a tender or exchange offer made by the Trust or any
subsidiary of the Trust for all or any portion of the Common Shares
shall expire and such tender or exchange offer shall involve the
payment by the Trust or such subsidiary of consideration per Common
Share having a fair market value (as determined in good faith by the
Board, whose determination shall be conclusive and described in a
resolution of the Board), at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange
offer, which exceeds the Current Market Price per Common Share on the
Trading Day next succeeding the Expiration Time, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
paragraph (D), by a fraction of which the numerator shall be the
number of Common Shares outstanding (including any tendered or
exchanged Common Shares) at the Expiration Time, multiplied by the
Current Market Price per Common Share on the Trading Day next
succeeding the Expiration Time, and the denominator shall be the sum
of (i) the fair market value (determined as aforesaid) of the
aggregate consideration payable to Shareholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all Common Shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the Common Shares deemed so
accepted, up to any maximum, being referred to as the "Purchased
Shares") and (ii) the product of the number of Common Shares
outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price per Common Share on the Trading Day next
succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time.
(E) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this paragraph (E) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment until made; and provided, further, that any adjustment
shall be required and made in accordance with the provisions of this
subsection (f) (other than this paragraph (E)) not later than such
time as may be required in order to preserve the tax-free nature of a
distribution to the holders of Common Shares. Notwithstanding any
other provisions of this subsection (f), the Trust shall not be
required to make any adjustment of the Conversion Price for the
issuance of any Common Shares pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of the
Trust and the investment of additional optional amounts in Common
Shares under such plan.
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<PAGE>
All calculations under this subsection (f) shall be made to the
nearest cent (with $0.005 being rounded upward) or to the nearest one-
tenth of a Share (with 0.05 of a Share being rounded upward), as the
case may be. Anything in this subsection (f)(vii) to the contrary
notwithstanding, the Trust shall be entitled, to the extent permitted
by law, to make such reductions in the Conversion Price, in addition
to those required by this subsection (f)(vii), as it in its discretion
shall determine to be advisable in order that any Share dividends,
subdivision of Shares, reclassification or combination of Shares,
distribution of rights or warrants to purchase Shares or securities,
or a distribution of other assets (other than cash dividends)
hereafter made by the Trust to its Shareholders shall not be taxable.
(viii) If the Trust shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or substantially all Common Shares, sale of all or
substantially all of the Trust's assets or recapitalization of the Common
Shares and excluding any transaction as to which paragraph (A) of
subsection (f)(vii) of this Section 2 applies) (each of the foregoing being
referred to herein as a "Transaction"), in each case as a result of which
all or substantially all Common Shares are converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), each Series A Preferred Share which is not redeemed
or converted into the right to receive stock, securities or other property
prior to such Transaction shall thereafter be convertible into the kind and
amount of shares of stock, securities and other property (including cash or
any combination thereof) receivable upon the consummation of such
Transaction by a holder of such number of Common Shares into which one
Series A Preferred Share was convertible immediately prior to such
Transaction, assuming such holder of Common Shares (i) is not a Person with
which the Trust consolidated or into which the Trust merged or which merged
into the Trust or to which such sale or transfer was made, as the case may
be (a "Constituent Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or
amount of stock, securities and other property (including cash) receivable
upon such Transaction (provided that if the kind or amount of stock,
securities and other property (including cash) receivable upon such
Transaction is not the same for each Common Share held immediately prior to
such Transaction by other than a Constituent Person or an affiliate thereof
and in respect of which such rights of election shall not have been
exercised (a "Non-Electing Share"), then for purposes of this subsection
(f)(viii) the kind and amount of stock, securities and other property
(including cash) receivable upon such Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by
a plurality of the Non-Electing Shares). The Trust shall not be a party to
any Transaction unless the terms of such Transaction are consistent with
the provisions of this subsection (f)(viii), and it shall not consent or
agree to the occurrence of any Transaction until the Trust has entered into
an agreement with the successor or purchasing entity, as the case may be,
for the benefit of the holders of the Series A Preferred Shares which shall
contain provisions enabling the holders of the Series A Preferred Shares
which remain outstanding after such
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<PAGE>
Transaction to convert into the consideration received by holders of Common
Shares at the Conversion Price in effect immediately prior to such
Transaction. The provisions of this subsection (f)(viii) shall similarly
apply to successive Transactions.
(ix) If:
(A) the Trust shall declare a dividend (or any other
distribution) on the Common Shares (other than cash dividends or
distributions paid with respect to the Common Shares after September
30, 1993 not in excess of the sum of the Trust's cumulative
undistributed funds from operations at September 30, 1993, plus the
cumulative amount of funds from operations, as determined by the
Board, after September 30, 1993, minus the cumulative amount of
dividends accrued or paid in respect of the Series A Preferred Shares
or any other class or series of Preferred Shares of the Trust after
the Issue Date); or
(B) the Trust shall authorize the granting to the holders of
Common Shares of rights, options or warrants to subscribe for or
purchase any Shares of any class or any other rights, options or
warrants; or
(C) there shall be any reclassification of the Common Shares
(other than an event to which paragraph (A) of subsection (f)(vii) of
this Section 2 applies) or any consolidation or merger to which the
Trust is a party and for which approval of any Shareholders of the
Trust is required, or a statutory share exchange, or a self tender
offer by the Trust for all or substantially all of the outstanding
Common Shares or the sale or transfer of all or substantially all of
the assets of the Trust as an entirety; or
(D) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Trust,
then the Trust shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of Series A Preferred Shares at their
addresses as shown on the Share records of the Trust, as promptly as
possible, but at least 10 days prior to the applicable date hereinafter
specified, a notice stating (i) the date on which a record is to be taken
for purposes of such dividend, distribution or granting of rights, options
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Shares of record to be entitled to such dividend,
distribution or granting of rights, options or warrants are to be
determined or (ii) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution
or winding up is expected to become effective, and the date as of which it
is expected that holders of Common Shares of record shall be entitled to
exchange their Common Shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution
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<PAGE>
or winding up. Failure to give or receive such notice or any defect therein
shall not affect the legality or validity of the proceedings described in
this subsection (f).
(x) Whenever the Conversion Price is adjusted as herein provided,
the Trust shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Trust shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Series A Preferred
Share at such holder's last address as shown on the Share records of the
Trust.
(xi) In any case in which subsection (f)(vii) of this Section 2
provides that an adjustment shall become effective on the day next
following the record date for an event, the Trust may defer until the
occurrence of such event (i) issuing to the holder of any Series A
Preferred Share converted after such record date and before the occurrence
of such event the additional Common Shares issuable upon such conversion by
reason of the adjustment required by such event over and above the Common
Shares issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such holder any amount of cash in lieu of any
fraction pursuant to subsection (f)(vi) of this Section 2.
(xii) There shall be no adjustment of the Conversion Price in case of
the issuance of any Shares of the Trust in a reorganization, acquisition or
other similar transaction except as specifically set forth in this
subsection (f). If any action or transaction would require adjustment of
the Conversion Price pursuant to more than one paragraph of this subsection
(f), only one adjustment shall be made and such adjustment shall be the
amount of adjustment which has the highest absolute value.
(xiii) If the Trust shall take any action affecting the Common Shares,
other than action described in this subsection (f), which in the opinion of
the Board would materially and adversely affect the conversion rights of
the holders of the Series A Preferred Shares, the Conversion Price for the
Series A Preferred Shares may be adjusted, to the extent permitted by law,
in such manner, if any, and at such time, as the Board, in its sole
discretion, may determine to be equitable in the circumstances.
(xiv) (A) The Trust covenants that it shall at all times reserve and
keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Shares, for purposes of effecting
conversion of the Series A Preferred Shares, the full number of Common
Shares deliverable upon the conversion of all outstanding Series A
Preferred Shares not theretofore converted. For purposes of this
subsection (f)(xiv), the number of Common Shares which
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shall be deliverable upon the conversion of all outstanding Series A
Preferred Shares shall be computed as if at the time of computation
all such outstanding Series A Preferred Shares were held by a single
holder.
(B) The Trust covenants that any Common Shares issued upon
conversion of the Series A Preferred Shares shall be validly issued,
fully paid and non-assessable. Before taking any action which would
cause an adjustment reducing the Conversion Price below the then-par
value of the Common Shares deliverable upon conversion of the Series A
Preferred Shares, the Trust shall take any trust action which, in the
opinion of its counsel, may be necessary in order that the Trust may
validly and legally issue fully paid and (subject to any customary
qualification based on the nature of a business trust) non-assessable
Common Shares at such adjusted Conversion Price.
(C) The Trust shall endeavor to list the Common Shares required
to be delivered upon conversion of the Series A Preferred Shares,
prior to such delivery, on each national securities exchange, if any,
on which the outstanding Common Shares are listed at the time of such
delivery.
(D) Prior to the delivery of any securities which the Trust
shall be obligated to deliver upon conversion of the Series A
Preferred Shares, the Trust shall endeavor to comply with all federal
and state laws and regulations thereunder requiring the registration
of such securities with, or any approval of or consent to the delivery
thereof by, any governmental authority.
(xv) The Trust shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
Common Shares or other securities or property on conversion of the Series A
Preferred Shares pursuant hereto; provided, however, that the Trust shall
not be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Shares or other
securities or property in a name other than that of the holder of the
Series A Preferred Shares to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery
has paid to the Trust the amount of any such tax or established, to the
reasonable satisfaction of the Trust, that such tax has been paid.
(g) Shares To Be Retired. All Series A Preferred Shares which shall have
been issued and reacquired in any manner by the Trust shall be restored to the
status of authorized but unissued Shares of the Trust, without designation as to
class or series.
(h) Ranking. Any class or series of Shares of the Trust shall be deemed to
rank:
(i) prior to the Series A Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if the holders
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of such class or series shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series A Preferred
Shares;
(ii) on a parity with the Series A Preferred Shares, as to the
payment of dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per Share thereof be
different from those of the Series A Preferred Shares, if the holders of
such class or series and the Series A Preferred Shares shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of
accrued and unpaid dividends per Share or liquidation preferences, without
preference or priority one over the other ("Parity Shares");
(iii) junior to the Series A Preferred Shares, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Junior Shares; and
(iv) junior to the Series A Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if such class or series shall be Fully Junior
Shares.
(i) Voting.
(i) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series A Preferred Shares or any series or
class of Parity Shares shall be in arrears (which shall, with respect to
any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not earned or declared, the number of Trustees then
constituting the Board shall be increased by two and the holders of Series
A Preferred Shares, together with the holders of Shares of every other
series of Parity Shares (any such other series, the "Voting Preferred
Shares"), voting as a single class regardless of series, shall be entitled
to elect the two additional Trustees to serve on the Board at any annual
meeting of Shareholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series A Preferred Shares and the
Voting Preferred Shares called as hereinafter provided. Whenever all
arrears in dividends on the Series A Preferred Shares and the Voting
Preferred Shares then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, then the right of the holders of the
Series A Preferred Shares and the Voting Preferred Shares to elect such
additional two Trustees shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages in six quarterly dividends), and the terms of office of
all persons elected as Trustees by the holders of the Series A Preferred
Shares and the Voting Preferred Shares shall forthwith terminate and the
number of the Board shall be reduced accordingly. At any time after such
voting power shall have been so
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<PAGE>
vested in the holders of Series A Preferred Shares and the Voting Preferred
Shares, the Secretary of the Trust may, and upon the written request of any
holder of Series A Preferred Shares (addressed to the Secretary at the
principal office of the Trust) shall, call a special meeting of the holders
of the Series A Preferred Shares and of the Voting Preferred Shares for the
election of the two Trustees to be elected by them as herein provided, such
call to be made by notice similar to that provided in the Trust's Bylaws
(the "Bylaws") for a special meeting of the Shareholders or as required by
law. If any such special meeting required to be called as provided above
shall not be called by the Secretary within 20 days after receipt of any
such request, then any holder of Series A Preferred Shares may call such
meeting, upon the notice provided above, and for such purpose shall have
access to the Share records of the Trust. The Trustees elected at any such
special meeting shall hold office until the next annual meeting of the
Shareholders or special meeting held in lieu thereof if such office shall
not have previously terminated as provided above. If any vacancy shall
occur among the Trustees elected by the holders of the Series A Preferred
Shares and the Voting Preferred Shares, a successor shall be elected by the
Board, upon the nomination of the then-remaining Trustee elected by the
holders of the Series A Preferred Shares and the Voting Preferred Shares or
the successor of such remaining Trustee, to serve until the next annual
meeting of the Shareholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.
Notwithstanding any other provisions of this subsection (i), in any vote
for the election of additional Trustees hereunder, the Series A Preferred
Shares and Voting Preferred Shares beneficially owned by Security Capital
Group Incorporated, a Maryland corporation ("Security Capital Group"), any
of its direct or indirect subsidiaries and any of their respective
directors, officers or controlling stockholders (together, the "Restricted
Parties"), shall be voted in the same respective percentages as the Series
A Preferred Shares and Voting Preferred Shares which are not beneficially
owned by the Restricted Parties. The provisions in the preceding sentence
shall cease and be of no further force and effect from and after such time,
but only as long as, the Restricted Parties together no longer beneficially
own in excess of 10% of the Trust's outstanding Common Shares.
(ii) So long as any Series A Preferred Shares are outstanding, in
addition to any other vote or consent of Shareholders required by law or by
this Declaration of Trust, the affirmative vote of at least two-thirds of
the votes entitled to be cast by the holders of the Series A Preferred
Shares and the Voting Preferred Shares, at the time outstanding, acting as
a single class regardless of series, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(A) Any amendment, alteration or repeal of any of the provisions
of this Declaration of Trust which materially and adversely affects
the voting powers, rights or preferences of the holders of the Series
A Preferred Shares or the Voting Preferred Shares; provided, however,
that the amendment of the provisions of this Declaration of Trust so
as to authorize or create or to increase
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<PAGE>
the authorized amount of, any Fully Junior Shares, Junior Shares which
are not senior in any respect to the Series A Preferred Shares, or any
Shares of any class ranking on a parity with the Series A Preferred
Shares or the Voting Preferred Shares shall not be deemed to
materially adversely affect the voting powers, rights or preferences
of the holders of Series A Preferred Shares; and provided, further,
that if any such amendment, alteration or repeal would materially and
adversely affect any voting powers, rights or preferences of the
Series A Preferred Shares or another series of Voting Preferred Shares
which are not enjoyed by some or all of the other series otherwise
entitled to vote in accordance herewith, the affirmative vote of at
least two-thirds of the votes entitled to be cast by the holders of
all series similarly affected, similarly given, shall be required in
lieu of the affirmative vote of at least two-thirds of the votes
entitled to be cast by the holders of the Series A Preferred Shares
and the Voting Preferred Shares otherwise entitled to vote in
accordance herewith; or
(B) A share exchange which affects the Series A Preferred
Shares, a consolidation with or merger of the Trust into another
entity, or a consolidation with or merger of another entity into the
Trust, unless in each such case each Series A Preferred Share (i)
shall remain outstanding without a material and adverse change to its
terms and rights or (ii) shall be converted into or exchanged for
convertible preferred stock of the surviving entity having
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or conditions of
redemption thereof identical to that of a Series A Preferred Share
(except for changes which do not materially and adversely affect the
holders of the Series A Preferred Shares); or
(C) The authorization or creation of, or the increase in the
authorized amount of, any Shares of any class or any security
convertible into Shares of any class ranking prior to the Series A
Preferred Shares in the distribution of assets on any liquidation,
dissolution or winding up of the Trust or in the payment of dividends;
provided, however, that no such vote of the holders of Series A Preferred
Shares shall be required if, at or prior to the time when such amendment,
alteration or repeal is to take effect, or when the issuance of any such
prior Shares or convertible security is to be made, as the case may be,
provision is made for the redemption of all Series A Preferred Shares at
the time outstanding.
(iii) For purposes of the foregoing provisions of this subsection
(i), each Series A Preferred Share shall have one vote per Share, except
that when any other series of preferred Shares shall have the right to vote
with the Series A Preferred Shares as a single class on any matter, then
the Series A Preferred Shares and such other series shall have with respect
to such matters one vote per $25.00 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
Series A
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<PAGE>
Preferred Shares shall not have any relative, participating, optional or
other special voting rights and powers other than as set forth herein, and
the consent of the holders thereof shall not be required for the taking of
any Trust action.
(j) Limitation on Ownership.
(i) Notwithstanding any other provision of the terms of the Series A
Preferred Shares, except as provided in the next sentence and in subsection
(j)(ii) of this Section 2, no Person, or Persons acting as a group, shall
at any time directly or indirectly acquire ownership of more than 25% of
the outstanding Series A Preferred Shares. Any Series A Preferred Shares
owned by a Person or Persons acting as a group in excess of such 25% shall
be deemed "Excess Preferred Shares," except that any such Series A
Preferred Shares in excess of 25% shall not be considered Excess Preferred
Shares if the 25% limitation is exceeded solely as a result of the Trust's
redemption of Series A Preferred Shares, provided that thereafter any
additional Series A Preferred Shares acquired by such Person or Persons
acting as a group shall be considered Excess Preferred Shares. Within 10
days of becoming aware of the existence of Excess Preferred Shares (whether
by notice on Schedule 13D or otherwise), the Trust shall redeem any and all
Excess Preferred Shares by giving notice of redemption to the holder or
holders thereof, unless, prior to the giving of such notice, the holder
shall have disposed of its ownership in the Excess Preferred Shares. Such
notice shall set forth the number of Series A Preferred Shares constituting
Excess Preferred Shares, the redemption price and the place or places at
which the certificates representing such Excess Preferred Shares are to be
surrendered and such notice shall set forth the matters described in the
following sentence. From and after the date of giving such notice of
redemption, the Series A Preferred Shares called for redemption shall cease
to be outstanding and the holder thereof shall cease to be entitled to
dividends (other than dividends declared but unpaid prior to the notice of
redemption), voting rights and other benefits with respect to such Series A
Preferred Shares excepting the rights to payment of the redemption price
determined and payable as set forth in the next two sentences. Subject to
the limitation on payment set forth in the following sentence, the
redemption price of each Excess Preferred Share called for redemption shall
be the average daily per Series A Preferred Share closing sales price, if
the Series A Preferred Shares are listed on a national securities exchange
or, if not, are reported on the NASDAQ National Market System, and if the
Series A Preferred Shares are not so listed or reported, shall be the mean
between the average per Series A Preferred Share closing bid prices and the
average per Series A Preferred Share closing asked prices, in each case
during the 30 day period ending on the business day prior to the redemption
date, or if there have been no sales on a national securities exchange or
the NASDAQ National Market System and no published bid quotations and no
published asked quotations with respect to Series A Preferred Shares during
such 30 day period, the redemption price shall be the price determined by
the Board in good faith. Unless the Board determines that it is in the
interest of the Trust to make earlier payment of all of the amount
determined as the redemption price per Series A Preferred Share in
accordance with the preceding sentence,
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<PAGE>
the redemption price may be payable, at the option of the Board, at any
time or times up to, but not later than the earlier of (i) five years after
the redemption date or (ii) the liquidation of the Trust, in which latter
event the redemption price shall not exceed an amount which is the sum of
the per Series A Preferred Share distributions designated as liquidating
distributions and return of capital distributions declared with respect to
unredeemed Series A Preferred Shares of the Trust of record subsequent to
the redemption date; and in any event, no interest shall accrue with
respect to the period subsequent to the redemption date to the date of such
payment. Nothing in this subsection (j)(i) shall preclude the settlement of
any transaction entered into through the facilities of the NYSE.
(ii) The limitation on ownership set forth in subsection (j)(i) of
this Section 2 shall not apply to the acquisition of Series A Preferred
Shares by an underwriter in a public offering of Series A Preferred Shares.
The Board, in its sole and absolute discretion, may exempt from the
ownership limitation set forth in subsection (j)(i) of this Section 2
certain designated Series A Preferred Shares owned by a person (other than
any of the Restricted Parties) who has provided the Board with evidence and
assurances acceptable to the Board that the qualification of the Trust as a
REIT would not be jeopardized thereby.
(k) Record Holders. The Trust and the Transfer Agent may deem and treat
the record holder of any Series A Preferred Shares as the true and lawful owner
thereof for all purposes, and neither the Trust nor the Transfer Agent shall be
affected by any notice to the contrary.
(l) Sinking Fund. The Series A Preferred Shares shall not be entitled to
the benefits of any retirement or sinking fund.
A-21
<PAGE>
ANNEX B
SERIES B CUMULATIVE REDEEMABLE PREFERRED
SHARES OF BENEFICIAL INTEREST
(a) Number of Shares and Designation. This class of preferred Shares shall
be designated as Series B Cumulative Redeemable Preferred Shares of Beneficial
Interest ("Series B Preferred Shares") and the number of Shares which shall
constitute such series shall not be more than 4,200,000 Shares, par value $1.00
per Share, which number may be decreased (but not below the number thereof then
outstanding plus the number required to fulfill the Trust's obligations under
options, warrants or similar rights issued by the Trust) from time to time by
the Board.
(b) Definitions. For purposes of the Series B Preferred Shares, the
following terms shall have the meanings indicated:
"Board" shall mean the Board or any committee authorized by the Board
to perform any of its responsibilities with respect to the Series B
Preferred Shares.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"Call Date" shall mean the date specified in the notice to holders
required under subsection (e)(iv) of this Section 3 as the Call Date.
"Common Shares" shall mean the common shares of beneficial interest of
the Trust, par value $1.00 per Share.
"Dividend Payment Date" shall mean the last calendar day of March,
June, September and December in each year, commencing on June 30, 1995;
provided, however, that if any Dividend Payment Date falls on any day other
than a Business Day, the dividend payment due on such Dividend Payment Date
shall be paid on the Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing on
April 1, July 1, October 1, and January 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which commenced on the
Issue Date and ended on and included June 30, 1995).
"Fully Junior Shares" shall mean the Common Shares and any other class
or series of Shares of the Trust now or hereafter issued and outstanding
over which the Series B Preferred Shares have preference or priority in
both (i) the payment of dividends
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<PAGE>
and (ii) the distribution of assets on any liquidation, dissolution or
winding up of the Trust.
"Issue Date" shall mean the first date on which the Series B Preferred
Shares were issued and sold.
"Junior Shares" shall mean the Common Shares and any other class or
series of Shares of the Trust now or hereafter issued and outstanding over
which the Series B Preferred Shares have preference or priority in the
payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Trust.
"Parity Shares" shall have the meaning set forth in subsection (g)(ii)
of this Section 3.
"Person" shall mean any individual, firm, partnership, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Series B Preferred Shares" shall have the meaning set forth in
subsection (a) of this Section 3.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
a declaration of dividends or other distribution by the Board, the
allocation of funds to be so paid on any series or class of Shares of the
Trust; provided, however, that if any funds for any class or series of
Junior Shares or any class or series of Shares ranking on a parity with the
Series B Preferred Shares as to the payment of dividends are placed in a
separate account of the Trust or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Series B
Preferred Shares shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Transfer Agent" means ChaseMellon Shareholder Services, L.L.C., New
York City, New York, or such other agent or agents of the Trust as may be
designated by the Board or its designee as the transfer agent for the
Series B Preferred Shares.
"Voting Preferred Shares" shall have the meaning set forth in
subsection (h) of this Section 3.
(c) Dividends.
(i) The holders of Series B Preferred Shares shall be entitled to
receive, when, as and if declared by the Board out of funds legally
available for such purpose, dividends payable in cash in an amount per
Series B Preferred Share equal to $2.25. Such dividends shall begin to
accrue and shall be fully cumulative from the Issue Date,
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<PAGE>
whether or not in any Dividend Period or Periods there shall be funds of
the Trust legally available for the payment of such dividends, and shall be
payable quarterly, when, as and if declared by the Board, in arrears on
Dividend Payment Dates, commencing on the first Dividend Payment Date after
the Issue Date. Each such dividend shall be payable in arrears to the
holders of record of Series B Preferred Shares, as they appear on the Share
records of the Trust at the close of business on such record dates, not
less than 10 nor more than 50 days preceding such Dividend Payment Dates
thereof, as shall be fixed by the Board. Accrued and unpaid dividends for
any past Dividend Periods may be declared and paid at any time and for such
interim periods, without reference to any regular Dividend Payment Date, to
holders of record on such date, not less than 10 nor more than 50 days
preceding the payment date thereof, as may be fixed by the Board.
(ii) The amount of dividends payable for each full Dividend Period for
the Series B Preferred Shares shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series B Preferred Shares shall be computed on the basis of
twelve 30-day months and a 360-day year. Holders of Series B Preferred
Shares shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of cumulative dividends, as herein provided,
on the Series B Preferred Shares. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments
on the Series B Preferred Shares which may be in arrears.
(iii) So long as any Series B Preferred Shares are outstanding, no
dividends, except as described in the immediately following sentence, shall
be declared or paid or set apart for payment on any class or series of
Parity Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Series B
Preferred Shares for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Shares. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared on Series B Preferred
Shares and all dividends declared on any other class or series of Parity
Shares shall be declared ratably in proportion to the respective amounts of
dividends accumulated and unpaid on the Series B Preferred Shares and
accumulated and unpaid on such Parity Shares.
(iv) So long as any Series B Preferred Shares are outstanding, no
dividends (other than dividends or distributions paid solely in, or
options, warrants or rights to subscribe for or purchase, Fully Junior
Shares) shall be declared or paid or set apart for payment or other
distribution declared or made on Junior Shares, nor shall any Junior Shares
be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Shares made for purposes of an
employee incentive or benefit plan of the Trust or any subsidiary) for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such Shares) by the
B-3
<PAGE>
Trust, directly or indirectly (except by conversion into or exchange for
Fully Junior Shares), unless in each case (i) the full cumulative dividends
on all outstanding Series B Preferred Shares and any other Parity Shares of
the Trust shall have been paid or declared and set apart for payment for
all past Dividend Periods with respect to the Series B Preferred Shares and
all past dividend periods with respect to such Parity Shares and (ii)
sufficient funds shall have been paid or declared and set apart for the
payment of the dividend for the current Dividend Period with respect to the
Series B Preferred Shares and the current dividend period with respect to
such Parity Shares.
(v) No distributions on Series B Preferred Shares shall be declared by
the Board or paid or set apart for payment by the Trust at such time as the
terms and provisions of any agreement of the Trust, including any agreement
relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration or payment shall be restricted or
prohibited by law.
(d) Liquidation Preference.
(i) Upon any liquidation, dissolution or winding up of the Trust,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Trust (whether capital or surplus) shall be made to or set
apart for the holders of Junior Shares, the holders of the Series B
Preferred Shares shall be entitled to receive Twenty-Five Dollars ($25.00)
per Series B Preferred Share plus an amount equal to all dividends (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. If, upon any liquidation, dissolution or winding up of the
Trust, the assets of the Trust, or proceeds thereof, distributable among
the holders of the Series B Preferred Shares shall be insufficient to pay
in full the preferential amount aforesaid and liquidating payments on any
other class or series of Parity Shares, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series B Preferred
Shares and any such other Parity Shares ratably in accordance with the
respective amounts which would be payable on such Series B Preferred Shares
and any such other Parity Shares if all amounts payable thereon were paid
in full. For purposes of this subsection (d), (i) a consolidation or merger
of the Trust with one or more corporations, (ii) a sale or transfer of all
or substantially all of the Trust's assets or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, of the Trust.
(ii) Subject to the rights of the holders of any series or class or
classes of Shares ranking on a parity with or prior to the Series B
Preferred Shares upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Trust, after payment shall
have been made in full to the holders of the Series B Preferred Shares, as
provided in this subsection (d), any other series or class or classes
B-4
<PAGE>
of Junior Shares shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series B Preferred Shares
shall not be entitled to share therein.
(e) Redemption at the Option of the Trust.
(i) Subject to subsection (i) of this Section 3, the Series B
Preferred Shares shall not be redeemable by the Trust prior to the fifth
anniversary of the Issue Date. On and after the fifth anniversary of the
Issue Date, the Trust, at its option, may redeem the Series B Preferred
Shares, in whole at any time or from time to time in part at the option of
the Trust at a redemption price of Twenty-Five Dollars ($25.00) per Series
B Preferred Share, plus the amounts indicated in subsection (e)(ii) of this
Section 3.
(ii) Upon any redemption of Series B Preferred Shares pursuant to this
subsection (e), the Trust shall pay any accrued and unpaid dividends in
arrears for any Dividend Period ending on or prior to the Call Date. If the
Call Date falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of Series B Preferred
Shares at the close of business on such dividend payment record date shall
be entitled to the dividend payable on such Series B Preferred Shares on
the corresponding Dividend Payment Date notwithstanding the redemption of
such Series B Preferred Shares before such Dividend Payment Date. Except as
provided above, the Trust shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on Series B Preferred Shares called
for redemption.
(iii) If full cumulative dividends on the Series B Preferred Shares
and any other class or series of Parity Shares of the Trust have not been
paid or declared and set apart for payment, the Series B Preferred Shares
may not be redeemed under this subsection (e) in part and the Trust may not
purchase or acquire Series B Preferred Shares, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of Series
B Preferred Shares or pursuant to subsection (i) of this Section 3.
(iv) The redemption price to be paid upon any redemption of the Series
B Preferred Shares (other than any amounts indicated in subsection (e)(ii)
of this Section 3 and other than a redemption pursuant to subsection (i) of
this Section 3) shall be payable solely out of the sale proceeds of other
Shares of the Trust and from no other source.
(v) Notice of the redemption of any Series B Preferred Shares under
this subsection (e) shall be mailed by first-class mail to each holder of
record of Series B Preferred Shares to be redeemed at the address of each
such holder as shown on the Trust's record, not less than 30 nor more than
90 days prior to the Call Date. Neither the failure to mail any notice
required by this subsection (e)(v), nor any defect therein or in the
mailing thereof, to any particular holder, shall affect the sufficiency of
the notice or the validity of the proceedings for redemption with respect
to the other holders.
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<PAGE>
Any notice which was mailed in the manner herein provided shall be
conclusively presumed to have been duly given on the date mailed whether or
not the holder receives the notice. Each such mailed notice shall state, as
appropriate: (i) the Call Date; (ii) the number of Series B Preferred
Shares to be redeemed and, if fewer than all of the Series B Preferred
Shares held by such holder are to be redeemed, the number of Series B
Preferred Shares to be redeemed from such holder; (iii) the place or places
at which certificates for such Series B Preferred Shares are to be
surrendered; and (iv) that dividends on the Series B Preferred Shares to be
redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been mailed as aforesaid, from and after the
Call Date (unless the Trust shall fail to make available an amount of cash
necessary to effect such redemption), (A) except as otherwise provided
herein, dividends on the Series B Preferred Shares so called for redemption
shall cease to accrue, (B) such Series B Preferred Shares shall no longer
be deemed to be outstanding and (C) all rights of the holders thereof as
holders of Series B Preferred Shares of the Trust shall cease (except the
right to receive cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so
required and to receive any dividends payable thereon). The Trust's
obligation to provide cash in accordance with the preceding sentence shall
be deemed fulfilled if, on or before the Call Date, the Trust shall deposit
with a bank or trust company (which may be an affiliate of the Trust) which
has an office in the Borough of Manhattan, City of New York, and which has,
or is an affiliate of a bank or trust company which has, capital and
surplus of at least $50,000,000, necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption
of the Series B Preferred Shares so called for redemption. No interest
shall accrue for the benefit of the holders of Series B Preferred Shares to
be redeemed on any cash so set aside by the Trust. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the Call
Date shall revert to the general funds of the Trust, after which reversion
the holders of such Series B Preferred Shares so called for redemption
shall look only to the general funds of the Trust for the payment of such
cash.
(vi) As promptly as practicable after the surrender in accordance with
such notice of the certificates for any such Series B Preferred Shares so
redeemed (properly endorsed or assigned for transfer, if the Trust shall so
require and if the notice shall so state), such Series B Preferred Shares
shall be exchanged for any cash (without interest thereon) for which such
Series B Preferred Shares have been redeemed. If fewer than all of the
outstanding Series B Preferred Shares are to redeemed, the Series B
Preferred Shares to be redeemed shall be selected by the Trust from
outstanding Series B Preferred Shares not previously called for redemption
by lot or pro rata (as nearly as may be) or by any other method determined
by the Trust in its sole discretion to be equitable. If fewer than all of
the Series B Preferred Shares represented by any certificate are redeemed,
then new certificates representing the unredeemed Series B Preferred Shares
shall be issued without cost to the holder thereof.
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<PAGE>
(f) Shares To Be Retired. All Series B Preferred Shares which shall have
been issued and reacquired in any manner by the Trust shall be restored to the
status of authorized but unissued Shares of the Trust, without designation as to
class or series.
(g) Ranking. Any class or series of Shares of the Trust shall be deemed to
rank:
(i) prior to the Series B Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Series B Preferred Shares;
(ii) on a parity with the Series B Preferred Shares, as to the payment
of dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per Share thereof be
different from those of the Series B Preferred Shares, if the holders of
such class or series and the Series B Preferred Shares shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of
accrued and unpaid dividends per Share or liquidation preferences, without
preference or priority one over the other ("Parity Shares");
(iii) junior to the Series B Preferred Shares, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Junior Shares; and
(iv) junior to the Series B Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if such class or series shall be Fully Junior
Shares.
(h) Voting.
(i) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series B Preferred Shares or any series or
class of Parity Shares shall be in arrears (which shall, with respect to
any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not earned or declared, the number of Trustees then
constituting the Board shall be increased by two and the holders of Series
B Preferred Shares, together with the holders of Shares of every other
series of Parity Shares (any such other series, the "Voting Preferred
Shares"), voting as a single class regardless of series, shall be entitled
to elect two additional Trustees to serve on the Board at any annual
meeting of Shareholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series B Preferred Shares and the
Voting Preferred Shares called as hereinafter provided. Whenever all
arrears in dividends on the Series B Preferred Shares and the Voting
Preferred Shares then outstanding shall have
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<PAGE>
been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, then the right
of the holders of the Series B Preferred Shares and the Voting Preferred
Shares to elect such additional two Trustees shall cease (but subject
always to the same provision for the vesting of such voting rights in the
case of any similar future arrearages in six quarterly dividends), and the
terms of office of all persons elected as Trustees by the holders of the
Series B Preferred Shares and the Voting Preferred Shares shall forthwith
terminate and the number of the Board shall be reduced accordingly. At any
time after such voting power shall have been so vested in the holders of
Series B Preferred Shares and the Voting Preferred Shares, the Secretary of
the Trust may, and upon the written request of any holder of Series B
Preferred Shares (addressed to the Secretary at the principal office of the
Trust) shall, call a special meeting of the holders of the Series B
Preferred Shares and of the Voting Preferred Shares for the election of the
two Trustees to be elected by them as herein provided, such call to be made
by notice similar to that provided in the Bylaws for a special meeting of
the Shareholders or as required by law. If any such special meeting
required to be called as provided above shall not be called by the
Secretary within 20 days after receipt of any such request, then any holder
of Series B Preferred Shares may call such meeting, upon the notice
provided above, and for such purpose shall have access to the Share records
of the Trust. The Trustees elected at any such special meeting shall hold
office until the next annual meeting of the Shareholders or special meeting
held in lieu thereof if such office shall not have previously terminated as
provided above. If any vacancy shall occur among the Trustees elected by
the holders of the Series B Preferred Shares and the Voting Preferred
Shares, a successor shall be elected by the Board, upon the nomination of
the then-remaining Trustee elected by the holders of the Series B Preferred
Shares and the Voting Preferred Shares or the successor of such remaining
Trustee, to serve until the next annual meeting of the Shareholders or
special meeting held in place thereof if such office shall not have
previously terminated as provided above. Notwithstanding any other
provisions of this subsection (h), in any vote for the election of
additional Trustees hereunder, the Series B Preferred Shares and Voting
Preferred Shares beneficially owned by Security Capital Group, any of its
direct or indirect subsidiaries and any of their respective directors,
officers or controlling stockholders (together, the "Restricted Parties"),
shall be voted in the same respective percentages as the Series B Preferred
Shares and Voting Preferred Shares which are not beneficially owned by the
Restricted Parties. The provisions in the preceding sentence shall cease
and be of no further force and effect from and after such time, but only as
long as, the Restricted Parties together no longer beneficially own in
excess of 10% of the Trust's outstanding Common Shares.
(ii) So long as any Series B Preferred Shares are outstanding, in
addition to any other vote or consent of Shareholders required by law or by
this Declaration of Trust, the affirmative vote of at least two-thirds of
the votes entitled to be cast by the holders of the Series B Preferred
Shares and the Voting Preferred Shares, at the time outstanding, acting as
a single class regardless of series, given in person or by proxy,
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<PAGE>
either in writing without a meeting or by vote at any meeting called for
the purpose, shall be necessary for effecting or validating:
(A) Any amendment, alteration or repeal of any of the provisions
of this Declaration of Trust which materially and adversely affects
the voting powers, rights or preferences of the holders of the Series
B Preferred Shares or the Voting Preferred Shares; provided, however,
that the amendment of the provisions of this Declaration of Trust so
as to authorize or create or to increase the authorized amount of, any
Fully Junior Shares, Junior Shares which are not senior in any respect
to the Series B Preferred Shares, or any Shares of any class ranking
on a parity with the Series B Preferred Shares or the Voting Preferred
Shares shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Series B Preferred
Shares; and provided, further, that if any such amendment, alteration
or repeal would materially and adversely affect any voting powers,
rights or preferences of the Series B Preferred Shares or another
series of Voting Preferred Shares which are not enjoyed by some or all
of the other series otherwise entitled to vote in accordance herewith,
the affirmative vote of at least two-thirds of the votes entitled to
be cast by the holders of all series similarly affected, similarly
given, shall be required in lieu of the affirmative vote of at least
two-thirds of the votes entitled to be cast by the holders of the
Series B Preferred Shares and the Voting Preferred Shares otherwise
entitled to vote in accordance herewith; or
(B) A share exchange which affects the Series B Preferred Shares,
a consolidation with or merger of the Trust into another entity, or a
consolidation with or merger of another entity into the Trust, unless
in each such case each Series B Preferred Share (i) shall remain
outstanding without a material and adverse change to its terms and
rights or (ii) shall be converted into or exchanged for convertible
preferred stock of the surviving entity having preferences, conversion
or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms or conditions of redemption
thereof identical to that of a Series B Preferred Share (except for
changes which do not materially and adversely affect the holders of
the Series B Preferred Shares); or
(C) The authorization or creation of, or the increase in the
authorized amount of, any Shares of any class or any security
convertible into Shares of any class ranking prior to the Series B
Preferred Shares in the distribution of assets on any liquidation,
dissolution or winding up of the Trust or in the payment of dividends;
provided, however, that no such vote of the holders of Series B Preferred
Shares shall be required if, at or prior to the time when such amendment,
alteration or repeal is to take effect, or when the issuance of any such
prior Shares or convertible security is to
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be made, as the case may be, provision is made for the redemption of all
Series B Preferred Shares at the time outstanding.
(iii) For purposes of the foregoing provisions of this subsection (h),
each Series B Preferred Share shall have one vote per Share, except that
when any other series of preferred Shares shall have the right to vote with
the Series B Preferred Shares as a single class on any matter, then the
Series B Preferred Shares and such other series shall have with respect to
such matters one vote per $25.00 of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein, the Series
B Preferred Shares shall not have any relative, participating, optional or
other special voting rights and powers other than as set forth herein, and
the consent of the holders thereof shall not be required for the taking of
any Trust action.
(i) Limitation on Ownership.
(i) Notwithstanding any other provision of the terms of the Series B
Preferred Shares, except as provided in the next sentence and in subsection
(i)(ii) of this Section 3, no Person, or Persons acting as a group, shall
at any time directly or indirectly acquire ownership of more than 25% of
the outstanding Series B Preferred Shares. Any Series B Preferred Shares
owned by a Person or Persons acting as a group in excess of such 25% shall
be deemed "Excess Preferred Shares," except that any such Series B
Preferred Shares in excess of 25% shall not be considered Excess Preferred
Shares if the 25% limitation is exceeded solely as a result of the Trust's
redemption of Series B Preferred Shares, provided that thereafter any
additional Series B Preferred Shares acquired by such Person or Persons
acting as a group shall be considered Excess Preferred Shares. Within 10
days of becoming aware of the existence of Excess Preferred Shares (whether
by notice on Schedule 13D or otherwise), the Trust shall redeem any and all
Excess Preferred Shares by giving notice of redemption to the holder or
holders thereof, unless, prior to the giving of such notice, the holder
shall have disposed of its ownership in the Excess Preferred Shares. Such
notice shall set forth the number of Series B Preferred Shares constituting
Excess Preferred Shares, the redemption price and the place or places at
which the certificates representing such Excess Preferred Shares are to be
surrendered and such notice shall set forth the matters described in the
following sentence. From and after the date of giving such notice of
redemption, the Series B Preferred Shares called for redemption shall cease
to be outstanding and the holder thereof shall cease to be entitled to
dividends (other than dividends declared but unpaid prior to the notice of
redemption), voting rights and other benefits with respect to such Series B
Preferred Shares excepting the rights to payment of the redemption price
determined and payable as set forth in the next two sentences. Subject to
the limitation on payment set forth in the following sentence, the
redemption price of each Excess Preferred Share called for redemption shall
be the average daily per Series B Preferred Share closing sales price, if
the Series B Preferred Shares are listed on a national securities exchange
or, if not, are reported on the NASDAQ National Market System, and if the
Series B Preferred Shares are not so listed or reported, shall be the mean
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between the average per Series B Preferred Share closing bid prices and the
average per Series B Preferred Share closing asked prices, in each case
during the 30 day period ending on the business day prior to the redemption
date, or if there have been no sales on a national securities exchange or
the NASDAQ National Market System and no published bid quotations and no
published asked quotations with respect to Series B Preferred Shares during
such 30 day period, the redemption price shall be the price determined by
the Board in good faith. Unless the Board determines that it is in the
interest of the Trust to make earlier payment of all of the amount
determined as the redemption price per Series B Preferred Share in
accordance with the preceding sentence, the redemption price may be
payable, at the option of the Board, at any time or times up to, but not
later than the earlier of (i) five years after the redemption date or (ii)
the liquidation of the Trust, in which latter event the redemption price
shall not exceed an amount which is the sum of the per Series B Preferred
Share distributions designated as liquidating distributions and return of
capital distributions declared with respect to unredeemed Series B
Preferred Shares of the Trust of record subsequent to the redemption date;
and in any event, no interest shall accrue with respect to the period
subsequent to the redemption date to the date of such payment. Nothing in
this subsection (i)(i) shall preclude the settlement of any transaction
entered into through the facilities of the NYSE.
(ii) The limitation on ownership set forth in subsection (i)(i) of
this Section 3 shall not apply to the acquisition of Series B Preferred
Shares by an underwriter in a public offering of Series B Preferred Shares
and shall not apply to the ownership of Series B Preferred Shares by a
managing underwriter in the initial public offering of Series B Preferred
Shares. The Board, in its sole and absolute discretion, may exempt from the
ownership limitation set forth in subsection (i)(i) of this Section 3
certain designated Series B Preferred Shares owned by a person (other than
any of the Restricted Parties) who has provided the Board with evidence and
assurances acceptable to the Board that the qualification of the Trust as a
REIT would not be jeopardized thereby.
(j) Record Holders. The Trust and the Transfer Agent may deem and treat
the record holder of any Series B Preferred Shares as the true and lawful owner
thereof for all purposes, and neither the Trust nor the Transfer Agent shall be
affected by any notice to the contrary.
(k) Sinking Fund. The Series B Preferred Shares shall not be entitled to
the benefits of any retirement or sinking fund.
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ANNEX C
SERIES C CUMULATIVE REDEEMABLE PREFERRED
SHARES OF BENEFICIAL INTEREST
(a) Number of Shares and Designation. This class of preferred Shares shall
be designated as Series C Cumulative Redeemable Preferred Shares of Beneficial
Interest ("Series C Preferred Shares") and the number of shares which shall
constitute such series shall be not more than 2,000,000 Shares, par value $1.00
per Share, which number may be decreased (but not below the number then
outstanding plus the number required to fulfill the Trust's obligations under
options, warrants or similar rights issued by the Trust) from time to time by
the Board.
(b) Definitions. For purposes of the Series C Preferred Shares, the
following terms shall have the meanings indicated:
"Board" shall mean the Board or any committee authorized by the Board
to perform any of its duties or exercise any of its powers with respect to
the Series C Preferred Shares.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"Call Date" shall mean the date specified in the notice to holders
required under subsection (e)(v) of this Section 4 as the Call Date.
"Common Shares" shall mean the common shares of beneficial interest,
par value $1.00 per share, of the Trust.
"Dividend Payment Date" shall mean the last calendar day of March,
June, September and December in each year, commencing on the first of such
days to occur at the conclusion of the Initial Dividend Period; provided,
however, that if any Dividend Payment Date falls on any day other than a
Business Day, the dividend payment due on such Dividend Payment Date shall
be paid on the next succeeding Business Day.
"Dividend Periods" shall mean quarterly dividend periods commencing on
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period.
"Dividend Record Date" shall have the meaning set forth in subsection
(c)(i) of this Section 4.
"Fully Junior Shares" shall mean the Common Shares and any other class
or series of Shares of the Trust now or hereafter issued and outstanding to
which the Series
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C Preferred Shares have preference or priority in both (i) the payment of
dividends and (ii) the distribution of assets on any liquidation,
dissolution or winding up of the Trust.
"Initial Dividend Period" shall mean the first quarterly dividend
period immediately following the most recent dividend record date relating
to the Series A Cumulative Redeemable Preferred Stock, par value $0.01 per
share (the "Atlantic Series A Preferred Shares"), of Security Capital
Atlantic Incorporated, a Maryland corporation, exchanged for the Series C
Preferred Shares in connection with the merger of Security Capital Atlantic
Incorporated with and into the Trust (it being the intention of the Trust
that holders of Atlantic Series A Preferred Shares and the Series C
Preferred Shares shall not receive two dividends, or fail to receive one
dividend, for any single calendar quarter with respect to their Atlantic
Series A Preferred Shares or Series C Preferred Shares).
"Junior Shares" shall mean the Common Shares and any other class or
series of Shares of the Trust now or hereafter issued and outstanding to
which the Series C Preferred Shares have preference or priority in either
(i) the payment of dividends or (ii) the distribution of assets on any
liquidation, dissolution or winding up of the Trust and, unless the context
clearly indicates otherwise, shall include Fully Junior Shares.
"Parity Shares" shall have the meaning set forth in subsection (g)(i)
of this Section 4.
"Person" shall mean any individual, firm, partnership, corporation,
real estate investment trust or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Series C Preferred Shares" shall have the meaning set forth in
subsection (a) of this Section 4.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
authorization or declaration of dividends or other distribution by the
Board, the allocation of funds to be so paid on any class or series of
Shares of the Trust; provided, however, that if any funds for any Junior
Shares or any Parity Shares are placed in a separate account of the Trust
or delivered to a disbursing, paying or other similar agent, then "set
apart for payment" with respect to the Series C Preferred Shares shall mean
placing such funds in a separate account or delivering such funds to a
disbursing, paying or other similar agent.
"Transfer Agent" means ChaseMellon Shareholder Services, L.L.C., New
York City, New York, or such other agent or agents of the Trust as may be
designated by the Board or its designee as the transfer agent for the
Series C Preferred Shares.
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"Voting Preferred Shares" shall have the meaning set forth in
subsection (h) of this Section 4.
(c) Dividends.
(i) The holders of Series C Preferred Shares shall be entitled to
receive, when, as and if authorized or declared by the Board, out of funds
legally available for such purpose, cash dividends in an amount per share
equal to 8.625% of the liquidation preference per annum (equivalent to
$2.15625 per share). Such dividends shall begin to accrue and shall be
fully cumulative from the first day of the Initial Dividend Period, whether
or not in any Dividend Period or Periods there are funds of the Trust
legally available for the payment of such dividends, and shall be payable
quarterly, when, as and if declared by the Board, in arrears on Dividend
Payment Dates, commencing with the first Dividend Payment Date to occur at
the conclusion of the Initial Dividend Period. Each such dividend shall be
payable in arrears to the holders of record of Series C Preferred Shares,
as they appear in the Share records of the Trust at the close of business
on such record date as is fixed by the Board, which shall be not less than
10 nor more than 50 days prior to the corresponding Dividend Payment Date
(each, a "Dividend Record Date"). Accrued and unpaid dividends for any past
Dividend Periods may be authorized or declared and paid at any time and for
such interim periods, without reference to any regular Dividend Payment
Date, to holders of record on such record date as may be fixed by the
Board, which shall be not less than 10 nor more than 50 days prior to the
corresponding payment date.
(ii) The dividend for each full Dividend Period for the Series C
Preferred Shares shall be computed by dividing the annual dividend rate by
four. The dividend for any period shorter than a full Dividend Period on
the Series C Preferred Shares shall be computed on the basis of a 360-day
year of twelve 30-day months. Holders of Series C Preferred Shares shall
not be entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as provided herein, on the
Series C Preferred Shares. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments
on the Series C Preferred Shares which may be in arrears.
(iii) So long as any Series C Preferred Shares are outstanding, no
dividends, except as described in the immediately following sentence, shall
be declared or paid or set apart for payment on any Parity Shares for any
period unless (i) full cumulative dividends have been or contemporaneously
are paid or declared and a sum sufficient for the payment thereof set apart
for payment for all past Dividend Periods with respect to the Series C
Preferred Shares and (ii) a sum sufficient for the payment thereof has been
or contemporaneously is set apart for payment of the dividend for the
current Dividend Period with respect to the Series C Preferred Shares. When
dividends are not paid in full, or a sum sufficient for the payment thereof
is not set apart for payment, on the Series C Preferred Shares and any
Parity Shares as provided above, all dividends
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declared on the Series C Preferred Shares and any Parity Shares shall be
declared ratably in proportion to the respective amounts of dividends
accrued and unpaid on the Series C Preferred Shares and on such Parity
Shares.
(iv) So long as any Series C Preferred Shares are outstanding, no
dividends (other than dividends or distributions paid solely in, or
options, warrants or rights to subscribe for or purchase, Fully Junior
Shares) shall be declared or paid or set apart for payment or other
distribution shall be declared or made on Junior Shares, nor shall any
Junior Shares be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Shares made for
purposes of an employee incentive or benefit plan of the Trust or any
subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any Junior Shares) by
the Trust, directly or indirectly (except by conversion into or exchange
for Fully Junior Shares), unless in each case (i) full cumulative dividends
have been or contemporaneously are paid or declared and a sum sufficient
for the payment thereof set apart for payment for all past Dividend Periods
with respect to the Series C Preferred Shares and all past dividend periods
with respect to any Parity Shares and (ii) a sum sufficient for the payment
thereof has been or contemporaneously is set apart for payment of the
dividend for the current Dividend Period with respect to the Series C
Preferred Shares and the current dividend period with respect to any Parity
Shares.
(v) No distributions on Series C Preferred Shares shall be declared
or paid or set apart for payment by the Trust at such time as the terms and
provisions of any agreement of the Trust, including any agreement relating
to its indebtedness, prohibits such declaration, payment or setting apart
for payment or provides that such declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if
such declaration, payment or setting apart for payment is restricted or
prohibited by law.
(d) Liquidation Preference.
(i) Upon any liquidation, dissolution or winding up of the Trust,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Trust (whether capital or surplus) is made to or set apart
for the holders of the Common Shares or any other class or series of Shares
of the Trust now or hereafter issued and outstanding to which the Series C
Preferred Shares have preference or priority in the distribution of assets
on any liquidation, dissolution or winding up at the Trust, the holders of
Series C Preferred Shares shall be entitled to receive out of assets of the
Trust legally available for such purpose, liquidating distributions in the
amount of $25.00 per Series C Preferred Share, plus an amount equal to all
dividends (whether or not earned or authorized or declared) accrued and
unpaid thereon to the date of final distribution to such holders, if any;
but such holders shall not be entitled to any further payment. If, upon any
liquidation, dissolution or winding up of the Trust, the assets of the
Trust, or the proceeds thereof, distributable among the holders of Series C
Preferred Shares are
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<PAGE>
insufficient to pay in full such preferential amount with respect to the
Series C Preferred Shares and the corresponding amounts with respect to all
Parity Shares, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series C Preferred Shares and all such
Parity Shares in proportion to the full liquidating distributions to which
they would otherwise be respectively entitled.
(ii) Subject to the rights of the holders of shares of any class or
series of Shares ranking on a parity with or senior to the Series C
Preferred Shares in the distribution of assets on any liquidation,
dissolution or winding up of the Trust, upon any liquidation, dissolution
or winding up of the Trust, whether voluntary or involuntary, after payment
has been made in full to the holders of Series C Preferred Shares, as
provided in this Section 4, the holders of any Junior Shares shall, subject
to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed,
and the holders of Series C Preferred Shares shall not be entitled to share
therein.
(iii) For the purposes of this Section 4, (i) a consolidation or
merger of the Trust with or into one or more corporations, real estate
investment trusts or other entities, (ii) a sale or transfer of all or
substantially all of the Trust's assets or (iii) a statutory share exchange
shall not be deemed to be a liquidation, dissolution or winding up of the
Trust, whether voluntary or involuntary.
(e) Redemption at the Option of the Trust.
(i) Subject to subsection (i) of this Section 4, the Series C
Preferred Shares are not redeemable by the Trust prior to August 20, 2002.
On and after such date, the Trust, at its option, may redeem the Series C
Preferred Shares, in whole at any time or in part from time to time, for
cash at a redemption price of $25.00 per Series C Preferred Share, plus the
amounts indicated in subsection (e)(ii) of this Section 4.
(ii) Upon any redemption of Series C Preferred Shares pursuant to
this subsection (e), the Trust shall pay all dividends accrued and unpaid
thereon, if any, in arrears for any Dividend Period ending on or prior to
the Call Date. If the Call Date falls after a Dividend Record Date and
prior to the corresponding Dividend Payment Date, then each holder of
Series C Preferred Shares at the close of business on such Dividend Record
Date shall be entitled to receive the dividend payable on such Series C
Preferred Shares on the corresponding Dividend Payment Date notwithstanding
the redemption of such Series C Preferred Shares before such Dividend
Payment Date. Except as provided above, the Trust shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series C
Preferred Shares called for redemption.
(iii) Unless (i) full cumulative dividends have been or
contemporaneously are paid or declared and a sum sufficient for the payment
thereof set apart for payment for all past Dividend Periods with respect to
the Series C Preferred Shares and all past
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dividend periods with respect to any Parity Shares and (ii) a sum
sufficient for the payment thereof has been or contemporaneously is set
apart for payment of the dividend for the current Dividend Period with
respect to the Series C Preferred Shares and the current dividend period
with respect to any Parity Shares, the Series C Preferred Shares may not be
redeemed under this subsection (e) in part and the Trust may not purchase
or otherwise acquire Series C Preferred Shares, except pursuant to a
purchase or exchange offer made on the same terms to all holders of Series
C Preferred Shares or by conversion into or exchange for Fully Junior
Shares or pursuant to subsection (i) of this Section 4.
(iv) The redemption price to be paid upon any redemption of the Series
C Preferred Shares (other than any amounts indicated in subsection (e)(ii)
of this Section 4 and other than a redemption pursuant to subsection (i) of
this Section 4) shall be payable solely out of the sale proceeds of other
Shares of the Trust and from no other source.
(v) Notice of the redemption of any Series C Preferred Shares under
this subsection (e) shall be mailed by first class mail, not less than 30
nor more than 90 days prior to the Call Date, to each holder of record of
Series C Preferred Shares to be redeemed at the address of such holder as
shown on the Trust's Share records. Neither the failure to mail any notice
required by this subsection (e)(v), nor any defect therein or in the
mailing thereof, to any particular holder, shall affect the sufficiency of
the notice or the validity of the proceedings for redemption with respect
to any other holder. Any notice which was mailed in the manner provided
herein shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such mailed
notice shall state, as appropriate: (i) the Call Date; (ii) the number of
Series C Preferred Shares to be redeemed and, if fewer than all Series C
Preferred Shares held by such holder are to be redeemed, the number of
Series C Preferred Shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places at which certificates
representing such Series C Preferred Shares are to be surrendered; and (v)
that dividends on the Series C Preferred Shares to be redeemed shall cease
to accrue on the Call Date except as otherwise provided herein. If notice
of redemption of any Series C Preferred Shares has been mailed as provided
above, then from and after the Call Date (unless the Trust fails to make
available an amount of cash necessary to effect such redemption), (A)
except as otherwise provided herein, dividends shall cease to accrue on the
Series C Preferred Shares so called for redemption, (B) such Series C
Preferred Shares shall no longer be deemed to be outstanding and (C) all
rights of the holders thereof as holders of Series C Preferred Shares shall
terminate (except the right to receive cash payable upon such redemption,
without interest thereon, upon surrender and endorsement of their
certificates if so required and to receive any dividends payable thereon).
The Trust's obligation to provide cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Trust deposits with a bank or trust company (which may be an affiliate of
the Trust) which has an office in the Borough of Manhattan, City of New
York, and which has, or is an affiliate of a bank
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or trust company which has, capital and surplus of at least $50,000,000,
the funds necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the Series C
Preferred Shares so called for redemption. No interest shall accrue for the
benefit of the holders of Series C Preferred Shares to be redeemed on any
cash so set aside by the Trust. Subject to applicable escheat laws, any
such cash unclaimed at the end of two years after the Call Date shall
revert to the general funds of the Trust, after which reversion the holders
of Series C Preferred Shares so called for redemption shall look only to
the general funds of the Trust for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates representing any Series C Preferred Shares so
redeemed (properly endorsed or assigned for transfer, if the Trust so
requires and if the notice so states), such Series C Preferred Shares shall
be exchanged for any cash (without interest thereon) for which such Series
C Preferred Shares have been redeemed. If fewer than all the outstanding
Series C Preferred Shares are to redeemed, the Series C Preferred Shares to
be redeemed shall be selected by the Trust from outstanding Series C
Preferred Shares not previously called for redemption by lot or pro rata
(as nearly as may be) or by any other method determined by the Board or the
Chairman or any Co-Chairman of the Trust in its, his or her sole discretion
to be equitable. If fewer than all the Series C Preferred Shares
represented by any certificate are redeemed, then new certificates
representing the unredeemed Series C Preferred Shares shall be issued
without cost to the holder thereof.
(f) Shares To Be Retired. All Series C Preferred Shares which are issued
and reacquired in any manner by the Trust shall be restored to the status of
authorized but unissued Shares of the Trust, without designation as to class or
series.
(g) Ranking. Any class or series of Shares of the Trust shall be deemed to
rank:
(i) senior to the Series C Preferred Shares, in the payment of
dividends or in the distribution of assets on any liquidation, dissolution
or winding up of the Trust, if the holders of such class or series are
entitled to the receipt of dividends or amounts distributable on any
liquidation, dissolution or winding up of the Trust, as the case may be, in
preference or priority to the holders of Series C Preferred Shares;
(ii) on a parity with the Series C Preferred Shares, in the payment of
dividends and in the distribution of assets on any liquidation, dissolution
or winding up of the Trust, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof are
different from those of the Series C Preferred Shares, if the holders of
such class or series and the holders of Series C Preferred Shares are
entitled to the receipt of dividends and amounts distributable on any
liquidation, dissolution or winding up of the Trust in proportion to their
respective amounts of dividends accrued and unpaid per share or liquidation
preferences, without preference or priority to each other ("Parity
Shares");
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(iii) junior to the Series C Preferred Shares, in the payment of
dividends or in the distribution of assets on any liquidation, dissolution
or winding up of the Trust, if such class or series is Junior Shares; and
(iv) junior to the Series C Preferred Shares, in the payment of
dividends and in the distribution of assets on any liquidation, dissolution
or winding up of the Trust, if such class or series is Fully Junior Shares.
(h) Voting.
(i) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series C Preferred Shares or any Parity Shares
are in arrears (which shall, with respect to any such quarterly dividend,
mean that any such dividend has not been paid in full), whether or not
earned or declared, the number of Trustees then constituting the Board
shall be increased by two, and the holders of Series C Preferred Shares,
together with the holders of any Parity Shares (any such Parity Shares, the
"Voting Preferred Shares"), voting as a single class regardless of class or
series, shall have the right to elect two additional Trustees to serve on
the Board at the next annual meeting of Shareholders or a special meeting
held in lieu thereof, or at a special meeting of the holders of Series C
Preferred Shares and Voting Preferred Shares called as provided
hereinafter. Whenever all dividends in arrears on the Series C Preferred
Shares and Voting Preferred Shares then outstanding have been paid and a
sum sufficient for the payment thereof has been set apart for payment of
the dividend for the current Dividend Period with respect to the Series C
Preferred Shares and the current dividend period with respect to the Voting
Preferred Shares, then the right of the holders of Series C Preferred
Shares and Voting Preferred Shares to elect such additional two Trustees
shall cease (but subject always to the same provision for the vesting of
such voting rights in the case of any similar future arrearages in six
quarterly dividends), and the terms of office of all persons elected as
Trustees by the holders of Series C Preferred Shares and Voting Preferred
Shares shall immediately terminate and the number of Trustees constituting
the Board shall be reduced accordingly. At any time after such voting
rights have so vested in the holders of Series C Preferred Shares and
Voting Preferred Shares, the Secretary of the Trust may, and upon the
written request of any holder of Series C Preferred Shares (addressed to
the Secretary at the principal office of the Trust) shall, call a special
meeting of the holders of Series C Preferred Shares and Voting Preferred
Shares for the election of the two Trustees to be elected by them as
provided herein, such call to be made by notice similar to that provided in
the Bylaws of the Trust for a special meeting of the Shareholders or as
required by law. If any such special meeting required to be called as
provided above is not called by the Secretary within 20 days after receipt
of any such request, then any holder of Series C Preferred Shares may call
such meeting, upon the notice provided above, and for such purpose shall
have access to the Share records of the Trust. The Trustees elected at any
such special meeting shall hold office until the next annual meeting of the
Shareholders or special meeting held in lieu thereof if the term of such
Trustees has not previously terminated as provided above. If any vacancy
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occurs among the Trustees elected by the holders of Series C Preferred
Shares and Voting Preferred Shares, a successor shall be elected by the
Board, upon the nomination of the then remaining Trustee elected by the
holders of Series C Preferred Shares and Voting Preferred Shares or the
successor of such remaining Trustee, to serve until the next annual meeting
of the Shareholders or special meeting held in lieu thereof if the term of
such Trustees has not previously terminated as provided above.
Notwithstanding any other provisions of this subsection (h), in any vote
for the election of additional Trustees hereunder, any Series C Preferred
Shares and Voting Preferred Shares beneficially owned by Security Capital
Group, any of its direct or indirect subsidiaries, and any of their
respective directors, trustees, officers or controlling stockholders
(together, the "Restricted Parties"), shall be voted in the same respective
percentages as the Series C Preferred Shares and Voting Preferred Shares
which are not beneficially owned by the Restricted Parties. The provisions
in the preceding sentence shall cease and be of no further force and effect
from and after such time, but only for so long as, the Restricted Parties
together no longer beneficially own in excess of ten percent of the Trust's
outstanding Common Shares.
(ii) So long as any Series C Preferred Shares are outstanding, in
addition to any other vote or consent of Shareholders required by this
Declaration of Trust, the affirmative vote of at least two-thirds of the
votes entitled to be cast by the holders of Series C Preferred Shares and
Voting Preferred Shares similarly affected, at the time outstanding, voting
as a single class regardless of class or series, given in person or by
proxy, either in writing without a meeting or by vote at any meeting called
for such purpose, shall be necessary for effecting or validating:
(A) any amendment, alteration or repeal of any of the provisions
of this Declaration of Trust which materially and adversely affects
the voting powers, rights or preferences of the holders of Series C
Preferred Shares or Voting Preferred Shares; provided, however, that
the amendment of the provisions of this Declaration of Trust so as to
authorize or create or to increase the authorized amount of, any Fully
Junior Shares, any Junior Shares which do not rank senior to the
Series C Preferred Shares in any respect, or any Parity Shares shall
not be deemed to materially and adversely affect the voting powers,
rights or preferences of the holders of Series C Preferred Shares or
Voting Preferred Shares, and provided, further, that, if any such
amendment, alteration or repeal would materially and adversely affect
any voting powers, rights or preferences of the holders of Series C
Preferred Shares or another series of Voting Preferred Shares which
are not enjoyed by the holders of some or all of the other series
otherwise entitled to vote in accordance herewith, the affirmative
vote of at least two-thirds of the votes entitled to be cast by the
holders of all series similarly affected, similarly given, shall be
required in lieu of the affirmative vote of at least two-thirds of the
votes entitled to be cast by the holders of Series C Preferred Shares
and Voting Preferred Shares otherwise entitled to vote in accordance
herewith; or
C-9
<PAGE>
(B) a share exchange which affects the Series C Preferred Shares,
a consolidation with or merger of the Trust into another entity, or a
consolidation with or merger of another entity into the Trust, unless
in each such case each Series C Preferred Share (A) remains
outstanding without a material and adverse change to its terms and
rights or (B) is converted into or exchanged for preferred stock of
the surviving entity having preferences, rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption identical to those of a Series C
Preferred Share (except for changes which do not materially and
adversely affect the holders of Series C Preferred Shares); or
(C) the authorization, reclassification or creation of, or the
increase in the authorized amount of, Shares of any class, or
securities convertible into Shares of any class, ranking senior to the
Series C Preferred Shares in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up
of the Trust;
provided, however, that no such vote of the holders of Series C Preferred
Shares shall be required if, at or prior to the time when such amendment,
alteration or repeal is to take effect, or when the issuance of any such
senior Shares or convertible security is to be made, as the case may be,
provision is made for the redemption of all Series C Preferred Shares at
the time outstanding.
(iii) For purposes of the foregoing provisions of this subsection (h),
each Series C Preferred Share shall have one vote per Share, except that
when any other series of preferred Shares has the right to vote with the
Series C Preferred Shares as a single class on any matter, then the Series
C Preferred Shares and such other series shall have with respect to such
matters one vote per $25.00 of stated liquidation preference. Except as
otherwise set forth herein, the Series C Preferred Shares shall not have
any relative, participating, optional or other special voting rights and
powers other than as set forth herein, and the consent of the holders
thereof shall not be required for the taking of any Trust action.
(i) Limitation on Ownership.
(i) Notwithstanding any other provision of the terms of the Series C
Preferred Shares, except as provided in the next sentence and in subsection
(i)(ii) of this Section 4, no Person, or Persons acting as a group, shall
at any time directly or indirectly acquire ownership of more than 25% of
the outstanding Series C Preferred Shares. Any Series C Preferred Shares
owned by a Person or Persons acting as a group in excess of such 25% shall
be deemed "Excess Preferred Shares," except that any such Series C
Preferred Shares in excess of such 25% will not be considered Excess
Preferred Shares if such 25% is exceeded solely as a result of the Trust's
redemption of Series C Preferred Shares, provided that thereafter any
additional Series C Preferred Shares
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<PAGE>
acquired by such Person or Persons shall be considered Excess Preferred
Shares. Within 10 days of becoming aware of the existence of Excess
Preferred Shares (whether by notice on Schedule 13D or otherwise), the
Trust shall redeem any and all Excess Preferred Shares by giving notice of
redemption to the holder or holders thereof, unless prior to the giving of
such notice the holders have disposed of such Excess Preferred Shares. Such
notice shall set forth the number of Series C Preferred Shares constituting
Excess Preferred Shares, the redemption price and the place or places at
which certificates representing such Excess Preferred Shares are to be
surrendered and such notice shall set forth the matters described in the
following sentence. From and after the date of giving such notice of
redemption, the Series C Preferred Shares so called for redemption shall
cease to be outstanding and the holders thereof shall cease to be entitled
to dividends (other than dividends authorized or declared but unpaid prior
to the notice of redemption), voting rights and other benefits with respect
to such Series C Preferred Shares except for the right to payment of the
redemption price determined and payable as set forth in the next two
sentences. Subject to the limitation on payment set forth in the following
sentence, the redemption price of each Excess Preferred Share called for
redemption shall be the average daily per Series C Preferred Share closing
sales price, if the Series C Preferred Shares are listed on a national
securities exchange or are reported on the NASDAQ National Market System,
and if the Series C Preferred Shares are not so listed or reported, shall
be the mean between the average per Series C Preferred Share closing bid
prices and the average per Series C Preferred Share closing asked prices,
in each case during the 30-day period ending on the business day prior to
the redemption date, or if there have been no sales on a national
securities exchange or the NASDAQ National Market System and no published
bid quotations and no published asked quotations with respect to Series C
Preferred Shares during such 30-day period, the redemption price shall be
the price determined by the Board in good faith. Unless the Board
determines that it is in the best interests of the Trust to make earlier
payment of all of the amount determined as the redemption price per Series
C Preferred Share in accordance with the preceding sentence, the redemption
price may be payable, at the option of the Board, at any time or times up
to, but not later than, the earlier of (i) five years after the redemption
date or (ii) the liquidation of the Trust, in which latter event the
redemption price shall not exceed an amount which is equal to the sum of
the per Series C Preferred Share distributions designated as liquidating
distributions and return of capital distributions declared with respect to
unredeemed Series C Preferred Shares with record dates subsequent to the
redemption date; and in any event, no interest shall accrue with respect to
the period subsequent to the redemption date to the date of such payment.
Nothing in this subsection (i)(i) shall preclude the settlement of any
transaction entered into through the facilities of the NYSE.
(ii) The limitation on ownership set forth in subsection (i)(i) of
this Section 4 shall not apply to the acquisition of Series C Preferred
Shares by an underwriter in a public offering of Series C Preferred Shares
and shall not apply to the ownership of Series C Preferred Shares by a
managing underwriter in the initial public offering of Series C Preferred
Shares. The Board, in its sole and absolute discretion, may exempt
C-11
<PAGE>
from the ownership limitation set forth in subsection (i)(i) of this
Section 4 certain designated Series C Preferred Shares owned by a person
(other than any of the Restricted Parties) who has provided the Board with
evidence and assurances acceptable to the Board that the qualification of
the Trust as a REIT would not be jeopardized thereby.
(iii) Each certificate for Series C Preferred Shares shall bear a
legend stating that the Trust will furnish information about the foregoing
restrictions to any holder of Series C Preferred Shares on request and
without charge.
(j) Record Holders. The Trust and the Transfer Agent may deem and treat the
record holder of any Series C Preferred Shares as the true and lawful owner
thereof for all purposes, and neither the Trust nor the Transfer Agent shall be
affected by any notice to the contrary.
(k) Sinking Fund. The Series C Preferred Shares shall not be entitled to
the benefit of any retirement or sinking fund.
C-12
<PAGE>
ANNEX D
JUNIOR PARTICIPATING PREFERRED
SHARES OF BENEFICIAL INTEREST
(a) Designation and Amount. There shall be a series of preferred Shares of
the Trust, par value $1.00 per Share, which shall be designated Junior
Participating Preferred Shares of Beneficial Interest, par value $1.00 per Share
(the "Junior Participating Preferred Shares"), and the number of Shares
constituting such series shall be 2,500,000. Such number of Shares may be
increased or decreased by resolution of the Board and by the filing of articles
of amendment in accordance with the provisions of Title 8 of the Corporations
and Associations Article of the Code of Maryland stating that such increase or
reduction has been so authorized; provided, however, that no decrease shall
reduce the number of Junior Participating Preferred Shares to a number less than
the number of Junior Participating Preferred Shares then outstanding plus the
number of Junior Participating Preferred Shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Trust.
(b) Dividends and Distributions.
(i) Subject to the prior and superior rights of the holders of any
Shares of any class or series of preferred Shares of the Trust ranking
prior and superior to the Junior Participating Preferred Shares with
respect to dividends, the holders of Junior Participating Preferred Shares
shall be entitled to receive, when, as and if declared by the Board out of
funds legally available for the purpose, quarterly dividends payable in
cash to holders of record on the last Business Day of January, April, July
and October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), (commencing on the first Quarterly
Dividend Payment Date after the first issuance of a Junior Participating
Preferred Share or fraction thereof) in an amount per Share (rounded to the
nearest cent) equal to the greater of (A) $1.00 or (B) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
Share amount of all cash dividends, and 100 times the aggregate per Share
amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in Common Shares (hereinafter defined) or a
subdivision of the outstanding Common Shares (by a reclassification or
otherwise), declared on the common shares of beneficial interest, par value
$1.00 per Share, of the Trust (the "Common Shares") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any Junior
Participating Preferred Share or fraction thereof. If the Trust shall at
any time following July 21, 1994 (1) declare any dividend on Common Shares
payable in Common Shares, (2) subdivide the outstanding Common Shares or
(3) combine the outstanding Common Shares into a smaller number of Shares,
then in each such case the amount to which holders of Junior Participating
Preferred Shares were entitled immediately prior to such event under clause
(B) of the preceding sentence shall be adjusted by multiplying each such
amount by a fraction the numerator of which is the number of Common Shares
outstanding
<PAGE>
immediately after such event and the denominator of which is the number of
Common Shares which were outstanding immediately prior to such event.
(ii) The Trust shall declare a dividend or distribution on the Junior
Participating Preferred Shares as provided in paragraph (i) above at the
time it declares a dividend or distribution on the Common Shares (other
than a dividend payable in Common Shares).
(iii) No dividend or distribution (other than a dividend or
distribution payable in Common Shares) shall be paid or payable to the
holders of Common Shares unless, prior thereto, all accrued but unpaid
dividends to the date of such dividend or distribution shall have been paid
to the holders of Junior Participating Preferred Shares.
(iv) Dividends shall begin to accrue and be cumulative on outstanding
Junior Participating Preferred Shares from the Quarterly Dividend Payment
Date next preceding the date of issuance of such Junior Participating
Preferred Shares, unless the date of issuance of such Shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such Shares shall begin to accrue and be cumulative from
the date of issuance of such Shares, or unless the date of issuance is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Junior Participating Preferred Shares entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Junior
Participating Preferred Shares in an amount less than the total amount of
such dividends at the time accrued and payable on such Shares shall be
allocated pro rata on a Share-by-Share basis among all such Shares at the
time outstanding. The Board may fix a record date for the determination of
holders of Junior Participating Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for the payment
thereof.
(c) Voting Rights. The holders of Junior Participating Preferred Shares
shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set forth,
each one one-hundredth of a Junior Participating Preferred Share shall
entitle the holder thereof to one vote on all matters submitted to a vote
of the Shareholders of the Trust. If the Trust shall at any time following
July 21, 1994 (A) declare any dividend on Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares or (C) combine the
outstanding Common Shares into a smaller number of Shares, then in each
such case the number of votes per Share to which holders of Junior
Participating Preferred Shares were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common
Shares which were outstanding
D-2
<PAGE>
immediately after such event and the denominator of which is the number of
Common Shares which were outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or required by law, the
holders of Junior Participating Preferred Shares and the holders of Common
Shares and any other Shares of the Trust having general voting rights shall
vote together as one class on all matters submitted to a vote of
Shareholders of the Trust.
(iii) (A) Whenever, at any time or times, dividends payable on any
Junior Participating Preferred Shares shall be in arrears in an amount
equal to at least six full quarterly dividends (whether or not
declared and whether or not consecutive), the holders of record of the
outstanding Junior Participating Preferred Shares shall have the
exclusive right, voting separately as a single class, to elect two
Trustees of the Trust at a special meeting of Shareholders of the
Trust or at the Trust's next annual meeting of Shareholders, and at
each subsequent annual meeting of Shareholders, as provided below. At
elections for such Trustees, the holders of Junior Participating
Preferred Shares shall be entitled to cast one vote for each one one-
hundredth of a Junior Participating Preferred Share held, subject to
adjustment.
(B) Upon the vesting of such right of the holders of the Junior
Participating Preferred Shares, the maximum authorized number of
members of the Board shall automatically be increased by two and the
two vacancies so created shall be filled by vote of the holders of the
outstanding Junior Participating Preferred Shares as hereinafter set
forth. A special meeting of the Shareholders of the Trust then
entitled to vote shall be called by the Chairman (or any Co-Chairman)
or the President or the Secretary of the Trust, if requested in
writing by the holders of record of not less than 10% of the Junior
Participating Preferred Shares then outstanding. At such special
meeting, or, if no such special meeting shall have been called, then
at the next annual meeting of Shareholders of the Trust, the holders
of the Junior Participating Preferred Shares shall elect, voting as
above provided, two Trustees of the Trust to fill the aforesaid
vacancies created by the automatic increase in the number of members
of the Board. At any and all such meetings for such election, the
holders of a majority of the outstanding Junior Participating
Preferred Shares shall be necessary to constitute a quorum for such
election, whether present in person or by proxy, and such two Trustees
shall be elected by the vote of at least a plurality of Shares held by
such Shareholders present or represented at the meeting. Any Trustee
elected by holders of Junior Participating Preferred Shares pursuant
to this Subsection may be removed at any annual or special meeting, by
vote of a majority of the Shareholders voting as a class who elected
such Trustee, with or without cause. In case any vacancy shall occur
among the Trustees elected by the holders of the Junior Participating
Preferred Shares pursuant to this Subsection, such vacancy may be
filled by the remaining Trustee so elected, or his successor then in
office,
D-3
<PAGE>
and the Trustee so elected to fill such vacancy shall serve until the
next meeting of Shareholders for the election of Trustees. After the
holders of the Junior Participating Preferred Shares shall have
exercised their right to elect Trustees in any default period and
during the continuance of such period, the number of Trustees shall
not be further increased or decreased except by vote of the holders of
Junior Participating Preferred Shares as herein provided or pursuant
to the rights of any equity securities ranking senior to or pari passu
with the Junior Participating Preferred Shares.
(C) The right of the holders of the Junior Participating
Preferred Shares, voting separately as a class, to elect two members
of the Board of the Trust as aforesaid shall continue until, and only
until, such time as all arrears in dividends (whether or not declared)
on the Junior Participating Preferred Shares shall have been paid or
declared and set apart for payment, at which time such right shall
terminate, except as herein or by law expressly provided, subject to
revesting upon each and every subsequent default of the character
mentioned above. Upon any termination of the right of the holders of
the Junior Participating Preferred Shares as a class to vote for
Trustees as herein provided, the term of office of all Trustees then
in office elected by the holders of Junior Participating Preferred
Shares pursuant to this Subsection shall terminate immediately.
Whenever the term of office of the Trustees elected by the holders of
the Junior Participating Preferred Shares pursuant to this Subsection
shall terminate and the special voting powers vested in the holders of
the Junior Participating Preferred Shares pursuant to this Subsection
shall have expired, the maximum number of members of the Board of the
Trust shall be such number as may be provided for in the Bylaws of the
Trust irrespective of any increase made pursuant to the provisions of
this subsection.
(iv) Except as otherwise provided herein or required by law, holders
of Junior Participating Preferred Shares shall have no special voting
rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Shares as provided herein) for
taking any trust action.
(d) Certain Restrictions.
(i) Whenever any quarterly dividends or other dividends or
distributions payable on the Junior Participating Preferred Shares as
provided in subsection (b) are in arrears, then, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
Junior Participating Preferred Shares outstanding shall have been paid in
full, the Trust shall not:
(A) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
Shares ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to
D-4
<PAGE>
the Junior Participating Preferred Shares, other than dividends paid
or payable in such junior Shares;
(B) declare or pay dividends on or make any other distributions
on any Shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Shares, except dividends paid ratably on the Junior
Participating Preferred Shares and all such parity Shares on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such Shares are then entitled;
(C) redeem or purchase or otherwise acquire for consideration
Shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Shares, provided that the Trust may at any time redeem,
purchase or otherwise acquire any such parity Shares in exchange for
Shares of the Trust ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Participating
Preferred Shares; or
(D) purchase or otherwise acquire for consideration any Junior
Participating Preferred Shares, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board)
to all holders of such Shares upon such terms as the Board, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(ii) The Trust shall not permit any subsidiary of the Trust to
purchase or otherwise acquire for consideration any Shares of the Trust
unless the Trust could, under paragraph (i) of this subsection, purchase or
otherwise acquire such Shares at such time and in such manner.
(e) Reacquired Shares. Any Junior Participating Preferred Shares purchased
or otherwise acquired by the Trust in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such Shares shall upon
their cancellation become authorized but unissued preferred Shares and may be
reissued as part of a new series of preferred Shares to be created by resolution
or resolutions of the Board, subject to the conditions and restrictions on
issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up.
(i) Upon any voluntary liquidation, dissolution or winding up of the
Trust, no distribution shall be made to the holders of Shares ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Junior Participating Preferred Shares unless, prior thereto, the
holders of Junior Participating Preferred
D-5
<PAGE>
Shares shall have received $1.00 per Share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment (the "Junior Participating Liquidation
Preference"). Following the payment of the full amount of the Junior
Participating Liquidation Preference, no additional distributions shall be
made to the holders of Junior Participating Preferred Shares unless, prior
thereto, the holders of Common Shares shall have received an amount per
Share (the "Common Adjustment") equal to the quotient obtained by dividing
(A) the Junior Participating Liquidation Preference by (B) 100 (as
appropriately adjusted as set forth in paragraph (iii) below to reflect
such events as Share splits, Share dividends and recapitalizations with
respect to the Common Shares) (such number in clause (B), the "Adjustment
Number"). Following the payment of the full amount of the Junior
Participating Liquidation Preference and the Common Adjustment in respect
of all outstanding Junior Participating Preferred Shares and Common Shares,
respectively, holders of Junior Participating Preferred Shares and holders
of Common Shares shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio, on a per Share basis, of
the Adjustment Number to 1 with respect to such Junior Participating
Preferred Shares and Common Shares, on a per Share basis, respectively.
(ii) If, however, there are not sufficient assets available to permit
payment in full of the Junior Participating Liquidation Preference and the
liquidation preferences of all other series of preferred Shares, if any,
which rank on a parity with the Junior Participating Preferred Shares, then
such remaining assets shall be distributed ratably to the holders of the
Junior Participating Preferred Shares and such parity Shares in proportion
to their respective liquidation preferences.
(iii) If the Trust shall at any time following July 21, 1994 (A)
declare any dividend on Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares or (C) combine the outstanding
Common Shares into a smaller number of Shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator
of which is the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares which
were outstanding immediately prior to such event.
(g) Consolidation, Merger, etc. If the Trust shall enter into any
consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other shares or securities, cash and/or
any other property, then in any such case, the Junior Participating Preferred
Shares shall at the same time be similarly exchanged or changed in an amount per
Share (subject to the provision for adjustment hereinafter set forth) equal to
100 times the aggregate amount of shares, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
Common Share is exchanged or changed. If the Trust shall at any time (i) declare
any dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares or (iii) combine the
D-6
<PAGE>
outstanding Common Shares into a smaller number of Shares, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of Junior Participating Preferred Shares shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares which were outstanding immediately prior to
such event.
(h) Redemption. The Junior Participating Preferred Shares shall not be
redeemable by the Trust. The preceding sentence shall not limit the ability of
the Trust to purchase or otherwise deal in such Shares to the extent permitted
by law.
(i) Ranking. The Junior Participating Preferred Shares shall rank junior to
all other series of the Trust's preferred Shares (whether with or without par
value) as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
(j) Amendment. The Trust's Amended and Restated Declaration of Trust, as
amended and supplemented from time to time, shall not be amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Junior Participating Preferred Shares so as to affect the holders of
Junior Participating Preferred Shares adversely without the affirmative vote of
the holders of a majority or more of the outstanding Junior Participating
Preferred Shares, voting separately as a class.
(k) Fractional Shares. Junior Participating Preferred Shares may be issued
in fractions of a Share which are integral multiples of one-one hundredth of a
Share, which shall entitle the holder, in proportion to such holder's fractional
Shares, to exercise voting rights, receive dividends and participate in
distributions and to have the benefit of all other rights of holders of Junior
Participating Preferred Shares.
D-7
<PAGE>
Exhibit 4.2
ARCHSTONE COMMUNITIES TRUST
AMENDED AND RESTATED BYLAWS
ARTICLE I. MEETINGS OF SHAREHOLDERS
Section 1. Place. All meetings of shareholders ("Shareholders") of
Archstone Communities Trust (the "Trust") shall be held at the principal office
of the Trust or at such other place within the United States as shall be stated
in the notice of the meeting.
Section 2. Special Meetings. Requests for special meetings shall state the
purpose of such meeting and the matters proposed to be acted on at such meeting.
The Secretary shall inform the requesting Shareholders of the reasonably
estimated cost of preparing and mailing notice of the meeting and, upon payment
to the Trust by such Shareholders of such costs, the Secretary shall give notice
of the meeting. Unless requested by the Shareholders entitled to cast a majority
of 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 Shareholders held during the preceding twelve
months.
Section 3. Notice. If mailed, notices of meetings of Shareholders shall be
deemed to be given when deposited in the United States mail addressed to the
Shareholder at his or her post office address as it appears on the records of
the Trust, with postage thereon prepaid.
Section 4. Scope of Notice. Any business of the Trust may be transacted at
an annual meeting of Shareholders without being specifically designated in the
notice, except such business as is required by any statute to be stated in such
notice.
Section 5. Waiver of Notice. Whenever any notice of a meeting of
Shareholders is required to be given pursuant to the Trust's Declaration of
Trust (as amended, supplemented or restated from time to time, the "Declaration
of Trust") or these Bylaws or pursuant to applicable law, a waiver thereof in
writing, signed by the Shareholder or Shareholders 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 Shareholder at any
meeting shall constitute a waiver of notice of such meeting, except where such
Shareholder 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.
Section 6. Organization. At every meeting of Shareholders, the Chairman of
the Board, if there is one (or any Co-Chairman of the Board, if there is more
than one), shall conduct the meeting or, in the case of vacancy in office or
absence of the Chairman of the Board (or all Co-Chairmen of the Board), one of
the following officers present shall conduct the meeting in the order stated:
the President, the Managing Directors in their order of rank and seniority, the
Vice Presidents in their order of rank and seniority, or a chairman chosen by
the Shareholders entitled to cast a majority of the votes which all Shareholders
present in person or
<PAGE>
by proxy are entitled to cast, shall act as chairman, and the Secretary, or, in
his or her 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. At any Shareholders' meeting, the chairman shall determine the
construction or interpretation of these Bylaws, or any part thereof, and the
ruling of the chairman shall be final.
Section 7. Quorum. If a quorum is not present at any meeting of the
Shareholders, the Shareholders entitled to vote at such meeting, present in
person or by proxy, shall have the power to adjourn such meeting from time to
time to a date not more than 120 days after the original record date without
notice other than announcement at such meeting. At any 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. Proxies. A Shareholder may cast the votes entitled to be cast by
the shares ("Shares") of the Trust owned of record by him, either in person or
by proxy executed in writing by the Shareholder or by his or her duly authorized
attorney in fact. Such proxy shall be filed with the Secretary 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 9. Voting of Shares by Certain Holders.
(a) Shares Held by an Entity. Shares 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 Shares
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 Shares. Any director or other fiduciary may vote Shares registered in his
or her name as such fiduciary, either in person or by proxy.
(b) Shares Held by Certain Persons. Shares registered in the name of a
person adjudged incompetent may be voted and all rights incident thereto may be
exercised only by his guardian, in person or by proxy. Shares registered in the
name of a deceased person may be voted and all rights incident thereto may be
exercised only by his executor or administrator, in person or by proxy. Shares
registered in the name of a minor may be voted and all rights incident thereto
may be exercised by his guardian, in person or by proxy, or in the absence of
such representation by his guardian, by the minor, in person or by proxy,
whether or not the Trust has notice, actual or constructive, of the minority or
the appointment of a guardian, and whether or not a guardian has in fact been
appointed.
(c) Shares Held by Two or More Persons. Shares registered in the names of
two or more persons shall be voted or represented in accordance with the vote or
consent of the majority of the persons in whose names the Shares stand. If only
one such person is present in
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person or by proxy, he or she may vote all the Shares, and all the Shares
standing in the names of such persons are represented for the purpose of
determining a quorum. This procedure also applies to the voting of Shares by two
or more administrators, executors, trustees or other fiduciaries, unless the
instrument or order of court appointing them otherwise directs.
(d) Shares Held by the Trust. Shares of the Trust 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.
(e) Certifications of Beneficial Ownership. The Board of Trustees (the
"Board") may adopt by resolution a procedure by which a Shareholder may certify
in writing to the Trust that any Shares registered in the name of the
Shareholder are held for the account of a specified person other than the
Shareholder. The resolution shall set forth: the class of Shareholders who may
make the certification; the purpose for which the certification may be made; the
form of certification; the information to be contained in it; if the
certification is with respect to a record date or closing of the Share transfer
books, the time after the record date or closing of the Share transfer books
within which the certification must be received by the Trust; and any other
provisions with respect to the procedure which the Board 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 Shareholder of record of the specified Shares in place of the
Shareholder who makes the certification.
Section 10. Inspectors. At any meeting of Shareholders, the chairman of the
meeting may, or upon the request of any Shareholder shall, 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 on 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 Shareholders. 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 11. Action Without Meetings. Any action required or permitted to be
taken at a meeting of Shareholders may be taken without a meeting if there is
filed with the records of Shareholders' meetings a unanimous written consent
which sets forth the action and is signed by each Shareholder entitled to vote
on the matter and a written waiver of any rights to dissent signed by each
Shareholder entitled to notice of the meeting but not entitled to vote at such
meeting.
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Section 12. Nominations and Proposals by Shareholders.
(a) Annual Meetings of Shareholders.
(1) Nominations of persons for election to the Board and the proposal
of business to be considered by the Shareholders may be made at an annual
meeting of Shareholders (i) pursuant to the Trust's notice of a meeting, (ii) by
or at the direction of the Board or (iii) by any Shareholder of the Trust who
was a Shareholder of record at the time of the giving of notice provided for in
this Section 12(a), 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 Shareholder pursuant to clause (iii) of paragraph (a)(1) of
this Section 12, the Shareholder must have given timely notice thereof in
writing to the Secretary. To be timely, a Shareholder's notice shall be
delivered to the Secretary at the principal executive offices of the Trust 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 if the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the Shareholder to be timely must be so delivered
not earlier than the 90th day prior to such annual meeting nor 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. Such Shareholder's notice shall set forth (i) as to each
person whom the Shareholder proposes to nominate for election or reelection as a
Trustee all information relating to such person which is required to be
disclosed in solicitations of proxies for election of Trustees, 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
Trustee if elected); (ii) as to any other business which the Shareholder
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
Shareholder and of the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the Shareholder 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 Shareholder, as they appear on the Trust's books, and of
such beneficial owner and (y) the number of Shares of each class of the Trust
which are owned beneficially and of record by such Shareholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 12 to the contrary, if the number of Trustees to be
elected to the Board is increased and there is no public announcement naming all
of the nominees for Trustee or specifying the size of the increased Board at
least 70 days prior to the first anniversary of the preceding year's annual
meeting, a Shareholder'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 Trust not later than
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the close of business on the tenth day following the day on which such public
announcement is first made by the Trust.
(b) Special Meetings of Shareholders. Only such business shall be
conducted at a special meeting of Shareholders as shall have been brought before
the meeting pursuant to the Trust's notice of meeting. Nominations of persons
for election to the Board may be made at a special meeting of Shareholders at
which Trustees are to be elected (i) pursuant to the Trust's notice of meeting,
(ii) by or at the direction of the Board or (iii) provided that the Board has
determined that Trustees shall be elected at such special meeting, by any
Shareholder of the Trust who is a Shareholder 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). If the Trust calls a
special meeting of Shareholders for the purpose of electing one or more Trustees
to the Board, any such Shareholder may nominate a person or persons (as the case
may be) for election to such position as specified in the Trust's notice of
meeting, if the Shareholder'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 Trust not earlier than 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 to be elected at such meeting.
(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 Trustees
and only such business shall be conducted at a meeting of Shareholders 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 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 defective 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 Trust
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
Shareholder shall also comply with all applicable requirements of Maryland 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 Shareholders to request inclusion of proposals in
the Trust's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
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ARTICLE II. TRUSTEES
Section 1. Annual And Regular Meetings. An annual meeting of the Board
shall be held immediately after and at the same place as the annual meeting of
Shareholders, no notice other than this bylaw being necessary. The Board 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 without other
notice than such resolution.
Section 2. Special Meetings. Special meetings of the Board may be called by
or at the request of the Chairman of the Board (or any Co-Chairman of the Board,
if there is more than one), the President or by a majority of the Trustees then
in office. The person or persons authorized to call special meetings of the
Board may fix any place, either within or without the State of Maryland, as the
place for holding any special meeting of the Board called by them.
Section 3. Notice. Notice of any special meeting of the Board shall be
delivered personally or by telephone, facsimile transmission, United States mail
or courier to each Trustee at his or her 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 Trustee 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 Trust by the Trustee and receipt of a completed
transmission indicating receipt. Neither the business to be transacted at, nor
the purpose of, any annual, regular or special meeting of the Board need be
stated in the notice, unless specifically required by statute or these Bylaws.
Section 4. Waiver of Notice. Whenever any notice of a meeting of the Board
or any committee thereof is required to be given pursuant to the Declaration of
Trust or these Bylaws or pursuant to applicable law, a waiver thereof in
writing, signed by the Trustee or Trustees 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 Trustee at any meeting shall
constitute a waiver of notice of such meeting, except where such Trustee 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.
Section 5. Organization. A majority of the Board may designate or elect a
Trustee to preside at Board meetings. In the absence of such designation or
election, the Chairman of the Board (or any Co-Chairman of the Board, if there
is more than one) or the President shall preside at Board meetings; in his
absence, the Trustees present at each meeting shall elect one of the Trustees
present as chairman. All rules of conduct adopted and used at Board meetings
shall be determined by the chairman, whose ruling on all procedural matters
shall be final.
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Section 6. Quorum. If less than a quorum of Trustees is present at a
meeting, a majority of the Trustees present may adjourn the meeting from time to
time without further notice, and further provided that if, pursuant to the
Declaration of Trust or these Bylaws, the vote of a majority of a particular
group of Trustees is required for action, a quorum must also include a majority
of such group. The Trustees present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Trustees to leave less than a quorum.
Section 7. Voting at Meetings. Voting at Board meetings may be conducted
orally, by show of hands, or, if requested by any Trustee, by written ballot.
The results of all voting shall be recorded by the Secretary in the minute book.
Section 8. Telephone Meetings. Trustees 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. Compensation. Trustees shall not receive any stated salary for
their services as Trustees but, by resolution of the Board, may receive fixed
sums per year and/or per meeting and/or per visit to real property owned or to
be acquired by the Trust and for any service or activity they performed or
engaged in as Trustees. Trustees may be reimbursed for expenses of attendance,
if any, at each annual, regular or special meeting of the Board 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
Trustees; but nothing herein contained shall be construed to preclude any
Trustees from serving the Trust in any other capacity and receiving compensation
therefor.
Section 10. Distributions. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Trust available
for dividends or other distributions such sum or sums as the Board 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 Trust or for such other purpose as the Board
shall determine to be in the best interest of the Trust and the Board may modify
or abolish any such reserve in the manner in which it was created.
Section 11. Investment Policy. Subject to the provisions of the Declaration
of Trust, the Board may from time to time adopt, amend, revise or terminate any
policy or policies with respect to investments by the Trust as it shall deem
appropriate in its sole discretion.
Section 12. Loss of Deposits. No Trustee 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 shares have been deposited.
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Section 13. Surety Bonds. Unless required by law, no Trustee shall be
obligated to give any bond or surety or other security for the performance of
any of his or her duties.
Section 14. Reliance. Each Trustee, officer, employee and agent of the
Trust shall, in the performance of his or her duties with respect to the Trust,
be fully justified and protected with regard to any act or failure to act in
reliance in good faith on the books of account or other records of the Trust, on
an opinion of counsel or on reports made to the Trust by any of its officers or
employees or by the adviser, accountants, appraisers or other experts or
consultants selected by the Board or officers of the Trust, regardless of
whether such counsel or expert may also be a Trustee.
Section 15. Certain Rights of Trustees, Officers, Employees And Agents.
The Trustees shall have no responsibility to devote their full time to the
affairs of the Trust. Any Trustee or officer, employee or agent of the Trust, in
his or her 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 Trust.
ARTICLE III. COMMITTEES
Section 1. Number, Tenure And Qualifications. The Board may appoint from
among its members an Executive Committee, an Audit Committee, an Executive
Compensation Committee, an Investment Committee and other committees, composed
of two or more Trustees, to serve at the pleasure of the Board.
Section 2. Meetings. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board. A majority of the
members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The Board may designate a chairman of
any committee and such chairman or any 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 Trustee to
act in the place of such absent member. Each committee shall keep minutes of its
proceedings.
Section 3. Telephone Meetings. Members of a committee of the Board 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 4. Informal Action by Committees. Any action required or
permitted to be taken at any meeting of a committee of the Board 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.
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Section 5. Vacancies. Subject to the provisions hereof, the Board 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.
ARTICLE IV. OFFICERS
Section 1. General Provisions. The officers of the Trust shall be elected
annually by the Board at the first meeting of the Board held after each annual
meeting of Shareholders, except that the Chairman of the Board (or any Co-
Chairman of the Board, if there is more than one) or the President 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 or her successor is elected and qualifies or until his or her death,
resignation or removal in the manner hereinafter provided. Any two or more
offices except (i) Chairman of the Board (or Co-Chairman of the Board, if there
is more than one) or President and (ii) Vice President may be held by the same
person. In its discretion, the Board may leave unfilled any office except that
of Treasurer and Secretary.
Section 2. Resignation. Any officer of the Trust may resign at any time
by giving written notice of his or her resignation to the Board, the Chairman of
the Board (or any Co-Chairman of the Board, if there is more than one), 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 Trust.
Section 3. Vacancies. A vacancy in any office may be filled by the Board
for the balance of the term.
Section 4. Chairman of The Board. The Chairman of the Board (or the Co-
Chairmen of the Board in the order of their election, if there is more than
one), if elected, shall also serve as the President and, as such, shall have
general supervision, direction and control of the business and affairs of the
Trust, subject to the control of the Board, shall preside at meetings of
Shareholders and shall have such other functions, authority and duties as
customarily appertain to the office of the chief executive of a business
corporation or as may be prescribed by the Board.
Section 5. President. The President, if elected, shall be the chief
executive officer of the Trust and, as such, shall have general supervision,
direction and control of the business and affairs of the Trust, subject to the
control of the Board, shall preside at meetings of Shareholders and shall have
such other functions, authority and duties as customarily appertain
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to the office of the chief executive of a business corporation or as may be
prescribed by the Board.
Section 6. Managing Director. The Managing Director (or the Managing
Directors, if there is more than one), shall have such functions, authority and
duties as may be prescribed by the Board, the Chairman of the Board (or any Co-
Chairman of the Board, if there is more than one) or the President.
Section 7. Vice Presidents. Each Vice President shall have such
functions, authority and duties, and have such additional descriptive
designations in his or her title (if any), as may be prescribed by the Board,
the Chairman of the Board (or any Co-Chairman of the Board, if there is more
than one), the President or any Managing Director.
Section 8. Secretary. The Secretary shall keep a record of all
proceedings of the Shareholders of the Trust and of the Board and shall perform
like duties for the standing committees when required. The Secretary shall give,
or cause to be given, notice, if any, of all meetings of the Shareholders and
shall perform such other duties as may be prescribed by the Board, the Chairman
of the Board (or any Co-Chairman of the Board, if there is more than one) or the
President. The Secretary shall have custody of the corporate seal of the Trust
and the Secretary or, in the absence of the Secretary, any Assistant Secretary
shall have authority to affix the same to any instrument requiring it and when
so affixed it may be attested by the signature of the Secretary or any Assistant
Secretary. The Board may give general authority to any other officer to affix
the seal of the Trust and to attest such affixing of the seal.
Section 9. Assistant Secretary. The Assistant Secretary, or if there is
more than one, the Assistant Secretaries in the order determined by the Board
(or if there is no such determination, then in the order of their election),
shall, in the absence of the Secretary or if the Secretary is unable or refuses
to act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties as may from time to time be prescribed by the Board,
the Chairman of the Board (or any Co-Chairman of the Board, if there is more
than one), the President or the Secretary.
Section 10. Treasurer. The Treasurer shall have the custody of the funds
and securities of the Trust and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit all
moneys and other valuable effects in the name and to the credit of the Trust in
such depositories as may be designated by the Board and shall perform such other
duties as may be prescribed by the Board, the Chairman of the Board (or any Co-
Chairman of the Board, if there is more than one) or the President.
Section 11. Assistant Treasurer. The Assistant Treasurer, or if there is
more than one, the Assistant Treasurers in the order determined by the Board (or
if there is no such determination, then in the order of their election), shall,
in the absence of the Treasurer or if the Treasurer is unable or refuses to act,
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties as may from time to time be prescribed by the
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Board, the Chairman of the Board (or any Co-Chairman of the Board, if there is
more than one), the President or the Treasurer.
Section 12. Salaries. The salaries and other compensation of the officers
shall be fixed from time to time by the Board and no officer shall be prevented
from receiving such salary or other compensation by reason of the fact that he
or she is also a Trustee.
Section 13. Execution of Documents. A person who holds more than one
office in the Trust may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed, acknowledged
or verified by more than one officer.
Section 14. Bonds. The Board may require any officer, agent or employee of
the Trust to give a bond to the Trust, conditioned on the faithful discharge of
his or her duties, with one or more sureties and in such amount as may be
satisfactory to the Board.
ARTICLE V. INDEMNIFICATION
Section 1. Procedure. Any indemnification, or payment of expenses in
advance of the final disposition of any proceeding, shall be made promptly, and
in any event within 60 days, upon the written request of the Trustee or officer
entitled to seek indemnification (the "Indemnified Party"). The right to
indemnification and advances hereunder shall be enforceable by the Indemnified
Party in any court of competent jurisdiction, if (i) the Trust denies such
request, in whole or in part, or (ii) no disposition thereof is made within 60
days. The Indemnified Party's costs and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or in
part, in any such action shall also be reimbursed by the Trust. It shall be a
defense to any action for advance of expenses that (a) a determination has been
made that the facts then known to those making the determination would preclude
indemnification or (b) the Trust has not received both (i) an undertaking as
required by law to repay such advances if it shall ultimately be determined that
the standard of conduct has not been met and (ii) a written affirmation by the
Indemnified Party of such Indemnified Party's good faith belief that the
standard of conduct necessary for indemnification by the Trust has been met.
Section 2. Exclusivity, Etc. The indemnification and advance of expenses
provided by the Declaration of Trust and these Bylaws shall not be deemed
exclusive of any other rights to which a person seeking indemnification or
advance of expenses may be entitled under any law (common or statutory), or any
agreement, vote of Shareholders or disinterested Trustees or other provision
which is consistent with law, both as to action in his or her official capacity
and as to action in another capacity while holding office or while employed by
or acting as agent for the Trust, shall continue in respect of all events
occurring while a person was a Trustee or officer after such person has ceased
to be a Trustee or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. All rights to indemnification and
advancement of expenses under the Declaration of Trust and these Bylaws shall be
deemed to be a contract between the Trust and each Trustee or officer of the
Trust who serves or served in such capacity at any time while such provisions
are in effect. Nothing herein shall prevent the
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amendment of these Bylaws, provided that no such amendment shall diminish the
rights of any person hereunder with respect to events occurring or claims made
before its adoption or as to claims made after its adoption in respect of events
occurring before its adoption. Any repeal or modification of these Bylaws shall
not in any way diminish any rights to indemnification or advancement of expenses
of such Trustee or officer of the obligations of the Trust arising hereunder
with respect to events occurring, or claims made, while these Bylaws or any
provision hereof is in effect.
ARTICLE VI. CONTRACTS AND ACCOUNTING
Section 1. Contracts. The Board 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 Trust 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 Trustees or by an authorized person shall be
valid and binding on the Board and on the Trust when authorized or ratified by
action of the Board.
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 Trust shall be signed by such officer or agent of the Trust in such manner
as shall from time to time be determined by the Board.
Section 3. Deposits. All funds of the Trust not otherwise employed shall
be deposited from time to time to the credit of the Trust in such banks, trust
companies or other depositories as the Board may designate.
Section 4. Books and Records. The Trust shall keep correct and complete
books and records of its accounts and transactions and minutes of the
proceedings of its Shareholders and Board and of any executive or other
committee when exercising any of the powers of the Board. The books and records
of the Trust may be in written form or in any other form which can be converted
within a reasonable time into written form for visual inspection. Minutes shall
be recorded in written form but may be maintained in the form of a reproduction.
The original or a certified copy of the Bylaws shall be kept at the principal
office of the Trust.
Section 5. Fiscal Year. The fiscal year of the Trust shall be the twelve
months ending December 31 in each year, unless otherwise provided by the Board.
ARTICLE VII. SHARES
Section 1. Certificates. Each Shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
Shares of each class held by him or her in the Trust. Each certificate shall be
signed by the Chairman of the Board (or any Co-Chairman of the Board, if there
is more than one), the President or a Vice President and countersigned by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant
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Treasurer and may be sealed with the seal, if any, of the Trust. The signatures
may be either manual or facsimile. Certificates shall be consecutively numbered;
and if the Trust shall, from time to time, issue several classes of Shares, 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 Trust, shall have a statement of such
restriction, limitation, preference or redemption provision, or a summary
thereof, plainly stated on the certificate. If the Trust has authority to issue
Shares 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 Shares and, if the Trust 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 to set the relative rights and preferences of subsequent
series. In lieu of such statement or summary, the certificate may state that the
Trust will furnish a full statement of such information to any Shareholder upon
request and without charge. If any class of Shares is restricted by the Trust as
to transferability, the certificate shall contain a full statement of the
restriction or state that the Trust will furnish information about the
restrictions to the Shareholder on request and without charge.
Section 2. Transfers. Upon surrender to the Trust or the transfer agent
of the Trust of a Share certificate duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, the Trust shall
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction on its books. Notwithstanding the
foregoing, transfers of Shares of any class will be subject in all respects to
the Declaration of Trust and all of the terms and conditions contained therein.
Section 3. Replacement Certificate. Any officer designated by the Board
may direct a new certificate to be issued in place of any certificate previously
issued by the Trust 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 may, in his or her 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 or she shall require and/or to give bond, with
sufficient surety, to the Trust 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.
(a) Fixing of Record Date. The Board may set, in advance, a record date
for the purpose of determining Shareholders entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of Shareholders for any other proper
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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 90 days before the
date on which the particular action requiring such determination of Shareholders
of record is to be held or taken. In lieu of fixing a record date, the Board may
provide that the Share transfer books shall be closed for a stated period but
not longer than 20 days.
(b) If Record Date Not Fixed. If no record date is fixed and the Share
transfer books are not closed for the determination of Shareholders, the record
date for the determination of Shareholders entitled to receive a 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 Board, declaring the dividend or
allotment of rights, is adopted.
(c) Record Dates for Adjourned Meetings. When a determination of
Shareholders entitled to vote at any meeting of Shareholders has been made as
provided in the Declaration of Trust, such determination shall apply to any
adjournment thereof, except when the meeting is adjourned to a date more than
120 days after the record date fixed for the original meeting, in which case a
new record date shall be determined as set forth in the Declaration of Trust.
(d) Share Transfers After Record Date. Except where the Board fixes a new
record date for any adjourned meeting as provided above, any Shareholder who was
a Shareholder on the original record date shall be entitled to receive notice of
and to vote at a meeting of Shareholders or any adjournment thereof and to
receive a dividend or allotment of rights even though he or she has since such
date disposed of his or her Shares, and no Shareholder becoming a Shareholder
after such date shall be entitled to receive notice of or to vote at such
meeting or any adjournment thereof or to receive such dividend or allotment of
rights.
(e) Paying of Pro Rata Dividends. Notwithstanding anything in this Section
4 to the contrary, the Board may declare and pay dividends or an allotment or
any other rights to those who are Shareholders as of a specified record date or,
alternatively, to those who are or were Shareholders at any time during any
quarter, year or other applicable period with respect to which any such dividend
or allotment of rights is paid so that each Shareholder shall receive, with
respect to each Share, the proportion of such dividend or allotment of rights
per Share which the number of days each Share is owned of record by such
Shareholder during such quarter, year or other applicable period bears to the
total number of days in such quarter, year or other applicable period.
Section 5. Share Ledger. The Trust 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 Shareholder and
the number of Shares of each class held by such Shareholder. The Trust shall be
entitled to treat the holder of record of any Share 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.
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Section 6. Fractional Shares; Issuance of Units. The Board may issue
fractional Shares 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 Declaration of Trust or these Bylaws to the contrary, the Board may issue
units consisting of different securities of the Trust. Any security issued in a
unit shall have the same characteristics as any identical securities issued by
the Trust, except that the Board may provide that, for a specified period,
securities of the Trust issued in such unit may be transferred on the books of
the Trust only in such unit.
ARTICLE VIII. SEAL
Section 1. Seal. The Board may adopt a suitable seal, bearing the name of
the Trust, which shall be in the charge of the Secretary. The Board may
authorize one or more duplicate seals and provide for the custody thereof.
Section 2. Affixing Seal. Whenever the Trust 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 Trust.
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Exhibit 10.1
AMENDMENT NO. 1
TO
THIRD AMENDED AND RESTATED INVESTOR AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of July 7, 1998, to the
Third Amended and Restated Investor Agreement, dated as of September 9, 1997
(the "Agreement"), is made by and between Archstone Communities Trust (formerly
Security Capital Pacific Trust), a Maryland real estate investment trust (the
"Company"), and Security Capital Group Incorporated, a Maryland corporation
("SCG").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of April 1,
1998, Security Capital Atlantic Incorporated, a Maryland corporation
("ATLANTIC"), was merged (the "Merger") with and into the Company; and
WHEREAS, as a result of the Merger, the parties desire to amend the
Agreement to reflect the increased size of the Company and various other
matters.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Amendment and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
amend the Agreement as follows:
1. The Amended and Restated Investor Agreement, dated as of September 9,
1997 by and between ATLANTIC and SCG is hereby terminated and shall be of no
further force or effect.
2. Section 5(a) of the Agreement is hereby amended and restated in its
entirety as follows:
" (a) Board Representation. From and after the date hereof and for so long
thereafter as SCG Beneficially Owns 10% or more of the outstanding Common
Shares, the Company shall not increase the number of members of its Board
to more than twelve (12), and SCG shall be entitled to designate one or
more Persons for nomination to the Board (such Person, a "Nominee") as
follows and the Company will use its best efforts to cause the election of
such Nominee or Nominees:
(i) So long as SCG Beneficially Owns at least 10% but less than
25% of the outstanding Common Shares, one (1) Nominee;
(ii) So long as SCG Beneficially Owns 25% or more of the
outstanding Common Shares, that number of Nominees as shall bear
approximately the same ratio (rounded down to the nearest whole
number) to the total number of members of the Board as the number of
Common Shares Beneficially Owned by SCG bears to the total number of
outstanding Common Shares, provided, that any Person who is employed
by SCG or who is an employee or a director of any corporation of which
SCG is a 25% shareholder (except for the Company) shall be deemed to
be a designee of SCG."
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3. Section 5(ii) through 5(c)(iv) of the Agreement is hereby amended and
restated in its entirety as follows:
" (ii) Expenses. Incurring expenses in any year exceeding (A) any
line item in the annual budget by the greater of $1,000,000 or 20% or
and (B) the total expenses set forth in the annual budget by 15%.
(iii) Assets. The acquisition or sale of any assets in any
single transaction or any series of related transactions in the
ordinary course of the Company's business where the aggregate purchase
price paid or received by the Company exceeds $50,000,000.
(iv) Contracts. Entering into any new contract with a service
provider (A) for investment management, property management, or
leasing services or (B) that reasonably contemplates annual contract
payments by the Company in excess of $2,000,000."
4. Capitalized terms used in this Amendment but not specifically defined
herein shall have the meanings ascribed thereto in the Agreement. All references
to the Company in the Agreement and this Amendment shall be deemed to refer to
Archstone Communities Trust, the surviving entity in the Merger, unless the
context requires otherwise. All references to the term "Registrable Securities"
shall be deemed to include the common shares of beneficial interest of the
Company issued to SCG in connection with the Merger.
5. Except as otherwise specifically modified hereby, the Agreement shall
remain in full force and effect.
6. This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland.
7. This Amendment may be executed in any number of counterparts, each of
which may be deemed an original and all of which together shall constitute one
and the same instrument.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
ARCHSTONE COMMUNITIES TRUST
By: /s/ R. Scot Sellers
------------------------------------------
R. Scot Sellers
Co-Chairman and Chief Investment Officer
SECURITY CAPITAL GROUP INCORPORATED
By: /s/ Jeffrey A. Klopf
------------------------------------------
Jeffrey A. Klopf
Senior Vice President
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Exhibit 99.1
[ARCHSTONE LOGO APPEARS HERE]
News Release Contact: Constance B. Moore (404) 237-9292
ARCHSTONE COMMUNITIES MERGER CLOSES
Denver - (July 6, 1998) - Security Capital Atlantic Incorporated and Security
Capital Pacific Trust jointly announced that their merger, creating Archstone
Communities, closed today. The merger, effective July 7, was approved by
shareholders of both companies at annual meetings on June 29. Archstone, a
dominant, national multifamily company with a current total market
capitalization of $5.3 billion, will trade on the New York Stock Exchange under
its new symbol "ASN" beginning July 7.
Archstone Communities is a preeminent real estate operating company focusing on
the development, acquisition, operation and long-term ownership of multifamily
communities in markets and submarkets with strong economic fundamentals and high
barriers to entry throughout the United States. With a total market
capitalization of $5.3 billion, Archstone's primary objective is creating long-
term, sustainable growth in per share cash flow. The company expects to generate
significant internal growth from its well-located operating communities and the
completion and stabilization of new communities in its $2.1 billion development
pipeline. Archstone has a dominant, national presence with 315 communities
representing 93,115 units, including 25,868 units in its development pipeline,
as of May 31, 1998, in markets that include 29 of the nation's 50 largest
metropolitan markets.
